What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-10-15 compared with 2023-09-29 · 287 added, 320 removed, 59 unchanged (91% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with

our consolidated financial statements and the related notes included elsewhere in the Report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction

with our consolidated financial statements and the related notes included elsewhere in the Report.

This discussion contains forward-looking

statements that involve risks and uncertainties.

Actual results and the timing of selected events could differ materially from those anticipated

in these forward-looking statements as a result of various factors.

We previously focused on providing

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

more revenue.

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

In the fiscal years

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

provided by our US subsidiary Brilliant Warehouse Service Inc.

On January 3, 2022, we changed our corporate name to Singularity Future

Technology Ltd.

Actual results and the timing of selected events could differ materially from those

anticipated in these forward-looking statements as a result of various factors.

previously focused on providing customized freight logistics services, but starting in 2017, we began exploring new opportunities to

expand our business and generate more revenue.

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

In the fiscal years 2023 and 2024, while we continued to provide our freight logistics business, we expanded our services

to include warehousing services provided by our US subsidiary Brilliant Warehouse Service Inc.

On January 3, 2022, we changed our corporate

name to Singularity Future Technology Ltd.

to align with our entry into the digital assets business through our U.S.

subsidiaries.

During 2022, we engaged in purchases

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

2022, we engaged in purchases and sales of cryptocurrency mining machines through our U.S.

subsidiaries.

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

(1) freight logistics services, through our subsidiaries

in the U.S and PRC;

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

The Company no longer

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

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

Recent Developments

The following events had a

material impact on our financial statements.

For other recent developments, see “Item 1.

Business – Recent Developments.”

January 10, 2022, Thor Miner entered into a purchase agreement with HighSharp.

Pursuant to the agreement, Thor Miner agreed to purchase

certain cryptocurrency mining equipment from HighSharp.

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

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

amount of $48,930,000.

Due to HighSharp’s production

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

for breach of contract on December 9, 2022.

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

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

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

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

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

Thor Miner wrote off the balance of the deposit it received

from SOSNY and the balance of its payment to HighSharp.

Impact of COVID-19

The outbreak of the COVID-19

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

In March 2020, the World Health Organization declared

COVID-19 as a pandemic.

In early December 2022, Chinese government eased

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

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

The impact of any future spread of COVID-19

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

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

The impact of COVID-19 on our business, financial

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

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

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

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

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

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

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

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

Although the impact of COVID-19 on our operations

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

The impact of any future spread

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

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

Results of Operations

Comparison of the Years Ended June 30, 2023 and 2022

The following table sets forth

the results of our operations for the periods indicated:

For the fiscal year ended June 30, 2024, we were engaged in providing

freight logistics services including warehouse services, which were operated by our subsidiaries Trans Pacific Shipping Limited and Gorgeous

and Brilliant Warehouse Service Inc in the United States, .

Our range of services include transportation, warehouse, collection,

last-mile delivery, drop shipping, customs clearance, and overseas transit delivery.

For the fiscal year ended June 30, 2024, the Company

did not sell crypto-mining machines.

have not generated any revenues to date with respect to our entry into the solar panel production and distribution business.

February 9, 2024, the Company effectuated a 1-for-10 reverse stock split of its common stock.

Beginning on February 12, 2024, the Company’s

common stock trades on The Nasdaq Stock Market on a split adjusted basis.

Upon effectiveness of the reverse stock split, every 10 shares

of the Company’s issued and outstanding common stock were automatically converted into one share of common stock.

No fractional

shares were issued.

Instead, any fractional shares that would have resulted from the split was rounded up to the next whole number.

in the common stock continues on the Nasdaq Stock Market under the symbol “SGLY”.

The new CUSIP number for the common stock

following the reverse stock split is 82935V 307.

The reverse stock split was intended to increase the per share trading price of the

Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing of the common stock on the NASDAQ

Stock Market.

The reverse stock split did not affect the number of total authorized shares of common stock of the Company.

Listing Deficiencies

January 3, 2024, the Company received a Staff determination notice from Nasdaq notifying the Company of the Staff’s determination

to delist the Company’s securities from Nasdaq because of the Company’s failure to regain compliance with the $1 per share

minimum bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2).

the Nasdaq letter, unless the Company requested an appeal of the determination notice, trading of the Company’s common stock would

be suspended at the opening of business on January 12, 2024.

