EDGAR 10-K Filing

Company CIK: 1422892
Filing Year: 2024
Filename: 1422892_10-K_2024_0001213900-24-087619.json

---

ITEM 1. BUSINESS
Item 1. Business.
Overview
We are a global logistics integrated solution provider that was founded in the United States in 2001. On September 18, 2007, the Company merged into a new corporation, Sino-Global Shipping America, Ltd. in Virginia. On January 3, 2022, the Company changed its corporate name to Singularity Future Technology Ltd. to reflect its expanded operations into the digital assets business. Currently, we primarily focus on providing freight logistics services, which mainly include shipping, warehouse services and other logistical support to steel companies.
In 2017, we began exploring new opportunities to expand our business and generate more revenue. These opportunities ranged from complementary businesses to other new service and product initiatives. In the fiscal year 2022, while we continued to provide our traditional freight logistics business, we expanded our services to include warehousing services provided by our U.S. subsidiary Brilliant Warehouse Service Inc.
We are currently engaged in providing freight logistics services including warehouse services, which are operated by our subsidiaries Trans Pacific Shipping Limited in China and Gorgeous Trading Ltd. and Brilliant Warehouse Service Inc in the United States. Our range of services include transportation, warehouse, collection, last-mile delivery, drop shipping, customs clearance, and overseas transit delivery.
As a holding company with no material operations, conduct substantially all of our operations through subsidiaries established in the United States, the People’s Republic of China (the “PRC” or “China”) and Hong Kong. However, neither the holding company nor any of the Company’s Chinese subsidiaries conduct any operations through contractual arrangements with a variable interest entity based in China. Investors in our common stock should be aware that they may never directly hold equity interests in the PRC operating entities, but rather equity interests solely in Singularity, our Virginia holding company. Furthermore, shareholders may face difficulties enforcing their legal rights under United States securities laws against our directors and officers who are located outside of the United States.
The diagram below shows our corporate structure as of the date of this report.
* Unless otherwise indicated in the diagram, all the subsidiaries of the Company are wholly owned.
As of June 30, 2024, the Company’s subsidiaries were as follows:
Name
Background
Ownership
Sino-Global Shipping New York Inc. (“SGS NY”)
● A New York corporation
100% owned by the Company
●
Incorporated on May 03, 2013
● Primarily engaged in freight logistics services
Sino-Global Shipping HK Ltd. (“SGS HK”)
● A Hong Kong corporation
100% owned by the Company
● Incorporated on September 22, 2008
● No material operations
Trans Pacific Shipping Ltd. (“Trans Pacific Beijing”)
● A PRC limited liability company
100% owned by the Company
● Incorporated on November 13, 2007.
● Primarily engaged in freight logistics services
Trans Pacific Logistic Shanghai Ltd. (“Trans Pacific Shanghai”)
● A PRC limited liability company
90% owned by Trans Pacific Beijing
● Incorporated on May 31, 2009
● Primarily engaged in freight logistics services
● No material operations
Gorgeous Trading Ltd (“Gorgeous Trading”)
● A Texas corporation
100% owned by SGS NY
● Incorporated on July 01, 2021
● Primarily engaged in warehouse related services
Brilliant Warehouse Service Inc. (“Brilliant Warehouse”)
● A Texas corporation
51% owned by SGS NY
● Incorporated on April 19, 2021
● Primarily engaged in warehouse house related services
Phi Electric Motor In. (“Phi”)
●
●
●
A New York Corporation
Incorporated on August 30, 2021
No operations
51% owned by SGS NY
SG Shipping & Risk Solution Inc, (“SGSR”)
● A New York corporation
100% owned by the Company
● Incorporated on September 29, 2021
● No material operations
SG Link LLC (“SG Link”)
● A New York corporation
100% owned by SG Shipping & Risk Solution Inc
● Incorporated on December 23, 2021
● No material operations
New Energy Tech Limited (“New Energy”)
● A New York corporation
100% owned by the Company
● Incorporated on September 19, 2023
● No material operations
Singularity (Shenzhen) Technology Ltd.
● A Mainland China corporation
100% owned by the Company
(“SGS Shenzhen”)
● Incorporated on September 4, 2023
● No material operations
Our equity structure is a direct holding structure. Within our direct holding structure, the cross-border transfer of funds within our corporate entities is legal and compliant with the laws and regulations of the PRC. After the foreign investors’ funds enter Singularity, the funds can be directly transferred to the PRC operating companies through its subsidiaries. Specifically, Singularity is permitted under the Virginia laws to provide funding to our subsidiaries in the PRC and Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the date hereof, there have not been any transfers, dividends or distributions made between the holding company, its subsidiaries, and to investors. Furthermore, as of the date hereof, no cash generated from one subsidiary is used to fund another subsidiary’s operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have also not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. For the foreseeable future, we intend to use the earnings for our business operations and as a result, we do not intend to distribute earnings or pay any cash dividends.
To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant to the tax agreement between Mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.
Because some of our operations are located in the PRC through our subsidiaries, we are subject to certain legal and operational risks associated with our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the U.S, or Chinese or U.S regulations may materially and adversely affect our business, financial condition and results of operations. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our common stock, or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
We believe that we will not be subject to cybersecurity review with the Cyberspace Administration of China, or the “CAC,”, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures. We do not believe that our subsidiaries are directly subject to these regulatory actions or statements, as we have not implemented any monopolistic behavior and our business does not involve the collection of user data or implicate cybersecurity. As of the date hereof, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission, or the CSRC, or any other PRC governmental authorities for future offerings, nor has our Virginia holding company or any of our subsidiaries received any inquiry, notice, warning or sanctions regarding previous offerings from the CSRC or any other PRC governmental authorities. However, on February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and five relevant guidelines, which became effective on March 31, 2023. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report relevant information. The Overseas Listing Trial Measures provides that an overseas listing or offering is explicitly prohibited, if any of the following: (1) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (4) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (5) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
The Overseas Listing Trial Measures also provide that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (1) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the issuer’s main business activities are conducted in China, or its main place(s) of business are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in China. Where an issuer submits an application for initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted. In addition, the Overseas Listing Trial Measures provide that the direct or indirect overseas listings of the assets of domestic companies through one or more acquisitions, share swaps, transfers or other transaction arrangements shall be subject to filing procedures in accordance with the Overseas Listing Trial Measures. The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC on material events, such as change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.
At a press conference held for these new regulations (“Press Conference”), officials from the CSRC clarified that the domestic companies that have already been listed overseas on or before March 31, 2023 shall be deemed as existing issuers (the “Existing Issuers”). Existing Issuers are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC upon occurrences of certain subsequent matters such as follow-on offerings of securities. According to the Overseas Listing Trial Measures and the Press Conference, the existing domestic companies that have completed overseas offering and listing before March 31, 2023, such as us, will not be required to perform filing procedures for the completed overseas securities issuance and listing. However, from the effective date of the regulation, any of our subsequent securities offering in the same overseas market or subsequent securities offering and listing in other overseas markets shall be subject to the filing requirement with the CSRC within three working days after the offering is completed or after the relevant application is submitted to the relevant overseas authorities, respectively. If it is determined that any approval, filing or other administrative procedures from other PRC governmental authorities is required for any future offering or listing, we cannot assure you that we can obtain the required approval or accomplish the required filings or other regulatory procedures in a timely manner, or at all. If we fail to fulfill filing procedure as stipulated by the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us, and impose a fine of between RMB1,000,000 and RMB10,000,000. Persons-in-charge and other persons that are directly liable for such failure shall be warned and each imposed a fine from RMB500,000 to RMB5,000,000. Controlling shareholders and actual controlling persons of us that organize or instruct such violations shall be imposed a fine from RMB1,000,000 and RMB10,000,000.
On February 24, 2023, the CSRC published the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Provisions on Confidentiality and Archives Administration”), which came into effect on March 31, 2023. The Provisions on Confidentiality and Archives Administration requires that, in the process of overseas issuance and listing of securities by domestic entities, the domestic entities, and securities companies and securities service institutions that provide relevant securities service shall strictly implement the provisions of relevant laws and regulations and the requirements of these provisions, establish and improve rules on confidentiality and archives administration. Where the domestic entities provide or publicly disclose documents, materials or other items related to the state secrets and government work secrets to the relevant securities companies, securities service institutions, overseas regulatory authorities, or other entities or individuals, the companies shall apply for approval of competent departments with the authority of examination and approval in accordance with law and report the matter to the secrecy administrative departments at the same level for record filing. Where there is unclear or controversial whether or not the concerned materials are related to state secrets, the materials shall be reported to the relevant secrecy administrative departments for determination. However, there remain uncertainties regarding the further interpretation and implementation of the Provisions on Confidentiality and Archives Administration.
