Singularity Future Technology Ltd. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures As of June 30, 2023, the Company carried out an evaluation, under the supervision of and with the participation of its management, including the Company’s Chief Operating Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing evaluation, the Chief Operating 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 not 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 ineffective internal controls over financial reporting as more fully described below. 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). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was not effective due to the following material weaknesses for the year ended and as of June 30, 2023: ● 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; ● 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; ● Lack of resources with technical competency to address, review and record non-routine or complex transactions under U.S. GAAP; ● 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; ● 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); ● Lack of proper procedures to maintain supporting documents for accounting record; and ● Lack of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive. 34 A material weakness is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In order to remediate the material weaknesses stated above, we intend to implement the following measures, policies and procedures: ● Hiring additional accounting staff to report the internal financial timely; ● Reporting other material and non-routine transactions to the Board and obtain proper approval; ● Recruiting additional qualified professionals with appropriate levels of U.S. GAAP knowledge and experience to assist in resolving accounting issues in non-routine or complex transactions; ● Developing and conducting U.S. GAAP knowledge, SEC reporting and internal control training to senior executives, management personnel, accounting departments and the IT staff, so that management and key personnel understand the requirements and elements of internal control over financial reporting mandated by the U.S. securities laws; ● Setting up budgets and developing expectations based on understanding of the business operations, compare the actual results with the expectations periodically and document the reasons for the fluctuations with further analysis. This should be done by CFO and reviewed by CEO upon their communications with the Board; ● Strengthening our corporate governance; ● Setting up policies and procedures for the Company’s related party identification to properly identify, record and disclose related party transactions; and ● Setting up proper procedures for the Company’s fund disbursement process to ensure that cash is disbursed only upon proper authorization, for valid business purposes, and that all disbursements are properly recorded. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 35 PART III Item 10. Directors, Executive Officers and Corporate Governance. Name Age Positions Held Ziyuan Liu 34 Chief Executive Officer, Chairman of the Board Ying Cao 46 Chief Financial Officer Xu Zhao 37 Director Haotian Song 33 Director Zhongliang Xie 52 Director Ziyuan Liu Mr. Ziyuan Liu has been our Chief Executive Officer since April 2023 and a director and chairman of the Board since May 2023. Before joining the Company, Mr. Liu served as the manager of the North American market development department in Fulongma Group Co., Ltd., a comprehensive environmental sanitation solutions provider in China, from July 2022 to April 2023. Prior to that, he worked for Ningbo Shunxiang Group Co., Ltd., a polyester film manufacturer in China, as the chief operating officer from July 2019 to July 2022. From July 2018 to June 2019, he served as the project manager for Shouhang New Energy, a solar photovoltaics and energy storage solutions supplier in China. Prior to that, he worked for Hongkun Group, a real estate developer based in China, as the general manger for the Shenzhen area from July 2015 to June 2018. Mr. Liu graduated from Wuhan Institute of Technology with a major in project management. Ying Cao Mr. Ying Cao has been our Chief Financial Officer since August 2023. He has served as the department manager and quality control manager at Shaanxi Huaqiang Certified Public Accountants Co., Ltd. since 2015. Prior to that, he served as a project manager in Sigma Accounting Firm from 2007 to 2014. Mr. Cao obtained his bachelor’s degree in accounting from Xi’an University of Finance and Economics. Mr. Ying Cao is a Certified Public Accountant in China. 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. Haotian Song Mr. Haotian Song has been a director since May 2023. Mr. Song is the founder and chief executive officer of HT Processing, a cross-border payment system provider with extensive knowledge into Chinese consumer spending habits in hospitality and retail industries, from June 2017 to April 2023. Prior to that, he served as the chief operating officer of Calabash Brothers LLC, an Asian e-commerce logistics company, from November 2021 to April 2022. From August 2013 to August 2017, Mr. Song worked for Go To Travel, a travel agency company providing Asian tour operators with exclusive wholesale access to top attraction tickets in the east coast, as its general manager. Mr. Song received his bachelor’s degree in business administration from Baruch College of the City University of New York in 2013. 36 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. 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 September 25, 2023 Total Number of Directors 5 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 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, 2023, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements, except that, due to administrative errors, the following forms were filed late: 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. 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. 37 Audit Committee The Audit Committee consists of Zhongliang Xie 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. 38 Compensation Committee The Compensation Committee is composed of three independent directors including Zhongliang Xie and Xu Zhao. 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 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. 39 Item 11. Executive Compensation. The following table shows the annual compensation paid by us to Mr. Lei Cao, our former Chief Executive Officer and Chairman, Ms. Yang Jie, our former Chief Executive Officer and director, Ms. Tuo Pan, our former Chief Financial Officer, Mr. Zhikang Huang, our former Vice President, Mr. Jing Shan, our former Chief Operating Officer, Ziyuan Liu, our Chief Executive Officer, and Dianjiang Wang, our Chief Financial Officer for the years ended June 30, 2023 and 2022. Name Year Salary Bonus Securities- based Compensation All other Compensation Total Lei Cao, 2022 $ 426,609 (2) $ 800 - - $ 427,409 Former Chief Executive Officer (1)(6) 2023 261364 261364 Tuo Pan, 2022 $ 302,973 $ 800 - - $ 303,773 Former Chief Financial Officer (2)(7) 2023 66667 66667 Zhikang Huang, 2022 $ 275,000 $ 800 - - $ 275,800 Former Vice President and Director (3)(8) 2023 150000 666 150666 Jing Shan, 2022 $ 143,333 $ 800 - - $ 144,133 Chief Operating Officer (4) 2023 223185 92332 315517 Yang Jie, (5) 2022 $ 500,000 $ 800 - - $ 500,800 Former Chief Executive Officer and director (9) 2023 52,536 52,536 Ziyuan Liu 2022 Chief Executive Officer (10) 2023 $ 49,000 $ 49,000 Dianjiang Wang 2022 Chief Financial Officer (11) 2023 $ 10,000 $ 10,000 (1) According to the Employment Agreement dated January 1, 2019, Mr. Cao’s annual salary was $260,000, effective January 1, 2019. According to the Employment Agreement dated November 1, 2021, Mr. Cao’s annual salary was $500,000, effective November 1, 2021. (2) According to the Employment Agreement dated January 1, 2019, Ms. Pan’s annual salary was $100,000, effective January 1, 2019. According to the Employment Agreement dated November 1, 2021, Ms. Pan’s annual salary was $400,000, effective November 1, 2021. (3) According to the Employment Agreement dated January 1, 2019, Mr. Huang’s annual salary was $150,000, effective January 1, 2019. (4) According to the Employment Agreement dated August 5, 2021, Ms. Shan’s annual salary was $120,000, effective August 5, 2021. According to the Employment Agreement dated February 8, 2022, Ms. Shan’s annual salary was $200,000, effective February 8, 2022 and was raised to $250,000 since August 15, 2022. Pursuant to the cancellation agreement entered into on December 28, 2022, Ms. Shan agreed to return to the Company for cancellation 100,000 shares of common stock of the Company granted to her for her services as an officer of the Company. The shares are being cancelled. (5) Pursuant to the cancellation agreement entered into on December 19, 2022, Mr. Jie agreed to return to the Company for cancellation 300,000 shares of common stock of the Company granted to him for his services as an officer of the Company. The shares have been cancelled. (6) On November 1, 2021, Mr. Cao, retired from his position as the Company’s Chief Executive Officer. Mr. Cao resigned from the Board on January 9, 2023. Pursuant to the separation agreement entered into on January 9, 2023, Mr. Cao agreed to forfeit and return to the Company for cancellation 600,000 shares of common stock of the Company granted to him on August 13, 2021 under the terms of the 2014 Equity Incentive Plan of the Company. The shares are being cancelled. 40 (7) On August 31, 2022, Ms. Pan was terminated for cause as an employee and Chief Financial Officer of the Company and from any other position at any subsidiary of the Company to which she has been appointed. Ms. Pan was terminated for cause in accordance with the terms of her Employment Agreement dated November 9, 2021 and did not receive any salary or benefits from the Company except those earned through August 31, 2022. (8) On November 1, 2021, Mr. Huang resigned from his position as a member of the Board of the Company. (9) On August 9, 2022, Mr. Jie resigned as Chief Executive Officer and director, following the Board’s decision on August 8, 2022, which adopted the Special Committee’s recommendation that Mr. Jie be suspended immediately. (10) According to the Employment Agreement dated April 18, 2023, Mr. Liu’s compensation consists of an annual base salary of $240,000 in cash and a discretionary annual bonus, effective April 18, 2023. (11) According to the Employment Agreement dated May 1, 2023, Mr. Wang’s compensation consists of an annual base salary of $60,00, and a discretionary annual bonus, effective May 1, 2023. Outstanding Equity Awards of Named Executive Officers at Fiscal Year-End None. Director Compensation The table below sets forth the compensation received by our directors in the year ended June 30, 2023. Name (1) Fees earned or paid in cash ($) Stock awards ($) Option awards ($) All other compensation ($) Total ($) John Levy (3) 37,500 - - 159,565 (2) 197,065 Heng Wang 50,000 - - 167,029 (2) 217,029 Tieliang Liu (4) 50,000 - - 75,000 125,000 Haotian Song 6,667 - - - 6,667 Ling Jiang (5) 8,333 - - - 8,333 Ziyuan Liu 49,000 - - - 49,000 (1) This table does not include Mr. Ziyuan Liu, our Chief Executive Officer and director, Mr. Lei Cao, our former Chief Executive Officer and former director, Mr. Zhikang Huang, our former director and Vice President, and Mr. Yang Jie, our former Chief Executive Officer and director whose compensation is fully reflected in the Summary Compensation Table. (2) Represents compensation paid to Mr. Levy and Mr. Wang for their services as Chairman and member of the Special Committee, respectively, for the period July 2022 to February 2023. (3) On February 23, 2023, Mr. John Levy resigned as a director of the Board and member of the Audit Committee, Nominating and Corporate Governance Committee and the Compensation Committee. (4) On July 3, 2023, Mr. Tieliang Liu resigned as a director. (5) On September 28, 2023, Ms. Ling Jiang resigned as a director. Employment Agreements The Company has an employment agreement with Mr. Ziyuan Liu, our Chief Executive Officer. The employment agreement began on April 18, 2022, with a term of one year. The term shall automatically be extended for a one-year period in the absence of notice of non-renewal provided at least 30 days prior to the anniversary date of the employment agreement. Under the terms of the employment agreement, Mr. Liu will receive an annual base salary of $240,000 in cash, and a discretionary annual bonus. The Company has an employment agreement with Mr. Dianjiang Wang, our Chief Financial Officer. The employment agreement began on May 1, 2022, with a term of one year. The term shall automatically be extended for a one-year period in the absence of notice of non-renewal provided at least 30 days prior to the anniversary date of the employment agreement. Under the terms of the employment agreement, Mr. Liu will receive an annual base salary of $60,000 in cash, and a discretionary annual bonus. The Company had an employment agreement with Jing Shan, our former Chief Operating Officer. The employment agreement began on February 8, 2022 and was scheduled to end on August 4, 2024. Under the terms of the employment agreement, Ms. Shan received a base salary of $200,000 per year. Her performance and salary were subject to review at any time, and any increases in her salary that our Board may determine, were to be made on a basis consistent with the standard practices of our Company. On August 15, 2022, the Board approved an increase of Ms. Shan’s annual salary from $200,000 to $250,000 and she was paid a cash bonus of $50,000 upon conclusion of the Special Committee investigation. On July 10, 2023, Company terminated the employment of Ms. Shan for cause. 