The Company appealed the delisting determination to a Hearings Panel, and

hearing was scheduled to be held on March 28, 2024.

The Company’s common stock would continue to be listed for trading pending

the Hearing Panel’s decision.

As discussed in “Prospectus Summary - Recent Developments – Reverse Stock Split,”

the Company effectuated a 1-for-10 reverse stock split of its common stock on February 9, 2024.

Beginning on February 12, 2024, the Company’s

Common Stock trades on The Nasdaq Stock Market on a split adjusted basis.

March 12, 2024, the Company received a formal notification from the Nasdaq Stock Market LLC confirming that the Company had regained

compliance with bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2).

Consequently,

the scheduled hearing before the Hearings Panel on March 28, 2024 had been cancelled.

of SEC Subpoena

previously disclosed, on February 28, 2023 , the audit committee of the Company, after discussion with the management of the Company,

and in consultation with the Company’s independent registered public accounting firm, concluded that the Company’s previously

issued financial statements for the fiscal year ended June 30, 2021 included in the Company’s Annual Report on Form 10-K filed

with the Securities and Exchange Commission (the “SEC”) on November 29, 2021 (the “2021 Form 10-K”) should no

longer be relied upon as a result of incorrect accounting treatment of approximately $4.6 million of related party loan receivable.

audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included

in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected

Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result

of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30,

2021 and six months ended December 31, 2021.

The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K

(the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the

Amended Form 10-K, the “Restatements”).

June 17, 2024, the Company received a subpoena from the Securities and Exchange Commission (the “SEC”) requesting the production

of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”).

Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time.

SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result

in government enforcement actions and, to civil and/or criminal sanctions under relevant laws.

The Company intends to cooperate with

the SEC with respect to the Investigation.

into Joint Venture

On August 22, 2024, New Energy Tech Ltd., (“New Energy”)

a New York corporation and wholly owned subsidiary of the Company, entered into a certain joint venture agreement (the “JV Agreement”)

with Market One Service Corp., a corporation organized under the laws of Wyoming, (“Market One”).

Pursuant to the JV Agreement,

among other things and subject to the terms and conditions contained therein, New Energy and Market One agreed to establish a limited

company under the laws of Ohio, SG Campbells Creek Commodities (the “JV”), to engage in the business of commodity trading

The parties also plan to expand into the sale of solar panels.

outbreak of the COVID-19 virus (“COVID-19”) starting from late January 2020 in the PRC spread rapidly to many parts of the

In March 2020, the World Health Organization declared COVID-19 as a pandemic.

early December 2022, the Chinese government eased its strict control measures for COVID-19, which led to a surge in increased infections

and disruptions in our business operations.

In 2023, our China operation continued to suffer from the impact of COVID-19, although to

a lesser extent.

The impact of any future impact of COVID-19 on the Company’s China operational results will depend on, to a large

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

its impact, almost all of which are beyond our control.

impact of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:

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

As a result, our

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

the ear ended June 30, 2023.

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

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

Specifically, Crypto mining machine manufacturers were

impacted by the constrained supply of the semiconductors used in the production of the highly specialized crypto mining machines.

COVID-related

issues exacerbated port congestion and intermittent supplier shutdowns and delays, resulted in delayed shipments and additional expenses

to expedite delivery.

As a result, we were unable to fulfil our customer orders on a timely basis, resulting in the cancellation of orders

and the partial refund of purchases, as evident from the SOSNY settlement.

the impact of COVID-19 on our operations decreased in 2023, such impact still exists and may continue to exist for an unforeseeable period

The impact of any future spread of COVID-19 on the Company’s China operation will depend, to a large extent, on the duration

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

of which is beyond our control.

of Operations

of the Years Ended June 30, 2024 and 2023

following table sets forth the results of our operations for the periods indicated:

For the Years Ended June 30,

8 unchanged sentences

Total costs and expenses

Revenues increased by $550,308, or approximately

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

The increase was primarily due

to increased revenue from our sale of crypto mining equipment.