As of the date of this report, our PRC subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our PRC subsidiaries. In addition, as of the date of this annual report, we and our PRC subsidiaries are not required to obtain approval or permission from the CSRC or the CAC or any other entity that is required to approve our PRC subsidiaries’ operations or required for us to offer securities to foreign investors under any currently effective PRC laws, regulations, and regulatory rules. If it is determined that we are subject to filing requirements imposed by the CSRC under the Overseas Listing Regulations or approvals from other PRC regulatory authorities or other procedures, including the cybersecurity review under the revised Cybersecurity Review Measures, for our future offshore offerings, it would be uncertain whether we can or how long it will take us to complete such procedures or obtain such approval and any such approval could be rescinded. Any failure to obtain or delay in completing such procedures or obtaining such approval for our offshore offerings, or a rescission of any such approval if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure to file with the CSRC or failure to seek approval from other government authorization for our offshore offerings. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our common stock. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the securities offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our common stock.
Since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. The Standing Committee of the National People’s Congress, or the SCNPC, or other PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that requires our company or any of our subsidiaries to obtain regulatory approval from Chinese authorities before future offerings in the U.S. In other words, although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly; our ability to offer, or continue to offer, securities to investors would be potentially hindered and the value of our securities might significantly decline or be worthless, by existing or future laws and regulations relating to its business or industry or by intervene or interruption by PRC governmental authorities, if we or our subsidiaries (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, or (iv) any intervention or interruption by PRC governmental with little advance notice.
Please see “Risk Factors” beginning on page 15 of this annual report for additional information.
Holding Foreign Company Accountable Act
Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act (“HFCAA”), if the PCAOB is unable to adequately inspect audit documentation located in China, or investigate our auditor. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law, and amends the HFCAA and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to Public Company Accounting Oversight Board (“PCAOB”) inspections for two consecutive years instead of three. Our auditor, Audit Alliance LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, is headquartered in Singapore and is registered with the PCAOB, and was not included in the list of PCAOB Identified Firms in the PCAOB Determination Report issued in December 2021. On August 26, 2022, the PCAOB signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. Therefore, the PCAOB in the future may determine that it is unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong. Our auditor’s working papers related to us and our subsidiaries are located in China. If our auditor is not permitted to provide requested audit work papers located in China to the PCAOB, investors would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCAA, which would result in the delisting of our securities from the Nasdaq. See “Risk Factors - Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China. The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment.”
Recent Developments
We are currently exploring new business opportunities while continuing to provide freight logistics services. On September 19, 2023, the Company formed a 100% owned subsidiary, New Energy Tech Limited, . (“New Energy”) in New York for to engage in the commodity trading business . In August 2024, New Energy entered into a joint venture development agreement with Market One Services Corp., a Wyoming corporation, to establish a joint venture to carry out the commodity trading business. The parties also plan to expand into the sale of solar panels
The Company decided to develop the solar panel business based on its insight into the broad prospects of new energy. In the decision-making process, the needs of environmental protection and market potential were fully considered. This new solar panel business complements our existing businesses and will expand the company’s sustainable development.
Special Committee Investigation
As previously disclosed, on May 6, 2022, the Board of Directors of the Company (the “Board”) formed a special committee (the “Special Committee”) to investigate claims of alleged fraud, misrepresentation, and inadequate disclosure related to the Company and certain of its management personnel raised in a report, published by Hindenburg Research on May 4, 2022 (the “Hindenburg Report”). On February 23, 2023, the Board approved the dissolution of the Special Committee upon conclusion of the committee’s investigation. On July 3, 2023, the Company entered into settlement and release agreement with Mr. Yang Jie, the Company’s former CEO, which fully resolved his claims against the Company.
Executive Changes
On July 3, 2023, Mr. Tieliang Liu resigned as a director the Company and a member of the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.
On July 10, 2023, Company terminated the employment of its Chief Operating Officer, Jing Shan, with cause. The termination was effective immediately.
On July 31, 2023, the Company elected Mr. Zhongliang Xie as a Class II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting from the resignation of Mr. Tieliang Liu. The Board appointed Mr. Xie to serve as Chair of the Audit Committee, a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee.
On September 21, 2023, Mr. Heng Wang resigned as a director of the Company and a member of the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.
On September 25, 2023, the Company elected Mr. Xu Zhao as a Class I independent director to serve until the annual meeting of stockholders for the fiscal year 2022, to fill the vacancy on the Board resulting from the resignation of Mr. Heng Wang. The Board appointed Mr. Zhao to serve as a member of the Audit Committee, a member of the Compensation Committee and Chair of the Nominating and Corporate Governance Committee.
On September 28, 2023, Ms. Ling Jiang resigned as a director of the Company and a member of the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.
On October 6, 2023, the Company elected Ms. Yangyang Xu as a Class III independent director to serve until the annual meeting of stockholders for the fiscal year 2024, to fill the vacancy resulting from the resignation of Ms. Ling Jiang. The Board appointed Ms. Xu to serve as Chairwoman of the Compensation Committee and as a member of the Audit Committee and the Nominating and Corporate Governance Committee.
On July 31, 2024, Mr. Haotian Song resigned from his position as a vice president of the Company and as a director of the Board.
On August 6, 2024, the Company appointed Ms. Jia Yang as a vice president of the Company and as a director of the Board to fill the vacancy resulting from Mr. Haotian Song’s resignation.
Litigation
On December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired publicly traded securities of the Company between February 2021 and November 2022, filed a putative class action against the Company and other defendants in the United States District Court for the Eastern District of New York (“EDNY”), alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings (the “SGLY Securities Class Action”). The plaintiff seeks damages, plus interest, costs, fees, and attorneys’ fees. The Company filed a motion to dismiss on November 20, 2023, which is fully-briefed and awaiting the Court’s determination. As this action is still in the early stage, the Company cannot predict the outcome.
On July 13, 2023, SG Shipping & Risk Solution Inc. (“SG Shipping”), an indirect wholly owned subsidiary of the Company, filed a complaint against Jing Shan, its former chief operating officer, accusing her of the unauthorized wire transfer of $3 million to Goalowen (the “Conversion Lawsuit”). On March 23, 2023, Jing Shan allegedly signed, without Board’s due authorization, an operating income right transfer contract with Goalowen Inc., pursuant to which Goalowen agreed to transfer its rights to receive income from operating a tuna fishing vessel to SG Shipping for $3 million. Ms. Shan alleged made the unauthorized wire transfer of $3 million to Goalowen on May 5, 2023. This lawsuit is filed with the EDNY. Ms. Shan moved to dismiss the case on March 19, 2024 and the decision is currently pending with the court. Fact discovery is currently underway. The Company remains committed to pursuing its claims and seeks damages.
On August 23, 2023, Jing Shan commenced a lawsuit against the Company in the Richmond City Circuit Court of Virginia for unpaid salaries and indemnification of her litigation costs defending herself in the SGLY Securities Class Action and the Conversion Lawsuit. The court entered an order on May 3, 2024, granted Jing Shan’s request for payment of withheld wages through the time of her termination, plus liquidated damages, and litigation costs in prosecuting the withheld wages. The court denied Jing Shan’s motion for expenses incurred in other ligation, deferring those issues to resolution by trial. The Company has paid the past due wages and statutory liquidated damages. Jing Shan filed a motion for rule to show cause on July 29, 2024, demanding payment of attorney’s fees of $36,523.21, plus sanctions by the court for the Company’s failure to comply with the court’s order of payment.
On October 23, 2023, the Company filed a complaint against its former CFO, Tuo Pan, accusing her of conversion due to her alleged involvement in two unauthorized transfers from the Company, amounting to $219,000 and $7,920, respectively. The Company decided not to pursue this matter any further and withdrew the complaint.