41 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 September 25, 2023, for (i) each named executive officer and director, and (ii) all executive officers and directors as a group. As of September 25, 2023, 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 17,515,526 shares of our common stock issued and outstanding as of September 25, 2023. Name and Address of Beneficial Owner (1) Number of Shares Beneficially Owned Approximate Percentage of Outstanding Shares of Common Stock Ziyuan Liu - Ying Cao - - Ling Jiang - Haotian Song - 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., 98 Cutter Mill Road, Suite 311, Great Neck, New York 11021. Securities Authorized for Issuance to Our Officers, Directors, Employees and Consultants under Equity Compensation Plans The below table reflects, as of September 25, 2023, 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 2,000 $ 10.05 47,781 (1) Equity compensation plans under the 2014 Incentive Plan approved by security holders - - 110,000 (1) Equity compensation plans under the 2021 Incentive Plan approved by security holders - - 9,800,000 (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. On 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 shares under the 2008 Incentive Plan, and we may issue 110,000 and 9,800,000 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. 42 Item 13. Certain Relationships and Related Transactions, and Director Independence. Related Transactions Set forth below are our transactions with related persons for the years ended June 30, 2023 and 2022. Advance to Related Party Suppliers The Company’s advances to related party suppliers are as follows: June 30, June 30, 2023 2022 Bitcoin mining hardware and other equipment (1) $ - $ 6,153,546 Total Advances to suppliers-related party $ - $ 6,153,546 (1) On January 10, 2022, the Company’s joint venture, Thor Miner, entered into a Purchase and Sales Agreement (“PSA”) with HighSharp. Pursuant to the Purchase Agreement, Thor Miner agreed to purchase certain cryptocurrency mining equipment. In January and April 2022, Thor Miner made total prepayment of $35,406,649 for the order and no prepayment as of June 30, 2023. Due to production issues from HighSharp, Thor Miner was not able to timely deliver the full quantity of cryptocurrency mining machines to SOSNY under the PSA and was sued by SOSNY for breach of contract on December 9, 2022. The Company entered into a settlement agreement with SOSNY effective on December 28, 2022, under which the Company will repay $13.0 million to SOSNY and terminate the previous agreements and balance of the deposits. The Company also assigned to SOSNY the right for the deposit that Thor Miner has paid to HighSharp. As of December 22, 2022, the balance of advances to HighSharp and deposits from SOSNY amounted to $27,927,583 and $40,560,569, respectively. Thor Miner paid $13.0 million on December 23, 2022 to SOSNY which was received by SOSNY on December 28, 2022. Thor Miner wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp resulted in net bad debt expenses of $367,014. Due from Related Party As of June 30, 2023 and June 30, 2022, the outstanding amounts due from related parties consist of the following: June 30, June 30, 2023 2022 Zhejiang Jinbang Fuel Energy Co., Ltd (1) 458,607 415,412 Shanghai Baoyin Industrial Co., Ltd (2) 1,068,014 1,306,004 LSM Trading Ltd (3) 570,000 570,000 Rich Trading Co. Ltd (4) 103,424 103,424 Cao Lei (5) 13,166 54,860 Less: allowance for doubtful accounts (2,138,276 ) (2,449,700 ) Total $ 74,935 $ - (1) As of June 30, 2023 and 2022, the Company advanced $458,607 and $415,412 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 and due on demand. The Company provided allowance of $383,672 and $415,412 for the year ended June 30, 2023 and 2022, and the allowance changes as a result of changes in exchange rates. (2) As of June 30, 2023 and 2022, the Company advanced approximately $1.1 million and $1.3 million to Shanghai Baoyin Industrial Co., Ltd. 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. (3) As of June 30, 2023, the Company advanced $570,000 to LSM Trading Ltd, which is 40% owned by the Company. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable. The Company is taking actions in order to pursue all available legal remedies including lawsuits to recover these funds. (4) On November 16, 2021, the Company entered into a project cooperation agreement with Rich Trading Co. Ltd USA (“Rich Trading”) for the trading of computer equipment. Rich Trading’s bank account was controlled by now-terminated members of the Company’s management and was, at the time, an undisclosed related party. According to the agreement, the Company was to invest $4.5 million in the trading business operated by Rich Trading and the Company would be entitled to 90% of profits generated by the trading business. The Company advanced $3,303,424 for this project, of which $3,200,000 has been returned to the Company. The Company provided allowance of $103,424 for the year ended June 30, 2023 and 2022. (5) The amount represents business advances to Mr. Lei Cao, the former Chairman of the Board. During the six months ended June 30, 2023, Lei Cao repaid approximately $54,000, of which approximately $13,000 additional payment was recognized as non-operating income. The Company provided full credit losses for the remaining balance of the receivable. 43 Loan Receivable- Related Parties As of June 30, 2023 and June 30, 2022, the outstanding loan receivable from related parties consists of the following: June 30, June 30, 2023 2022 Wang Qinggang (1) $ - $ 552,285 (1) On June 10, 2021, the Company entered into a loan agreement with Wang Qinggang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The loan is was non-interest bearing for a loan amount of up to $630,805 (RMB 4 million). In February 2022, Wang Qinggang, borrowed and repaid $232,340 of the loan amount. In June 2022, an additional $552,285 (RMB 3,700,000) was loaned to Wang Qinggang with a due date of June 7, 2024. The outstanding loan was fully repaid in December 2022 . Accounts payable- related parties As of June 30, 2023 and June 30, 2022, the Company had accounts payable to Rich Trading Co. Ltd of $63,434. Due to Related Party As of June 30, 2023, the Company owed Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, of $104,962. These payments were made on behalf of the Company for the daily operational activities. Revenue - Related Party For the year ended June 30, 2023, the company had no revenue from a related party. For the year ended June 30, 2022, revenue from related party, Zhejiang Jinbang, to which the Company provided logistics services including coal transportation, amounted to $222,963. Director Independence Our Board has determined that each of Zhongliang Xie and Xu Zhao is an “independent director” as defined by the applicable SEC rules and Nasdaq Listing Rules. 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, 2023 and June 30, 2022 for services rendered by them as our independent registered accounting firm for such years. Fiscal 2023 Fiscal 2022 Audit fees $ 390,100 $ 115,000 Audit-related fees - - Total Audit & Audit-related fees $ 390,100 $ 115,000 Tax fees - - All other fees - - Total fees $ 390,100 $ 115,000 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 2023 or 2022. 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 2023 or 2022. 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. 44 Item 15. Exhibits, Financial Statement Schedules. Number Exhibit 3.1 Articles of Incorporation of Singularity Future Technology, Ltd. (1) 3.2 Certificate of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd. (2) 3.3 Articles of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd. (3) 3.4 Bylaws of Singularity Future Technology, Ltd. (4) 4.1 Specimen Certificate for Common Stock (4) 4.2 Form of Series A Warrant to purchase Common Stock dated March 12, 2018 (5) 4.3 Form of Series B Warrant to purchase Common Stock dated March 12, 2018 (6) 4.4 Form of Common Stock Purchase Warrant dated September 2020 (7) 4.5 Form of Warrant to purchase Common Stock (8) 4.6 Form of Warrant, dated December 14, 2021 (9) 10.1 Employment Agreement by and between Ms. Jing Shan and Sino-Global Shipping America, Ltd., dated as of August 5, 2021 (10) 10.2 Employment Agreement by and between Mr. Ziyuan Liu and the Company, dated April 18, 2022 (11) 10.3 Employment Agreement by and between Mr. Dianjiang Wang and the Company, dated May 1, 2022 (12) 10.4 The Company’s 2021 Stock Incentive Plan (13) 10.5 Strategic Alliance Agreement by and between Shenzhen HighSharp Electronic Ltd. And the Company, dated October 3, 2021 (14) 10.6 Offer Letter by and between Mr. Heng Wang and the Company, dated as of November 1, 2021 (15) 10.7 Form of Warrant, dated as of December 2021 (16) 10.8 Form of Securities Purchase Agreement, dated as of December 2021 (17) 10.9 Form of Senior Convertible Note, dated as of December 2021 (18) 10.10 Form of Warrant Purchase Agreement, dated as of January 2022 (19) 10.11 Purchase and Sale Agreement by and between Thor Miner, Inc. and the Company, dated January 10, 2022 (20) 10.12 Employment Agreement by and between Ms. Jing Shan and the Company, dated February 8, 2022 (21) 10.13 Form of Amended and Restated Senior Convertible Note, dated as of March 2022 (22) 10.14 Joint Venture Agreement by and between Golden Mainland Inc. and the Company, dated April 10, 2022 (23) 10.15 Form of Settlement Agreement by and between SOS Information Technology New York, Inc. and Thor Miner, Inc., the Company, Lei Cao, Yang Jie, John F. Levy, Tieliang Liu, Tuo Pan, Shi Qiu, Jing Shan, and Heng Wang (24) 10.16 Separation Agreement by and between the Company and Lei Cao, dated as of January 9, 2023 (25) 10.17 Placement Agreement by and between Sino-Global Shipping America, Ltd. and Maxim Group LLC, dated as of February 5, 2021 (26) 10.18 Form of Services Agreement by and between the Company and Chongqing Iron & Steel Ltd 14.1 Code of Ethics of the Company (27) 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** 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. 45 (1) Incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 27, 2014. (2) Incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 5, 2022. (3) Incorporated herein by reference to exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 5, 2022. (4) Incorporated by reference to the Company’s Registration Statement on Form S-1, Registration Nos. 333-150858 and 333-148611. (5) Incorporated herein by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 12, 2018. (6) Incorporated herein by reference to exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 12, 2018. (7) Incorporated herein by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 18, 2020. (8) Incorporated herein by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on Form 8-K filed on February 8, 2021. (9) Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021. (10) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 9, 2021. (11) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 19, 2021. (12) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2021. (13) Incorporated by reference to exhibit 99.2 to the Company’s Form S-8 filed on August 27, 2021. (14) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2021. (15) Incorporated by reference to exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 1, 2021. (16) Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021. (17) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021. (18) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 23, 2021. (19) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 6, 2022. (20) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 14, 2022. (21) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2022. (22) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 10, 2022. (23) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 14, 2022. (24) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 5, 2023. (25) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 13, 2023. (26) Incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 8, 2021. (27) Incorporated by reference to exhibit 14.1 to the Company’s Annual Report on Form 10-KSB filed on September 29, 2008 (File No. 001-34024). Item 16. Form 10-K Summary. We have elected not to include a summary pursuant to this Item 16. 46 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 28, 2023 By: /s/ Ziyuan Liu Ziyuan Liu 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/ Ziyuan Liu Director, Chairman of the Board and Chief Executive Officer September 28, 2023 Ziyuan Liu (Principal Executive Officer) /s/ Haotian Song Director September 28, 2023 Haotian Song /s/ Zhongliang Xie Director September 28, 2023 Zhongliang Xie /s/ Xu Zhao Director September 28, 2023 Xu Zhao /s/ Ying Cao Chief Financial Officer September 28, 2023 Ying Cao (Principal Financial and Accounting Officer) 47 Index to Financial Statements Pages Report of Independent Registered Public Accounting Firm (PCAOB ID: 3487) F-2 Consolidated balance sheets as of June 30, 2023 and 2022 F-3 Consolidated statements of operations and comprehensive income (loss) for the years ended June 30, 2023 and 2022 F-4 Consolidated statements of shareholders’ equity F-5 Consolidated statements of cash flows for the years ended June 30, 2023 and 2022 F-6 Notes to consolidated financial statements F-7 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, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for the years ended June 30, 2023 and 2022, 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 audit. 