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

The following tables present summary information

by segments for the years ended June 30, 2023 and 2022:

(10,074,632 )

decreased by $1,402,042, or approximately 30.9%, to $ 3,136,681 for the year ended June 30, 2024 from $4,538,723 for the year ended June

The decrease was primarily due to decreased revenue from our sale of crypto mining equipment and the decline in revenues of

our freight logistics services.

Revenues from our logistics services business decreased by $669,477, or approximately 17.6%, to $3,136,681

for the year ended June 30, 2024 from $3,806,158 for the year ended June 30, 2023.The Company ceased to sell crypto-mining equipment

since January 1, 2023.

following tables present summary information by segments for the years ended June 30, 2024 and 2023:

For the Year Ended June 30, 2024

3 unchanged sentences

Total capital expenditures

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

For the Year Ended June 30, 2023

2 unchanged sentences

Total capital expenditures

% Changes For the Years Ended June 30, 2023 and 2022

% Changes For the Years Ended

June 30, 2024 and 2023

Cost of revenues

1 unchanged sentence

Total capital expenditures

Disaggregated information of revenues by geographic

locations are as follows:

Disaggregated

information of revenues by geographic locations are as follows:

For the Years Ended

Total revenues

Freight Logistics Services

Freight logistics services

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

Revenues from freight logistics services were

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

June 30, 2022.

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

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

subsidiary, Brilliant Warehouse, of approximately $0.43

Sales of Crypto Mining Machines

On January 10, 2022, Thor Miner entered into the

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

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

hardware and other equipment.

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

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

responsible for shipping and custom clearing for the products.

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

years ended June 30, 2023 and 2022.

Logistics Services

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

Revenues from freight logistics

services were $3,136,681 for the year ended June 30, 2024, a decrease of $669,477, or approximately 17.6%, as compared to $3,806,158

for the year ended June 30, 2023.

The decrease in shipping revenue of approximately $826,331 from our U.S.

subsidiary, Brilliant Warehouse

was due to the decline of business volume, offset in part to an increase of revenue from our PRC operation of approximately $156,854

was due to increase several new customers.

of Crypto Mining Machines

On January 10, 2022, Thor Miner entered into a purchase and sale agreement

with SOSNY, a wholly owned subsidiary of SOS Ltd.

Pursuant to the agreement, Thor Miner agreed to sell to SOSNY certain cryptocurrency

mining hardware and other equipment.

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

purchase orders.

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

was responsible for shipping and custom clearing for the products.

The net revenue amounted to $732,565 for the years ended June 30, 2023.

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

Cost of Revenues

Cost of revenues for our freight

logistics services segment mainly consisted of freight costs to various freight carriers, cost of labor, warehouse rent and other overhead

and sundry costs.

Cost of revenues for our freight logistics services segment was $3,990,654 for the year ended June 30, 2023, a decrease

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

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

Our gross margin was 12.1%

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

This increase in gross margin in freight logistics segment was mainly

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

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

margin of our operations.

Operating Costs and Expenses

Operating costs and expenses

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

ended June 30, 2022.

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

of use assets as more fully discussed below.

Selling Expenses

Our selling expenses consisted

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

For the year ended June 30, 2023, we

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

approximately 39.7%.

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

compared to the year ended June 30, 2022.

General and Administrative Expenses

Our general and administrative

expenses consist primarily of salaries and benefits, travel expenses for our administration department, office expenses, and regulatory

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

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

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

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

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

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

Impairment Loss of Cryptocurrencies

We recorded an impairment

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

Impairment Loss of Fixed Assets and Right of

We recorded impairment losses

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

We performed our annual goodwill

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

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

The fair values are determined by income approach where projected future

cash flows discounted at rates commensurate with the risks involved, (“Discounted Cash Flow” or “DCF” of the income

Assumptions used in a DCF analysis require the exercise of significant judgment, including judgment about appropriate discount

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

Impairment Loss of Investment

The Company recorded $128,369

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

No impairment loss was recorded

of revenues for our freight logistics services segment mainly consisted of freight costs to various freight carriers, cost of labor,

warehouse rent and other overhead and sundry costs.

Cost of revenues for our freight logistics services segment was $3,614,947 for the

year ended June 30, 2024, a decrease of $375,707, or approximately 9.4%, as compared to $3,990,654 for the year ended June 30, 2023 as

a result of reduced activity in our truck dispatch business.