On January 18, 2024, John Levy, a former board member of the Company, filed a claim in the EDNY for reimbursement and advancement of reasonable legal fees, costs, and expenses incurred in connection with defending the action Crivellaro v. Singularity Future Technology Ltd., 22-cv-7499-BMC, in which John Levy was named as an individual defendant. On a letter dated August 6, 2024, John Levy notified the court that it would move for default judgement. The Company does not intend to defend its position.
In February 2024, Zhikang Huang, a former employee of the Company filed a lawsuit against the Company in the Richmond City Circuit Court of Virginia. In the complaint, Zhikang Huang alleges claims that the Company failed to compensate him for the severance payment of $300,000 contemplated in Section 6.3 of the Employee Agreement, his two months’ salary of $25,000 for the months of November and December 2023 and the incentive-based bonus to which he is entitled pursuant to paragraph 4.2 of the Employee Agreement. A hearing on plaintiff’s motion to compel discovery was scheduled on August 26, 2024. The Company intends to defend its position.
Government Investigations
Following the publication of the Hindenburg Report, the Company received subpoenas from the United States Attorney’s Office for the Southern District of New York and the United States Securities and Exchange Commission (the “SEC”). The Company cooperated with these governmental authorities regarding these matters. The Company is not able to estimate the outcome or duration of the government investigations. As of the date of this report, the Company has not received any updates.
On February 28, 2023 , the audit committee of the Company, after discussion with the management of the Company, and in consultation with the Company’s independent registered public accounting firm, concluded that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2021 (the “2021 Form 10-K”) should no longer be relied upon as a result of incorrect accounting treatment of approximately $4.6 million of related party loan receivable. The audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30, 2021 and six months ended December 31, 2021. The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K (the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the Amended Form 10-K, the “Restatements”).
On June 17, 2024, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation.
Nasdaq Listing Deficiencies
On July 7, 2023, the Company received an Notice of Noncompliance Letter (the “Letter”) from the Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rules due to its failure to timely hold an annual meeting of shareholders for the fiscal year ended June 30, 2022, which is required to be held within twelve months of the Company’s fiscal year end under Nasdaq Listing Rule 5620(a) and 5810(c)(2)(G). The Letter also states that the Company has 45 calendar days to submit a plan to regain compliance and if Nasdaq accepts the Plan, it can grant the Company an exception of up to 180 calendar days from the fiscal year end, or until December 27, 2023, to regain compliance. The Company complied with the Nasdaq requirement that the Plan be submitted no later than August 21, 2023. On October 19, 2023, the Company received a formal notification from the Nasdaq confirming that the Company had regained compliance with Listing Rule 5620(a), and that the matter is now closed.
On July 13, 2023, the Company received a notice from Nasdaq stating that the Company no longer complies with Nasdaq’s independent director and audit committee requirements under Nasdaq’s Listing Rule 5605 following the resignation of Mr. Liu from the Company’s board of directors and audit committee effective July 3, 2023. Nasdaq advised the Company that in accordance with Nasdaq’s Listing Rule 5605(c)(4), the Company has a cure period to regain compliance (1) until the earlier of the Company’s next annual shareholders’ meeting or July 3, 2024; or (2) if the next annual shareholders’ meeting is held before January 2, 2024, then the Company must evidence compliance no later than January 2, 2024. In response to this notice, on July 31, 2023, the Company elected Mr. Zhongliang Xie as a Class II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting from the resignation of Mr. Liu. The Board appointed Mr. Xie to serve as Chair of the Audit Committee, a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee.
On July 13, 2023, the Company received a notice from Nasdaq stating that the Company failed to regain compliance with respect to the minimum $1 bid price per share requirement under Nasdaq Listing Rules during the 180 calendar days given by Nasdaq for the Company to regain compliance, which ended on July 5, 2023. However, Nasdaq has determined that the Company is eligible for an additional 180 calendar day period, or until January 2, 2024, to regain compliance. On January 3, 2024, the Company received a notification from Nasdaq, notifying the Company of the determination to delist the Company’s securities from Nasdaq because of the Company’s failure to regain compliance with the $1 per share bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2). On March 12, 2024, the Company received a formal notification from Nasdaq confirming that the Company had regained compliance with bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2).
Corporate History and Our Business Segments
From inception in 2001 to our fiscal year ended June 30, 2013, our sole business was providing shipping agency services. In general, we provided two types of shipping agency services: loading/discharging services and protective agency services, in which we acted as a general agent to provide value added solutions to our customers. For loading/discharging agency services, we received the total payment from our customers in U.S. dollars and paid the port charges on behalf of our customers in RMB. For protective agency services, we charged a fixed amount as agent fee while customers were responsible for the payment of port costs and expenses.
Later, we expanded our business to include freight logistics services to provide import security filing services with the U.S. Customs and Department of Homeland Security, on behalf of importers who ship goods into the U.S. and also provided inland transportation services to these importers in the U.S. We also expanded into container trucking services as new business sectors to provide related transportation logistics services to customers in the U.S. and in China. We shift our focus back to the shipping agency business around 2019.
In 2021, the Company set up a joint venture in Texas, Brilliant Warehouse Service Inc., to support its freight logistics services in the U.S., and a new subsidiary, Gorgeous Trading Ltd., which mainly engages in smart warehouse and related business in Texas.
On December 31, 2021, the Company terminated its variable interest entity (“VIE”) structure and deconsolidated its formerly controlled entity Sino-Global Shipping Agency Ltd. (“Sino-China”). The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Shipping Limited. The Company dissolved the VIE structure, Sino-China and its subsidiary Sino-Global Shipping LA, Inc.
From 2021 to 2022, the Company engaged in cryptocurrency mining in China for a brief period of time but ceased such business in 2022 due to restrictions and bans on crypto mining operations in China. Thor Miner Inc., a Delaware subsidiary of the Company that engaged in technical development and commercialization of a bitcoin mining machine, was dissolved on February 14, 2024. The Company does not plan to pursue bitcoin mining business at this moment.
The following subsidiaries or joint ventures have no operations as of the date of this report: LSM Trading Ltd., Singularity (Shenzhen) Technology Ltd., Phi Electric Motor, Inc. in New York, SG Shipping & Risk Solution Inc., in New York and SG Link LLC in New York.
Our subsidiary, Ningbo Saimeinuo Web Technology Ltd., which primarily engaged in transportation management and freight logistics services, including overseas shipping, was dissolved on October 24, 2023. Our subsidiary, Blumargo IT Solution Ltd., was dissolved on April 17, 2024.
On September 19, 2023, the Company formed a 100% owned subsidiary, New Energy Tech Limited. (“New Energy”) in New York to engage in the commodity trading business . In August 2024, New Energy entered into a joint venture development agreement with Market One Services Corp., a Wyoming corporation, to establish a joint venture to carry out the commodity trading business. The parties also plan to expand into the sale of solar panels.
Our Strategy
Our strategy is to:
● Provide better solutions for issues and challenges faced by the entire shipping and freight logistics chain to better serve our customers and explore additional growth avenues.
● Diversify our current service offerings organically or through acquisitions and/or strategic alliance; continue to grow our business in the U.S. market;
● Continue to streamline our business practice, optimize our cost structure and improve our operating efficiency through effective planning, budgeting, execution and cost control and strengthening our IT infrastructure;
● Continue to reduce our dependency on our legacy business and few key customers;
● Continue to monetize our relationships with our strategic partners and leverage their support and our innovation to expand our business;
Continue to explore cutting-edge technologies in new energy, such as the development of high-efficiency solar panel materials and innovative waste recycling processes, and actively acquire small new energy companies with potential to rapidly expand our business footprint;
Use vivid cases and data to showcase the company’s outstanding achievements in the field of new energy and attract public attention, and organize new energy science activities to enhance brand reputation and social responsibility; and
Develop customized sales plans for different customer groups and cooperate with financial institutions to launch new energy project financing services to reduce customer costs and promote sales growth.
Our Goals and Strategic Plan
By leveraging our extensive business relationships, technical ability and in-depth knowledge of the shipping industry, our goal is to further strengthen our position as a leading global logistics solution provider who offers innovative resolutions to better address complex issues in different aspects in the entire shipping and freight logistics chain.
Meanwhile, we plan to build a solar energy production facility in the United States. The Company actively seeks cooperation with multiple parties. It plans to jointly develop new energy technologies with scientific research institutions to enhance its strength, to cooperate with solar energy companies to establish recycling channels, to join hands with environmental protection organizations to promote concepts, and to cooperate with the government to participate in projects and obtain support.