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 the standards of the PCAOB. 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, nor were we 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 express no such 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. /s/ Audit Alliance LLP We have served as the Company’s auditor since October 28, 2020 AUDIT ALLIANCE LLP ( 3487 ) Singapore September 28, 2023 F- 2 SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, June 30, 2023 2022 Assets Current assets Cash $ 17,390,156 $ 55,833,282 Cryptocurrencies 72,179 90,458 Accounts receivable, net 198,553 108,381 Other receivables, net 76,814 25,057 Advances to suppliers - third parties 128,032 36,540 Advances to suppliers - related party - 6,153,546 Prepaid expenses and other current assets 252,047 365,913 Due from related party 74,935 - Loan receivable-related parties, net - 552,285 Total Current Assets 18,192,716 63,165,462 Property and equipment, net 426,343 548,956 Right-of-use assets 381,982 732,744 Other long-term assets - deposits 236,766 237,749 Investment in unconsolidated entity - 162,829 Total Assets $ 19,237,807 $ 64,847,740 Current Liabilities Deferred revenue $ 66,531 $ 6,955,577 Refund payable - 13,000,000 Accounts payable 494,329 508,523 Accounts payable – related party 63,434 63,434 Lease liabilities - current 330,861 471,976 Taxes payable 3,334,958 3,457,177 Due to related party 104,962 - Accrued expenses and other current liabilities 636,694 756,272 Total current liabilities 5,031,769 25,212,959 Lease liabilities - noncurrent 245,171 846,871 Convertible notes 5,000,000 5,000,000 Total liabilities 10,276,940 31,059,830 Commitments and Contingencies Equity Preferred stock, 2,000,000 shares authorized, no par value, no shares issued and outstanding as of June 30, 2023 and June 30, 2022, respectively - - Common stock, 50,000,000 shares authorized, no par value; 17,715,526 and 22,244,333 shares issued and outstanding as of June 30, 2023 and June 30,2022, respectively 94,332,048 96,127,691 Additional paid-in capital 2,334,962 2,334,962 Accumulated deficit ( 85,576,438 ) ( 62,579,592 ) Accumulated other comprehensive income 90,236 45,739 Total Stockholders’ Equity attributable to controlling shareholders of the Company 11,180,808 35,928,800 Non-controlling Interest ( 2,219,941 ) ( 2,140,890 ) Total Equity 8,960,867 33,787,910 Total Liabilities and Equity $ 19,237,807 $ 64,847,740 The accompanying notes are an integral part of these audited consolidated financial statements. F- 3 SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended June 30, 2023 2022 Net revenues $ 4,538,723 $ 3,988,415 Cost of revenues ( 3,990,654 ) ( 4,136,474 ) Gross profit 548,069 ( 148,059 ) Selling expenses ( 232,569 ) ( 385,890 ) General and administrative expenses ( 11,572,888 ) ( 9,301,784 ) Impairment loss of investment ( 128,369 ) - Impairment loss of cryptocurrencies ( 18,279 ) ( 170,880 ) Impairment loss of fixed assets and intangible assets ( 33,469 ) ( 1,006,305 ) Provision for doubtful accounts, net ( 2,827,511 ) ( 1,613,504 ) Stock-based compensation ( 329,778 ) ( 10,064,622 ) Total operating expenses ( 15,142,863 ) ( 22,542,985 ) Operating loss ( 14,594,794 ) ( 22,691,044 ) Loss from disposal of subsidiary and VIE ( 42,191 ) ( 6,131,616 ) Lawsuit settlement expenses ( 8,400,491 ) - Other income (expenses), net 74,989 ( 105,709 ) Net loss before provision for income taxes ( 22,962,487 ) ( 28,928,369 ) Income tax expense ( 135,855 ) - Net loss ( 23,098,342 ) ( 28,928,369 ) Net loss attributable to non-controlling interest ( 101,496 ) ( 670,539 ) Net loss attributable to controlling shareholders of the Company. $ ( 22,996,846 ) $ ( 28,257,830 ) Comprehensive loss Net loss $ ( 23,098,342 ) $ ( 28,928,369 ) Other comprehensive income - foreign currency 66,942 801,065 Comprehensive loss ( 23,031,400 ) ( 28,127,304 ) Less: Comprehensive loss attributable to non-controlling interest ( 79,051 ) ( 644,309 ) Comprehensive loss attributable to controlling shareholders of the Company. $ ( 22,952,349 ) $ ( 27,482,995 ) Loss per share Basic and diluted $ ( 1.09 ) $ ( 1.58 ) Weighted average number of common shares used in computation Basic and diluted 21,123,252 17,924,098 The accompanying notes are an integral part of these audited consolidated financial statements. F- 4 SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Preferred Stock Common Stock Additional paid-in Shares to be Accumulated Accumulated other comprehensive Noncontrolling Shares Amount Shares Amount capital cancelled deficit loss interest Total BALANCE, June 30, 2021(Restated) - $ - 15,132,113 $ 82,555,700 $ 2,334,962 $ - $ ( 34,321,762 ) $ ( 729,096 ) $ ( 7,415,631 ) $ 42,424,173 Issuance of common stock to private placement - - 2,328,807 5,961,911 - - - - - 5,961,911 Issuance of common stock to private investors - - 1,400,000 4,563,908 - - - - - 4,563,908 Stock based compensation to employee - - 1,620,000 6,044,400 - - - - - 6,044,400 Stock based compensation to consultants - - 900,000 4,020,222 - - - - - 4,020,222 Cashless exercise of stock warrants - - 599,413 - - - - - - - Warrant repurchase - - - ( 7,948,000 ) - - - - - ( 7,948,000 ) Warrant exercise - - 264,000 929,550 - - - - - 929,550 Disposal of VIE and subsidiaries - - - - - - 5,919,050 5,919,050 Foreign currency translation - - - - - - - 774,835 26,230 801,065 Net loss - - - - - - ( 28,257,830 ) - ( 670,539 ) ( 28,928,369 ) BALANCE, June 30, 2022 - $ - 22,244,333 $ 96,127,691 $ 2,334,962 $ - $ ( 62,579,592 ) $ 45,739 $ ( 2,140,890 ) $ 33,787,910 Stock based compensation to consultants - - - 329,777 - - - - - 329,777 Cancellation of stock compensation - - ( 1,000,000 ) - - - - - - - Cancellation of shares due to settlement - - ( 3,528,807 ) ( 2,125,420 ) - ( 200,000 ) - - - ( 2,125,420 ) Foreign currency translation - - - - - - - 44,497 22,445 66,942 Net loss - - - - - - ( 22,996,846 ) - ( 101,496 ) ( 23,098,342 ) BALANCE, June 30, 2023 - - 17,715,526 94,332,048 2,334,962 ( 200,000 ) ( 85,576,438 ) 90,236 ( 2,219,941 ) 8,960,867 The accompanying notes are an integral part of these audited consolidated financial statements. F- 5 SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended June 30, 2023 2022 Operating Activities Net loss $ ( 23,098,342 ) $ ( 28,928,369 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 329,778 10,064,622 Depreciation and amortization 164,348 533,638 Non-cash lease expense 351,005 611,022 Provision for doubtful accounts, net 2,827,511 1,613,504 Impairment loss of fixed assets and intangible asset 33,469 1,006,305 Gain on disposal of ROU ( 177,970 ) - (Gain) loss on disposal of fixed assets ( 12,926 ) 147,154 Loss on disposal of subsidiaries 42,191 6,131,616 Impairment loss of investment 128,369 - Impairment loss of cryptocurrencies 18,279 170,880 Investment loss from unconsolidated subsidiary 34,459 47,181 Changes in assets and liabilities Accounts receivable 28,362 ( 39,669 ) Other receivables 228,593 1,418,393 Advances to suppliers – third parties ( 96,941 ) 543,321 Advances to suppliers – related party 6,153,546 ( 34,081,129 ) Prepaid expenses and other current assets 113,866 ( 24,463 ) Other long-term assets – deposits 418 ( 123,869 ) Deferred revenue ( 6,888,971 ) 34,047,696 Refund payable ( 13,000,000 ) 13,000,000 Accounts payable ( 10,948 ) 24,967 Taxes payable ( 114,845 ) 94,393 Lease liabilities ( 564,813 ) ( 633,376 ) Accrued expenses and other current liabilities ( 131,843 ) 294,253 Net cash (used in) provided by operating activities ( 33,643,405 ) 5,918,070 Investing Activities Acquisition of property and equipment ( 35,588 ) ( 874,518 ) Proceeds from disposal of property and equipment 90,956 - Loan receivable – related parties 510,087 ( 573,252 ) Investment in unconsolidated entity - ( 210,010 ) Advance to related parties ( 74,934 ) ( 1,923,896 ) Repayment from related parties 283,771 - Amount paid to Goalowen ( 3,000,000 ) - Net cash provided by (used in) investing activities ( 2,225,708 ) ( 3,581,676 ) Financing Activities Proceeds from issuance of preferred stock - - Proceeds from issuance of common stock - 10,525,819 Warrant exercise - 929,550 Proceeds from convertible notes - 10,000,000 Repayment of convertible notes - ( 5,000,000 ) Warrant repurchase - ( 7,948,000 ) Repayment of loan payable - ( 155,405 ) Payment of legal settlement to cancel shares ( 2,125,420 ) - Net cash (used in) provided by financing activities ( 2,125,420 ) 8,351,964 Effect of exchange rate fluctuations on cash ( 448,593 ) 307,607 Net (decrease) increase in cash ( 38,443,126 ) 10,995,965 Cash at beginning of year 55,833,282 44,837,317 Cash at end of year $ 17,390,156 $ 55,833,282 Supplemental information Income taxes paid $ - $ - Interest paid $ - $ 2,404 Non-cash transactions of operating and investing activities Initial recognition of right-of-use assets and lease liabilities $ - $ 1,523,433 The accompanying notes are an integral part of these audited consolidated financial statements. F- 6 SINGULARITY FUTURE TECHNOLOGY, LTD. AND AFFILIATES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. ORGANIZATION AND NATURE OF BUSINESS The Company is a global logistics integrated solution provider that was incorporated in the United States in 2001. On September 18, 2007, the Company amended its Articles of Incorporation and Bylaws to merge into a new corporation, Sino-Global Shipping America, Ltd. in Virginia. The Company primarily focuses on providing logistics and support to businesses in the Peoples’ Republic of China (“PRC”) and the United States. On January 3, 2022, the Company changed its corporate name from Sino-Global Shipping America, Ltd. to Singularity Future Technology Ltd. to reflect its expanded operations into the digital assets business. The Company conducts its business primarily through its wholly-owned subsidiaries in the PRC (including Hong Kong) and the United States, where the majority of its clients are located. For the twelve months ended June 30, 2023, the Company operated in two segments: (1) freight logistics services, which were operated by its subsidiaries in both the United States and PRC, and (2) the sale of crypto-mining machines, which were operated by its subsidiaries in the United States. On Feb 27, 2023, Ningbo Saimeinuo Supply Chain Management Ltd. changed its name to Ningbo Saimeinuo Web Technology Ltd. On March 30, 2023, the board of directors of the Company authorized the Company to conduct an e-commerce business in China. The outbreak of the novel coronavirus (COVID-19) starting in late January 2020 in the PRC spread rapidly to many parts of the world. In March 2020, the World Health Organization declared the COVID-19 as a pandemic and has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in China and the U.S. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of the Company’s business operations and its workforce are concentrated in China and the U.S., the Company’s business, results of operations, and financial condition have been adversely affected. In early December 2022, Chinese government eased the strict control measures for COVID-19, which led to a surge in increased infections and disruption in our business operations. Any future impact of COVID-19 on our operating results in China 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. F- 7 As of June 30, 2023, the Company’s subsidiaries included the following: Name Background Ownership Sino-Global Shipping New York Inc. (“SGS NY”) ● ● ● A New York Corporation Incorporated on May 03, 2013 Primarily engaged in freight logistics services 100% owned by the Company Sino-Global Shipping HK Ltd. (“SGS HK”) ● ● ● A Hong Kong Corporation Incorporated on September 22, 2008 No material operations 100% owned by the Company Thor Miner Inc. (“Thor Miner”) ● ● ● A Delaware Corporation Incorporated on October 13, 2021 Primarily engaged in sales of crypto mining machines 51% owned by the Company Trans Pacific Shipping Ltd. (“Trans Pacific Beijing”) ● ● ● A PRC limited liability company Incorporated on November 13, 2007. Primarily engaged in freight logistics services 100% owned the Company Trans Pacific Logistic Shanghai Ltd. (“Trans Pacific Shanghai”) ● ● ● A PRC limited liability company Incorporated on May 31, 2009 Primarily engaged in freight logistics services 90% owned by Trans Pacific Beijing Ningbo Saimeinuo Web Technology Ltd. (“SGS Ningbo”) ● ● ● A PRC limited liability company Incorporated on September 11,2017 Primarily engaged in freight logistics services 100% owned by SGS NY Blumargo IT Solution Ltd. (“Blumargo”) ● ● ● A New York Corporation Incorporated on December 14, 2020 No material operations 100% owned by SGS NY Gorgeous Trading Ltd (“Gorgeous Trading”) ● ● ● A Texas Corporation Incorporated on July 01, 2021 Primarily engaged in warehouse related services 100% owned by SGS NY Brilliant Warehouse Service Inc. (“Brilliant Warehouse”) ● ● ● A Texas Corporation Incorporated on April 19,2021 Primarily engaged in warehouse house related services 51% owned by SGS NY Phi Electric Motor