We determined to restrict this business to large customers in order improve

profitability.

gross margin was (15.2%) and 12.1% for the years ended June 30, 2024 and 2023, respectively.

This decrease in gross margin was mainly

due to decreased revenue from our freight logistics business and ceased to sell crypto-mining equipment since January 1, 2023.

Costs and Expenses

costs and expenses decreased by $10,074,632 or approximately 52.7% from $9,058,885 for the year ended June 30, 2024 compared to $19,133,517

for the year ended June 30, 2023.

Provision for Doubtful Accounts, Net of Recovery

Our total bad debt expenses amounted to approximately

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

on May 5, 2023 without the Board’s

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

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

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

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

Stock-based Compensation

Stock-based compensation

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

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

Loss from disposal of subsidiaries and VIE

On December 31, 2021, the

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

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

The Company made the decision to dissolve

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

with VIE structures.

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

its subsidiary Sino-Global Shipping Canada, Inc.

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

This decrease was mainly due to the decrease in general and administrative expenses, provision for

doubtful accounts, stock-based compensation and impairment loss of investment as more fully discussed below.

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

year ended June 30, 2024, we had $252,278 in selling expenses, as compared to $232,569 for the year ended June 30, 2023, which represents

an increase of $19,709 or approximately 8.5%.

The increase was mainly due to an increase in salaries as we added to employees and

incurred increased marketing expenses for the freight logistics segment for our sales team.

and Administrative Expenses

general and administrative expenses consist primarily of salaries and benefits, travel expenses for our administration department, office

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

For the year ended June 30, 2024,

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

in November 2022.

Since these entities did not

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

we had $5,031,852 of general and administrative expenses, as compared to $11,572,888 for the year ended June 30, 2023, representing a

decrease of $6,541,036 or approximately 56.5%.

The decrease was mainly due to the decreased lawyer fees of $4,633,711 which mainly related

to legal fees relating to the Company’s special committee’s investigation of claims of alleged fraud, misrepresentation,

and inadequate disclosure raised in the Hindenburg Report and other related matters incurred in the last fiscal year.

Loss of Cryptocurrencies

recorded an impairment loss of $72,179 and $18,279 for the year ended June 30, 2024 and 2023 respectively, for the cryptocurrencies held

by us as the ownership of the cryptocurrencies could not be verified.

Loss of Fixed Assets and Right of Use Assets

recorded impairment losses of nil and $$33,469 for the year ended June 30, 2024 and 2023.

recorded no impairment charges related to fixed assets and right of use assets during the years ended June 30, 2024.

Loss of Investment

Company recorded $128,369 for the year ended June 30, 2023 due to the impairment of the Company’s investment in LSM Trading Ltd.

No impairment loss was recorded for the year ended June 30, 2024.

for Doubtful Accounts, Net of Recovery

total bad debt expenses amounted to approximately $87,629 for the year ended June 30, 2024, mainly due to the bad debt provision of $50,000

due the early termination of a lease agreement in Jericho, New York.

total bad debt expenses amounted to approximately $2.8 million for the year ended June 30, 2023, mostly due to a $3 million wire transfer

made by our former COO, Jing Shan to Goalowen Inc.

on May 5, 2023 without the Board’s authorization, as payment for the transfer

by Goalowen to the Company of an operating income right to be derived from fishing activities.

The Company has demanded the return of

the $3 million but has not been successful.

As of June 30, 2023, the Company reviewed the unauthorized transfer, evaluated the collection

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

compensation was nil and $329,778 for the year ended June 30, 2024 and 2023, and we did not issue any stock compensation to employees

and directors in the fiscal year of 2024.

from disposal of subsidiaries and VIE

October 24, 2023, February 19, 2024 and April 17, 2024, the Company dissolved its subsidiaries of Ningbo Saimeinuo Web Technology Ltd.,

Thor Miner Inc.

and Blumargo It Solution Ltd., respectively.

Total gain from the three disposals was $ 359,781.

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

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

Lawsuit settlement expenses

We recorded $8.4 million in lawsuit settlement

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

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

settlement expenses

recorded $8.4 million in lawsuit settlement expenses for the year ended June 30, 2023, compared to nil in lawsuit settlement expenses

for the year ended June 30, 2024.