Our Customers
Our main customers for the fiscal years ended June 30, 2024 and 2023 are Chongqing Iron & Steel Ltd. and SOSNY. For the years ended June 30, 2024 and 2023, Chongqing Iron & Steel Ltd. accounted for 77.2% and 52.7% of the Company’s revenues, respectively. For the years ended June 30, 2024 and 2023, SOSNY accounted for nil and 16.1% of the Company’s gross revenue.
Our Suppliers
Our operations consist of working directly with our customers to understand in detail their needs and expectations and then managing local suppliers to ensure that our customers’ needs are met. For the year ended June 30, 2024, two suppliers accounted for approximately 21.2% and 20.1% of our total purchases, respectively. For the year ended June 30, 2023, two suppliers accounted for approximately 19.6% and 19.5% of our total purchases, respectively.
Our Strengths
We believe that the following strengths differentiate us from our competitors:
● Proven industry experience and problem-solving reputation. We are a non-asset based global shipping and freight logistics solution provider. We provide tailored solutions and value-added services to our customers to drive effectiveness and control in related aspects throughout the entire shipping and freight logistic chain. We believe that our years of successful track record of applying integrated solutions to complex issues in the global shipping logistics business gives us a competitive advantage in attracting large clients and helps us maintain strong long terms business relationship with them.
● A competent professional team. Most of our employees have marine business experience, and many of our managers/chief operators served in other large Chinese shipping companies prior to joining us. With these professionals and experienced staff, we believe that we provide the best services to our customers at competitive prices.
● Extensive network and positive industry recognition. Doing business in China often requires a strong business network and support of key strategic partners. The Company served as one of the executive directors of China Association of Shipping Agencies & Non-Vessel-Operating Common Carriers (CASA), the authoritative industry association in China. We are the only non-state-owned enterprise represented on the CASA board guiding the development of the industry. Our good reputation and industry recognition enables us to maintain strong relationships with our business partners and have an extensive network of contacts throughout the industry, which helps us gain necessary support to execute our business plans.
● Lean organization and a flexible business model. Although we are a small business with limited resources, we have a cohesive and effective organizational structure with the goal of maximizing customer value while minimizing waste. Our unique flexible business model allows us to quickly respond to changing market demand and offer our customers innovative problem-solving solutions, quality customer service, and competitive prices to achieve greater market acceptance and gain additional market share.
● U.S.-registered and NASDAQ-listed public company. We believe our status as a U.S. corporation gives us more credibility among existing and potential customers, suppliers, and other business partners than a privately owned company would have in our industry. Our ability to raise capital through the capital market or use our common stock as “currency” to facility potential merger and acquisition transactions can also help us carry out or accelerate our growth strategies.
Our Opportunities
For more than thirty years, the shipping and freight logistics industry has been operated under traditional business models without meaningful change. Many of these business practices are inefficient and problematic; therefore, maintaining an innovative mindset is critical to achieving continuous business success and growth. We are a value-added logistics solution provider with successful past performance and individuals that have been in the industry for a long time. Instead of playing the traditional logistics broker role, we focus on providing technology solutions and innovative leading-edge services to bridge the asset-based world with the digital world. We shape our industry practice and profit model by analyzing wider developments both in the global markets and the technology industry so we can address unique problems that are currently pervasive across the shipping and freight logistics industry.
We believe we can capture the business opportunity and grow our business organically or through acquisitions or strategic alliance by:
● Continuing to streamline our business operations and improve our operating efficiency through innovative technology, effective planning, budgeting, execution and cost control;
● Diversifying our business to focus on providing innovative technology based solution to our customers to promote our sustainable business growth;
The current market of China’s shipping agency industry is mature comparing to what it was ten years ago when the shipping agency industry was fueled by the massive construction of China’s infrastructure, yet the over-supply of shipping agencies has also shrunk the profits of the industry. Many shipping agencies were constrained by the small size and the limited services. We have the professionalism and are the pioneers and leaders in the shipping agency industry in China. We maintain strong relationships with customers and market resources. The current shipping agency market is more competitive yet enable companies like us who has better resources in this market niche to expand.
In terms of the new Solar Panel Business, the United States has a developed steel industry and has a certain demand for scrap steel. On the one hand, domestic steel production in the United States consumes scrap steel, especially when iron ore prices fluctuate, steel mills may increase the use of scrap steel to reduce costs; on the other hand, the demand for steel in the manufacturing industry and other industries in the United States also indirectly drives the demand for scrap steel. For example, the construction industry and the automobile manufacturing industry are all large consumers of steel, and the development of these industries will increase the demand for scrap steel.
It is estimated that North America has installed more than 80 GW of solar power, a figure that could grow to more than 400 GW by 2030. Bloomberg News estimates that about 26,000 tons of photovoltaic panels were wasted in 2020, and as photovoltaic panels reach the end of their life in the 2030s, the amount of waste will grow to millions of tons. The solar recycling business market is a rapidly emerging but still developing field. As the global solar industry booms, a large number of photovoltaic modules will reach the end of their life and face retirement in the next few years. This brings both environmental challenges and huge market opportunities.
Our Challenges
We face significant challenges when executing our strategy, including:
● Given the complexity and length of restructuring our business, we face the challenge of generating sufficient cash from our current business activities to support our daily operations during the transition;
● We may not be able to establish a separate department to solve critical issues in today’s shipping logistics industry;
● We may not be able to manage our growth when we form more joint ventures for our shipping agency business as we need to better our standard operating and control procedures which may pose more challenges to our management.
● We may not have or not be able to get the necessary funds to continue to expand our service and market our services successfully;
● Our ability to respond to increasing competitive pressure on our growth and margins;
● Our ability to gain further expertise and to serve new customers in new service areas;
● From time to time, we may have difficulty carrying out services effectively and in a profitable way due to the cyclical nature of the shipping industry, which could lead to a prolonged period of sluggish demand for our services;
● Our ability to respond promptly to a changing regulatory environment, macroeconomic conditions, industry trends, and competitive landscape; and
● Developing a winning business model takes time and a new business model may not be recognized by the market immediately. As a publicly traded company, management may be forced to fulfill near-term performance goals that may not be consistent with the Company’s long-term vision.
Our Competition
The market segment that we now operate in, which is freight logistics services including warehouse services, does not have high entry barriers. In terms of our competition in China, there are many companies ranging from small to large that provide freight logistics services, and the state-owned companies in China generate a significant portion of the revenues in the industry. Our primary competitors in China are the China branches of international shipping companies or their exclusive agents in China. These companies include Evergreen Marine Corp., Orient Overseas Container Line, Ocean Network Express which includes Kawasaki Kisen Kaisha, Ltd, Mitsui O.S.K. Lines and Nippon Yusen Kabushiki Kaisha. The competition is intense due to the significant excess capacity. These companies have greater service capabilities, a larger customer base and more financial, marketing, network and human resources than we do. Most of them engage in a wide range of businesses and involve many aspects of the industry chain. However, we focus on providing tailored solutions and value-added services to customers in freight logistic services. As a boutique company with limited resources and history, we face intense competition. Our ability to grow in our industry depends on (1) our deep understanding of the complexity of industry issues and challenges and (2) our ability to develop optimal solutions to respond to the identified issues and provide effective problem-solving strategies to our targeted customers.
In terms of our competition in the United States, the freight logistics services industry is well developed, highly fragmented, and competition is fierce nationwide. Our primary competitors in the U.S. are local warehouse services providers and freight forwarding companies in Houston, for example, Bizto LLC, Golden Eagle Guns LLC, and Smart Supply Chain. Competition in the freight logistics services industry is driven by factors such as price, service quality, technology, and geographic reach. Companies that can offer a combination of these factors are often more competitive in the market. Additionally, companies that can adapt to changing customer demands and market trends, such as the shift towards e-commerce, are likely to be more successful in the long term. We aim at providing tailored and valued-added services for our international clients with needs for U.S. domestic logistics services.
Employees
As of the date of this Report, we have 15 full-time employees, 10 of whom are based in China and 5 are based in the United States. Of the total full-time employees, 6 are in management, 6 are in operations, 4 are in finance and accounting related and 1 are in administration and technical support. We believe that our relationship with our employees is good. We have never had a work stoppage, and our employees are not subject to a collective bargaining agreement.