In. (“Phi”) ● ● ● A New York Corporation Incorporated on August 30, 2021 No operations 51% owned by SGS NY SG Shipping & Risk Solution Inc(“SGSR”) ● ● ● A New York Corporation Incorporated on September 29, 2021 No material operations 100% owned by the Company SG Link LLC (“SG Link”) ● ● ● A New York Corporation Incorporated on December 23, 2021 No operations 100% owned by SG Shipping & Risk Solution Inc on January 25, 2022 F- 8 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. Prior to December 31, 2021, Sino-Global Shipping Agency Ltd. (“Sino-China”) was considered a Variable Interest Entity (“VIE”), with the Company as the primary beneficiary. The Company, through Trans Pacific Beijing, entered into certain agreements with Sino-China, pursuant to which the Company received 90 % of Sino-China’s net income. As a VIE, Sino-China’s revenues were included in the Company’s total revenues, and any income/loss from operations was consolidated with that of the Company. Because of contractual arrangements between the Company and Sino-China, the Company had a pecuniary interest in Sino-China that required consolidation of the financial statements of the Company and Sino-China. The Company has consolidated Sino-China’s operating results in accordance with Accounting Standards Codification (“ASC”) 810-10, “Consolidation”. The agency relationship between the Company and Sino-China and its branches was governed by a series of contractual arrangements pursuant to which the Company had substantial control over 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 dissolved its subsidiary Sino-Global Shipping Australia Pty Ltd. and canceled its registration with the State Administration for Industry and Commerce of the People’s Republic of China on November 9, 2022. and recorded the disposal loss of $ 0.04 million for the year ended June 30, 2023. F- 9 (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 accounts receivable, other receivables, other current assets, and current liabilities 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, fair value of stock-based compensation, cost of revenues, allowance for doubtful accounts, impairment loss, deferred income taxes, income tax expense and the useful lives of property and equipment. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. 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”), its subsidiary Sino-Global Shipping Australia Pty Ltd., reports its financial positions and results of operations in Australian dollar (“AUD”), its subsidiary Sino-Global Shipping (HK), Ltd. reports its financial positions and results of operations in Hong Kong dollar (“HKD”). The accompanying consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the fixed 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 People’s Bank of China 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. F- 10 The exchange rates for the years ended June 30, 2023 and 2022 are as follows: June 30, 2023 June 30, 2022 June 30 Foreign currency Balance Sheet Balance Sheet 2023 Profits/Loss 2022 Profits/Loss 1USD: RMB 7.2537 6.6994 6.9501 6.4544 1USD: AUD 1.5012 1.4484 1.4861 1.3788 1USD: HKD 7.8366 7.8474 7.8379 7.8045 (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, Australia, Hong Kong and the U.S. As of June 30, 2023 and June 30, 2022, cash balances of $ 183,510 and $ 143,044 , respectively, were maintained at financial institutions in the PRC. $ 74,533 and $ nil of these balances are not covered by insurance as the deposit insurance system in China only insured each depositor at one bank for a maximum of approximately $ 70,000 (RMB 500,000 ). As of, June 30, 2023 and June 30, 2022, cash balances of $ 919,990 and $ 55,636,636 , respectively, were maintained at U.S. financial institutions. $ 450,636 and $ 53,869,575 of these balances are not covered by insurance, as each U.S. account was insured by the Federal Deposit Insurance Corporation or other programs subject to $ 250,000 limitations. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately $ 64,000 ) if the bank with which an individual/a company holds its eligible deposit fails. As of June 30, 2023 and June 30, 2022, cash balances of $ 16,285,067 and $ 51,701 , respectively, were maintained at financial institutions in Hong Kong, and $ 16,216,393 and $ nil of these balances are not covered by insurance. As of June 30, 2023 and June 30, 2022, cash balances of $ nil and $ 192 , respectively, were maintained at Australia financial institutions, and were insured as the Australian government guarantees deposits up to AUD 250,000 (approximately $ 172,000 ). As of June 30, 2023 and June 30, 2022, amount of deposits the Company had covered by insurance amounted to $ 647,004 and $ 1,961,997 , respectively. (f) Cryptocurrencies Cryptocurrencies, mainly bitcoin, are included in current assets in the accompanying consolidated balance sheets. Cryptocurrencies purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for as other income for the year ended June 30, 2022. No other income was generated for the year ended June 30, 2023. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. (g) Receivables and Allowance for Doubtful Accounts Accounts receivable are presented at net realizable value. The Company maintains allowances for doubtful accounts and for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual receivable balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balances, customers’ historical payment history, their current credit-worthiness and current economic trends. Receivables are generally considered past due after 180 days. The Company reserves 25%-50% of the customers balance aged between 181 days to 1 year, 50%-100% of the customers balance over 1 year and 100% of the customers balance over 2 years. Accounts receivable are written off against the allowances only after exhaustive collection efforts. As the Company has focused its development on the shipping management segment, its customer base consists of more smaller privately owned companies that will pay more timely than state owned companies. 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 bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts 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. F- 11 (h) Property and Equipment, net Property and equipment are stated at historical cost less accumulated depreciation. Historical cost comprises its purchase price and any directly attributable costs of bringing the assets to its working condition and location for its intended use. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Buildings 20 years Motor vehicles 3 - 10 years Computer and office equipment 1 - 5 years Furniture and fixtures 3 - 5 years System software 5 years Leasehold improvements Shorter of lease term or useful lives Mining equipment 3 years The carrying value of a long-lived asset is considered impaired by the Company when the anticipated undiscounted cash flows from such asset is less than its carrying value. If impairment is identified, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved or based on independent appraisals. The Company inquired with the car dealer and obtained the following market value for similar vehicles and provide impairments to carrying value of fixed assets of $ 33,469 . And no impairments were recorded for the years ended June 30, 2022. (i) Investments in unconsolidated entity Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has voting shares representing 20 % to 50 %, and other factors, such as representation on the board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the equity method investments are recorded as reductions in the cost of such investments. The Company generally considers an ownership interest of 20 % or higher to represent significant influence. The Company accounts for the investments in entities over which it has neither control nor significant influence, and no readily determinable fair value is available, using the investment cost minus any impairment, if necessary. Investments are evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investment is less than its carrying value. An impairment loss is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investment; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. On January 10, 2020, the Company entered into a cooperation agreement with Mr. Shanming Liang, a shareholder of the Company, to set up a joint venture in New York named LSM Trading Ltd., (“LSM”) in which the Company holds a 40 % equity interest. Mr. Shanming Liang subsequently transferred his shares to Guanxi Golden Bridge Industry Group Co., Ltd in October 2021. For the year ended June 30, 2023, the Company invested $ 210,000 and recorded $ 81,640 investment loss in LSM. The joint venture has not started its operations due to COVID-19.As we could not get the financial information of the investee, we determined to provide full impairment of our equity investment. The Company recorded $ 128,360 impairment loss for the year ended June 30, 2023. F- 12 (j) Convertible notes The Company evaluates its convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives. The result of this accounting treatment is that the fair value of the embedded derivative is recorded at fair value each reporting period and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. (k) 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 provided transportation services which included mainly shipping services. In fiscal year 2021, the Company also provided shipping agency and management services The Company derived transportation revenue from sales contracts with its customers with revenues being recognized upon performance of services. Sales price to the customer was fixed upon acceptance of the sales contract and there was no separate sales rebate, discount, or other incentive. The Company’s revenues were recognized at a point in time after all performance obligations were satisfied. For the Company’s warehouse services, which are included in the freight logistic services, the Company’s contracts provide the customer an integrated service that includes two or more services, including but not limited to warehousing, collection, first-mile delivery, drop shipping, customs clearance packaging, etc. Accordingly, the Company generally identifies one performance obligation in its contracts, which is a series of distinct services that remain substantially the same over time and possess the same pattern of transfer. Revenue is recognized over the period in which services are provided under the terms of the Company’s contractual relationships with its clients. The transaction price is based on the amount specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration in a contract represents facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract. The variable consideration is comprised of cost reimbursement determined based on the costs incurred. Revenue relating to variable pricing is estimated and included in the consideration if it is probable that a significant revenue reversal will not occur in the future. The estimate of variable consideration is determined by the expected value or most likely amount method and factors in current, past and forecasted experience with the customer. Customers are billed based on terms specified in the revenue contract and they pay us according to approved payment terms. Revenue for the above services is recognized on a gross basis when the Company controls the services as it has the obligation to (i) provide all services (ii) bear any inventory risk for warehouse services. In addition, the Company has control to set its selling price to ensure it would generate profit for the services. For the year ended June 30, 2023, the Company also engaged in sales of cryptocurrency mining equipment. On January 10, 2022, the Company’s joint venture, Thor Minor, entered into a Purchase and Sale Agreement with SOS Information Technology New York Inc. (the “Buyer”). Pursuant to the Purchase and Sale Agreement, Thor agreed to sell and the Buyer agreed to purchase certain cryptocurrency mining equipment. F- 13 The Company’s performance obligation is to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control of products or services are transferred to customers. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in 606-10-55-39. The Company considers this guidance in conjunction with the terms in the Company’s arrangements with both suppliers and customers. In general, revenue is recognized on a gross basis when the Company controls the products as it has the obligation to (i) fulfill the products delivery and custom clearance (ii) bear any inventory risk as legal owners. In addition, when establishing the selling prices for delivery of the resale products, the Company has control to set its selling price to ensure it would generate profit for the products delivery arrangements. If the Company is not responsible for provision of product and does not bear inventory risk, the Company recorded revenue on a net basis. For the year ended June 30, 2023, the Company recognized the sale of cryptocurrency mining equipment based on net basis as the manufacturer of the products are responsible for shipping and custom clearing for the products. Contract balances The Company records receivables related to revenue when the Company has an unconditional right to invoice and receive payment. Deferred revenue consists primarily of customer billings made in advance of performance obligations being satisfied and revenue being recognized. Contract balance amounted to $ 66,531 and $ 6,955,577 for the year ended June 30, 2023 and 2022, respectively. Refund payable amounted to $ nil and $ 13,000,000 for the year ended June 30, 2023 and 2022, respectively as a result of termination of the contract with customer (See Note 21 for details). The Company’s disaggregated revenue streams are described as follows: For the Years Ended June 30, June 30, 2023 2022 Sale of crypto mining machines $ 732,565 $ 157,800 Shipping agency and management services - - Freight logistics services 3,806,158 3,830,615 Total $ 4,538,723 $ 3,988,415 Disaggregated information of revenues by geographic locations are as follows: For the Years Ended June 30, June 30, 2023 2022 PRC $ 2,529,449 $ 2,982,691 U.S. 2,009,274 1,005,724 Total revenues $ 4,538,723 $ 3,988,415 F- 14 (l) 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 7 % based on the duration of lease terms. 