The expenses were related to the lawsuits in connection with the Securities Purchase

Agreement and the Financial Advisory Agreement described in Item 1.

Business – Litigation.

Other Expenses, Net

Other expenses, net was $0.07

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

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

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

Our income tax expenses amounted

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

We have incurred a cumulative

federal net operating loss (“NOL”) of approximately $22,000,000 as of June 30, 2022, which may reduce future federal

taxable income.

Expenses, Net

income, net was $90,649 for the year ended June 30, 2024, which mainly consisted of interest income of $185,626 and exchange loss of

$ 119,992, as compared to $74,989 for the year ended June 30, 2023, which mainly consisted of interest expense for our convertible debt

of approximately $250,000 and the gain on disposal of right of use assets and fixed assets of $190,897 .

income tax expenses amounted to nil and $135,855 for the years ended June 30, 2024 and 2023, respectively.

have incurred a cumulative U.S.

federal net operating loss (“NOL”) of approximately $41,700,000 as of June 30, 2023, which

may reduce future federal taxable income.

The NOL generated for the year ended June 30, 2024 amounted to approximately $5,500,000.

The Tax benefit derived from

this NOL was approximately $8,775,000.

Tax benefit derived from this NOL was approximately $1,155,000.

As of June 30, 2024, our cumulative NOL amounted to approximately $47,200,000.

Our operations in China

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

in the year ended June 30, 2022.

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

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

Our PRC subsidiaries’ cumulative

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

We periodically evaluate

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

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

Management considers new evidence, both positive and negative, that

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

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

We determined that it is more likely

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

and venture into new businesses.

operations in China have incurred a cumulative NOL of approximately $1,703,000 as of June 30, 2023, which was mainly from net losses.

During the year ended June 30, 2024, we generated an additional NOL of approximately $359,000 due to increased third party service cots

as a result of our special committee’s investigation.

Our PRC subsidiaries’ cumulative NOL amounted to approximately $2,062,000

as of June 30, 2024, which may reduce future taxable income and will expire by 2026.

periodically evaluate the likelihood of the realization of our deferred tax assets and reduce the carrying amount of the deferred tax

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

Management considers new evidence, both positive

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

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

We determined that it is

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

reorganization and venture into new businesses.

We provided a 100% allowance for deferred tax assets as of June 30, 2024.

The net decrease in valuation

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

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

As a result of the

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

ended June 30, 2022.

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

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

The net increase

in valuation for the year ended June 30, 2024 amounted to approximately $1,196,000 based on management’s reassessment of the amount

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

a result of the foregoing, we had a net loss of $5,471,774 for the year ended June 30, 2024, compared to a net loss of $23,098,342 for

the year ended June 30, 2023.

After the deduction of non-controlling interest, net loss attributable to us was $5,108,528 for the year

ended June 30, 2024, compared to $22,996,846 for the same period in 2023.

Comprehensive loss attributable to us was $5,039,492 for the

year ended June 30, 2024, as compared to $22,952,349 for the year ended June 30, 2023.

Liquidity and Capital Resources

Cash Flows and Working Capital

As of June 30, 2023, we had

$17,390,156 in cash (including cash on hand and cash in bank).

The majority of our cash is in banks located in the U.S.

On December 19, 2021, the

Company issued two convertible notes to two non-U.S.

investors for an aggregate purchase price of $10,000,000 (the “December 2021

Convertible Notes”).

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

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

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

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

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

As of June 30, 2023, we had

the following loan outstanding:

Convertible Notes

December 2023

The following table sets forth

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

and Capital Resources

Flows and Working Capital

of June 30, 2024, we had $14,641,967 in cash (including cash on hand and cash in bank) and $3,094,092 in restricted cash.

Our cash position

improved in the year ended June 30, 2024 due to the receipt of $9.8 million from the year-end private placement.