Intellectual Property
As of the date of this Report, we do not have any registered patents, copyrights, or trademarks. We have seven registered domain names, including our corporate website https://www.singularity.us/.

---

ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to include risk factors in this Report. However, below are a number of material risks, uncertainties and other factors that could have a material effect on the Company and its operations as a result of recent developments. You should carefully consider the risks described below before purchasing our common stock. The risks highlighted here are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects, financial condition, or results of operations could be negatively affected, and you might lose all or part of your investment.
We are, and may continue to be, subject to litigation including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, and operating results.
As discussed in “Item 1. Business - Recent Developments,” we are, and from time to time may become, subject to litigation and various legal proceedings, including litigation and proceedings related to stockholder derivative suits, class action lawsuits and other matters, that involve claims for substantial amounts of money or for other relief or that might necessitate changes to our business or operations. In addition to this, we have been, currently are, and may from time to time become subject to, government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. The defense of these actions may be both time consuming and expensive. We evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the monetary amount of potential losses. Based on these assessments and estimates, we may establish reserves and/or disclose the relevant litigation claims or legal proceedings, as and when required or appropriate. These assessments and estimates are based on information available to management at the time of such assessment or estimation and involve a significant amount of judgment. As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates. Our failure to successfully defend or settle any of these litigations or legal proceedings could result in liability that, to the extent not covered by our insurance, could have an adverse effect on our business, financial condition and results of operations.
The scope, determination, and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with certainty, and may result in:
● substantial payments to satisfy judgments, fines, or penalties;
● substantial outside counsel, advisor, and consultant fees and costs;
● substantial administrative costs, including arbitration fees;
● loss of productivity and high demands on employee time;
● criminal sanctions or consent decrees;
● termination of certain employees, including members of our executive team;
● barring of certain employees from participating in our business in whole or in part;
● orders that restrict our business or prevent us from offering certain products or services;
● changes to our business model and practices
● delays to planned transactions, service launches or improvements; and
● damage to our brand and reputation.
We are, and may continue to be, subject to securities litigation, which is expensive and could divert management attention, cause harm to our reputation and result in significant damages for which we could be responsible.
We are subject to securities class action litigation, which is expensive, could divert our management’s attention, harm our reputation, and leave us liable for substantial damages. For example, as discussed in “Item 1. Business - Recent Developments,” on December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired publicly traded securities of the Company between February 2021 and November 2022, filed a putative class action against the Company, certain of our officers and directors, and other defendants in the United States District Court for the Eastern District of New York, alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings. The plaintiff seeks unspecified damages, plus interest, costs, fees, and attorneys’ fees. As this action is still in the early stage, the Company cannot predict the outcome, and certain of our officers in the U.S. District Court for the Eastern District of New York.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could adversely impact our business. Any adverse determination in litigation could also subject us to significant liabilities.
We are responsible for the indemnification of our officers and directors.
Should our officers and/or directors require us to contribute to their defense, we may be required to spend significant amounts of our capital. Our Certificate of Incorporation and bylaws also provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on behalf of our company. This indemnification policy could result in substantial expenditures, which we may be unable to recoup. If these expenditures are significant or involve issues which result in significant liability for our key personnel, we may be unable to continue operating as a going concern.
We depend on a limited number of major customers who are able to exert a high degree of influence over us and the loss of a major customer could adversely impact our business.
For the years ended June 30, 2023 and 2024, one customer, Chongqing Iron & Steel Ltd., accounted for 77.2%and 52.7% of our revenues, respectively. There can be no assurance that our major customer will continue to purchase our services in the same amount that it has in the past. The loss of our major customer or a material reduction in sales to a major customer could have a material adverse effect on our sales and results of operations. Additionally, given the high concentration of our customer base, a default by or a significant reduction in future transactions with our major customer could materially reduce our revenues, profitability, liquidity and growth prospects.
We depend on a limited number of suppliers who are able to exert a high degree of influence over us and the loss of our major suppliers could adversely impact our business.
For the year ended June 30, 2024, two suppliers accounted for approximately 21.2% and 20.1% of our total purchases, respectively. For the year ended June 30, 2023, two suppliers accounted for approximately 19.6% and 19.5% of our total purchases, respectively. There can be no assurance that our major suppliers will continue to supply us with the materials or services required to operate our business in the same amount that they have in the past. The loss of our major suppliers or a material reduction in the materials or services they provide to us could have a material adverse effect on our business and results of operations.
Additionally, due to the unpredictable nature of COVID-19 regulations in China, our suppliers based in China may be affected by COVID-19 related issues such as shutdowns and delays. This may cause us to become unable to fulfill our customer orders on a timely basis, which may cause us to cancel orders and provide refunds, as demonstrated in our settlement with SOSNY.
Our growth depends in part on the success of our relationships with third parties, including our solar partners.
A key component of our growth strategy is to develop or expand our relationships with third parties. For example, we are investing resources in establishing strategic relationships with market players across a variety of industries to generate new customers. These programs may not roll out as quickly as planned or produce the results we anticipated. A significant portion of our business depends on attracting and retaining new and existing solar partners. Negotiating relationships with our solar partners, investing in due diligence efforts with potential solar partners, training such third parties and contractors, and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding a direct sales or installation team. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to grow our business and address our market opportunity could be impaired. Even if we are able to establish and maintain these relationships, we may not be able to execute on our goal of leveraging these relationships to meaningfully expand our business, brand recognition and customer base. This would limit our growth potential and our opportunities to generate significant additional revenue or cash flows.
We and our potential solar partners depend on a limited number of suppliers of solar panels, and other system components to adequately meet anticipated demand for our solar panel offerings. Any shortage, bottlenecks, delay, detentions, or component price change from these suppliers, or the acquisition of any of these suppliers by a competitor, could result in sales and installation delays, cancellations, and loss of market share.
We and our potential solar partners purchase solar panels, and other system components from a limited number of suppliers, making us susceptible to quality issues, shortages, bottlenecks, and price changes. If we or our potential solar partners fail to develop, maintain and expand our relationships with these or other suppliers, we may be unable to adequately meet anticipated demand for our solar service offerings, or we may only be able to offer our systems at higher costs or after delays. If one or more of the suppliers that we or our solar partners rely upon to meet anticipated demand ceases or reduces production, we may be unable to quickly identify alternate suppliers or to qualify alternative products on commercially reasonable terms, and we may be unable to satisfy this demand.
The acquisition of a supplier by one of our competitors could also limit our access to such components and require significant redesigns of our solar energy systems or installation procedures and have a material adverse effect on our business.
The restatement of our prior financial statements may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries.
As discussed in our Current Form on Form 8-K filed on February 28, 2023, as amended by Amendment No. 1 filed on March 6, 2023, we determined to restate our financial statements as of and for the year ended June 30, 2021, three and six months ended September 30, 2021 and three and nine months ended December 31, 2021 after we identified errors related to, incorrect accounting treatment of related party loan receivable, incorrect recognition of revenue from freight shipping services and incorrect accounting treatment of recovery (provision) for doubtful accounts. As a result of these errors and the resulting restatements of our financial statements for the impacted periods, we have incurred, and may continue to incur, unanticipated costs for accounting and legal fees in connection with or related to the restatements, and have become subject to a number of additional risks and uncertainties, including the increased possibility of litigation and regulatory inquiries. Any of the foregoing may affect investor confidence in the accuracy of our financial disclosures and may raise reputational risks for our business, both of which could harm our business and financial results.
We have identified material weaknesses in our internal control over financial reporting and have determined to restate our previously issued financial statements. If our remediation of these material weaknesses is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of a material misstatement of our consolidated financial statements.
As a public company, we are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K. Effective internal control over financial reporting is necessary for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause our Company to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in reported financial information, which could have a negative effect on the trading price of our common stock.
Our management’s assessment must include disclosure of any material weaknesses identified by management in our internal control over financial reporting. Our management’s assessment could detect problems with internal controls. Undetected material weaknesses in internal controls could lead to financial statement restatements and require our Company to incur the expense of remediation.
A material weakness is a deficiency or combination of deficiencies in a company’s internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its consolidated financial statements would not be prevented or detected on a timely basis. This deficiency could result in additional misstatements to its consolidated financial statements that would be material and would not be prevented or detected on a timely basis.