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 use 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. (m) 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 no uncertain tax positions as of June 30, 2023 and 2022. Income tax returns for the years prior to 2018 are no longer subject to examination by U.S. tax authorities. F- 15 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 25 %. Sino-China and Trans Pacific Beijing were incorporated in the PRC and are subject to the Enterprise Income Tax Laws of the PRC. 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, including Trans Pacific, and the VIE, and Sino-China, are subject to VAT at rates ranging from 9 % to 13 %. Entities that are VAT general taxpayers are allowed to offset qualified VAT paid to suppliers against their VAT liability. Net VAT liability is recorded in taxes payable on the consolidated balance sheets. In addition, under the PRC regulations, the Company’s PRC subsidiaries and VIE are required to pay city construction tax ( 7 %) and education surcharges ( 3 %) based on the net VAT payments. (n) Earnings (loss) per Share Basic earnings (loss) per share is 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, 2023 and 2022, there was no dilutive effect of potential shares of common stock of the Company because the Company generated net loss. (o) 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 stockholders’ 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. (p) Stock-based Compensation The Company accounts for stock-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company records stock-based compensation expense at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. F- 16 Valuations of stock-based compensation are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. (q) 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. (r) Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s condensed consolidated financial statements properly reflect the change. In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this ASU address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses standard. The new effective date for these preparers is for fiscal years beginning after July 1, 2023, including interim periods within those fiscal years. The Company has not early adopted this update and it will become effective on July 1, 2023 assuming the Company will remain eligible to be smaller reporting company. The Company is currently evaluating the impact of this new standard on the Company’s consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. The amendments in this Update to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 is effective for the Company for annual and interim reporting periods beginning July 1, 2022. The Company adopted this new standard on July 1, 2021 on its accounting for the convertible notes issued in December 2021. F- 17 In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables—Non-refundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning July 1, 2021. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-10, “Codification Improvements”. The amendments in this Update represent changes to clarify the Codification or correct unintended application of guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in this Update affect a wide variety of Topics in the Codification and apply to all reporting entities within the scope of the affected accounting guidance. ASU 2020-10 is effective for annual periods beginning after July 1, 2021 for public business entities. The amendments in this Update should be applied retrospectively. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. On March 28, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-01, Leases (Topic 842): Common Control Arrangements . The amendments in ASU 2023-01 improve current GAAP by clarifying the accounting for leasehold improvements associated with common control leases, thereby reducing diversity in practice. Additionally, the amendments provide investors and other allocators of capital with financial information that better reflects the economics of those transactions. The new standard is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. On June 30, 2022, FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security’s unit of account. The new standard is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. Note 3. DISPOSAL OF VIE AND SUBSIDIAIRIES On December 31, 2021, the Company entered into a series of agreements to terminate 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 (“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. In addition, the Company dissolved its subsidiary Sino-Global Shipping LA, Inc. On March 14, 2022, the company discontinued its subsidiary Sino-Global Shipping Canada, Inc., no gain or loss was recognized in the deconsolidation. In November 2022, the Company dissolved its subsidiary Sino-Global Shipping Australia Pty Ltd., and recorded the disposal loss of $ 0.04 million for the year ended June 30, 2023. F- 18 Since the disposal did not represent any strategic change of the Company’s operation, the disposal was not presented as discontinued operations. Net assets of the entities disposed and loss on disposal was as follows: For the Year Ended June 30, 2023 VIE Subsidiaries Total Total current assets $ - $ 376 $ 376 Total other assets - 5,392 5,392 Total assets - 5,768 5,769 Total current liabilities - - - Total net assets - 5,768 5,769 Exchange rate effect - 36,423 36,422 Total loss on disposal $ - $ 42,191 $ 42,191 For the Year Ended June 30, 2022 VIE Subsidiaries Total Total current assets $ 83,573 $ 20,898 $ 104,471 Total other assets 8,723 - 8,723 Total assets 92,296 20,898 113,194 Total current liabilities 41,608 1,100 42,708 Total net assets 50,688 19,798 70,486 Noncontrolling interests 5,919,050 - 5,919,050 Exchange rate effect 142,080 - 142,080 Total loss on disposal $ 6,111,818 $ 19,798 $ 6,131,616 F- 19 Note 4. CRYPTOCURRENCIES The following table presents additional information about cryptocurrencies: June 30, June 30, 2023 2022 Beginning balance $ 90,458 $ 261,338 Receipt of cryptocurrencies from mining services - - Impairment loss ( 18,279 ) ( 170,880 ) Ending balance $ 72,179 $ 90,458 Impairment loss amounted to $ 18,279 and $ 170,880 for the years ended June 30, 2023 and 2022. Note 5. ACCOUNTS RECEIVABLE, NET The Company’s net accounts receivable are as follows: June 30, June 30, 2023 2022 Trade accounts receivable $ 3,487,293 $ 3,521,491 Less: allowances for doubtful accounts ( 3,288,740 ) ( 3,413,110 ) Accounts receivable, net $ 198,553 $ 108,381 Movement of allowance for doubtful accounts are as follows: June 30, June 30, 2023 2022 Beginning balance $ 3,413,110 $ 3,475,769 Provision for doubtful accounts, net of recovery - 257 Write-off/recovery - - Exchange rate effect ( 124,370 ) ( 62,916 ) Ending balance $ 3,288,740 $ 3,413,110 For the years ended June 30, 2023 and 2022, the provision for doubtful accounts was $ nil and $ 257 , respectively. F- 20 Note 6. OTHER RECEIVABLES, NET The Company’s other receivables are as follows: June 30, 2023 June 30, 2022 Advances to customers* $ 7,060,456 $ 3,943,547 Employee business advances 10,570 23,768 Total 7,071,026 3,967,315 Less: allowances for doubtful accounts ( 6,994,212 ) ( 3,942,258 ) Other receivables, net $ 76,814 $ 25,057 * In fiscal year 2019 and 2020, the Company entered into contracts with several customers where the Company’s services included both freight charge and cost of commodities to be shipped to customers’ designated locations. The terms of the contracts required the Company to prepay the commodities. The Company prepaid for the commodities and reclassified the payment as other receivables as the payments were paid on behalf of the customers. These payments will be repaid to the Company when either the contract is executed or the contracts are terminated by either party. The customers were negatively impacted by the pandemic and required additional time to execute the contracts, due to significant uncertainty on whether the delayed contracts will be executed timely, the Company had provided full allowance due to contract delay during the fiscal year ended June 30, 2020. The Company subsequently recovered and $ 1,934,619 in fiscal year 2022. On March 23, 2023, SG Shipping & Risk Solution Inc. an indirect wholly owned subsidiary of SGLY entered into an operating income right transfer contract with Goalowen Inc. pursuant to which Goalowen agreed to transfer its rights to receive income from operating a certain tuna fishing vessel to SG Shipping for $ 3 million. Such contract was signed by the former COO Jing Shan without the Board’s authorization. On May 5, 2023, Ms. Shan made a wire transfer of $ 3 million to Goalowen without the Board’s authorization,. It was recorded as an Advance to customers. As of June 30, 2023, the Company evaluated the collection possibility, and decided to provide a 100 % allowance provision in the amount of $ 3 million. Movement of allowance for doubtful accounts are as follows: June 30, June 30, 2023 2022 Beginning balance $ 3,942,258 $ 6,024,266 Increase 3,000,000 Recovery for doubtful accounts - ( 1,934,619 ) Less: write-off Exchange rate effect 51,954 ( 147,389 ) Ending balance $ 6,994,212 $ 3,942,258 F- 21 Note 7. ADVANCES TO SUPPLIERS The Company’s advances to suppliers – third parties are as follows: June 30, June 30, 2023 2022 Freight fees (1) $ 428,032 $ 336,540 Less: allowances for doubtful accounts ( 300,000 ) ( 300,000 ) Advances to suppliers-third parties, net $ 128,032 $ 36,540 (1) The advanced freight fee is the Company’s prepayment made for various shipping costs for shipments from July 2022 to June 2023. The Company provided allowance of $ 300,000 for the year ended June 30, 2022, and there was no change in the fiscal year 2023. Note 8. PREPAID EXPENSES AND OTHER CURRENT ASSETS The Company’s prepaid expenses and other assets are as follows: June 30, June 30, 2023 2022 Prepaid income taxes $ 11,929 $ 11,929 Other (including prepaid professional fees, rent, listing fees) 240,118 353,984 Total $ 252,047 $ 365,913 Note 9. OTHER LONG-TERM ASSETS – DEPOSITS, NET The Company’s other long-term assets – deposits are as follows: June 30, June 30, 2023 2022 Rental and utilities deposits $ 244,923 $ 246,581 Freight logistics deposits (1) - - Total other long-term assets - deposits $ 244,923 $ 246,581 Less: allowances for deposits ( 8,157 ) ( 8,832 ) Other long-term assets- deposits, net $ 236,766 $ 237,749 (1) On March 8, 2018, the Company entered into contract with BaoSteel Resources Co., Ltd (“BaoSteel”) to provide supply chain services for BaoSteel. The contract required the Company to pay BaoSteel approximately $ 3.1 million (RMB 20 million) of deposit. This refundable deposit is to cover any possible loss of merchandise, as well as any non-performance on the part of the Company and its vendors. The restricted deposit is expected be repaid to the Company when either the contract term expires by March 2023 or the contract is terminated by either party. Due to impact of COVID-19 and recent rising freight costs, the Company has not been able to fulfill the contract to BaoSteel and expect it may not be able to collect the full deposit, as such the Company provided full allowance for the $ 3.1 million deposit with BaoSteel in fiscal year 2021. During fiscal year 2022, the Company wrote off the $ 3.1 million deposit. F- 22 Movements of allowance for deposits are as follows: June 30, June 30, 2023 2022 Beginning balance $ 8,832 $ 3,177,127 Allowance for deposits - - Less: Write-off - ( 3,173,408 ) Exchange rate effect ( 675 ) 5,113 Ending balance $ 8,157 $ 8,832 Note 10. PROPERTY AND EQUIPMENT, NET The Company’s net property and equipment are as follows: June 30, June 30, 2023 2022 Motor vehicles 542,904 715,571 Computer equipment 113,097 117,397 Office equipment 67,699 67,139 Furniture and fixtures 533,634 390,093 System software 103,038 111,562 Leasehold improvements 766,294 829,687 Mining equipment 922,438 922,438 Total 3,049,104 3,153,887 Less: Impairment reserve ( 1,233,521 ) ( 1,236,282 ) Less: Accumulated depreciation and amortization ( 1,389,240 ) ( 1,368,649 ) Property and equipment, net $ 426,343 $ 548,956 Depreciation and amortization expenses for the years ended June 30, 2023 and 2022 were $ 164,348 and $ 533,638 , respectively. Impairment loss amounted to $ 33,470 and $ 410,552 for the years ended June 30, 2023 and 2022, respectively. F- 23 Note 11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES June 30, June 30, 2023 2022 Salary and reimbursement payable $ 117,648 $ 305,423 Professional fees and other expense payable 97,563 305,264 Interest payable 386,378 136,379 Others 35,105 9,206 Total $ 636,694 $ 756,272 Note 12. CONVERTIBLE NOTES On December 19, 2021, the Company issued two Senior Convertible Notes (the “Convertible Notes”) to two non-U.S. investors for an aggregate purchase price of $ 10,000,000 . The Convertible Notes bear an interest at 5 % annually and may be converted into shares of the Company’s common stock, no par value per share at a conversion price of $ 3.76 per share, the closing price of the common stock on December 17, 2021. The Convertible Notes are unsecured senior obligations of the Company, and the maturity date of the Convertible Notes is December 18, 2023. The Company may repay any portion of the outstanding principal, accrued and unpaid interest, without penalty for early repayment. The Company may make any repayment of principal and interest in (a) cash, (b) common stock at the conversion price or (c) a combination of cash or common stock at the conversion price. The investors may convert any conversion amount into common stock on any date beginning on June 19, 2022. The Company evaluated the convertible notes agreement under ASC 815 Derivatives and Hedging (“ASC 815”) amended by ASU 2020-06. ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. Based on terms of the convertible notes agreements, the Company’s notes are convertible for a fixed number of shares and do not require the Company to net settle. None of the embedded terms required bifurcation and liability classification. On March 8, 2022, the Company issued amended and restated the terms of the notes and issued the Amended and Restated Senior Convertible Notes (the “Amended and Restated Convertible Notes”) to the investors to change the principal amount of the Convertible Notes to an aggregate principal amount of $ 5,000,000 . There other terms of the notes remained unchanged. The terms of the Amended and Restated Convertible Notes are the same as that of the original Convertible Notes, except for the reduced principal amount and the waiver of interest for the $ 5,000,000 payment made on March 8, 2022. For the year ended June 30, 2023 and 2022, interest expenses related to the aforementioned convertible notes amounted to $ 250,000 and $ 132,977 , respectively. F- 24 Note 13. LEASES The Company determines if a contract contains a lease at inception which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s leases are classified as operating leases. The Company has several lease agreements with lease terms ranging from two to five years . As of June 30, 2023, ROU assets and lease liabilities amounted to $ 381,982 and $ 576,032 (including $ 330,861 from lease liabilities current portion and $ 245,171 from lease liabilities non-current portion), respectively and weighted average discount rate was approximately 10.61 %. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration and the weighted average remaining lease terms are 2.15 years. For the years ended June 30, 2023 and 2022, rent expense amounted to approximately $ 549,842 and $ 779,841 , respectively. Impairment loss amounted to $ 371,606 and $ 595,753 for the years ended June 30, 2023 and 2022. The Company terminated several lease agreements and resulting in a gain on disposal of ROU assets of $ 177,970 for the years ended June 30, 2023. The five-year maturity of the Company’s lease obligations is presented below: Twelve Months Ending June 30, Operating Lease Amount 2024 $ 382,291 2025 147,149 2026 114,523 2027 9,567 Total lease payments 653,530 Less: Interest 77,498 Present value of lease liabilities $ 576,032 Note 14. EQUITY After the close of the stock market on July 7, 2020, the Company effected a l-for-5 reverse stock split of its common stock in order to satisfy continued listing requirements of its common stock on the NASDAQ Capital Market. The reverse stock split was approved by the Company’s board of directors and stockholders and was intended to allow the Company to meet the minimum share price requirement of $ 1.00 per share for continued listing on the NASDAQ Capital Market. As a result, all common stock share amounts included in this filing have been retroactively reduced by a factor of five, and all common stock per share amounts have been increased by a factor of five. Amounts affected include common stock outstanding, including those that have resulted from the stock options, and warrants exercisable for common stock. F- 25 Stock issuances: On September 17, 2020, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended, pursuant to which the Company sold an aggregate of 720,000 shares of the Company’s common stock, no par value, and warrants to purchase 720,000 shares at a per share purchase price of $ 1.46 . The net proceeds to the Company from such offering were approximately $ 1.05 million. The warrants became exercisable on March 16, 2021 at an exercise price of $ 1.825 per share. The warrants may also be exercised on a cashless basis if at any time after March 16, 2021, there is no effective registration statement registering, or no current prospectus available for, the resale of the warrant shares. The warrants will expire on March 16, 2026. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the Company’s common stock trades at or above $4.38 for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 60,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date. On November 2 and November 3, 2020, the Company issued an aggregate of 860,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), each convertible into one share of common stock, no par value, of Company, upon the terms and subject to the limitations and considerations set forth in the Certificate of Designation of the Series A Preferred Stock, and warrants to purchase up to 1,032,000 shares of common stock. The purchase price for each share of Series A Preferred Stock and accompanying warrants is $ 1.66 . The net proceeds to the Company from this offering was approximately $ 1.43 million, not including any proceeds that may be received upon cash exercise of the warrants. The warrants became exercisable six (6) months following the date of issuance at an exercise price of $ 1.99 per share. The warrants may also be exercised on a cashless basis if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the warrant Shares. The warrants will expire five and a half ( 5.5 ) years from the date of issuance. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the closing price of the common stock equals or exceeds $ 5.97 for twenty (20) consecutive trading days, provided, among other things, that the shares issuable upon exercise of the warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 60,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date. In February 2021, the shareholders approved the preferred shareholders’ right to convert 860,000 shares of Series A Preferred Stock into 860,000 shares of common stock in the Company’s annual meeting of shareholders. As of June 30, 2022, the Series A Preferred Stock have been fully converted to common stock on a one-for-one basis. On December 8, 2020, the Company entered into a securities purchase agreement with certain investors thereto pursuant to which the Company sold to the investors, and the investors purchased from the Company, in a registered direct offering, an aggregate of 1,560,000 shares of the common stock of the Company, no par value per share, at a purchase price of $ 3.10 per share, and warrants to purchase up to an aggregate of 1,170,000 shares of common stock of the Company at an exercise price of $ 3.10 per share, for aggregate gross proceeds to the Company of $ 4,836,000 . The warrants are initially exercisable beginning on December 11, 2020 and will expire three and a half ( 3.5 ) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. F- 26 On January 27, 2021, the Company entered into a securities purchase agreement with certain non-U.S. investors thereto pursuant to which the Company sold to the investors, and the investors purchased from the Company, an aggregate of 1,086,956 shares of common stock, no par value, and warrants to purchase 5,434,780 shares. The net proceeds to the Company from this offering were approximately $ 4.0 million. The purchase price for each share of common stock and five warrants is $ 3.68 , and the exercise price per warrant is $ 5.00 . The warrants became exercisable at any time during the period beginning on or after July 27, 2021 and ending on or prior on January 27, 2026 but not thereafter; provided, however, that the total number of the Company’s issued and outstanding shares of common stock, multiplied by the NASDAQ official closing bid price of the common stock shall equal or exceed $ 0.3 billion for a three consecutive month period prior to an exercise. 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 1,998,500 shares of the common stock of the Company, no par value per share, at a purchase price of $ 6.805 per share. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, were approximately $ 12.4 million. The Company also sold to the investors warrants to purchase up to an aggregate of 1,998,500 shares of common stock at an exercise price of $ 6.805 per share. The warrants are exercisable upon issuance and expire five and a half ( 5.5 ) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. 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 3,655,000 shares of the common stock of the Company, no par value per share, at a purchase price of $ 7.80 per share. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, were approximately $ 26.1 million. The Company also sold to the investors warrants to purchase up to an aggregate of 3,655,000 shares of common stock at an exercise price of $ 7.80 per share. The warrants are exercisable upon issuance and expire five and a half ( 5.5 ) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. 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 3,228,807 shares of common stock, no par value, and warrants to purchase 4,843,210 shares. The purchase price for each share of common stock and one and a half warrants was $ 3.26 , and the exercise price per warrant is $ 4.00 . The Company received net proceed of $ 10,525,819 and issued 3,228,807 shares and 4,843,210 warrants. In connection with the issuance, the Company issued 500,000 shares to a consultant in assisting the Company in finding potential investors. The warrants will be exercisable at any time during the Exercise Window. The “Exercise Window” means the period beginning on or after June 14, 2022 and ending on or prior to 5:00 p.m. (New York City time) on December 13, 2026 but not thereafter; provided, however, that the total number of the Company’s issued and outstanding shares of common stock, multiplied by the NASDAQ official closing bid price of the common stock shall equal or exceed $ 150,000,000 for a three consecutive month period prior to an exercise. 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 F- 27 On January 6, 2022, the Company entered into Warrant Purchase Agreements with certain warrant holders (the “Sellers”) pursuant to which the Company agreed to buy back an aggregate of 3,870,800 warrants (the “Warrants”) from the Sellers, and the Sellers agreed to sell the Warrants back to the Company. These Warrants were sold to these Sellers in three previous transactions that closed on February 11, 2021, February 10, 2021, and March 14, 2018. The purchase price for each Warrant is $ 2.00 . Following announcement of the Warrant Purchase Agreements on January 6, 2022, the Company agreed to repurchase an additional 103,200 warrants from other Sellers on the same terms as the previously announced Warrant Purchase Agreements. The aggregate number of warrants repurchased under the Warrant Purchase Agreements was 3,974,000 . On January 7, 2022, the Company wired the purchase price to each Seller. Each Seller has agreed to deliver the Warrant to the Company for cancellation as soon as practicable following the closing date, but in no event later than January 13, 2022. The Warrants are deemed cancelled upon the receipt by the Sellers of the purchase price. Following is a summary of the status of warrants outstanding and exercisable as of June 30, 2023 Warrants Weighted Average Exercise Price Warrants outstanding, as of June 30, 2022 12,191,824 $ 4.37 Issued Exercised Repurchased 　 　 Warrants outstanding, as of June 30, 2023 12,191,824 $ 4.37 　 　 Warrants exercisable, as of June 30, 2023 12,191,824 $ 4.37 Warrants Outstanding Warrants Exercisable Weighted Average Exercise Price Average Remaining Contractual Life 2018 Series A, 400,000 103,334 $ 8.75 1.21 years 2020 warrants, 2,922,000 181,000 $ 1.83 3.17 years 2021 warrants, 11,088,280 11,907,490 $ 4.94 4.06 years Stock-based compensation: By action taken as of August 13, 2021, the Board of Directors (the “Board”) of the Company and the Compensation Committee of the Board (the “Committee”) approved a one-time award of a total of 1,020,000 shares of the common stock under the Company’s 2014 Stock Incentive Plan (the “Plan”) to, including (i) a one-time stock award grant of 600,000 shares to Chief Executive Officer, Lei Cao, (ii) a one-time stock award grant of 200,000 shares to acting Chief Financial Officer, Tuo Pan, (iii) a one-time stock award grant of 160,000 shares to Board member, Zhikang Huang, (iv) a one-time stock award grant of 20,000 shares to Board member, Jing Wang, (v) a one-time stock award grant of 20,000 