Singularity Future Technology Ltd. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in the Report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. Overview 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 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. subsidiaries. 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 Trading Ltd. 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. We have not generated any revenues to date with respect to our entry into the solar panel production and distribution business. 20 Recent Developments Reverse Stock Split On 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 were rounded up to the next whole number. Trading 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. Nasdaq Listing Deficiencies On 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). Pursuant to 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. On 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. Receipt of SEC Subpoena As 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. The audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30, 2021 and six months ended December 31, 2021. The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K (the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the Amended Form 10-K, the “Restatements”). On June 17, 2024, the Company received a subpoena from the Securities and Exchange Commission (the “SEC”) requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation. 21 On January 17, 2025, after cooperating with the Investigations, the Company reached a resolution with the SEC regarding the aforementioned matters. The SEC approved the Company’s Offer of Settlement and issued its Cease-and-Desist Order (the “SEC Order”) dated January 17, 2025, with respect to certain violations related to the Company’s financial reporting, accounting, books and records, and internal controls. Pursuant to the terms of the SEC Order, the Company will pay a civil monetary penalty of $350,000 to the SEC, comply with certain undertakings to remediate its material weaknesses in the internal control and disclosure deficiencies by June 30, 2026, and cease and desist any violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-15 thereunder. In the event the Company fails to comply with these undertakings, the Company shall, by December 31, 2026, pay an additional civil monetary penalty of $1,000,000 to the SEC. The above descriptions of the SEC Order are not complete and are qualified in their entirety by the terms thereof. The complete SEC Order, including the Company’s obligations thereunder, can be accessed at the SEC website at www.sec.gov. Entry 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. Levy v. Singularity Future Technology Ltd. As previously disclosed, on January 18, 2024, John F. Levy (“Levy”), a former member of the Board of the Company, filed a claim against the Company in the Court, Levy v. Singularity Future Technology Ltd. f/k/a Sino-Global Shipping America Ltd. , 24-cv-0384-NG-JMW (the “Lawsuit”). On April 1, 2025, Levy and the Company entered into a confidential settlement and mutual release agreement to fully resolve the Lawsuit (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company paid a sum of one hundred and fifty thousand dollars ($150,000) to Blank Rome LLP, which was counsel to Levy. On April 17, 2025, the stipulation to dismiss the Lawsuit with prejudice was filed with the Court. On April 18, 2025, this Lawsuit was terminated. Crivellaro v. Singularity Future Technology Ltd. As previously disclosed, on December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired the publicly traded common stock of the Company between February 2021 and November 2022, brought a putative class action, Crivellaro v. Singularity Future Technology Ltd., 22-cv-7499-BMC , against the Company and a dozen related person and entities in the United States District Court for the Eastern District of New York (the “Court”). Plaintiffs alleged violations of the U.S. federal securities laws by the Company. Plaintiffs seek damages, plus interest, costs, fees, and attorneys’ fees. The Company filed a motion to dismiss on November 20, 2023. On December 17, 2024, the Court issued an order that partially denied the motions to dismiss filed by the Company and its former chief executive officer, Yang Jie, arising from various statements made by Yang Jie about two allegedly fraudulent transactions. The rest of the motions are granted. On January 2, 2025, the Company filed an answer to the Second Amended Class Action complaint. 22 On May 29, 2025, the Company and the lead plaintiffs in the class action executed a binding term sheet (the “Settlement Term Sheet”) setting forth the material terms of their proposed settlement on a class wide basis. On July 13, 2025, the parties executed a Stipulation and Agreement of Settlement (“Settlement Agreement”). Pursuant to the Settlement Agreement, in exchange for the Settlement payment and subject to final approval by the Court, all plaintiffs in the Class Action will release the Company and the other defendants on all claims. The Settlement Payment include cash payment of $3,000,000 and 6,500,000 freely tradable shares of the Company’s Common Stock (the “Settlement Shares”), which shall be issued pursuant to Section 3(a)(10) of the Securities Act of 1933, subject to the Court’s approval of the Settlement. In the event of a reverse stock split prior to the effectiveness of the Settlement, the number of Settlement Shares and/or the put option purchase price (described below) shall be reformulated so that the value of the Settlement Shares/put option shall not be less than $5,850,0000 as of the effectiveness of the Settlement. The settlement class has the right to sell all or a portion of the unsold Settlement Shares back to the Company at $0.85 per share if the 10-trading day average closing price immediately prior to the exercise of the put option falls below $0.85 before the class lead counsel sells the Settlement Shares. The Company agreed to maintain a cash balance $3,250,000 in a dedicated escrow account to mitigate the risk that it is unable to satisfy the put option. On September 22, 2025, the Court imposed a temporary restraining order on the Company, pursuant to which the Company and the Ms. Jia Yang, CEO of the Company, (i) were mandated to transfer $6,250,000 amount, plus interest, from the Company’s Silk Road Bank account in Djibouti to the Company’s Bank of America account in the United States by September 23, 2025; (ii) were mandated to file a status report which identifies the balance of the Bank of America account every Friday until October 9, 2025; and (iii) are prohibited from taking any further steps toward consummating the merger described in the Company’s Schedule 14-A filed with the SEC and from participating in any other transaction which might have the effect of divesting this Court’s jurisdiction over the Company and its assets. As of the date of this report, the Company has requested that Silkroad International Bank S.A. (“Silkroad”) transfer a total of $6.3 million to the Company’s Bank of America account. The Company has requested an input from Silkroad as to the initial $3,000,000 that the Company requested that Silkroad transfer to the Company’s Bank of America account in August 2025. Silkroad indicated that it expects the funds to be credited to the Company’s Bank of America account “within 3-5 business days, subject to the completion of intermediary and central bank procedures.” As of the date of this report, the Company has wired $2,000,000, which are loans from unrelated parties, as part of the settlement cash payment to the Escrow Account set forth in the Settlement Agreement. Huang v. Singularity Future Technology Ltd. As previously disclosed, in February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond. In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the severance payment, his two months’ salary and the incentive-based bonus. On January 31, 2025, a judgment from the Circuit Court for the City of Richmond was entered in favor of Zhikang Huang and against the Company in the amount of $468,956.75, with interest accruing from the date of the judgment. On April 23, 2025, said Virginia judgment was filed in the Supreme Court of New York, County of Westchester and entered in New York in favor of Zhikang Huang and against the Company in the amount of $468,956.75, with interest accruing from January 31, 2025. On August 23, 2025, a settlement agreement was signed between the Company and Zhikang Huang to fully settle all claims by paying $300,000 to Zhikang Huang by August 25, 2025 and issuance of 90,000 shares to Zhikang Huang by October 22, 2025. As of the date of this report, the Company has completed the $300,000 settlement payment to Zhikang Huang. 23 Entry into a Material Definitive Agreement On June 19, 2025, the “Company entered into a securities purchase agreement (the “SPA”) with eighteen investors, under which the Company agrees to sell to the investors an aggregate of 32,188,841 units (the “Unit”), each Unit consisting of one share of the Company’s common stock, without par value (the “Common Stock”) and three warrants, with each warrant initially exercisable to purchase one share of the Common Stock at an exercise price of $1.165 (the “Warrants”), in a private placement to certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, at a price of $0.932 per Unit for an aggregate purchase price of approximately $30 million (the “Offering”). The Warrants are exercisable immediately upon the date of issuance at an initial exercise price of $1.165, for cash. The Warrants may also be exercised cashlessly 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 shares of Common Stock underlying the Warrant. The Warrants shall expire five years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting capitalizations and subdivisions or other similar transactions. The SPA is subject to various conditions to closing, including, among other things, (a) receipt of the Company’s shareholders’ approval and ratification of the SPA and (b) accuracy of the parties’ representations and warranties. Registered Direct Offering On January 24, 2025, the Company entered into certain securities purchase agreement (the “Purchase Agreement”) with certain non-affiliated institutional investors (the “Purchasers”) pursuant to which the Company agreed to sell 700,000 shares of its Common Stock (“Common Stock”) in a registered direct offering (the “Offering”), for gross proceeds of approximately $1.14 million. The purchase price for each share of Common Stock is $1.63. The Purchase Agreements contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions. In addition, the Company agreed that for a period of thirty (30) days from the closing date of the Offering, it will not, including but not limited to,: (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of capital stock or equivalent securities; or (ii) file or caused to be filed any registration statement or amendment or supplement thereto, subject to certain limited exceptions. In addition, the Company agreed that it will not conduct any sales of Ordinary Shares or equivalent securities involving a variable rate transaction (as defined in the Purchase Agreement) for a period of thirty (30) days from the closing date of the Offering, subject to certain exceptions as described in the Purchase Agreements. The Company currently intends to use the net proceeds from the Offering for working capital and general corporate purposes. The Offering closed on January 27, 2025. The Company also entered into certain placement agency agreement dated January 24, 2025 (the “Placement Agency Agreement”), with Maxim Group LLC, as exclusive placement agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as the sole lead/exclusive placement agent in connection with the Offering. The Company agreed to pay the Placement Agent an aggregate fee equal to 7% of the gross proceeds raised in the Offering. The Company also agreed to reimburse the Placement Agent up to an aggregate of $50,000 for the for non-accountable expenses and reasonable and accounted fees and expenses of legal counsel. Furthermore, the Placement Agent was granted a right of first refusal for a period of twelve (12) months from the closing date of the Offering. 24 Results of Operations Comparison of the Years Ended June 30, 2025 and 2024 The following table sets forth the results of our operations for the periods indicated: For the Years Ended June 30, Variance 2025 2024 Amount % Net revenues $ 1,813,193 $ 3,136,681 ($ 1,323,488 ) (42.2 )% Cost of revenues (1,761,794 ) (3,614,947 ) (1,853,153 ) (51.3 )% Gross profit (loss) 51,399 (478,266 ) 529,665 110.7 % Selling expenses (245,077 ) (252,278 ) (7,201 ) (2.9 )% General and administrative expenses (2,518,079 ) (5,031,852 ) (2,513,773 ) (50.0 )% Impairment loss of cryptocurrencies - (72,179 ) (72,179 ) (100.0 )% Allowance for credit losses, net - (87,629 ) (87,629 ) (100.0 )% Operating loss (2,711,757 ) (5,922,204 ) (3,210,447 ) (54.2 )% Gain from disposal of subsidiary and VIE - 359,781 (359,781 ) (100.0 )% Interest income 135,176 - 135,176 100.0 )% Interest expenses (146,370 ) - 146,370 100.0 % Judgment debt expenses (638,586 ) - 638,586 100.0 % Other income, net 77,236 90,649 (13,413 ) (14.8 )% Net loss before income tax expenses (3,284,301 ) (5,471,774 ) (2,187,473 ) (40.0 )% Income tax expense (30,230 ) - 30,230 100.0 % Net loss ($ 3,314,531 ) ($ 5,471,774 ) (2,157,243 ) (39.4 )% Revenues from Freight Logistics Services Freight logistics services primarily consist of cargo forwarding, brokerage, warehouse and other freight services. Revenues from freight logistics services decreased by approximately $1.3 million, or approximately 42.2%, to $1.8 million for the year ended June 30, 2025 from $3.1 million for the year ended June 30, 2024. The decrease was mainly caused by shipping revenue declined $0.5 million from our U.S. subsidiary, Brilliant Warehouse, due to closure of operations in fiscal 2024 and $0.9 million declined in revenue from our PRC subsidiaries as the tariff wars caused significant decline in business volume. For the year ended June 30, 2025, the Company generated all of its revenue in PRC. Cost of Revenues Cost of revenues for our freight logistics services mainly consisted of freight costs to various freight carriers, cost of labor, warehouse rent and other overhead and sundry costs. Cost of revenues for our freight logistics services decreased by approximately $1.9 million, or 51.3%, to approximately $1.8 million for the year ended June 30, 2025 from approximately $3.6 million. The closure of U.S. subsidiary, Brilliant Warehouse in fiscal 2024 which significant reduced cost of revenue by $1.0 million. The cost from our PRC subsidiaries declined by $0.8 million mainly contributed by decline in business volume as a result of tariff wars. Our gross margin was 2.8% from our PRC subsidiaries for the year ended June 30, 2025 which declined by 0.5% from 3.4% for the year ended June 30, 2024 due to marginal increase in freight costs. Our gross margin was (15.2%) for the year ended June 30, 2024, which was mainly due to decreased revenue from our freight logistics business and ceased to sell crypto-mining equipment since January 1, 2023. Selling Expenses Our selling expenses consisted primarily of salaries, meals and entertainment and travel expenses for our sales representatives. Our selling expenses decreased by approximately $7,201, or 2.9%, to $0.2 million for the year ended June 30, 2025 from $0.3 million for the same period of last year. The decrease was mainly attributable in the decrease in freight volume which, in turn, reduced selling activities. 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. Our general and administrative expenses decreased by approximately $2.5 million, or 50.0%, to $2.5 million for the year ended June 30, 2025 from $5.0 million for the same period of last year. Since closure of business operation in U.S., the management undertook significant cost cutting initiatives reducing all categories of general administrative expenses across the board. 25 Impairment Loss of Cryptocurrencies We recorded an impairment loss of nil and $72,179 for the year ended June 30, 2025 and 2024 respectively, for the cryptocurrencies held by us as the ownership of the cryptocurrencies could not be verified. Allowance for credit losses, net Our allowance for credit losses decreased by approximately $87,629, or 100%, to nil for the year ended June 30, 2025, from allowance for credit losses of $87,629 for the same period of last year. For the year ended June 30, 2025, allowance for credit losses were fully provided in fiscal 2024. Gain from disposal of subsidiaries and VIE On 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. No such disposal for the year ended June 30, 2025. Interest income Interest income increased by approximately $0.1 million, or 100%, to approximately $0.1 million for the year ended June 30, 2025 from nil for the same period of last year, which was mainly related to interest earned on term deposit placed with East West Bank. Interest expenses Interest expenses increased to $0.1 million, or 100%, to $0.1 million for the year ended June 30, 2025 from nil for the same period of last year. As of June 30, 2025, loans from third parties amounted to $1.5 million with a weighted average interest rate of 12% per annum and a weighted average maturity of one year. Judgment debt expenses We recorded $0.6 million in judgment debt expenses for the year ended June 30, 2025, compared to nil in judgment debt expenses for the same period of last year. Judgment debt expenses mainly related to a judgment passed in January 2025 against the Company and in favor of plaintiff. In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond. In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the severance payment, his two months’ salary and the incentive-based bonus. On January 31, 2025, a judgment from the Circuit Court for the City of Richmond was entered in favor of Zhikang Huang and against the Company in the amount of $488,586, with interest accruing from the date of the judgment. On April 23, 2025, said Virginia judgment was filed in the Supreme Court of New York, County of Westchester and entered in New York in favor of Zhikang Huang and against the Company in the amount of $488,586 with interest accruing from January 31, 2025. Also, there was a settlement expenses with John Levy of $150,000. As previously disclosed, on January 18, 2024, John F. Levy (“Levy”), a former member of the Board of the Company, filed a claim against the Company in the Court, Levy v. Singularity Future Technology Ltd. f/k/a Sino-Global Shipping America Ltd. , 24-cv-0384-NG-JMW (the “Lawsuit”). On April 1, 2025, Levy and the Company entered into a confidential settlement and mutual release agreement to fully resolve the Lawsuit (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company paid a sum of one hundred and fifty thousand dollars ($150,000) to Blank Rome LLP, which was counsel to Levy. On April 17, 2025, the stipulation to dismiss the Lawsuit with prejudice was filed with the Court. On April 18, 2025, this Lawsuit was terminated. Other income, net Other income, net, decreased by $13,413, or 14.8%, to $77,236 for the year ended June 30, 2025 from $90,649 for the year ended June 30, 2024, which mainly related to reduced exchange gain . Income tax expenses Our income tax expenses amounted to $30,230 and nil for the years ended June 30, 2025 and 2024, respectively. The income tax expenses mainly attributable to interest income earned from terms deposits. Net Loss As a result of the foregoing, we had a net loss of $3.3 million and $5.5 million for the year ended June 30, 2025 and 2024, respectively. 26 Liquidity and Capital Resources Cash Flows and Working Capital As of June 30, 2025, we had $14.5 million in cash (including cash on hand and cash in bank) and $3.1 million in restricted cash due to the guarantee that the Company provided to its business partner Solarlink Group Inc. and the garnishment process initiated by Zhikang Huang, as discussed in the Recent Developments section. 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. The following table sets forth a summary of our cash flows for the periods as indicated: For the Years Ended June 30, 2025 2024 Net cash used in operating activities $ (2,692,682 ) $ (4,408,691 ) Net cash provided by investing activities - 75,580 Net cash provided by financing activities 2,607,261 4,456,576 Effect of changes of foreign exchange rate on cash and restricted cash 1,258 222,438 Cash and restricted cash, beginning of year 17,736,059 17,390,156 Cash and restricted cash, end of year $ 17,651,896 $ 17,736,059 The following table sets forth a summary of our working capital: As of As of June 30, June 30, 2025 2024 Variance % Total Current Assets $ 18,134,340 $ 18,247,523 ($ 113,183 ) (0.6 )% Total Current Liabilities $ 7,274,565 $ 5,343,001 $ 1,931,564 36.2 % Working Capital $ 10,859,775 $ 12,904,522 ($ 2,044,747 ) (15.8 )% Current Ratio 2.49 3.42 (0.92 ) (27.0 )% 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, 2025, our working capital was $10.9 million and we had cash of approximately $14.5 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 Our net cash used in operating activities was approximately $2.7 million for the year ended June 30, 2025. The operating cash outflow for the year ended June 30, 2025 was primarily attributable to our net loss of approximately $2.3 million. Our 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, 2024 was primarily attributable to our net loss of approximately $5.5 million. Investing Activities Net cash provided by investing activities was nil for the year ended June 30, 2025. Net 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. Financing Activities Net cash provided by financing activities for the year ended June 30, 2025 was proceeds of $2.1 million from third parties loans and proceeds of $1.1 million from issuance of 0.7 million common shares, as partially offset by repayment of $0.6 million third parties’ loans. Net 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. 27 Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies” of the notes to the financial statements included elsewhere in this Report describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the date of this Report. Off-Balance Sheet Arrangements None. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not applicable. Item 8. Financial Statements and Supplementary Data. The Company’s financial statements and the related notes, together with the report of Audit Alliance LLP, are set forth following the signature pages of this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.