As discussed in “Item 9.A Controls and Procedures - Disclosure Controls and Procedures,” under the supervision and with the participation of our management, we conducted an assessment of the effectiveness of our disclosure controls and procedures as of June 30, 2024. Based on the foregoing evaluation, our Chief Operating Officer concluded that the Company’s disclosure controls and procedures were not effective due to ineffective internal controls over financial reporting that stemmed from the following material weaknesses for the year ended and as of June 30, 2024:
● Lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries in some of the subsidiaries within the consolidation, lack of supervision, coordination and communication of financial information between different entities within the Group;
● Lack of a full time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions which led to error in revenue recognition in previously issued financial statements;
● Lack of resources with technical competency to address, review and record non-routine or complex transactions under U.S. GAAP;
● Lack of management control reviews of the budget against actual with analysis of the variance with a precision that can be explained through the analysis of the accounts;
● Lack of proper procedures in identifying and recording related party transactions which led to restatement of previously issued financial statements (See Note 1 of the accompanying consolidated financial statement footnotes);
● Lack of proper procedures to maintain supporting documents for accounting record; and
● Lack of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive.
In order to remediate the material weaknesses stated above, we intend to implement the following policies and procedures:
● Hiring additional accounting staff to report the internal financial timely;
● Reporting other material and non-routine transactions to the Board and obtain proper approval;
● Recruiting additional qualified professionals with appropriate levels of U.S. GAAP knowledge and experience to assist in resolving accounting issues in non-routine or complex transactions;
● Developing and conducting U.S. GAAP knowledge, SEC reporting and internal control training to senior executives, management personnel, accounting departments and the IT staff, so that management and key personnel understand the requirements and elements of internal control over financial reporting mandated by the U.S. securities laws;
● Setting up budgets and developing expectations based on understanding of the business operations, compare the actual results with the expectations periodically and document the reasons for the fluctuations with further analysis. This should be done by CFO and reviewed by CEO upon their communications with the Board;
● Strengthening our corporate governance;
● Setting up policies and procedures for the Company’s related party identification to properly identify, record and disclose related party transactions; and
● Setting up proper procedures for the Company’s fund disbursement process to ensure that cash is disbursed only upon proper authorization, for valid business purposes, and that all disbursements are properly recorded.
We cannot provide assurance that these or other measures will fully remediate our material weaknesses in a timely manner. If our remediation of these material weaknesses is not effective, it may cause our Company to become subject to investigation or sanctions by the SEC. It may also adversely affect investor confidence in our Company and, as a result, the value of our common stock. There can be no assurance that all existing material weaknesses have been identified, or that additional material weaknesses will not be identified in the future. In addition, if we are unable to continue to meet our financial reporting obligations, we may not be able to remain listed on Nasdaq.
Our ability to maintain compliance with Nasdaq continued listing requirements, including whether we are able to maintain the closing bid price of our common stock, could result in the delisting of our common stock.
Our common stock is currently listed on The Nasdaq Capital Market (“Nasdaq”). To maintain this listing, we must satisfy minimum financial and other requirements.
On July 7, 2023, the Company received a notification from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rules due to its failure to timely hold an annual meeting of shareholders for the fiscal year ended June 30, 2022, which is required to be held within twelve months of the Company’s fiscal year end under Nasdaq Listing Rule 5620(a) and 5810(c)(2)(G). On October 19, 2023, the Company received a formal notification from the Nasdaq confirming that the Company had regained compliance with Listing Rule 5620(a), and that the matter is now closed.
On July 13, 2023, the Company received a notice from Nasdaq stating that the Company no longer complies with Nasdaq’s independent director and audit committee requirements under Nasdaq’s Listing Rule 5605 following the resignation of Tieliang Liu from the Company’s board of directors and audit committee effective July 3, 2023. Nasdaq advised the Company that in accordance with Nasdaq’s Listing Rule 5605(c)(4), the Company has a cure period to regain compliance (1) until the earlier of the Company’s next annual shareholders’ meeting or July 3, 2024; or (2) if the next annual shareholders’ meeting is held before January 2, 2024, then the Company must evidence compliance no later than January 2, 2024. In response to this notice, on July 31, 2023, the Company elected Mr. Zhongliang Xie as a Class II independent director to serve until the annual meeting of stockholders for the fiscal year 2023, to fill the vacancy on the Board resulting from the resignation of Mr. Tieliang Liu. The Board appointed Mr. Xie to serve as Chair of the Audit Committee, a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee.
On July 13, 2023, the Company received a notice from Nasdaq stating that the Company failed to regain compliance with respect to the minimum $1 bid price per share requirement under Nasdaq Listing Rules during the 180 calendar days given by Nasdaq for the Company to regain compliance, which ended on July 5, 2023. However, Nasdaq has determined that the Company is eligible for an additional 180 calendar day period, or until January 2, 2024, to regain compliance. On January 3, 2024, the Company received a notification from Nasdaq, notifying the Company of the determination to delist the Company’s securities from Nasdaq because of the Company’s failure to regain compliance with the $1 per share bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2). On March 12, 2024, the Company received a formal notification from Nasdaq confirming that the Company had regained compliance with bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2).
There can be also no assurance that our stock price will meet the minimum bid price requirement or we will meet other requirements for continued listing on Nasdaq. If our common stock is delisted from Nasdaq and we are unable to list our common stock on another national securities exchange, we expect our common stock would be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences, including the limited availability of market quotations for our common stock; substantially decreased trading in our common stock; decreased market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; an adverse effect on our ability to issue additional securities or obtain additional financing in the future on acceptable terms, if at all; potential loss of confidence by investors, suppliers, partners, and employees and fewer business development opportunities; and limited news and analyst coverage. Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.
For additional risks relating to our operations, see the section titled “Risk Factors” contained in our Registration Statement on Form S-3, filed with the SEC on September 9, 2024 and other filings we file with the SEC from time to time.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
The Company does not have any unresolved or outstanding staff comments.

---

ITEM 2. PROPERTIES
Item 2. Properties.
We currently rent two facilities. Our PRC headquarters is in Shanghai and our U.S. headquarters is in New York. We have closed the two facilities in Texas when the leases expired earlier this year.
Office
Address
Rental Term
Space
New York, USA
Cutter Mill Rd
Suite
Great Neck, New York 11021
Expires 07/31/2026
3,033 ft2
Shanghai, PRC
Rm 12D & 12E, No.359
Dongdaming Road,
Hongkou District,
Shanghai, PRC 200080
Expires 12/31/2024
3,078 ft2
Texas, USA
Savoy Dr,
Suite
Houston, Texas 77036
Expired 06/30/2024
ft2
Texas, USA
Stafford Road,
Suite
Stafford, Texas 77477
Expired 07/31/2024
46,463 ft2

---

ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
See “Item 1. Business - Recent Developments” for a description of legal proceedings the Company is currently involved in, which is incorporated herein by reference.

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
This item is not applicable to the Company.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market for Our Common Stock
Our common stock is traded on the Nasdaq Capital Market under the symbol SGLY.
Holders of Our Common Stock
As of September 12, 2024, there were 26 holders of record of our common stock. This number does not include stockholders who hold their shares of common stock in street name.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our Board and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the Board may deem relevant. Payments of dividends by our PRC subsidiaries to our company are subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents.
Recent Sales of Unregistered Securities and Issuer Purchases of Equity Securities
None.

---

ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in the Report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
We previously focused on providing customized freight logistics services, but starting in 2017, we began exploring new opportunities to expand our business and generate more revenue. These opportunities ranged from complementary businesses to other new service and product initiatives. In the fiscal years 2023 and 2024, while we continued to provide our freight logistics business, we expanded our services to include warehousing services provided by our US subsidiary Brilliant Warehouse Service Inc. On January 3, 2022, we changed our corporate name to Singularity Future Technology Ltd. to align with our entry into the digital assets business through our U.S. subsidiaries. During 2022, we engaged in purchases and sales of cryptocurrency mining machines through our U.S. subsidiaries.
For the fiscal year ended June 30, 2024, we were engaged in providing freight logistics services including warehouse services, which were operated by our subsidiaries Trans Pacific Shipping Limited and Gorgeous Trading Ltd. and Brilliant Warehouse Service Inc in the United States, . Our range of services include transportation, warehouse, collection, last-mile delivery, drop shipping, customs clearance, and overseas transit delivery. For the fiscal year ended June 30, 2024, the Company did not sell crypto-mining machines.
We have not generated any revenues to date with respect to our entry into the solar panel production and distribution business.
Recent Developments
Reverse Stock Split
On February 9, 2024, the Company effectuated a 1-for-10 reverse stock split of its common stock. Beginning on February 12, 2024, the Company’s common stock trades on The Nasdaq Stock Market on a split adjusted basis. Upon effectiveness of the reverse stock split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued. Instead, any fractional shares that would have resulted from the split was rounded up to the next whole number. Trading in the common stock continues on the Nasdaq Stock Market under the symbol “SGLY”. The new CUSIP number for the common stock following the reverse stock split is 82935V 307. The reverse stock split was intended to increase the per share trading price of the Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing of the common stock on the NASDAQ Stock Market. The reverse stock split did not affect the number of total authorized shares of common stock of the Company.
Nasdaq Listing Deficiencies
On January 3, 2024, the Company received a Staff determination notice from Nasdaq notifying the Company of the Staff’s determination to delist the Company’s securities from Nasdaq because of the Company’s failure to regain compliance with the $1 per share minimum bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2). Pursuant to the Nasdaq letter, unless the Company requested an appeal of the determination notice, trading of the Company’s common stock would be suspended at the opening of business on January 12, 2024. The Company appealed the delisting determination to a Hearings Panel, and hearing was scheduled to be held on March 28, 2024. The Company’s common stock would continue to be listed for trading pending the Hearing Panel’s decision. As discussed in “Prospectus Summary - Recent Developments - Reverse Stock Split,” the Company effectuated a 1-for-10 reverse stock split of its common stock on February 9, 2024. Beginning on February 12, 2024, the Company’s Common Stock trades on The Nasdaq Stock Market on a split adjusted basis.
On March 12, 2024, the Company received a formal notification from the Nasdaq Stock Market LLC confirming that the Company had regained compliance with bid price requirement required for continued listing on the Nasdaq as set forth in Listing Rule 5550(a)(2). Consequently, the scheduled hearing before the Hearings Panel on March 28, 2024 had been cancelled.
Receipt of SEC Subpoena
As previously disclosed, on February 28, 2023 , the audit committee of the Company, after discussion with the management of the Company, and in consultation with the Company’s independent registered public accounting firm, concluded that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on November 29, 2021 (the “2021 Form 10-K”) should no longer be relied upon as a result of incorrect accounting treatment of approximately $4.6 million of related party loan receivable. The audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30, 2021 and six months ended December 31, 2021. The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K (the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the Amended Form 10-K, the “Restatements”).
On June 17, 2024, the Company received a subpoena from the Securities and Exchange Commission (the “SEC”) requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation.
Entry into Joint Venture
On August 22, 2024, New Energy Tech Ltd., (“New Energy”) a New York corporation and wholly owned subsidiary of the Company, entered into a certain joint venture agreement (the “JV Agreement”) with Market One Service Corp., a corporation organized under the laws of Wyoming, (“Market One”). Pursuant to the JV Agreement, among other things and subject to the terms and conditions contained therein, New Energy and Market One agreed to establish a limited company under the laws of Ohio, SG Campbells Creek Commodities (the “JV”), to engage in the business of commodity trading .. The parties also plan to expand into the sale of solar panels.
Impact of COVID-19
The outbreak of the COVID-19 virus (“COVID-19”) starting from late January 2020 in the PRC spread rapidly to many parts of the world. In March 2020, the World Health Organization declared COVID-19 as a pandemic.
In early December 2022, the Chinese government eased its strict control measures for COVID-19, which led to a surge in increased infections and disruptions in our business operations. In 2023, our China operation continued to suffer from the impact of COVID-19, although to a lesser extent. The impact of any future impact of COVID-19 on the Company’s China operational results will depend on, to a large extent, on the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which are beyond our control.
The impact of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:
* Our customers have been negatively impacted by the pandemic, which reduced their demand for freight logistics services. As a result, our revenue for the year ended June 30, 2022 was down by approximately $1.2 million, or 22.6% and our freight revenue declined slightly in the ear ended June 30, 2023.
* Due to travel restrictions between US and China, our new business development for existing segments or new ventures has been slowed down.
* Our sales of crypto mining machines were materially adversely affected by COVID-19. Specifically, Crypto mining machine manufacturers were impacted by the constrained supply of the semiconductors used in the production of the highly specialized crypto mining machines. COVID-related issues exacerbated port congestion and intermittent supplier shutdowns and delays, resulted in delayed shipments and additional expenses to expedite delivery. As a result, we were unable to fulfil our customer orders on a timely basis, resulting in the cancellation of orders and the partial refund of purchases, as evident from the SOSNY settlement.
Although the impact of COVID-19 on our operations decreased in 2023, such impact still exists and may continue to exist for an unforeseeable period of time. The impact of any future spread of COVID-19 on the Company’s China operation will depend, to a large extent, on the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which is beyond our control.
Results of Operations
Comparison of the Years Ended June 30, 2024 and 2023
The following table sets forth the results of our operations for the periods indicated:
For the Years Ended June 30,
Change
US $ % US $ % US $ %
Revenues 3,136,681 100.0 % 4,538,723 100.0 % (1,402,042 ) (30.9 )%
Cost of revenues 3,614,947 115.2 % 3,990,654 87.9 % (375,707 ) (9.4 )%
Gross margin (15.2 )% N/A 12.1 % N/A (27.3 )% N/A
Selling expenses 252,278 8.0 % 232,569 5.1 % 19,709 8.5 %
General and administrative expenses 5,031,852 160.4 % 11,572,888 255.0 % (6,541,036 ) (56.5 )%
Impairment loss of investment - - 128,369 2.8 (128,369 ) (100.0 )%
Impairment loss of Cryptocurrencies 72,179 2.3 % 18,279 0.4 % 53,900 294.9 %
Impairment loss of fixed assets and right of use asset - - 33,469 0.7 % (33,469 ) (100.0 )%
Provision for doubtful accounts, net of recovery 87,629 2.8 % 2,827,511 62.3 % (2,739,882 ) (96.9 )%
Stock-based compensation - - 329,778 7.3 % (329,778 ) (100.0 )%
Total costs and expenses 9,058,885 288.8 % 19,133,517 421.6 % (10,074,632 ) (52.7 )%
Revenues
Revenues decreased by $1,402,042, or approximately 30.9%, to $ 3,136,681 for the year ended June 30, 2024 from $4,538,723 for the year ended June 30, 2023. The decrease was primarily due to decreased revenue from our sale of crypto mining equipment and the decline in revenues of our freight logistics services. Revenues from our logistics services business decreased by $669,477, or approximately 17.6%, to $3,136,681 for the year ended June 30, 2024 from $3,806,158 for the year ended June 30, 2023.The Company ceased to sell crypto-mining equipment since January 1, 2023.
The following tables present summary information by segments for the years ended June 30, 2024 and 2023:
For the Year Ended June 30, 2024
Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues* $ 3,136,681 $ - $ 3,136,681
Cost of revenues $ 3,614,947 $ - $ 3,614,947
Gross profit $ (478,266 ) $ - $ (478,266 )
Depreciation and amortization $ 131,125 $ 1,070 $ 132,195
Total capital expenditures $ (589 ) $ - $ (589 )
Gross margin (15.2 )% - (15.2 )%
For the Year Ended June 30, 2023
Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues $ 3,806,158 $ 732,565 $ 4,538,723
Cost of revenues $ 3,990,654 $ - $ 3,990,654
Gross profit $ (184,496 ) $ 732,565 $ 548,069
Depreciation and amortization $ 163,635 $ 713 $ 164,348
Total capital expenditures $ (38,440 ) $ 2,852 $ (35,588 )
Gross margin (4.8 )% 100 % 12.1 %
% Changes For the Years Ended
June 30, 2024 and 2023
Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues (17.6 )% (100.0 )% (30.9 )%
Cost of revenues (9.4 )% N/A % (9.4 )%
Gross profit 159.2 % (100.0 )% (187.3 )%
Depreciation and amortization (19.9 )% 50.1 % (19.6 )%
Total capital expenditures (98.5 )% (100.0 )% (98.3 )%
Gross margin (10.4 )% (100.0 )% (27.3 )%
Disaggregated information of revenues by geographic locations are as follows:
For the Years Ended
June 30, June 30,
PRC 2,686,303 2,529,449
U.S. 450,378 2,009,274
Total revenues $ 3,136,681 $ 4,538,723
Revenues
Freight Logistics Services
Freight logistics services primarily consist of cargo forwarding, brokerage, warehouse and other freight services. Revenues from freight logistics services were $3,136,681 for the year ended June 30, 2024, a decrease of $669,477, or approximately 17.6%, as compared to $3,806,158 for the year ended June 30, 2023. The decrease in shipping revenue of approximately $826,331 from our U.S. subsidiary, Brilliant Warehouse was due to the decline of business volume, offset in part to an increase of revenue from our PRC operation of approximately $156,854 was due to increase several new customers.