shares to Board member, Xiaohuan Huang, and (vi) a one-time stock award grant of 20,000 shares to Board member, Tieliang Liu. The shares were valued at an aggregate of $ 2,927,400 based on the grant date fair value of such shares. F- 28 On November 18, 2021, Mr. Jing Wang retired from his position as a member of the Board, the Chairperson of the Committee, a member of Nominating/Corporate Governance Committee, and a member of the Audit Committee. In connection with Mr. Wang’s retirement, the Company granted Mr. Wang 100,000 shares of common stock under the Company’s 2021 stock incentive plan, which shares were valued at $ 377,000 based on the grant date fair value. On February 4, 2022, the Company approved a one-time award of a total of 500,000 shares of common stock under the Company’s 2021 Stock Incentive Plan to certain executive officers of the Company, including Chief Executive Officer, Yang Jie ( 300,000 shares), Chief Operating Officer, Jing Shan ( 100,000 shares), and Chief Technology Officer, Shi Qiu ( 100,000 shares). The total fair value of the grants amounts to $ 2,740,000 based on the grant date share price of $ 5.48 . On February 16, 2022, the Company’s Board approved a consulting agreement pursuant to which the Company will pay the consultant a monthly fee of $ 10,000 and 100,000 shares of the Company’s common stock. The shares were valued at $ 7.42 at grant date with a grant date fair value of $ 742,000 to be amortized through October 31, 2022. Stock compensation expenses for this contract were $ 412,222 for the year ended June 30, 2023. In connection with the purchase order between SOSNY and Thor Miner (see note 2), the Company issued 800,000 restricted shares to Future Tech Business Consulting (“Future Tech”) pursuant to an Advisory Agreement under which Future Tech was to assist to the Company to find suitable buyers for cryptocurrency mining machines sold by Thor Miner. The shares were valued at approximately $ 3.6 million and the Company recorded the full amount as stock compensation expense for the year ended June 30, 2023. During the years ended June 30, 2023 and 2022, $ 329,778 and $ 10,064,622 were recorded as stock-based compensation expense, respectively. Stock Options: A summary of the outstanding options is presented in the table below: Options Weighted Average Exercise Price Options outstanding, as of June 30, 2022 2,000 $ 10.05 Granted Exercised Cancelled, forfeited or expired 　 　 Options outstanding, as of June 30, 2023 2,000 $ 10.05 　 　 Options exercisable, as of June 30, 2023 2,000 $ 10.05 Following is a summary of the status of options outstanding and exercisable as of June 30, 2023: Outstanding Options Exercisable Options Exercise Price Number Average Remaining Contractual Life Average Exercise Price Number Average Remaining Contractual Life $ years $ years F- 29 Note 15. NON-CONTROLLING INTEREST The Company’s non-controlling interest consists of the following: June 30, June 30, 2023 2022 Trans Pacific Logistics Shanghai Ltd. ( 1,522,971 ) ( 1,521,645 ) Thor ( 814,005 ) ( 486,942 ) Brilliant Warehouse Service, Inc. 117,035 ( 132,303 ) Total $ ( 2,219,941 ) $ ( 2,140,890 ) Note 16. COMMITMENTS AND CONTINGENCIES Contingencies From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. SOS Information Technology New York, Inc. (“SOSNY”), a company incorporated under the laws of State of New York and a wholly owned subsidiary of SOS Ltd., filed lawsuit in the New York State Supreme Court on December 9, 2022 against Thor Miner, Inc., which is Singularity’s joint venture (“Thor Miner”), the Company, and, together with Thor Miner, referred to as the “Corporate Defendants”), Lei Cao, Yang Jie, John F. Levy, Tieliang Liu, Tuo Pan, Shi Qiu, Jing Shan, and Heng Wang (jointly referred to as the “Individual Defendants”) (collectively, the Individual Defendants and the Corporate Defendants are the “Defendants”). SOSNY and Thor Miner entered into a January 10, 2022 Purchase and Sale Agreement (the “PSA”) for the purchase of $ 200,000,000 in crypto mining rigs, which SOSNY claims was breached by the Defendants. SOSNY and Defendants entered into a certain settlement agreement and general mutual release with an Effective Date of December 28, 2022 (“Settlement Agreement”). Pursuant to the Settlement Agreement, Thor Miner agreed to pay a sum of thirteen million in U.S. dollars ($ 13,000,000 ) (the “Settlement Payment”) to SOSNY in exchange for SOSNY dismissing the lawsuit with prejudice as to the settling Defendants and without prejudice as to all others. The full Settlement Payment was received by SOSNY on December 28, 2022. SOSNY dismissed the lawsuit with prejudice against the Company (and other Defendants) on December 28, 2022. The Company and Thor Miner further covenanted and agreed that if they receive additional funds from HighSharp (Shenzhen Gaorui) Electronic Technology Co., Ltd. (“HighSharp”) related to the PSA, they will promptly transfer such funds to SOSNY in an amount not to exceed forty million, five hundred sixty thousand, five hundred sixty-nine dollars ($ 40,560,569.00 ) (which is the total amount paid by SOSNY pursuant to the PSA less the price of the machines actually received by SOSNY pursuant to the PSA). The Settlement Payment and any payments subsequently received by SOSNY from HighSharp shall be deducted from the total amount of forty million, five hundred sixty thousand, five hundred sixty-nine dollars ($ 40,560,569.00 ) previously paid by, and now due and owing to SOSNY. In further consideration of the Settlement Agreement, Thor Miner agreed to execute and provide to SOSNY, within seven (7) business days after SOSNY’s receipt of the Settlement Payment, an assignment of all claims it may have against HighSharp or otherwise to the proceeds of the PSA. See Note 19 for further details. F- 30 Lawsuits in connection with the Securities Purchase Agreement On September 23, 2022, Hexin Global Limited and Viner Total Investments Fund filed a lawsuit against the Company and other defendants in the United States District Court for the Southern District of New York (the “Hexin lawsuit”). On December 5, 2022, St. Hudson Group LLC, Imperii Strategies LLC, Isyled Technology Limited, and Hsqynm Family Inc. filed a lawsuit against the Company and other defendants in the United States District Court for the Southern District of New York (the “St. Hudson lawsuit,” and together with the Hexin lawsuit, the “Investor Actions”). The plaintiffs in the Investor Actions are investors that entered into a securities purchase agreement (“Securities Purchase Agreement”) with the Company in late 2021. Each of these plaintiffs asserts causes of action for, among other things, violations of federal securities laws, breach of fiduciary duty, fraudulent inducement, breach of contract, conversion, and unjust enrichment, and seeks monetary damages and specific performance to remove legends from certain securities sold pursuant to the Securities Purchase Agreement. The Hexin lawsuit claims monetary damages of “at least $ 6 million,” plus interest, costs, fees, and attorneys’ fees. The St. Hudson lawsuit claims monetary damages of “at least $ 4.4 million,” plus interest, costs, fees, and attorneys’ fees. Lawsuit in connection with the Financial Advisory Agreement On October 6, 2022, Jinhe Capital Limited (“Jinhe”) filed a lawsuit against the Company in the United States District Court for the Southern District of New York, asserting causes of actions for, among other things, breach of contract, breach of the covenant of good faith and fair dealing, conversion, quantum meruit, and unjust enrichment, in connection with a financial advisory agreement entered into by and between Jinhe and the Company on November 10, 2021. Jinhe claims monetary damages of “at least $ 575,000 ” and “potentially exceeding $ 1.8 million,” plus interest, costs, and attorneys’ fees. On January 10, 2023, St. Hudson lawsuit was consolidated with this lawsuit and Hexin lawsuit and on February 24, 2023, all three consolidated actions were dismissed without prejudice by the court, in furtherance of the parties having reached an agreement in principle to settle their disputes. The Company, Yang Jie, Jing Shan, and the plaintiffs of the above three actions entered into a certain settlement agreement and general mutual release with an effective date of March 10, 2023, pursuant to which the Company agreed to pay the sum of $ 10,525,910.82 . Plaintiffs in the actions agreed to discharge and forever release the defendants in the actions from all claims that were or could have been raised in those actions, as well as dismissal of each of the actions with prejudice. The Company has no role or knowledge as to how the settlement payment will be allocated between and among the plaintiffs. The Company paid the settlement payment on March 14, 2023. In addition, the plaintiffs agreed to irrevocably forfeit 3,728,807 shares of Common Stock they hold. The cancellation of 3,528,807 shares has been completed, while the cancellation of the remaining 200,000 shares is still in processing for the year ended June 30, 2023. The fair value of the shares was $ 2,125,420 at March 10, 2023, the settlement amount over the fair value of the shares to be cancelled is recorded as other expenses in the Company’s consolidated statement of operations. The cancellation of 200,000 shares completed on July 8, 2023 F- 31 Putative Class Action 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 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. As this action is still in the early stage, the Company cannot predict the outcome. In addition to the above litigations, the Company is also subject to additional contractual litigations as to which it is unable to estimate the outcome. Government Investigations Following a publication issued by Hindenburg Research dated May 5, 2022, 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 Company is cooperating with the government regarding these matters. The Company is not able to estimate the outcome or duration of the government investigations. Employee Agreement For the year ended June 30, 2023, the Company had employment agreements with each of Mr. Lei Cao, Ms. Tuo Pan and Mr. Yang Jie. Employment agreement of Mr. Lei Cao provided for a ten-year term that extended automatically in the absence of termination notice provided at least 30 days prior to the fifth anniversary date of the agreement. Employment agreements of Mr. Tuo Pan and Mr. Yang Jie provided for five-year terms that extended automatically in the absence of termination notice provided at least 30 days prior to the fifth anniversary date of the agreement. If the Company failed to provide this notice or if the Company wished to terminate an employment agreement in the absence of cause, then the Company was obligated to provide at least 30 days’ prior notice. In such case during the initial term of the agreement, the Company would need to pay such executive (i) the remaining salary through the date of October 31, 2026. In addition, to pay Mr. Lei Cao and Ms. Tuo Pan (ii) two times of the then applicable annual salary if there had been no change in control, as defined in the employment agreements or three-and-half times of the then applicable annual salary if there was a change in control. The employment agreements for Ms. Tuo Pan and Mr. Yang Jie were terminated in 2022, the Company has no remaining obligation under such agreements. Note 17. 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. The Company’s income tax expenses for years ended June 30, 2023 and 2022 are as follows: For the Years Ended June 30 2023 2022 Current U.S. $ ( 135,855 ) $ - PRC - Total income tax expenses $ ( 135,855 ) $ - F- 32 Income tax expense for the years ended June 30, 2023 and 2022 varied from the amount computed by applying the statutory income tax rate to income before taxes. Reconciliations between the expected federal income tax rates using 21 % for the year ended June 30, 2023 and 2022 to the Company’s effective tax rate are as follows: June 30, 2023 June 30, 2022 % % US Statutory tax rate $ 21.0 $ 21.0 Permanent difference* ( 42.0 ) ( 5.3 ) Change in valuation allowance 20.5 ( 14.9 ) Rate differential in foreign jurisdiction ( 0.1 ) ( 0.8 ) $ ( 0.6 ) $ - * Permanent difference includes non-deductible expenses mainly stock compensation. The Company’s deferred tax assets are comprised of the following: June 30, 2023 June 30, 2022 Allowance for doubtful accounts U.S. $ 1,241,000 $ 617,000 PRC 1,655,000 1,830,000 Net operating loss U.S. 8,775,000 4,670,000 PRC 1,425,000 1,283,000 Total deferred tax assets 13,096,000 8,400,000 Valuation allowance ( 13,096,000 ) ( 8,400,000 ) Deferred tax assets, net - long-term $ - $ - The Company’s operations in the U.S. incurred a cumulative U.S. federal net operation loss (“NOL”) of approximately $ 22,000,000 as of June 30, 2022, which may reduce future federal taxable income. During the year ended June 30, 2023, approximately $ 19,700,000 of NOL was generated and the tax benefit derived from such NOL was approximately $ 8,775,000 . As of June 30, 2023, the Company’s cumulative NOL amounted to approximately $ 41,700,000 which may reduce future federal taxable income. F- 33 The Company’s operations in China incurred a cumulative NOL of approximately $ 1,333,000 as of June 30, 2022. During the year ended June 30, 2023, additional NOL of approximately $ 370,000 was generated. As of June 30, 2023, the Company’s cumulative NOL amounted to approximately $ 1,730,000 which may reduce future taxable income which will expire by 2026. 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 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 100 % allowance for its DTA as of June 30, 2023. 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 the Company’s deferred tax assets that are more likely than not to be realized. The Company’s taxes payable consists of the following: June 30, June 30, 2023 2022 VAT tax payable $ 1,016,529 $ 1,098,862 Corporate income tax payable 2,261,131 2,295,803 Others 57,298 62,512 Total $ 3,334,958 $ 3,457,177 Note 18. CONCENTRATIONS Major Customers For the year ended June 30, 2023, two customers accounted for 52.7 % and 16.1 % of the Company’s gross revenues. As of June 30, 2023, two customers accounted for 35.6 % and 18.1 % of the Company’s accounts receivable, net. For the year ended June 30, 2022, two customers accounted for 45.6 % and 27.9 % of the Company’s gross revenues. As of June 30, 2022, two customers accounted for 43.3 % and 10.4 % of the Company’s accounts receivable, net. Major Suppliers For the year ended June 30, 2023, two suppliers accounted for approximately 19.6 % and 19.5 % of the total gross purchases, respectively. For the year ended June 30, 2022, two suppliers accounted for approximately 26.3 % and 24.1 % of the total gross purchases, respectively. F- 34 Note 19. SEGMENT REPORTING ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in consolidated financial statements for detailing the Company’s business segments. The Company’s chief operating decision maker is the Chief Operating Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. As of June 30, 2023, the Company had two operating segments: (1) freight logistics services and (2) sales of crypto-mining machines. 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 following tables present summary information by segment for the years ended June 30, 2023 and 2022, respectively: For the Year Ended June 30, 2023 Shipping Agency and Management Services Freight Logistics Services Sale of Crypto-mining Machines Total Net revenues $ - $ 3,806,158 $ 732,565 $ 4,538,723 Cost of revenues $ - $ 3,990,654 $ - $ 3,990,654 Gross profit $ - $ ( 184,496 ) $ 732,565 $ 548,069 Depreciation and amortization $ - $ 163,635 $ 713 $ 164,348 Total capital expenditures $ - $ ( 38,440 ) $ 2,852 $ ( 35,588 ) Gross margin% - % ( 4.85 )% 100 % 12.08 % For the Year Ended June 30, 2022 Shipping Agency and Management Services Freight Logistics Services Sales of Crypto-mining Machines Total Net revenues $ - $ 3,830,615 $ 157,800 $ 3,988,415 Cost of revenues $ - $ 4,136,474 $ - $ 4,136,474 Gross (loss) profit $ - $ ( 305,859 ) $ 157,800 $ ( 148,059 ) Depreciation and amortization $ - $ 512,586 $ 21,052 $ 533,638 Total capital expenditures $ - $ 840,319 $ 34,199 $ 874,518 Gross margin% - % ( 8.0 )% 100 % ( 3.7 )% Total assets as of: June 30, June 30, 2023 2022 Shipping Agency and Management Services $ - $ - Freight Logistic Services 19,075,202 44,058,444 Sales of crypto-mining machines 162,605 20,789,296 Total Assets 19,237,807 $ 64,847,740 The Company’s operations are primarily based in the PRC and U.S, where the Company derives all of its revenues. Management also reviews consolidated financial results by business locations. Disaggregated information of revenues by geographic locations are as follows: For the Years Ended June 30, June 30, 2023 2022 PRC $ 2,529,449 $ 2,982,691 U.S. 2,009,274 1,005,724 Total revenues $ 4,538,723 $ 3,988,415 F- 35 Note 20. RELATED PARTY BALANCE AND TRANSACTIONS Advance to suppliers-related party The Company’s advances to suppliers – related party are as follows: June 30, June 30, 2023 2022 Bitcoin mining hardware and other equipment (1) $ - $ 6,153,546 Total Advances to suppliers-related party $ - $ 6,153,546 (1) On January 10, 2022, the Company’s joint venture, Thor Miner, entered into a Purchase and Sales Agreement (“PSA”) with HighSharp. Pursuant to the Purchase Agreement, Thor Miner agreed to purchase certain cryptocurrency mining equipment. In January and April 2022, Thor Miner made total prepayment of $ 35,406,649 for the order and no prepayment as of June 30, 2023. Due to production issues from HighSharp, Thor Miner was not able to timely deliver the full quantity of cryptocurrency mining machines to SOSNY under the PSA and was sued by SOSNY for breach of contract on December 9, 2022. The Company entered into a settlement agreement with SOSNY effective on December 28, 2022, under which the Company will repay $ 13.0 million to SOSNY and terminate the previous agreements and balance of the deposits. The Company also assigned to SOSNY the right for the deposit that Thor Miner has paid to HighSharp. As of December 22, 2022, the balance of advances to HighSharp and deposits from SOSNY amounted to $ 27,927,583 and $ 40,560,569 , respectively. Thor Miner paid $ 13.0 million on December 23, 2022 to SOSNY which was received by SOSNY on December 28, 2022. Thor Miner wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp resulted in net bad debt expenses of $ 367,014 . Due from related party, net As of June 30, 2023 and June 30, 2022, the outstanding amounts due from related parties consist of the following: June 30, June 30, 2023 2022 Zhejiang Jinbang Fuel Energy Co., Ltd (1) 458,607 415,412 Shanghai Baoyin Industrial Co., Ltd (2) 1,068,014 1,306,004 LSM Trading Ltd (3) 570,000 570,000 Rich Trading Co. Ltd (4) 103,424 103,424 Cao Lei (5) 13,166 54,860 Less: allowance for doubtful accounts ( 2,138,276 ) ( 2,449,700 ) Total $ 74,935 $ - (1) As of June 30, 2023 and 2022, the Company advanced $ 458,607 and $ 415,412 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 and due on demand. The Company provided allowance of $ 383,672 and $ 415,412 for the year ended June 30, 2023 and 2022, and the allowance changes as a result of changes in exchange rates. (2) As of June 30, 2023 and 2022, the Company advanced approximately $ 1.1 million and $ 1.3 million to Shanghai Baoyin Industrial Co., Ltd. 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. F- 36 (3) As of June 30, 2023, the Company advanced $ 570,000 to LSM Trading Ltd, which is 40 % owned by the Company. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable. (4) On November 16, 2021, the Company entered into a project cooperation agreement with Rich Trading Co. Ltd USA (“Rich Trading”) for the trading of computer equipment. Rich Trading’s bank account was controlled by now-terminated members of the Company’s management and was, at the time, an undisclosed related party. According to the agreement, the Company was to invest $ 4.5 million in the trading business operated by Rich Trading and the Company would be entitled to 90 % of profits generated by the trading business. The Company advanced $ 3,303,424 for this project, of which $ 3,200,000 has been returned to the Company. The Company provided allowance of $ 103,424 for the year ended June 30, 2023 and 2022. (5) The amount represents business advance to Mr. Lei Cao, the former Chairman of the Board. During the six months ended June 30, 2023, Lei Cao repaid approximately $ 54,000 , of which approximately $ 13,000 additional payment was recognized as non-operating income. The Company provided full credit losses for the remaining balance of the receivable. Loan receivable- related parties As of June 30, 2023 and June 30, 2022, the outstanding loan receivable from related parties consists of the following: June 30, June 30, 2023 2022 Wang, Qinggang (1) $ $ 552,285 (1) On June 10, 2021, the Company entered into a loan agreement with Wang Qinggang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The loan is non-interest bearing for loan amount up to $ 630,805 (RMB 4 million). In February 2022, Wang Qinggang, borrowed and repaid $ 232,340 of the loan amount. In June 2022, additional $ 552,285 (RMB 3,700,000 ) was loaned to Wang Qinggang with due date of June 7, 2024. The outstanding loan was fully repaid in December 2022. Accounts payable - related parties As of June 30, 2023 and June 30, 2022, the Company had accounts payable to Rich Trading Co. Ltd of $ 63,434 . Due to Related Party As of June 30, 2023, the Company had accounts payable to Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, of $ 104,962 . These payments were made on behalf of the Company for the daily business operational activities. Revenue - Related Party For the year ended June 30, 2023, the company had no revenue from related party. For the year ended June 30, 2022, revenue from related party, Zhejiang Jinbang, amounted to $ 222,963 . F- 37 Note 21. SUBSEQUENT EVENTS On July 3, 2023, the Company entered into a Settlement and Release Agreement with Mr. Jie which fully resolved his claims against the Company.On July 3, 2023, Mr. Tieliang Liu resigned as a director of Singularity Future Technology Ltd. (the “Company”) and a member of the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee. Mr. Liu’s decision did not result from any disagreement with the Company relating to its operations, policies, or practice. On July 10, 2023, Company terminated the employment of its Chief Operating Officer Jing Shan with cause. The termination was effective immediately. On July 31, 2023, the Company elected Mr. Zhongliang Xie as a Class II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting from the resignation of Mr. Tieliang Liu. The Board appointed Mr. Xie to serve as Chair of the Audit Committee, a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee. On August 15, 2023, Mr. Dianjiang Wang resigned as the Chief Financial Officer of the Company. Mr. Wang’s decision did not result from any disagreement with the Company relating to its operations, policies, or practices. On August 21, 2023, the Company entered into an employment agreement with Mr. Ying Cao to serve as the Chief Financial Officer of the Company. Mr. Ying Cao has served as the department manager and quality control manager at Shaanxi Huaqiang Certified Public Accountants Co., Ltd. since 2015. Prior to that, he served as a project manager in Sigma Accounting Firm from 2007 to 2014. Mr. Cao obtained his bachelor’s degree in accounting from Xi’an University of Finance and Economics. Mr. Cao does not have any family relationships with any of the Company’s directors or executive officers. Nasdaq Listing Deficiencies On July 7, 2023, the Company received an Notice of Noncompliance Letter (the “Letter”) from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rules due to its failure to timely hold an annual meeting of shareholders for the fiscal year ended June 30, 2022, which is required to be held within twelve months of the Company’s fiscal year end under Nasdaq Listing Rule 5620(a) and 5810(c)(2)(G). The Letter also states that the Company has 45 calendar days to submit a plan to regain compliance (the “Plan”) and if Nasdaq accepts the Plan, it can grant the Company an exception of up to 180 calendar days from the fiscal year end, or until December 27, 2023, to regain compliance. Nasdaq requires the Plan to be submitted no later than August 21, 2023. On July 13, 2023, the Company received a notice from Nasdaq stating that the Company no longer complies with Nasdaq’s independent director and audit committee requirements under Nasdaq’s Listing Rule 5605 following the resignation of Tieliang Liu from the Company’s board of directors and audit committee effective July 3, 2023. Nasdaq advised the Company that in accordance with Nasdaq’s Listing Rule 5605(c)(4), the Company has a cure period to regain compliance (1) until the earlier of the Company’s next annual shareholders’ meeting or July 3, 2024; or (2) if the next annual shareholders’ meeting is held before January 2, 2024, then the Company must evidence compliance no later than January 2, 2024. In response to this notice, on July 31, 2023, the Company elected Mr. Zhongliang Xie as a Class II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting from the resignation of Mr. Tieliang Liu. The Board appointed Mr. Xie to serve as Chair of the Audit Committee, a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee. On July 13, 2023, the Company received a notice from Nasdaq stating that the Company failed to regain compliance with respect to the minimum $ 1 bid price per share requirement under Nasdaq Listing Rules during the 180 calendar days given by Nasdaq for the Company to regain compliance, which ended on July 5, 2023. However, Nasdaq has determined that the Company is eligible for an additional 180 calendar day period, or until January 2, 2024, to regain compliance. Such determination is based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. The Company intends to regain compliance with Nasdaq’s bid price requirement prior to the end of the second bid price extension. On August 30, 2023, the Company received a formal notification from Nasdaq confirming that the Company had regained compliance with the independent director and audit committee requirements for continued listing on The Nasdaq Capital Market set forth in Listing Rules 5605(b)(1) and 5605(c)(2) by appointing Mr. Zhongliang Xie to the Company’s board of directors and audit committee on July 31, 2023, and that the matter is now closed. On August 30, 2023, the Company received a formal notification from Nasdaq stating that it has determined to grant the Company an extension until December 27, 2023, to regain compliance with Listing Rule 5620(a), which requires that the Company hold an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end. F-38