The majority of our

cash is in banks located in the Djibouti a country in East Africa and the restricted cash is in banks located in U.S.

following table sets forth a summary of our cash flows for the periods as indicated:

For the Years Ended

Net cash (used in) provided by operating activities

Net cash used in operating activities

$ (4,408,691 )

Net cash used in investing activities

$ (33,643,405 )

Net cash provided by (used in) investing activities

$ (2,225,708 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

$ (2,125,420 )

Effect of exchange rate fluctuations on cash

Net (decrease) increase in cash

Net increase (decrease) in cash

$ (38,443,126 )

1 unchanged sentence

Cash at the end of period

The following table sets forth a summary of our

working capital:

following table sets forth a summary of our working capital:

Total Current Assets

$ (44,972,746 )

Total Current Liabilities

$ (20,181,190 )

Working Capital

$ (24,791,556 )

Current Ratio

In assessing the liquidity,

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

Our liquidity needs are to meet our working

capital requirements, operating expenses and capital expenditure obligations.

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

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

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

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

Operating Activities

assessing the liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.

Our liquidity

needs are to meet our working capital requirements, operating expenses and capital expenditure obligations.

As of June 30, 2024, our

working capital was $12,904,522 and we had cash and restricted cash of approximately $17,736,059 (including $14,641,967 in cash and $3,094,092

in restricted cash).

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

due within one year from the date of this Report.

net cash used in operating activities was approximately $4.4 million for the year ended June 30, 2024.

The operating cash outflow

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

million lawsuit settlement.

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

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

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

the cost for the sale of cryptocurrency equipment.

Our net cash provided by operating

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

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

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

$10.0 million, loss on disposal of subsidiaries and VIE of approximately $6.1 million and provision for doubtful accounts of approximately

$1.6 million.

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

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

$13.0 million to SOSNY in December 2022.

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

million which was for the purchase of cryptocurrency mining machines.

Investing Activities

The operating cash outflow for

the year ended June 30, 2024 was primarily attributable to our net loss of approximately $5.5 million.

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

The operating cash outflow for

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

lawsuit settlement.

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

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

by cash inflow consisting of advance to a related party supplier of approximately $6.2 million which we realized as the cost for the

sale of cryptocurrency equipment.

cash provided by investing activities was $0.1 million for the year ended June 30, 2024 due to repayments from related parties from Zhejiang

Jinbang, which is owned by Mr.

Qinggang Wang.

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

3 unchanged sentences

We also had cash inflows from repayment of a loan

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

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

Net cash used in investing

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

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

We made an additional loan of $0.5 million

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

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

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

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

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

The Company is taking actions in order to pursue

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

Financing Activities

Financing activities for

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

Net cash provided by financing

activities was approximately $8.3 million for the year ended June 30, 2022 due to issuances of common stock in private placements of approximately

$10.5 million and proceeds from convertible notes of $10 million, repayment of convertible notes of $5.0 million and warrant repurchase

of approximately $7.9 million.

We also had cash from warrants exercise of approximately $0.9 million and repayment of Economic Injury

Disaster Loan.

Critical Accounting Estimates

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

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

cash provided by financing activities for the year ended June 30, 2024 was $4.5 million due to proceeds from issuance of common stock

of 9.9 million and the repayment of $5 million of convertible notes and accrued interest of $0.4 million.

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

Accounting Estimates

preparation of financial statements and related disclosures in conformity with U.S.

generally accepted accounting principles and the Company’s

discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions

and estimates that affect the amounts reported.

Note 2, “Summary of Significant Accounting Policies” of the notes to the financial

statements included elsewhere in this Report describe the significant accounting policies and methods used in the preparation of the Company’s

consolidated financial statements.

There have been no material changes to the Company’s critical accounting estimates since the

date of this Report.

Off-Balance Sheet Arrangements

Quantitative and Qualitative Disclosures

about Market Risk.

Not applicable.

Financial Statements and Supplementary

The Company’s financial

statements and the related notes, together with the report of Audit Alliance LLP, are set forth following the signature pages of this

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure.

generally accepted accounting principles and the

Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make

judgments, assumptions and estimates that affect the amounts reported.

Note 2, “Summary of Significant Accounting Policies”

of the notes to the financial statements included elsewhere in this Report describe the significant accounting policies and methods used

in the preparation of the Company’s consolidated financial statements.

There have been no material changes to the Company’s

critical accounting estimates since the date of this Report.

Sheet Arrangements

Quantitative and Qualitative Disclosures about Market Risk.

Financial Statements and Supplementary Data.

Company’s financial statements and the related notes, together with the report of Audit Alliance LLP, are set forth following the

signature pages of this Report.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis