TREASURE GLOBAL INC 10-K

Item 8. Financial Statements and Supplementary Data. TREASURE GLOBAL INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 1171) F-2 Consolidated Balance Sheets as of June 30, 2024 and 2023 F-3 Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2024 and 2023 F-4 Consolidated Statements of Changes in Stockholders’ Deficiency for the years ended June 30, 2024 and 2023 F-5 Consolidated Statements of Cash Flows for the years ended June 30, 2024 and 2023 F-6 Notes to Consolidated Financial Statements F-7 – F-36 F- 1 Report of Independent Registered Public Accounting Firm To: The Board of Directors and Stockholders of Treasure Global Inc Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Treasure Global Inc and its subsidiaries (the “Company”) as of June 30, 2024, and the related consolidated statements of operations and comprehensive loss, change in stockholders’ deficiency, and cash flows for the year ended June 30, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024, and the results of its operations and its cash flows for the year ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had an accumulated deficit and its net cash outflows from operating activities raises substantial doubt about its ability to continue as a going concern. Management’s plan regarding these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the 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 audit 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/ WWC, P.C. WWC, P.C. Certified Public Accountants PCAOB ID: 1171 We have served as the Company’s auditor since 2023. San Mateo, California September 30, 2024 F- 2 TREASURE GLOBAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of June 30 As of June 30, 2024 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 200,013 $ 4,593,634 Investment in marketable securities 171,633 - Accounts receivable, net - 163,169 Inventories, net 27,467 400,543 Other receivables and other current assets, net 186,829 613,125 Other receivable, a related party 12,246 12,379 Prepayments 358,526 248,551 Total current assets 956,714 6,031,401 OTHER ASSETS Property and equipment, net 173,678 279,600 Intangible assets, net 3,130,936 - Operating lease right-of-use assets 17,257 61,377 Total other assets 3,321,871 340,977 TOTAL ASSETS $ 4,278,585 $ 6,372,378 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) CURRENT LIABILITIES Related party loan, current portion $ 6,338 $ 5,323 Insurance loan 38,371 160,292 Convertible notes payable, net of unamortized discounts of $ 0 and $ 358,284 as of June 30, 2024 and 2023, respectively - 4,791,716 Accounts payable 22,441 42,853 Customer deposits 70,080 161,475 Contract liability 188,748 157,080 Other payables and accrued liabilities 508,657 723,396 Other payables, related parties 761 1,660 Amount due to related parties - 320,960 Operating lease liabilities 17,257 40,274 Income tax payables 42,456 67,546 Total current liabilities 895,109 6,472,575 NON-CURRENT LIABILITIES Operating lease liabilities, non-current - 22,036 Related party loan, non-current portion 2,743 8,099 Total non-current liabilities 2,743 30,135 TOTAL LIABILITIES 897,852 6,502,710 COMMITMENTS AND CONTINGENCIES - - STOCKHOLDERS’ EQUITY (DEFICIENCY) Common stock, par value $ 0.00001 ; 170,000,000 shares authorized, 1,671,623 and 255,734 shares issued and outstanding as of June 30, 2024 and 2023, respectively* 17 3 Additional paid-in capital 41,171,827 31,485,733 Accumulated deficit ( 38,030,074 ) ( 31,443,451 ) Accumulated other comprehensive income (loss) 238,963 ( 172,617 ) TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY) 3,380,733 ( 130,332 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) $ 4,278,585 $ 6,372,378 * Giving retroactive effect to the 1-for-70 reverse stock split effected on February 27, 2024 The accompanying notes are an integral part of these consolidated financial statements. F- 3 TREASURE GLOBAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For the Years Ended June 30, 2024 2023 REVENUES $ 22,066,829 $ 69,408,319 COST OF REVENUES ( 21,250,767 ) ( 68,885,035 ) GROSS PROFIT 816,062 523,284 SELLING ( 1,760,921 ) ( 4,721,723 ) GENERAL AND ADMINISTRATIVE ( 4,511,488 ) ( 4,670,030 ) RESEARCH AND DEVELOPMENT ( 513,524 ) ( 549,065 ) STOCK-BASED COMPENSATION ( 93,111 ) ( 819,332 ) TOTAL OPERATING EXPENSES ( 6,879,044 ) ( 10,760,150 ) LOSS FROM OPERATIONS ( 6,062,982 ) ( 10,236,866 ) OTHER (EXPENSE) INCOME Other (expense) income, net 102,514 ( 7,937 ) Interest expense ( 74,920 ) ( 95,242 ) Fair value loss on marketable securities ( 828,367 ) - Other income from software developing service, net of cost 675,131 - Amortization of debt discount ( 358,284 ) ( 1,290,050 ) TOTAL OTHER EXPENSE, NET ( 483,926 ) ( 1,393,229 ) LOSS BEFORE INCOME TAXES ( 6,546,908 ) ( 11,630,095 ) PROVISION FOR INCOME TAXES ( 39,715 ) ( 97,616 ) NET LOSS ( 6,586,623 ) ( 11,727,711 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments 411,580 ( 271,141 ) COMPREHENSIVE LOSS $ ( 6,175,043 ) $ ( 11,998,852 ) LOSS PER SHARE Basic and diluted* $ ( 7.67 ) $ ( 49.18 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic and diluted* 858,672 238,457 * Giving retroactive effect to the 1-for-70 reverse stock split effected on February 27, 2024 The accompanying notes are an integral part of these consolidated financial statements. F- 4 TREASURE GLOBAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ EQUITY (DEFICIENCY) ACCUMULATED TOTAL COMMON STOCK ADDITIONAL OTHER STOCKHOLDERS’ Number of shares* Par value PAID IN CAPITAL ACCUMULATED DEFICIT COMPREHENSIVE (LOSS) INCOME EQUITY (DEFICIENCY) Balance as of June 30, 2022 150,646 $ 2 $ 4,020,655 $ ( 19,715,740 ) $ 98,524 $ ( 15,596,559 ) Beneficial conversion feature from issuance of convertible notes - - 749,062 - - 749,062 Net loss - - - ( 11,727,711 ) - ( 11,727,711 ) Issuance of common stock - non-employee stock compensation 5,651 - 819,332 - - 819,332 Conversion of convertible note payable 59,288 1 14,476,366 - - 14,476,367 Conversion of convertible note payable, related parties 5,047 - 2,437,574 - - 2,437,574 Issuance of common stock in initial public offering, net of issuance costs 32,857 - 7,951,225 - - 7,951,225 Fair value of warrants issued in initial public offering - - 175,349 - - 175,349 Issuance of warrants - non- employee stock compensation - - 856,170 - - 856,170 Cashless exercise of warrants- non- employee stock compensation into common stock 2,245 - - - - - Foreign currency translation adjustments - - - - ( 271,141 ) ( 271,141 ) Balance as of June 30, 2023 255,734 3 31,485,733 ( 31,443,451 ) $ ( 172,617 ) ( 130,332 ) Net loss - - - ( 6,586,623 ) - ( 6,586,623 ) Conversion of convertible note payable 68,061 1 1,811,069 - - 1,811,070 Issuance of common stock to related parties for debts cancellation 25,954 - 321,562 - - 321,562 Issuance of common stock for acquiring intangible assets 635,348 6 3,553,494 - - 3,553,500 Issuance of common stock and prefunded warrants in public offering, net of issuance costs 371,629 4 3,457,302 - - 3,457,306 Issuance of common stock at the market offering, net of issuance costs 94,889 1 431,810 - - 431,811 Exercise of prefunded warrants into common stock 200,000 2 1,398 - - 1,400 Issuance of common stock - non-employee stock compensation 20,000 - 82,000 - - 82,000 Employee stock compensation - - 11,111 - - 11,111 Capital contribution - - 16,348 - - 16,348 Foreign currency translation adjustments - - - - 411,580 411,580 Additional shares of common stock round up adjustment due to retroactive effect of 1-for-70 reverse stock split 8 - - - - - Balance as of June 30, 2024 1,671,623 $ 17 $ 41,171,827 $ ( 38,030,074 ) $ 238,963 $ 3,380,733 * Giving retroactive effect to the 1-for-70 reverse stock split effected on February 27, 2024 The accompanying notes are an integral part of these consolidated financial statements. F- 5 TREASURE GLOBAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended June 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 6,586,623 ) $ ( 11,727,711 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 117,907 108,483 Amortization of intangible assets 612,909 - Amortization of debt discounts 358,284 1,290,050 Amortization of operating right-of-use assets 34,561 35,034 Allowance for credit losses 395,302 601 Inventories impairment 483 - Stock-based compensation 93,111 819,332 Other income from software developing service, net of cost ( 1,000,000 ) - Loss from disposal of equipment - 18,362 Gain from disposal of subsidiaries ( 203,333 ) - Fair value loss on marketable securities 828,367 - Change in operating assets and liabilities Accounts receivable ( 39,559 ) ( 170,107 ) Inventories 340,605 ( 204,028 ) Other receivables and other current assets 390,355 ( 352,990 ) Other receivables, a related party - ( 12,860 ) Prepayments ( 113,183 ) ( 58,941 ) Accounts payable 264,745 19,588 Accounts payable, related parties - ( 14,061 ) Customer deposits ( 90,086 ) 95,787 Contract liability 33,515 107,474 Other payables and accrued liabilities ( 96,398 ) 468,492 Other payables, related parties - 1,725 Operating lease liabilities ( 27,163 ) ( 34,065 ) Income tax payables ( 26,605 ) 49,550 Net cash used in operating activities ( 4,712,806 ) ( 9,560,285 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of equipment ( 16,740 ) ( 86,964 ) Purchases of intangible asset ( 191,119 ) - Cash released from disposal of subsidiaries, net of cash received ( 44,755 ) - Proceeds from sale of equipment - 25,720 Net cash used in investing activities ( 252,614 ) ( 61,244 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of deferred offering cost - ( 15,000 ) Proceeds from issuance of commons stock in initial public offering - 8,235,110 Proceeds from issuance of common stock and prefunded warrants in public offering 3,457,306 - Proceeds from issuance of common stock in market offering 431,811 - Proceeds received from exercising prefunded warrants 1,400 - Capital contribution 16,348 - Principal payments of insurance loan ( 184,886 ) ( 104,271 ) Payments of related party loan ( 4,215 ) ( 4,105 ) Proceeds from issuance of convertible notes - 7,732,092 Repayments of convertible notes ( 3,367,291 ) - Repayment of senior note - ( 65,000 ) Repayments to related parties - ( 1,728,225 ) Proceeds from third party loans - 556,719 Repayments to third party loans - ( 1,948,132 ) Net cash provided by financing activities 350,473 12,659,188 EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 221,326 ( 289,257 ) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 4,393,621 ) 2,748,402 CASH AND CASH EQUIVALENTS, beginning of year 4,593,634 1,845,232 CASH AND CASH EQUIVALENTS, end of year $ 200,013 $ 4,593,634 SUPPLEMENTAL CASH FLOWS INFORMATION Income taxes paid $ 29,957 $ 46,450 Interest paid $ 51,333 $ 65,679 SUPPLEMENTAL NON-CASH FLOWS INFORMATION Offering costs paid in the prior period $ - $ 93,536 Beneficial conversion feature resulted from issuance of convertible notes $ - $ 749,062 Fair value of warrants issued to underwriter $ - $ 175,349 Fair value of warrants issued to consultant $ - $ 856,170 Fair value of common stock issued to consultant $ 82,000 $ 819,332 Vesting of employee stock compensation $ 11,111 $ - Recognition of operating right-of-use asset and lease liability $ - $ 98,795 Recognition of accrued restoration cost in a lease $ - $ 24,664 Conversion of convertible note payable, net of unamortized discounts $ 1,811,070 $ 14,476,367 Conversion of convertible note payable, related parties $ - $ 2,437,574 Financing insurance premium paid by insurance loan $ 62,965 $ 264,563 Marketable securities received as in exchange of software developing service $ 1,000,000 $ - Issuance of common stock to related parties for debts cancellation $ 321,562 $ - Issuance of common stock for acquiring intangible assets $ 3,553,500 $ - The accompanying notes are an integral part of these consolidated financial statements. F- 6 TREASURE GLOBAL INC AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Nature of business and organization Treasure Global Inc. (“TGL” or the “Company”) is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware. The Company has no substantive operations other than holding all of the outstanding shares of ZCity Sdn. Bhd. (“ZCITY”), (formerly known as Gem Reward Sdn. Bhd, underwent a name change on July 20, 2023). ZCITY was originally established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization. On March 11, 2021, TGL completed a reverse recapitalization (“Reorganization”) under common control of its then existing stockholders, who collectively owned all of the equity interests of ZCITY prior to the Reorganization through a Share Swap Agreement. ZCITY is under common control of the same stockholders of TGL through a beneficial ownership agreement, which results in the consolidation of ZCITY and has been accounted for as a Reorganization of entities under common control at carrying value. Before and after the Reorganization, the Company, together with its subsidiaries is effectively controlled by the same stockholders, and therefore the Reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5. The Company, through its wholly owned subsidiary, ZCITY, engages in the payment processing industry and operate an online-to-offline (“O2O”) e-commerce platform known as “ZCITY”. The Company has extensive business interests in creating an innovative O2O e-commerce platform with an instant rebate and affiliate cashback program business model, focusing on providing a seamless payment solution and capitalizing on big data using artificial intelligence technology. The Company’s proprietary product is an internet application (or “app”) called “ZCITY App”. ZCITY App drives user app download and transactions by providing instant rebate and cashback. The Company aims to transform and simplify a user’s e-payment gateway experience by providing great deals, rewards and promotions with every use in an effort to make it Malaysia’s top reward and payment gateway platform. On April 12, 2023, the Company entered into a share sale agreement (the “Agreement”) with Damanhuri Bin Hussien (“DBH”), an unrelated party. Pursuant to the Agreement, the Company agreed to purchase 10,000 units of ordinary shares, representing a 100 % equity interest in Foodlink Global Sdn. Bhd. (“Foodlink”), along with its two wholly-owned subsidiaries, Morgan Global Sdn. Bhd (“Morgan”) and AY Food Ventures Sdn. Bhd. (“AY Food”), for a consideration of approximately $ 3,000 from DBH. Foodlink, Morgan, and AY Food are engaged in the operation of sub-licensing restaurant branding and the selling and trading of food and beverage products. Since Foodlink, Morgan, and AY Food are blank check companies that were incorporated in January 2023 without any operating history prior to the acquisition, the acquisition of these entities is immaterial to the Company’s consolidated financial statements. F- 7 The accompanying consolidated financial statements reflect the activities of TGL and each of the following entities. Name Background Ownership ZCity Sdn Bhd (formerly known as Gem Reward Sdn. Bhd.) (“ZCITY”) ● ● ● A Malaysian company Incorporated in June 2017 Operated O2O e-commerce platform known as ZCITY 100 % owned by TGL Foodlink Global Sdn. Bhd. (“Foodlink”) * ● ● ● A Malaysian company Incorporated in January 2023 Sub-licensing restaurant branding and selling and trading of foods and beverage products. 100 % owned by TGL Morgan Global Sdn. Bhd. (“Morgan”)* ● ● ● A Malaysian company Incorporated in January 2023 Sub-licensing restaurant branding and selling and trading of foods and beverage products. 100 % owned by Foodlink AY Food Ventures Sdn. Bhd. (“AY Food”)* ● ● ● A Malaysian company Incorporated in January 2023 Sub-licensing restaurant branding and selling and trading of foods and beverage products. 100 % owned by Foodlink * Due to recurring loss from the operation of sub-licensing restaurant branding and the selling and trading of food and beverage products. The Company decided to dispose Foodlink and its subsidiaries. On May 24, 2024, the Company, Jeffrey Goh Sim Ik (the “Purchaser”) and Koo Siew Leng (the “Guarantor”) entered into a Share Sale and Purchase Agreement (the “Agreement”), in which the Company agreed to sell all of its equity interest in Foodlink and its subsidiaries Morgan and AY Food to the Purchaser, in exchange for a total of $ 148,500 , of which shall be payable by the Purchaser to the Company as follows: (i) an initial deposit payable on May 24, 2024; and (ii) the balance of the purchase price payable in eight installment payments starting from May 24, 2024. The Company recognized a gain from disposal of Foodlink and its subsidiaries amounted to $ 203,333 . However, the disposal did not have material impact to the Company’s operations and its consolidated financial statements. Note 2 – Summary of significant accounting policies Going concern In assessing the Company’s liquidity and the significant doubt about its ability to continue as a going concern, the Company monitors and analyzes cash on hand and operating expenditure commitments. The Company’s liquidity needs are to meet working capital requirements and operating expense obligations. To date, the Company has financed its operations primarily through cash flows from contributions from stockholders, issuance of convertible notes from third parties and related parties, related party loans, its initial underwritten public offering (the “Offering”), its underwritten public offering (the “November 2023 Offering”), and its market offering (the “Market Offering”) The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to: (1) recurring loss from operations of approximately $ 6.1 million for the year ended June 30, 2024; (2) accumulated deficit of approximately $ 38.0 million as of June 30, 2024; and (3) net operating cash outflow of approximately $ 4.7 million for the year ended June 30, 2024. On August 15, 2022, the Company closed its Offering of 32,857 ( 2,300,000 pre reverse split) shares of common stock, par value $ 0.00001 per share, at $ 280 ($ 4.00 pre reverse split) per share. The Company received aggregate net proceeds from the closing of approximately $ 8.2 million, after deducting underwriting discounts, commissions, fees, and other estimated offering expenses. From February 2023 to June 2023, the Company issued two convertible notes to a third party, in an aggregate principal amount of $ 5,500,000 . Upon completion of these transactions, the Company received $ 5,060,000 in net proceeds from this third party, net of debt discount. The convertible notes accrue or will accrue interest expense at 4 % per annum and have a 12-month term. F- 8 On November 30, 2023, the Company closed its November 2023 Offering of (i) 371,628 ( 26,014,000 pre reverse split) shares of common stock, par value $ 0.00001 per share, at a public offering price of $ 0.10 per share of Common Stock and (ii) 14,000,000 pre-funded warrants (the “Pre-Funded Warrants”), each with the right to purchase 0.01 (one share pre reverse split) of Common Stock, at a public offering price of $ 0.0999 per Pre-Funded Warrants. Upon closing of the November 2023 Offering, the Company received an aggregated net proceed of approximately $ 3.5 million, after deducting underwriting discounts, and non-accountable expense. On March 22, 2024, the Company and H.C. Wainwright & Co., LLC, (the “Manager”) entered into a marketing offering agreement (“Marketing Offering Agreement”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. For the year ended June 30, 2024, the Company received an aggregated net proceed of approximately $ 0.4 million, net of broker fee from issuance of 94,889 shares of common stock which sell through or to the Manager. As disclosed in Note 18, the Company received net proceed of $ 2,457,456 , net of broker fee from issuance of 1,583,418 shares of common stock which sell through or to the Manager related to the Marketing Offering Agreement. Despite receiving the net proceeds from the offerings, and issuance of convertible notes, the Company’s management is of the opinion that it will not have sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due starting from one year from the date of this report due to the recurring loss. Therefore, management has determined that there is a significant doubt about its ability to continue as a going concern. If the Company is unable to generate significant revenue, it may be required to curtail or cease its operations. Management is trying to alleviate the going concern risk through the following sources: ● Equity financing to support its working capital; ● Financial support and credit guarantee commitments from the Company’s related parties. There, however, is no guarantee that the substantial doubt about the Company’s ability to continue as a going concern will be alleviated. Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. Enterprise wide disclosure The Company’s Chief Operating Decision Makers (CODM), which include the Chief Executive Officer and their direct reports, review financial information presented on a consolidated basis. This information is accompanied by a breakdown of revenues from different revenue streams, facilitating resource allocation and financial performance evaluation. The reporting of operating segments aligns with the internal reports provided to the CODM, a group composed of specific members of the Company’s management team. Following the disposal of Foodlink and its subsidiaries, along with their food and beverage product distribution and sublicensing operation on May 24, 2024, the Company now operates under a single segment which is payment processing and e-commerce operation in its ZCITY platform as of June 30, 2024. F- 9 Use of estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in our consolidated financial statements include the estimated retail price per point and estimated breakage to calculate the revenue recognized in our loyalty program revenue, useful lives of property and equipment, impairment of long-lived assets, allowance for credit loss, write-down for estimated obsolescence or unmarketable inventories, realization of deferred tax assets and uncertain tax position, fair value of our stock price to determine the beneficial conversion feature (“BCF”) within the convertible note, fair value of the stock-based compensation, fair value of the marketable securities, and fair value of the warrants issued. Actual results could differ from these estimates. Foreign currency translation and transaction Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive loss. The reporting currency of the Company is United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. The Company’s subsidiaries in Malaysia conducts their businesses and maintains their books and record in the local currency, Malaysian Ringgit (“MYR” or “RM”), as its functional currency. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive gain or loss within the consolidated statements of changes in stockholders’ deficiency. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation of foreign currencies into US$ 1 have been made at the following exchange rates for the respective periods: As of June 30, 2024 June 30, 2023 Period-end MYR: US$1 exchange rate 4.72 4.67 For the years ended June 30, 2024 2023 Period-average MYR: US$1 exchange rate 4.69 4.53 Cash and cash equivalents Cash is carried at cost and represent cash on hand, time deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. Cash equivalents consist of funds received from customer, which funds were held at the third-party platform’s fund account, and which are unrestricted and immediately available for withdrawal and use. F- 10 Accounts receivable, net Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest. The Company provides various payment terms from cash due on delivery to 90 days based on customer’s credibility. Accounts receivable include money due from sales of health care product on its ZCITY platform as well as sublicensing revenue, and sales of food and beverage products. Starting from July 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Company used a modified retrospective approach, and the adoption does not have material impact on our consolidated financial statements. The carrying value of accounts receivable is reduced by an allowance for credit losses that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for credit losses is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance for credit losses when it is considered necessary. Account balances are charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of June 30, 2024 and 2023, the Company recorded $ 1,100 , and $ 214 of allowance for credit loss, respectively. For the years ended June 30, 2024 and 2023, the Company record $ 182,544 and $ 601 additional allowance for credit loss against accounts receivable, respectively. Inventories Inventories are stated at the lower of cost or net realizable value, cost being determined on a first in first out method. Costs include gift card or “E-voucher” pin code which are purchased from the Company’s suppliers as merchandized goods or store credit. Costs also included health care products, foods and beverage products which are purchased from the Company’s suppliers as merchandized goods. Management compares the cost of inventories with the net realizable value and if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventories are reviewed for potential write-down for estimated obsolescence or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value based upon forecasts for future demand and market conditions. When inventories are written-down to the lower of cost or net realizable value, it is not marked up subsequently based on changes in underlying facts and circumstances. For the years ended June 30, 2024 and 2023, $ 483 and $ 0 write-down for inventories were recorded, respectively. Other receivables and other current assets, net Other receivables and other current assets consist of prepayment made by the Company to third parties for cyber security service, director & officer liability insurance (“D&O Insurance”), and other professional fee. Other receivables and other current assets also include refundable advance to third party service provider, and other deposits. Starting from July 1, 2023 , the Company adopted ASC Topic 326 on its other receivables using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new accounting guidance, the Company measures credit losses on its other receivables using the current expected credit loss model under ASC 326. As of June 30, 2024 and 2023, the Company provided allowance for credit loss of $ 212,758 and $0 , respectively. Prepayment Prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any prepayments determined by management that such advances will not be in receipts of inventories, services, or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its prepayments on a regular basis to determine if the 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. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of June 30, 2024 and 2023, the Company did not record allowance for doubtful account against prepayment. F- 11 Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with no residual value. The estimated useful lives are as follows: Expected useful lives Computer and office equipment 5 years Furniture and fixtures 3 - 5 years Motor vehicles 5 years Leasehold improvement 3 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives . Intangible assets, net The Company’s acquired intangible assets with definite useful lives only consist of internal used software. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its internal use software with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated economic lives, which is determined to be approximately one to five years . Impairment for long-lived assets Long-lived assets, including property and equipment, and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2024 and 2023, no impairment of long-lived assets was recognized. Investment in marketable securities Investments in marketable securities, net, consist of investments in listed shares, which are listed on Nasdaq. Marketable securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges with changes in fair value recorded in other (expense) income in the consolidated statements of operations and comprehensive loss. All changes in a marketable security’s fair value are reported in earnings as they occur, as such, the sale of a marketable security does not necessarily give rise to a significant gain or loss. Unrealized gains/(losses) due to fluctuations in fair value are recorded in the consolidated statements of operations and comprehensive loss. Declines in fair value below cost deemed to be other-than-temporary are recognized as impairments in the consolidated statements of comprehensive income. Customer deposits Customer deposits represent amounts advanced by customers on service order. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy. Additionally, customer deposits also include unamortized member subscription revenue. 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. F- 12 In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF, and the Company amortizes the discount to interest expense, over the life of the debt. Upon conversion, the carrying amount of the convertible note, net of the unamortized discount shall be reduced by, if any, the cash (or other assets) transferred and then shall be recognized in the capital accounts to reflect the shares issued and no gain or loss is recognized pursuant to ASC Topic 470-20-40-4. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. As the Company’s warrants meet all of the criteria for equity classification, so the Company classified each warrant as its own equity. Revenue recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606) for all periods presented. The core principle underlying the revenue recognition of this ASU allows the Company to recognize - revenue that 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. This will require the Company to identify contractual performance obligations and determine 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. To achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (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. The Company accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of substantially collection. F- 13 Revenue recognition policies for each type of revenue stream are as follows: Product revenue - Performance obligations satisfied at a point in time The Company primarily sells discounted gift cards (or E-vouchers) from retailers, health care products and computer products through individual order directly through the Company’s online marketplace platform and its mobile application (“ZCITY”). In addition, the Company through its subsidiaries, Morgan and AY Food, engages in sales of food and beverage products. When the Company is acting as a principal in the transaction, the Company accounts for the revenue generated from its sales of E-vouchers, health care products, computer products, and food and beverage product on a gross basis as the Company is responsible for fulfilling the promise to provide the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. In making this determination, the Company assesses whether it is primarily obligated in these transactions, is subject to inventory risk, has latitude in establishing prices, or has met several but not all of these indicators in accordance with ASC 606-10-55-36 through 40. The Company determined that it is primarily responsible for fulfilling the promise to provide the specified good as the Company directly purchases and pays for in full the applicable E-voucher, health care products and computer products from the vendors prior to posting of such products for sale on its online marketplace platform and prior to taking any orders for sales of such products. Meanwhile, the Company maintained an average daily inventory of approximately $ 0.2 million to support an average 4.7 days of sales during the years ended June 30, 2024, which demonstrate the Company had control over the products prior to selling it to the customers as the ownership of the products did not transfer momentarily to the customer after the Company purchased the products from vendors. In addition, the Company cannot return the products to the vendors due to lack of sales which demonstrated that the Company is subject to inventory risk, and it has discretion in establishing the price of the products which has demonstrated that the Company has the ability to direct the use of that good or service and obtain substantially all of the remaining benefits. In certain instances, the Company is acting as an agent in the transaction and is engaging in drop shipping arrangements for health care, food, and beverage products, where the products were shipped directly from the vendors to the customers. In these drop shipping transactions, the Company was not primarily responsible for fulfilling the promise to deliver the products to the customers, and as a result, did not exercise control over the goods or assume any inventory risks. Therefore, the Company determined that revenue from sales of products under the drop shipping arrangements were recognized on a net basis. The Company recognizes the sales of E-vouchers, health care products, computer products, and food and beverage products revenue when the control of the specified goods is transferred to its customer. No refund or return policy is provided to the customer. Payment is received before the goods are delivered to customers, as such no financing component has been recognized as the payment terms are for reasons other than financing. The products are sold without any warranty provided. For the years ended June 30, 2024 and 2023, approximately $ 0.4 and $ 1.8 million of product revenues are related to non-spending related activities with the same amount recorded as selling expenses, respectively. Loyalty program - Performance obligations satisfied at a point in time The Company’s ZCITY reward loyalty program allows members to earn points on purchases that can be redeemed for rewards that include discounts on future purchases. When members purchase the Company’s product or make purchase with the Company’s participated vendor through ZCITY, the Company allocate the transaction price between the product and service, and the reward points earned based on the relative stand-alone selling prices and expected point redemption. The portion allocated to the reward points is initially recorded as contract liability and subsequently recognized as revenue upon redemption or expiration. The two primary estimates utilized to record the contract liabilities for reward points earned by members are the estimated retail price per point and estimated breakage. The estimated retail price per point is based on the actual historical retail prices of product purchased or service obtained through the redemption of reward points. The Company estimate breakage of reward points based on historical redemption rates. The Company continually evaluates its methodology and assumptions based on developments in retail price per point redeemed, redemption patterns and other factors. Changes in the retail price per point and redemption rates have the effect of either increasing or decreasing the contract liabilities through current period revenue by an amount estimated to represent the retail value of all points previously earned but not yet redeemed by loyalty program members as of the end of the reporting period. F- 14 Transactions revenue - Performance obligations satisfied at a point in time The transactions revenues primarily consist of fees charged to merchants for participating in ZCITY upon successful sales transaction and payment service taken place between the merchants and their customers online. The Company earns transaction revenue from merchants when transactions are completed on certain retail marketplaces. Such revenue is generally determined as a percentage based on the value of merchandise or services being sold by the merchants. In connection with the transaction revenue, the Company offers to share the profit of the transaction (“agent commission”) to the agents who has referred merchants to participating in Company’s online marketplace platform and in ZCITY. Transaction revenue is recognized, net of agent commission, in the consolidated statements of operations at the time when the underlying transaction is completed. Member subscription revenue - Performance obligations satisfied over time In order to attract more customer to engage with the Company’s online marketplace and in ZCITY, the Company provides membership subscription to the customers to join the Zmember program, a membership program that provides member with benefits which included exclusive saving, bonus, and referral rewards. Member subscription revenue primarily consists of fees charge to customers who sign up for Zmember. As the Company provides customers with 6 months member subscription service in general, member subscription revenue is recognized in the consolidated statement of operation over time across the subscription period. Sublicense revenue - Performance obligations satisfied over time The Company, through its wholly-owned subsidiaries, Morgan and AY Food, generates revenue by sublicensing the right to use the Licensor’s Trademark to its customers for the period from July 1, 2023 to May 24, 2024. Since the sublicense fee is charged to customers on a monthly basis throughout the contractual period, the Company recognizes sublicense revenue in the consolidated statements of operations over the duration of the contract. Furthermore, the Company establishes itself as the principal in these arrangements, as it possesses the latitude to establish pricing and assumes the inventory risk associated with fulfilling the minimum payment obligations to the Trademark’s licensor regardless of the number of sublicensees engaged by the Company during the license period. Disaggregated information of revenues by products/services are as follows: For the years ended June 30, 2024 2023 Gift card or “E-voucher” revenue (1) $ 20,042,191 $ 68,050,624 Health care products, computer products, and food and beverage products revenue (1) 1,289,846 324,209 Loyalty program revenue (1) 123,825 524,854 Transaction revenue (1) 61,241 75,274 Member subscription revenue (2) 375,949 383,538 Sublicense revenue (2) 173,777 49,820 Total revenues $ 22,066,829 $ 69,408,319 (1) Revenue recognized at a point in time. (2) Revenue recognized over time. F- 15 Cost of revenue Cost of revenue sold mainly consists of the purchases of the gift card or “E-voucher” pin code, and health care products which is directly attributable to the sales of product on the Company’s online marketplace platform. In addition, cost of revenue sold also consists of purchase of food and beverage products for resales and license payment to Trademark’s licensor for sublicense revenue. Advertising costs Advertising costs amounted to $ 1,280,393 and $ 3,494,347 for the years ended June 30, 2024 and 2023 respectively. Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, and related expenses for the Company’s research and product development team. Research and development expenses amounted to $ 513,524 and $ 549,065 for the years ended June 30, 2024 and 2023, respectively. Defined contribution plan The full-time employees of the Company are entitled to the government mandated defined contribution plan. The Company is required to accrue and pay for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan. Total expenses for the plans were $ 218,945 and $ 208,190 for the years ended June 30, 2024 and 2023, respectively. The related contribution plans include: ● Social Security Organization (“SOSCO”) – 1.75 % based on employee’s monthly salary capped of RM 4,000 ; ● Employees Provident Fund (“EPF”) – 12 % based on employee’s monthly salary; ● Employment Insurance System (“EIS”) – 0.2 % based on employee’s monthly salary capped of RM 4,000 ; Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 % likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax for the years ended June 30, 2024 and 2023. The Company is incorporated in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis. The Company conducts much of its business activities in Malaysia and is subject to tax in its jurisdiction. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities. F- 16 Stock-based compensation The Company recognizes compensation costs resulting from the issuance of stock-based awards to its officers, third party consultant and former director as an expense in the statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of stock-based awards granted are estimated as of the grant date using the Black-Scholes-Merton option-pricing model while the fair value of each common stock granted are estimated using the Company’s closing stock price on the grant date. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of the common stock of the Company, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if the Company uses different assumptions on future grants, stock-based compensation expense could be materially affected in future periods. Comprehensive loss Comprehensive loss consists of two components, net loss and other comprehensive loss. Net loss refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ deficiency. Other comprehensive loss is excluded from net loss. Other comprehensive loss consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. Loss per share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average common stock outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended June 30, 2024 and 2023, 1,428 ( 100,000 pre reverse split) contingent shares to be issued to the underwriters are excluded in the diluted EPS calculation due to its anti-diluted effect, respectively. Fair value measurements Fair value is defined as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The following summarizes the three levels of inputs required to measure fair value, of which the first two are considered observable and the third is considered unobservable: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value for certain assets and liabilities such as cash and cash equivalents, accounts receivable, inventories, other receivables and other current assets, prepayments, accounts payable, customers deposits, contract liabilities, other payables and accrued liabilities have been determined to approximate carrying amounts due to the short maturities of these instruments. The Company believes that its related party loan, insurance loan, and convertible notes approximates fair value based on current yields for debt instruments with similar terms. The fair value of investment in marketable securities is based on market price in an active market (Level 1) at the end of each reporting period. The following table presents information about the Company’s financial assets that were measured at fair value on a recurring basis as of 30 June, 2024: June 30, 2024 Quoted Prices in Active Market (Level 1) Significant Other Observable Input (Level 2) Significant Other Unobservable Input (Level 3) $ $ $ $ Assets: Investment in marketable securities 171,633 171,633 - - F- 17 Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Lease Effective July 1, 2022, the Company adopted ASU 2016-02, “Leases” (Topic 842), 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. If any of the following criteria are met, the Company classifies the lease as a finance lease: ● The lease transfers ownership of the underlying asset to the lessee by the end of the lease term; ● The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise; ● The lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% of the economic life of the underlying asset; ● The present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; or ● The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Leases that do not meet any of the above criteria are accounted for as operating leases. The Company combines lease and non-lease components in its contracts under Topic 842, when permissible. Operating lease right-of-use (“ROU”) asset and lease liability are recognized at the adoption date of July 1, 2022 or the commencement date, whichever is earlier, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU asset to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU asset and liability 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 for operating lease. The Company reviews the impairment of its ROU asset 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 liability in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. For the years ended June 30, 2024 and 2023, the Company did not recognize impairment loss on its operating lease ROU asset. F- 18 Recent accounting pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. -Recent accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Debt- Debt with Conversion and Other Options (Subtopic 47020) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 81540): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full retrospective adoption or modified retrospective adoption. The guidance is effective for the Company in the first quarter of fiscal year 2025 and early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting: Improvements to reportable Segment Disclosures (“ASU 2023-07”), which enhances the disclosure required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the pending adoption of AUS 2023-07 on its unaudited condensed consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on its annual and interim disclosures . -Recently adopted accounting pronouncements 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 Update 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, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning July 1, 2023 as the Company is qualified as an emerging growth company. The Company has adopted of this standard on July 1, 2023, the adoption did not have a material impact on its consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows. F- 19 Note 3 – Accounts receivable, net As of June 30, 2024 As of June 30, 2023 Accounts receivable $ 1,100 $ 163,383 Provision for estimated credit losses ( 1,100 ) ( 214 ) Total accounts receivable, net $ - $ 163,169 Movements of provision for accounts receivable’s estimated credit losses are as follows: As of June 30, 2024 As of June 30, 2023 Beginning balance $ 214 $ 227 Addition 182,544 601 Write-off - ( 601 ) Disposal of subsidiaries ( 180,792 ) - Exchange rate effect ( 866 ) ( 13 ) Ending balance $ 1,100 $ 214 Note 4 – Inventories, net Inventories consist of the following: As of June 30, 2024 As of June 30, 2023 Gift card (or E-voucher) $ 27,467 $ 378,710 Nutrition products - 8,383 Food and beverage products - 13,450 Total $ 27,467 $ 400,543 Note 5 – Other receivables and other current assets, net As of June 30, 2024 As of June 30, 2023 Deposits (i) $ 120,880 $ 59,486 Prepaid tax 20,752 1,595 Prepaid expense (ii) 45,201 552,044 Software development deposit (iii) 84,823 - Other receivable (iv) 127,226 - Total other receivables and other current assets 398,882 613,125 Provision for estimated credit loss ( 212,053 ) - Total other receivables and other current assets, net $ 186,829 $ 613,125 (i) The balance of deposits mainly represented deposit made by the Company to a third-party service provider to secure the service, security deposit consists of rent and utilities, and others. As of June 30, 2024 and 2023, $ 106,028 and $ 0 estimated credit loss was recorded against doubtful receivables. F- 20 (ii) The balance of prepaid expense mainly represented prepayment made by the Company to third parties for cyber security service, director & officer liability insurance (“D&O Insurance”) or other professional service. In July 2022, the Company entered into an IT service agreement (“Service Agreement”) with a third party. Pursuant to the Service Agreement, the third party will provide IT and advisory service to the Company to enhance its cyber security for a two-year period with a consideration of $ 477,251 . The Company amortized the prepaid expense related to Service Agreement based on the service performed and completed during each period. As of June 30, 2024, the prepaid expense pertained to the Service Agreement has been fully amortized. In February 2024, the Company purchased a D&O Insurance premium amounting $ 74,078 which covers a period of twelve months, to be expired on February 24, 2025 . As of June 30, 2024, the balance of prepaid expenses pertaining to the D&O Insurance amounted to $ 42,812 . (iii) The balance of Software development deposit consists as following: On July 20, 2023, the Company entered into a software development agreement (the “Agreement”) with Nexgen Advisory Sdn Bhd (“Nexgen”), an unrelated third party. Pursuant to the Agreement, the Company engaged with Nexgen in software development related to the creation of an artificial intelligence-powered travel platform. As of September 30, 2023, the Company had made a $ 209,768 service deposit to Nexgen; however, the service had not yet commenced. On September 25, 2023, the Company terminated the Agreement with Nexgen. As of June 30, 2024, $ 121,945 of the service deposit were refunded by Nexgen. The remaining deposit of $ 84,823 is expected to recover by end of June 2025. As of June 30, 2024 and 2023, $ 42,412 and $ 0 estimated credit loss was recorded against the software development deposits. (iv) The balance of other receivable consists as following: On May 24, 2024, the Company has disposed all of its equity interest in Foodlink and its subsidiaries Morgan and for a consideration of $ 148,500 . As of June 30, 2024, the Company has collected $ 21,274 from the Purchaser, and the remaining is expected to be fully repaid by January 2025. As of June 30, 2024 and 2023, $ 63,613 and $ 0 estimated credit loss was recorded against other receivable. Movements of provision for other receivables’ estimated credit loss are as follows: As of June 30, 2024 As of June 30, 2023 Beginning balance $ - $ - Addition 212,758 - Exchange rate effect ( 705 ) - Ending balance $ 212,053 $ - Note 6 – Prepayments As of June 30, 2024 As of June 30, 2023 Deposits to suppliers $ 358,526 $ 248,551 Note 7 – Property and equipment, net Property and equipment, net consist of the following: As of June 30, 2024 As of June 30, 2023 Computer and office equipment $ 154,772 $ 142,520 Furniture and fixtures 72,778 73,355 Motor vehicle 82,290 83,185 Leasehold improvement 131,369 132,797 Subtotal 441,209 431,857 Less: accumulated depreciation ( 267,531 ) ( 152,257 ) Total $ 173,678 $ 279,600 Depreciation expense for the years ended June 30, 2024 and 2023 were amounted to $ 117,907 and $ 108,483 , respectively. F- 21 Note 8 – Intangible assets, net Intangible assets, net consisted of the following: As of June 30, As of June 30, 2024 2023 Internal use software development $ 3,743,716 $ - Less: accumulated amortization ( 612,780 ) - Total intangible assets, net $ 3,130,936 $ - Amortization expense for the years ended of June 30, 2024 was amounted to $ 612,909 and $0 , respectively. The following table sets forth the Company’s amortization expense for the next five years ending: Amortization expenses Twelve months ending June 30, 2025 $ 795,017 Twelve months ending June 30, 2026 636,143 Twelve months ending June 30, 2027 636,143 Twelve months ending June 30, 2028 636,143 Twelve months ending June 30, 2029 427,490 Total $ 3,130,936 Note 9 – Investment in marketable securities On July 19 2023 (“Commencement Date”), the Company entered into a software developing agreement (“Developing Agreement”) with VCI Global Limited (“VCI”), an unrelated third party for collaboration and co-operating in the development of an artificial intelligence powered travel platform, the (“Platform”). Pursuant to the Software Development Agreement, VCI shall remit payment of cash in $ 1,000,000 or issuance and the allotment of ordinary shares in VCI with an equivalent value of $ 1,000,000 (“VCIG Shares”) within ten business days from the Commencement Date to the Company as service consideration. Both the Company and VCI had agreed that VCI to issued 286,533 shares of VCIG Shares at $ 3.49 per share based on 5-day volume weighted average price to the Company as a service consideration in developing above mentioned Platform. The VCIG Shares shall be issued on a restricted stock basis for a period of six (6) months from the commencement date of the Software Developing Agreement. Movements in investment in marketable securities are as follows: As of June 30, 2024 As of June 30, 2023 At fair value Beginning balance $ - $ - Addition 1,000,000 - Fair value loss recognized for the year ( 828,367 ) - Closing balance $ 171,633 $ - For the years ended June 30, 2024 and 2023, unrealized loss on marketable equity securities were $ 828,367 and $ 0 , respectively. F- 22 Note 10 – Loans and notes Insurance loan On February 28, 2023, the Company entered into a loan agreement with First Insurance Funding, a third party (the “Premium Finance Agreement”), pursuant to which First Insurance Funding provided the Company with a short-term loan (“Insurance loan 1”) amounted to $ 264,563 with interest rate of 5.9 % per annum to be due in ten equal monthly instalments of $ 27,177 . As of June 30, 2024, the Insurance loan 1 has been paid in full. In February 2024, the Company entered into another loan agreement with First Insurance Funding, to obtain a short term loan (“Insurance loan 2”) of $ 74,078 with interest rate of 9.5 % to be due in ten equal monthly instalments of $ 6,573 . As of June 30, 2024, the remaining balance of Insurance loan 2 was amounted to $ 38,371 . The funds from Insurance Loan 1 and 2 were exclusively allocated towards the payment of the Directors and Officers (D&O) insurance as indicated on Note 5. For the years ended June 30, 2024 and 2023, interest expenses pertained to the insurance loan amounted to $ 4,465 and $ 4,437 respectively. Loans from third parties The Company entered into a loan agreement with Agtiq Solutions Sdn Bhd, a third party (the “Agtiq Loan Agreement”) dated June 27, 2022, pursuant to which Agtiq Solutions Sdn Bhd provided the Company with a revolving loan facility to borrow up to RM 3,000,000 (approximately $ 0.7 million) bearing interest at 3.5 % per annum, which is payable on demand. As of June 30, 2022, the Company had balance outstanding from this facility amounted to $ 668,923 . On July 12, 2022, the Company repaid the remaining balance in full. The Company entered into a loan agreement with Technovative Hub Sdn Bhd, a third party (the “Technovative Loan Agreement”) date June 27, 2022, pursuant to which Technovative Hub Sdn Bhd provided the Company with a revolving loan facility to borrow up to RM 4,000,000 (approximately $ 1.0 million) bearing interest at 3.5 % per annum, which is payable on demand. As of June 30, 2022, the Company had balance outstanding form this facility amounted to $ 748,724 . In July 2022, the Company had withdrew additional $ 567,215 from this facility under the Technovative Loan Agreement and repaid the remaining balance in full on July 18, 2022. For the years ended June 30, 2024 and 2023, interest expenses related to the aforementioned loans from third parties amounted to $ 0 and $ 2,515 , respectively. Convertible notes The Company evaluated the convertible notes agreement under ASC 815 Derivatives and Hedging (“ASC 815”). 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. None of the embedded terms required bifurcation and liability classification. On November 13, 2020, the Company issue a convertible note, to an accredited investor, in the aggregate principal amount of $ 2,123,600 . Pursuant to the agreement, the note bear an interest rate of 13.33 % per annum, payable (i) on December 31, 2020; (ii) during calendar year 2021, monthly on the last day of each month and (iii) during calendar years 2022 and 2023 until the Maturity Date, semiannually on each June 30 and December 31; provided that for calendar year 2023 the final interest payment date shall be the Maturity Date. The Company evaluated the convertible notes agreement under ASC 815, which 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. None of the embedded terms in the convertible notes required bifurcation and liability classification. However, the Company was required to determine if the debt contained a beneficial conversion feature (“BCF”), which is based on the intrinsic value on the date of issuance. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price ($ 4.00 ) was below the market price ($ 5.48 ) as per an enterprise per share value appraised from an independent third party, and the convertible notes contained a beneficial conversion feature. F- 23 In addition, notes issuance costs in connection with this note were $ 212,360 and reduced the carrying value of the convertible notes as a debt discount. The carrying value, net of debt discount, will be accreted over the term of the convertible notes from date of issuance to date of maturity using effective interest rate method. For the year ended June 30, 2024 and 2023, amortization of debt discount amounted to $ 0 and $ 46,296 , respectively. Upon completion of the Company’s Offering on August 15, 2022, the above mentioned convertible note balance, net of unamortized discount amounted to $ 1,877,620 was converted into 7,585 ( 530,900 pre reverse split) shares of the Company’s common stock. Meanwhile, additional 228 ( 15,927 pre reverse split) shares of common stock were issued to this accredited investor as success fees. On January 3, 2022, the Company had entered into a loan agreement (the “Tophill Loan Agreement 1”) with a third party to borrow up to approximately $ 4.8 million with up to 3.5 % per annum interest rate. The loan is due on demand together with interest accrued thereon. On March 14, 2022, the Company and above mentioned third party had made amendment to the Tophill Loan Agreement 1. Pursuant to the amendment, the aggregate outstanding principal amount of all Loans plus any accrued and unpaid interest (“Loan balance”) thereon as of the closing date of the IPO shall automatically converted into a number of shares of the Company’s common stock equal to the Loan balance divided by 80 % of the public offering price of the Company’s common stock in the IPO; and the loan agreement shall terminate and no additional amounts under the loan agreement will be available to the Company and after taking into consideration the conversion of the Loan balance, no amount under any loan shall be outstanding. In addition, the Company entered into another Loan Agreement (the “Tophill Loan Agreement 2”) dated May 13, 2022 with Tophill, pursuant to which Tophill provided the company with a revolving loan facility to borrow up to RM 50,000,000 (approximately $ 11.9 million) bearing interest at 3.5 % per annum, which is payable on demand. Meanwhile, the agreement provides that (i) all principal and accrued and unpaid interest outstanding under the Tophill Loan Agreement 2 on the closing of the Company’s initial public offering will automatically be converted into shares of the Company’s common stock at a conversion price that is equal to 80 % of the initial public offering price and (ii) the Tophill Loan Agreement 2 terminates on the closing date of the Company’s initial public offering. The Company evaluated the loan agreement under ASC 815, which 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. None of the embedded terms in the loan required bifurcation and liability classification. However, the Company was required to determine if the debt contained a beneficial conversion feature (“BCF”), which is based on the intrinsic value on the date of issuance. The Company evaluated the loan for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price ($ 4.38 ) was below the market price ($ 5.48 ) as per an enterprise per share value appraised from an independent third party, and the loan contained a beneficial conversion feature. The carrying value, net of debt discount, will be accreted over the term of the loan from date of issuance to the date of maturity using effective interest rate method, recorded as current liabilities. For the years ended June 30, 2024 and 2023, amortization of debt discount amounted to $ 0 and $ 950,360 pertained to aforementioned convertible notes, respectively. Upon completion of the Company’s Offering on August 15, 2022, the remaining principal and accrued interest balance related to Tophill Loan Agreement 1 and Agreement 2 amounted to $ 8,639,307 was converted into 39,384 ( 2,756,879 pre reverse split) shares of the Company’s common stock. F- 24 In May, June, July, September, October, and December 2021, the Company issued various batches of convertible notes to 10 accredited investors which included 5 third parties in the aggregate principal amount of $ 3,580,488 and 5 related parties in the aggregate principal amount of $ 2,437,574 . Pursuant to the agreement, the maturity date is 36 months after the issuance, provided that if an IPO listing is not successful, the accredited investors should be entitled to require the Company to redeem the convertible notes at the subscription/conversion of $ 6.90 per share along with interest payable at the rate of 12.0 % per annum. The Company also evaluated the convertible notes agreement under ASC 815 and determined none of the embedded terms in the convertible notes required bifurcation and liability classification. However, the Company was required to determine if the debt contained a BCF and determined that the conversion price ($ 6.90 ) was above the market price ($ 5.48 ) as per an enterprise per share value appraised from an independent third party, and the convertible notes do not contain a beneficial conversion feature. As a result, the Company record the proceeds received from these convertible notes as a liability in its entirely. Upon completion of the Company’s Offering on August 15, 2022, the balance of these convertible notes amounted to $ 6,018,062 was converted into 12,460 ( 872,183 pre reverse split) shares of common stock, among which, $ 2,437,574 was converted into 5,047 ( 353,272 pre reverse split) shares of common stock are belonged to the related parties. On February 28, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with YA II PN, Ltd., (“YA II PN”), a third party. Pursuant to the Securities Purchase agreement, YA II PN agreed to purchase two unsecured convertible notes, in the aggregate principal amount of up to $ 5,500,000.00 in a private placement (the “Private Placement”) for a purchase price with respect to each convertible note of 92 % of the initial principal amount of such convertible notes. The convertible notes accrue or will accrue interest at 4.0 % per annum and has a 12 -month term after disbursement. The conversion price, as of any conversion date or other date of determination, is the lower of (i) $ 1.6204 per share of Common Stock (the “Fixed Conversion Price”) or (ii) 93 % of the lowest volume-weighted average price (“VWAP”) of the common shares on the primary market during the 10 consecutive trading days immediately preceding the date on which YA II PN exercises its conversion right in accordance with the requirements of the applicable convertible debenture or other date of determination, but not lower than $ 0.25 per share (the “Floor Price”). The conversion price will be subject to adjustment to give effect to any stock dividend, stock split or recapitalization. YA II PN may not during any calendar month convert more than an aggregate of the greater of (a) 25 % of the aggregate dollar value traded on the Primary Market during such calendar month or (b) $ 1,100,000 of principal amount of the Convertible Debentures (plus accrued and unpaid Interest) utilizing the variable conversion price. This limitation shall not apply (i) at any time upon the occurrence and during the continuance of an Event of Default, and (ii) with respect to any conversions utilizing the Fixed Conversion Price. This limitation may be waived with the consent of the Company. Notwithstanding anything to the contrary contained above, the Company shall not issue more than 49,370 ( 3,455,894 pre reverse split) shares of Common Stock (the “Exchange Cap”) pursuant to the terms of the Convertible, except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq Stock Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holder of the Convertible Debentures. It is a closing condition to the purchase by the Buyer of the $ 3,500,000 Convertible Debenture that such shareholder approval be obtained. As of June 30, 2023, YA II PN purchased two unsecured convertible notes consist of $ 2,000,000 (“Tranche 1”) and $ 3,500,000 (“Tranche 2”) in principal amount. The Company evaluated the Securities Purchase Agreement under ASC 815, which 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. None of the embedded terms in the convertible notes required bifurcation and liability classification. However, the Company was required to determine if the debt contained a beneficial conversion feature (“BCF”), which is based on the intrinsic value on the date of issuance. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price of Tranche 1 ($ 1.55 ) and Tranche 2 ($ 1.30 ), was below the market price of Tranche 1 ($ 1.56 ) and Tranche 2 ($ 1.38 ) as per stock price listed in the stock market on February 28, 2023, and June 14, 2023, respectively, therefore, the convertible notes contained a beneficial conversion feature. For the year ended June 30, 2024, $ 1,782,710 of these convertible notes along with $ 28,360 accrued interest was converted into 40,322 ( 2,822,472 pre reverse split) shares of common stock. On September 28, 2023, a Floor Price trigger event occurred as the Company’s daily VWAP is less than the Floor Price. According to the Securities Purchase Agreement, the Company was obligate to make monthly payments starting on the 10th day after the Trigger Date, consisting of the lesser of $ 1,000,000 or the outstanding principal amount (the “Triggered Principal Amount”), a 7 % redemption premium on the Triggered Principal Amount, and accrued unpaid interest. For the year ended June 30, 2024, the Company has remit $ 284,790 redemption premium to YA II PN as a result of Floor Price triggering event. F- 25 In December and October 2023, the Company has collectively repaid $ 3,367,290 principal balance pertained to above mentioned convertible notes. In addition, 8 % of purchase discount in connection with above mentioned convertible notes amounted to $ 440,000 reduced the carrying value of the convertible note as a debt discount. The carrying value, net of debt discount, will be accreted over the term of the convertible note from date of issuance to date of maturity using effective interest rate method. For the year ended June 30, 2024, amortization of debt discount were $ 358,284 pertained to convertible notes from YA II PN. As of June 30, 2024 and 2023, the convertible notes payable, net from YA II PN was amounted to $0 and $ 4,791,716 , respectively. The Company has convertible notes payable, net of unamortized discounts as follows: Face value of convertible notes payable Unamortized debt discounts Convertible notes payable, net of unamortized discounts Third parties Related parties June 30, 2022 balance 14,108,876 ( 717,260 ) 13,391,616 10,954,042 2,437,574 Issuance of convertible notes 8,172,093 ( 1,189,074 ) 6,983,019 6,983,019 - Amortization of debt discounts - 1,290,050 1,290,050 1,290,050 - Conversion ( 17,130,969 ) 245,980 ( 16,884,989 ) ( 14,447,415 ) ( 2,437,574 ) Exchange rate effect - 12,020 12,020 12,020 - June 30, 2023 balance $ 5,150,000 $ ( 358,284 ) $ 4,791,716 $ 4,791,716 $ - Amortization of debt discounts - 358,284 358,284 358,284 - Repayments ( 3,367,290 ) - ( 3,367,290 ) ( 3,367,290 ) - Conversion ( 1,782,710 ) - ( 1,782,710 ) ( 1,782,710 ) - June 30, 2024 balance $ - $ - $ - $ - $ - For the years ended June 30, 2024 and 2023, interest expenses related to the aforementioned convertible notes amounted to $ 69,041 and $ 85,184 , respectively. Note 11 – Other payables and accrued liabilities As of June 30, 2024 As of June 30, 2023 Accrued professional fees (i) $ 202,000 $ 233,600 Accrued promotion expenses (ii) - 39,538 Accrued payroll 69,147 157,542 Accrued interest (iii) 2,375 79,936 Payables to merchant from ZCITY platform (iv) 201,338 174,056 Others 29,022 38,724 Total other payables and accrued liabilities $ 508,657 $ 723,396 (i) Accrued professional fees The balance of accrued professional fees represented amount due to third parties service providers which include mobile application developing, marketing consulting service, IT related professional service, audit fee, tax filing fee, and consulting fee related to capital raising. F- 26 (ii) Accrued promotion expense The balance of accrued promotion expense represented the balance of profit sharing payable to the Company’s merchant and subscribed agents to promote business growth. (iii) Accrued interest The balance of accrued interest represented the balance of interest payable from convertible notes aforementioned in Note 10. (iv) Payables to merchants from ZCITY platform The balance of payables to merchants from ZCITY platform represented the amount the Company collected on behalf of merchant from its customer through the Company’s ZCITY platform. Note 12 – Related party balances and transactions Related party balances Other receivable, a related party Name of related party Relationship Nature As of June 30, 2024 As of June 30, 2023 Ezytronic Sdn Bhd Jau Long “Jerry” Ooi is the common shareholder Equipment rental deposit $ 12,246 $ 12,379 Other payables, related parties Name of Related Party Relationship Nature As of June 30, 2024 As of June 30, 2023 True Sight Sdn Bhd Su Huay “Sue” Chuah, the Company’s Former Chief Marketing Officer is the shareholder of this entity Consulting fee $ - $ 345 Ezytronic Sdn Bhd Jau Long “Jerry” Ooi is a common shareholder Operating expense paid on behalf 761 1,315 Total $ 761 $ 1,660 Amount due to related parties Name of Related Party Relationship Nature As of June 30, 2024 As of June 30, 2023 Chong Chan “Sam” Teo Former Directors,Former Chief Executive Officer, and Shareholder of TGL Interest-free loan, due on demand $ - $ 186,579 Kok Pin “Darren” Tan Shareholder of TGL Interest-free loan, due on demand - 134,381 Total $ - $ 320,960 F- 27 Related party loan On December 7, 2020, the Company obtained right of use of a vehicle through signing a trust of deed with Chan Chong “Sam” Teo, the Chief Executive Officer and a shareholder of TGL. In return, the Company is obligated to remit monthly installment auto loan payment related to this vehicle on behalf of the related party mentioned above. The total amount of loan that the Company is entitled to repay is approximately $ 27,000 (RM 114,000 ). The auto loan bear 5.96 % of interest rate per annum with 60 equal monthly installment payment due on the first of each month. As of June 30, 2024, such loan has an outstanding balance of $ 9,081 , of which $ 2,743 due after 12 months period and classified as related party loan, non-current portion. The interest expense was $ 1,414 and $ 1,779 for the years ended June 30, 2024 and 2023, respectively. Related party transactions Revenue from related parties Name of Related Party Relationship Nature For the year ended June 30, 2024 For the year ended June 30, 2023 Matrix Ideal Sdn Bhd Yu Weng Lok is a common shareholder Sales of products $ - 126 Purchase from related parties Name of Related Party Relationship Nature For the year ended June 30, 2024 For the year ended June 30, 2023 Ezytronic Sdn Bhd Jau Long “Jerry” Ooi is a common shareholder Purchase of products $ 25,446 $ 22,036 Equipment purchased from a related party Name of Related Party Relationship Nature For the year ended June 30, 2024 For the year ended June 30, 2023 Ezytronic Sdn Bhd Jau Long “Jerry” Ooi is a common shareholder Purchase of equipment $ 14,093 $ 52,328 F- 28 Operating expenses from related parties Name of Related Party Relationship Nature For the Year Ended June 30, 2024 For the Year Ended June 30, 2023 World Cloud Ventures Sdn Bhd Shareholder of TGI Operating expense - 55,484 VCI Global Limited Shareholder of TGI Operating expense 15,000 - Imej Jiwa Communications Sdn Bhd Voon Him “Victor” Hoo, the Company’s former Chairman and Managing Director is the director of this entity Consulting fess - 2,744 Ezytronic Sdn Bhd Jau Long “Jerry” Ooi is a common shareholder Operating expense 25,278 True Sight Sdn Bhd Su Huay “Sue” Chuah, the Company’s Former Chief Marketing Officer is a 40% shareholder of this entity Consulting fees 40,947 290,476 Total $ 81,225 $ 348,704 Note 13 – Stockholders’ deficiency Common stock Prior to October 2021, TGL is authorized to issue 10,000,000 shares having a par value of $ 0.00001 per share. In October 2021, TGL increased its authorized shares to 170,000,000 shares as part of the Reorganization with ZCITY, consisting of 150,000,000 shares of common stock with $ 0.00001 par value, and 20,000,000 shares of preferred stock with $ 0.00001 par value. The share capital increased of TGL presented herein is prepared on the basis as if the Reorganization became effective as of the beginning of the first period presented of shares capital of ZCITY. On February 22, 2024, a Certificate of Amendment to the Certificate of Incorporation, as amended, of the Company with the Secretary of State of the State of Delaware (the “Certificate of Amendment”) that provides for a 1-for-70 reverse stock split (the “Split”) of its shares of common stock, par value $ 0.00001 per share. 1-for-70 Reverse stock split On February 27, 2024, the Company effected a 1:70 reverse stock split of its shares of common stock. The Company believed it is appropriate to reflect the above transactions on a retroactive basis similar to those after a stock split or dividend pursuant to ASC 260. All shares and per share amounts used herein and in the accompanying consolidated financial statements have been retroactively stated to reflect the effect of the reverse stock split. Upon execution of the 1-for-70 reverse stock split, the Company recognized additional 8 shares of common stock due to round up issue. Beneficial conversion feature from issuance of convertible note On January 3, 2022 and May 13, 2022, the Company entered into 2 loan agreements which allow the third party to convert the loan balance along with interest balance incurred into a number of shares of the Company’s common stock as of the closing date of the IPO. For the year ended June 30, 2023, the Company has withdrew additional $ 2,686,914 from these loan agreements. As the Company determined that loan contained a beneficial conversion feature, the Company recognized the fair value of embedded conversion feature of $ 537,383 in the convertible notes as additional paid-in capital and reduced the carrying value of the convertible notes as a debt discount for the year ended June 30, 2023. From February to June, 2023, the Company issued two convertible notes, to a third party, in an aggregate principal amount of $ 5,500,000 . As the Company determined these convertible notes contained a beneficial conversion feature, therefore, the Company recognized the fair value of embedded conversion feature of $ 211,679 in the convertible notes as additional paid-in capital and reduced the carrying value of the convertible notes as a debt discount for the year ended June 30, 2023. F- 29 Common stock issued upon conversion of convertible note payable, net of unamortized discounts For the year ended June 30, 2023, the Company issued 64,335 ( 4,503,412 pre reverse split) shares of common stock upon the conversion of $ 16,913,941 of convertible note payable, net of unamortized discounts and accrued interest (Note 10), among which, $ 2,437,574 was converted into 5,047 ( 353,272 pre reverse split) shares of common stock are belonged to the related parties . For the year ended June 30, 2024, the Company issued 68,061 ( 4,764,200 pre reverse split) shares of common stock upon conversion of $ 1,811,070 of convertible note payable, net of unamortized discounts and accrued interest. (Note 10). Common stock issued from the Offering, net of issuance costs On August 15, 2022, the Company had closed its initial underwritten public offering of 32,857 ( 2,300,000 pre reverse split) shares of common stock, which included the full exercise of the underwriter’s over-allotment option, at a public price of $ 4.00 per share. The Company received net proceeds of approximately $ 8.2 million, net of underwriting discounts and commissions and fees, other offering expenses amounted to approximately $ 1.0 million, and fair value of warrants issued to the underwriters of approximately $ 0.2 million. Common stock issued for consulting services -Advisory service agreement with Exchange Listing, LLC In July 2021, the Company signed a capital market advisory agreement (“Agreement”) with Exchange Listing, LLC (“Consultant”), to engage in advisory service in capital market advisory, corporate governance, and organizational meeting. The term of this Agreement shall commence on the execution date and shall continue until the later of nine months or until the Company is trading on a senior exchange or otherwise extended by both parties. The Company extended the contract term until the Company is trading on a senior exchange. Upon execution of this agreement, the Company agrees to sell to the Consultant, or its designees shares of the Company’s common stock which equivalents to 2 % of the Company’s fully – diluted shares outstanding, at $ 0.001 per share. The Company estimated the fair value of the common stock issued to the Consultant for the year ended June 30, 2022 by using the market price $ 5.48 per share as per an enterprise per share value appraised from an independent third party. After completion of the Company’s Offering on August 15, 2022, the Company had issued additional 1,570 ( 109,833 pre reverse split) shares of common stock to ensure that the Consultant’s total shares of the Company’s common stock equivalents to 2 % of the Company’s fully – diluted shares outstanding using the fair value of $ 4.00 per share with the fair value of $ 439,332 . For the years ended June 30, 2024, and 2023, the Company incurred stock-based compensation expenses related to the aforementioned Consultant amounting to $0 and $ 439,332 , respectively. -Marketing service agreement with TraDigital Marketing Group In May 2024, the Company signed a marketing agreement (the “Marketing Agreement”) with TraDigital Marketing Group (“TraDigital”) to engage in consulting services for investor relations and digital marketing. The services are to be provided over three days, commencing on or after May 5, 2024. Pursuant to the Marketing Agreement, the Company agreed to pay $ 120,000 in cash and to issue 20,000 shares of the Company’s common stock with fair value of $ 4.1 per share to TraDigital in exchange for its consulting services. For the years ended June 30, 2024, and 2023, the Company incurred stock-based compensation expenses related to TraDigital amounting to $ 82,000 and $ 0 , respectively. Common stock issued to former director On March 20, 2023, Voon Him “Victor” Hoo has resigned as managing director and chairman of the Company. To compensate Victor for his service, the Board approved to issue 285,714 shares of common stock which is equivalent to $ 380,000 based on the closing price of the Company’s closing stock on March 21, 2023 to Victor. F- 30 Common stock issued from the November 2023 Offering, net of issuance costs On November 30, 2023, The Company had closed the November 2023 Offering of 371,629 ( 26,014,000 pre reverse split) shares of common stock, at a public offering price of $ 0.10 per share, and 14,000,000 Pre-Funded Warrants, each with the right to purchase 0.01 (one share pre reverse split) of Common Stock, at a public offering price of $ 0.0999 per Pre-Funded Warrant. The Company received net proceeds from November 2023 Offering of approximately $ 3.5 million, net of underwriting discounts and commissions and fees, other offering expenses amounted to approximately $ 0.5 million. Common stock issued from the Marketing Offering, net of issuance costs On March 22, 2024, the Company and H.C. Wainwright & Co., LLC, (the “Manager”) entered into a marketing offering agreement (“Marketing Offering Agreement”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. For the year ended June 30, 2024, the Company received an aggregated net proceed of $ 431,811 , net of broker fee from issuance of 94,889 shares of common stock which sell through or to the Manager. Common stock issued for acquiring intangible assets - AI Lab Martech Sdn. Bhd. On October 12, 2023, the Company, and AI Lab Martech Sdn. Bhd. (the “Licensor”) entered into a License and Service Agreement (the “License Agreement”), in which the Licensor shall provide a non-exclusive, non-transferable, royalty-free license to use and operate an AI software solutions (the “AI Software”) in exchange for the issuance of $ 563,000 worth of common stock of the Company, or 42,044 ( 2,943,021 pre reverse split) shares valued at $ 13.39 ($ 0.1913 pre reverse split) per share. The License Agreement is for a period of 12 months. - VT Smart Venture Sdn Bhd On December 19, 2023, the Company and VT Smart Venture Sdn Bhd (the “Developer”), a company that is in the business of, among other things, technology services, entered into a Software Development Agreement (the “Agreement”), in which the Developer shall provide application, services and turnkey solutions on software development in various aspects, including customization, software design layout, creative media platform development, artificial embedded and artificial intelligence related media platform and design in exchange for $ 1,000,000 worth of common stock, par value $ 0.00001 per share, of the Company, or 142,857 ( 10,000,000 pre reverse split) shares valued at $ 7.0 ( $ 0.10 pre reverse split) per share. The Agreement is for a period of one month. - Myviko Holding Sdn. Bhd Bhd On March 12, 2024, the Company and Myviko Holding Sdn. Bhd. (the “Seller”) entered into a Software Purchase Agreement (the “Purchase Agreement”), in which the Seller agreed to transfer all rights, title and interest to the Company, including without limitation, all computer software and its source code and software licenses in exchange for the issuance of $ 1,000,000 worth of common stock, par value $ 0.00001 per share, of the Company. Pursuant to the Purchase Agreement, the Shares will be issued within 5 business days from the effective date of the Purchase Agreement and will be restricted securities and not be listed on any exchange. As of June 30, 2024, the Company has issued 198,412 shares to the Seller. - MYUP Solution Sdn Bhd On April 8, 2024, The Company and MYUP Solution Sdn Bhd (the “Seller 2”), a company that is in the business of, among other things, technology services, entered into a Software Purchase Agreement (the “ Purchase Agreement 2 ”), in which the Seller 2 agreed to sell to the Company a certain software application in exchange for $ 495,500 worth of common stock, par value $ 0.00001 per share, of the Company, or 126,081 shares valued at $ 3.93 per share. As of June 30, 2024, the Company has issued 126,081 shares to the Seller 2. F- 31 - Falcon Gateway Sdn Bhd On May 27, 2024, the Company and Falcon Gateway Sdn Bhd (the “Seller 3”), a company that is in the business of, among other things, technology services, entered into a Software Purchase Agreement (the “Purchase Agreement 3”), in which the Seller agreed to sell to the Company a certain software application in exchange for $ 495,000 worth of common stock, par value $ 0.00001 per share, of the Company, or 125,954 shares valued at $ 3.93 per share. As of June 30, 2024, the Company has issued 125,954 shares to the Seller 3. Common stock issued to related parties for debts cancellation On October 30, 2023, the Company issued a total of 25,954 ( 1,816,735 pre reverse split) restricted shares of common stock to the Company’s Chief Executive Officer, Chong Chan “Sam” Teo, and shareholder, Kok Pin “Darren” Tan (collectively, the “Creditors”) in exchange for the cancellation of $ 321,562 in aggregate indebtedness owed to the Creditors. Capital Contribution In February 2024, the Company’s Chief Executive Officer, Chong Chan “Sam” Teo, made a capital contribution of $ 16,348 in addition to the debt cancellation, as further consideration for the common stock issued to him in October 2023. Warrants - Issuance of warrants - non- employee stock compensation Pertain to above mentioned Agreement with the Consultant, on August 15, 2022, the Company also issued 300,000 warrants to the Consultant or its designees exercisable for a period of five years at $ 4.00 per share upon completion of the Company’s Offering. Meanwhile, on the same date, the Consultant had exercised all of its warrants on cashless basis and received 2,245 ( 157,143 pre reverse split) shares of the Company’s common stock. The fair value of the warrants which was determined by using the Black Scholes model using the following assumptions: (1) expected volatility of 49.0 %, (2) risk-free interest rate of 0.89 %, (3) expected life of 5.0 years, (4) exercise price of $ 4.0 and (5) estimated market price of $ 5.48 on July 1, 2020, the date of which the consulting agreement was entered. Based on above assumption, the fair value of the warrants were estimated to be $ 856,170 . - Issuance of the underwriters warrants On August 10, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters (the “Representative”), relating to the Offering of 32,858 ( 2,300,000 pre reverse split) shares of the Company’s common stock, par value $ 0.00001 per share, at an Offering price of $ 280 ($ 4.00 pre reverse split) per share. Pursuant to the Underwriting Agreement, in exchange for the representative’s firm commitment to purchase the Shares, the Company agreed to issue the underwriters warrants (the “Representative’s Warrants”) to purchase an aggregate of 1,428 ( 100,000 pre reverse split) shares of the Company’s common stock, which is equal to five percent ( 5 %) of the shares sold in the Offering, excluding the over-allotment option, at an exercise price of $ 5.00 , which is equal to 125 % of the Offering price. The Representative’s Warrant may be exercised beginning on February 10, 2023, until August 10, 2027. As of June 30, 2024, none of the warrants has been exercised by the Representative. The fair value of the warrants which was determined by using the Black Scholes model using the following assumptions: (1) expected volatility of 54.8 %, (2) risk-free interest rate of 2.91 %, (3) expected life of 5.0 years, (4) exercise price of $ 5.0 and (5) stock price of $ 4.0 on August 15, 2022, the date of which the warrants were issued. Based on above assumption, the fair value of the warrants were estimated to be $ 175,349 . - Issuance of the Pre-Funded Warrants On November 28, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement 2”) with EF Hutton LLC as the underwriter, relating to the November 2023 Offering of (i) 371,629 ( 26,014,000 pre reverse split) shares of common stock, at a public offering price of $ 0.10 per share, and (ii) 14,000,000 Pre-Funded Warrants, each with the right to purchase 0.01 (one pre reverse split) share of Common Stock, at a public offering price of $ 0.0999 per Pre-Funded Warrant. The Pre-Funded Warrants became exercisable immediately upon issuance, at an exercise price of $ 0.0001 or through cashless option. F- 32 The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The Pre-Funded Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) permit the holders to receive a fixed number of shares of common stock upon exercise, (iv) are indexed to the Company’s common stock. The Company valued the Pre-Funded Warrants at issuance concluding the purchase price approximated the fair value and allocated net proceeds from the purchase proportionately to the common stock and Pre-Funded Warrants, of which $ 1,398,600 was allocated to the Pre-Funded Warrants and recorded as a component of additional paid in capital. - Exercise of the Pre-Funded Warrants In December 2023 and January 2024, the holder of Pre-Funded Warrants have collectively exercised 14,000,000 the Pre-Funded Warrants into 200,000 ( 14,000,000 pre reverse split) shares of the Company’s common stock at an exercise price of $ 0.0001 per share. Warrants outstanding as of June 30, 2024 are as follows: Shares Weighted Average Exercise Price* Weighted Average Remaining Contractual Term (Years) Outstanding at June 30, 2023 100,000 $ 5.00 4.1 Granted 14,000,000 0.0001 - Exercised ( 14,000,000 ) - - Outstanding at June 30, 2024 100,000 $ 5.00 3.1 Employee stock compensation In June 2024, the Company executed executive employment agreements (“Employment Agreements”) with three individuals, appointing them as the Company’s executive officers. Under the terms of the Employment Agreements, each executive officer is entitled to receive a predetermined monetary value of the Company’s common stock as annual compensation for the first year, with stock compensation for subsequent years contingent upon performance. The stock compensation is prorated on a monthly basis and is subject to the restrictions of Securities Act Rule 144. For the fiscal year ended June 30, 2024, the Company recognized $ 11,111 in stock-based compensation expense attributable to the Employment Agreement. However, none of the shares had been issued or settled by the Company as of June 30, 2024. Note 14 – Income taxes The United States and foreign components of loss before income taxes were comprised of the following: For the years ended June 30, 2024 2023 Tax jurisdictions from: - Local – United States $ ( 3,919,962 ) $ ( 3,728,225 ) - Foreign – Malaysia ( 2,626,946 ) ( 7,901,870 ) Loss before income tax $ ( 6,546,908 ) $ ( 11,630,095 ) F- 33 The provision for income taxes consisted of the following: For the years ended June 30, 2024 2023 Tax jurisdictions from: - Local – United States $ 33,680 $ 97,616 - Foreign – Malaysia 6,035 - Provision for income taxes $ 39,715 $ 97,616 United States of America TGL was incorporated in the State of Delaware and is subject to the tax laws of the United States of America. As of June 30, 2024, the operations in the United States of America incurred $ 8,340,387 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income, and can be used to offset up to 80 % of taxable income for losses arising in tax years beginning after June 30, 2022. The deferred tax valuation allowance as of June 30, 2024 and June 30, 2023 were $ 1,751,481 and $ 1,177,486 , respectively. TGL also subject to controlled foreign corporations Subpart F income (“Subpart F”) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 35 %. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (“GILTI”) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5 % for tax years ( 50 % deduction of the current enacted tax rate of 21 %) with a partial offset for 80 % foreign tax credits. If the foreign tax rate is 13.125 % or higher, there will be no U.S. corporate tax after the 80 % foreign tax credits are applied. For the years ended June 30, 2024 and 2023, the Company’s foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax. Malaysia ZCITY, Foodlink, Morgan, and AY Food are governed by the income tax laws of Malaysia and the income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, enterprises that incorporated in Malaysia are usually subject to a unified 24 % enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. As of June 30, 2024, the operations in the Malaysia incurred $ 22,033,996 of cumulative net operating losses which can be carried forward for a maximum period of ten consecutive years to offset future taxable income. The deferred tax valuation allowance as of June 30, 2024 and 2023 were $ 5,288,159 and $ 4,927,995 , respectively. The following table reconciles the local (United States) statutory rates to the Company’s effective tax rate for the periods indicated below: For the years ended June 30, 2024 2023 U.S. statutory rate 21.0 % 21.0 % Differential of Malaysia statutory tax rate 1.2 % 2.0 % Change in valuation allowance ( 19.0 )% ( 23.8 )% Permanent difference ( 3.8 )% - % Effective tax rate ( 0.6 )% ( 0.8 )% F- 34 The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of: As of June 30, 2024 As of June 30, 2023 Deferred tax assets: Net operating loss carry forwards in U.S. $ 1,751,481 $ 1,177,486 Net operating loss carry forwards in Malaysia 5,288,159 4,927,995 Allowance for credit losses 51,157 - Unrealized holding loss on marketable securities 173,957 - Amortization of debt discount 156,403 70,415 Less: valuation allowance* ( 7,421,158 ) ( 6,175,896 ) Deferred tax assets $ - $ - * Change in valuation allowance was amounted to $ 1,245,262 and $ 2,492,329 for the years ended June 30, 2024 and 2023, respectively. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2024 and 2023, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the years ended June 30, 2024 and 2023. Note 15 – Concentrations of risks (a) Major customers For the years ended June 30, 2024 and 2023, no customer accounted for 10.0% or more of the Company’s total revenues. As of June 30, 2024, three customers account for approximately 65.3 %, 19.3 %, and 15.4 % of the total balance of accounts receivable, respectively. As of June 30, 2023, two customers account for approximately 24.6 % and 24.6 % of the total balance of accounts receivable, respectively. (b) Major vendors For the years ended June 30, 2024, two vendors accounted for approximately 52.7 % and 41.2 % of the Company’s total purchases. For the years ended June 30, 2023, two vendors accounted for approximately 62.5 % and 32.7 % of the Company’s total purchases. As of June 30, 2024, two vendors accounted for approximately 85.1 %, and 11.6 % of the total balance of accounts payable. As of June 30, 2023, one vendor accounted for 91.0 % of the total balance of accounts payable. (c) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of June 30, 2024 and 2023, $ 198,952 and $ 4,593,634 were deposited with financial institutions or fund received from customer being held in third party platform’s fund account, and $ 85,308 and $ 2,458,638 of these balances are not covered by deposit insurance, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its accounts receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an provision for estimated credit losses based upon factors surrounding the credit risk of specific customers, historical trends and other information. F- 35 (d) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of RM converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. Note 16 – Leases The Company determines if a contract contains a lease at inception. 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. The Company’s office lease was classified as operating leases. The lease generally do not contain options to extend at the time of expiration. Upon adoption of FASB ASU 2016-02 on July 1, 2022, the Company recognized $ 84,829 ROU asset and same amount of operating lease liability based on the present value of the future minimum rental payments of leases, using a discount rate of 3.5 % based on duration of lease terms. As of June 30, 2024, the weighted-average lease term is 0.5 years for the remaining leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s lease liabilities under the remaining operating leases as of June 30, 2024 for the next five years is as follows: June 30, 2025 $ 17,554 2026 - Total undiscounted lease payments 17,554 Less imputed interest ( 297 ) Total lease liabilities $ 17,257 Lease expense for the years ended June 30, 2024 and 2023 were $ 40,676 , and $ 38,496 , respectively. Note 17 – Commitments and contingencies Contingencies Legal From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements. 18 – SUBSEQUENT EVENTS The Company evaluated all events and transactions that occurred after June 30, 2024 up through September 30, 2024, the date the Company issued these consolidated financial statements. From July to September 2024, the Company received net proceed of $ 2,457,456 , net of broker fee from issuance of 1,583,418 shares of common stock which sell through or to the Manager related to the Marketing Offering Agreement. On September 20, 2024, the Company entered into a partnership agreement (the “Agreement”) with Credilab Sdn. Bhd. (“CLSB”). Pursuant to the Agreement, the Company and CLSB will establish a strategic partnership aimed at leveraging their respective core competencies, resources, and market expertise to drive mutual benefit and growth. In September 2024, the Company issued 2,000,000 shares of its common stock to CLSB in exchange for CLSB’s integration of its credit services into the Company’s ZCity App. In addition, the Company will introduce portfolio clients (“Portfolio Clients”) to CLSB via the ZCity App, and in return, the Company will share one – third of the revenue and processing fee from CLSB’s profit derived from Portfolio Client. The five-year partnership facilitates joint marketing efforts, profit-sharing, and further strategic collaboration between the parties. F- 36 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.