Sales of Crypto Mining Machines
On January 10, 2022, Thor Miner entered into a purchase and sale agreement with SOSNY, a wholly owned subsidiary of SOS Ltd. Pursuant to the agreement, Thor Miner agreed to sell to SOSNY certain cryptocurrency mining hardware and other equipment. The total purchase price was $200,000,000 and the purchase was expected to be completed under separate purchase orders. We recognized the sales of cryptocurrency mining equipment based on a net basis as the manufacturer of the products was responsible for shipping and custom clearing for the products. The net revenue amounted to $732,565 for the years ended June 30, 2023. We ceased to sell crypto-mining equipment since January 1, 2023.
Cost of Revenues
Cost of revenues for our freight logistics services segment mainly consisted of freight costs to various freight carriers, cost of labor, warehouse rent and other overhead and sundry costs. Cost of revenues for our freight logistics services segment was $3,614,947 for the year ended June 30, 2024, a decrease of $375,707, or approximately 9.4%, as compared to $3,990,654 for the year ended June 30, 2023 as a result of reduced activity in our truck dispatch business. We determined to restrict this business to large customers in order improve profitability.
Our gross margin was (15.2%) and 12.1% for the years ended June 30, 2024 and 2023, respectively. This decrease in gross margin was mainly due to decreased revenue from our freight logistics business and ceased to sell crypto-mining equipment since January 1, 2023.
Operating Costs and Expenses
Operating costs and expenses decreased by $10,074,632 or approximately 52.7% from $9,058,885 for the year ended June 30, 2024 compared to $19,133,517 for the year ended June 30, 2023. This decrease was mainly due to the decrease in general and administrative expenses, provision for doubtful accounts, stock-based compensation and impairment loss of investment as more fully discussed below.
Selling Expenses
Our selling expenses consisted primarily of salaries, meals and entertainment and travel expenses for our sales representatives. For the year ended June 30, 2024, we had $252,278 in selling expenses, as compared to $232,569 for the year ended June 30, 2023, which represents an increase of $19,709 or approximately 8.5%. The increase was mainly due to an increase in salaries as we added to employees and incurred increased marketing expenses for the freight logistics segment for our sales team.
General and Administrative Expenses
Our general and administrative expenses consist primarily of salaries and benefits, travel expenses for our administration department, office expenses, and regulatory filing and professional service fees for auditing, legal and IT consulting. For the year ended June 30, 2024, we had $5,031,852 of general and administrative expenses, as compared to $11,572,888 for the year ended June 30, 2023, representing a decrease of $6,541,036 or approximately 56.5%. The decrease was mainly due to the decreased lawyer fees of $4,633,711 which mainly related to legal fees relating to the Company’s special committee’s investigation of claims of alleged fraud, misrepresentation, and inadequate disclosure raised in the Hindenburg Report and other related matters incurred in the last fiscal year.
Impairment Loss of Cryptocurrencies
We recorded an impairment loss of $72,179 and $18,279 for the year ended June 30, 2024 and 2023 respectively, for the cryptocurrencies held by us as the ownership of the cryptocurrencies could not be verified.
Impairment Loss of Fixed Assets and Right of Use Assets
We recorded impairment losses of nil and $$33,469 for the year ended June 30, 2024 and 2023.
We recorded no impairment charges related to fixed assets and right of use assets during the years ended June 30, 2024.
Impairment Loss of Investment
The Company recorded $128,369 for the year ended June 30, 2023 due to the impairment of the Company’s investment in LSM Trading Ltd. No impairment loss was recorded for the year ended June 30, 2024.
Provision for Doubtful Accounts, Net of Recovery
Our total bad debt expenses amounted to approximately $87,629 for the year ended June 30, 2024, mainly due to the bad debt provision of $50,000 due the early termination of a lease agreement in Jericho, New York.
Our total bad debt expenses amounted to approximately $2.8 million for the year ended June 30, 2023, mostly due to a $3 million wire transfer made by our former COO, Jing Shan to Goalowen Inc. on May 5, 2023 without the Board’s authorization, as payment for the transfer by Goalowen to the Company of an operating income right to be derived from fishing activities. The Company has demanded the return of the $3 million but has not been successful. As of June 30, 2023, the Company reviewed the unauthorized transfer, evaluated the collection possibility, and decided to provide 100% allowance provision with amount of USD 3 million.
Stock-based Compensation
Stock-based compensation was nil and $329,778 for the year ended June 30, 2024 and 2023, and we did not issue any stock compensation to employees and directors in the fiscal year of 2024.
Loss from disposal of subsidiaries and VIE
On October 24, 2023, February 19, 2024 and April 17, 2024, the Company dissolved its subsidiaries of Ningbo Saimeinuo Web Technology Ltd., Thor Miner Inc. and Blumargo It Solution Ltd., respectively. Total gain from the three disposals was $ 359,781.
Since these entities did not have any active operations prior to their disposal, the disposal did not represent a strategic change in the Company’s business. As such, the disposal was not presented as a discontinued operation.
Lawsuit settlement expenses
We recorded $8.4 million in lawsuit settlement expenses for the year ended June 30, 2023, compared to nil in lawsuit settlement expenses for the year ended June 30, 2024. The expenses were related to the lawsuits in connection with the Securities Purchase Agreement and the Financial Advisory Agreement described in Item 1. Business - Litigation.
Other Expenses, Net
Other income, net was $90,649 for the year ended June 30, 2024, which mainly consisted of interest income of $185,626 and exchange loss of $ 119,992, as compared to $74,989 for the year ended June 30, 2023, which mainly consisted of interest expense for our convertible debt of approximately $250,000 and the gain on disposal of right of use assets and fixed assets of $190,897.
Taxes
Our income tax expenses amounted to nil and $135,855 for the years ended June 30, 2024 and 2023, respectively.
We have incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $41,700,000 as of June 30, 2023, which may reduce future federal taxable income. The NOL generated for the year ended June 30, 2024 amounted to approximately $5,500,000. The Tax benefit derived from this NOL was approximately $1,155,000. As of June 30, 2024, our cumulative NOL amounted to approximately $47,200,000.
Our operations in China have incurred a cumulative NOL of approximately $1,703,000 as of June 30, 2023, which was mainly from net losses. During the year ended June 30, 2024, we generated an additional NOL of approximately $359,000 due to increased third party service cots as a result of our special committee’s investigation. Our PRC subsidiaries’ cumulative NOL amounted to approximately $2,062,000 as of June 30, 2024, which may reduce future taxable income and will expire by 2026.
We periodically evaluate the likelihood of the realization of our deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. Management considers new evidence, both positive and negative, that could affect our future realization of deferred tax assets including our recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. We determined that it is more likely than not our deferred tax assets would not be realized due to uncertainty on future earnings as a result of the Company’s reorganization and venture into new businesses. We provided a 100% allowance for deferred tax assets as of June 30, 2024. The net increase in valuation for the year ended June 30, 2024 amounted to approximately $1,196,000 based on management’s reassessment of the amount of our deferred tax assets that are more likely than not to be realized.
Net Loss
As a result of the foregoing, we had a net loss of $5,471,774 for the year ended June 30, 2024, compared to a net loss of $23,098,342 for the year ended June 30, 2023. After the deduction of non-controlling interest, net loss attributable to us was $5,108,528 for the year ended June 30, 2024, compared to $22,996,846 for the same period in 2023. Comprehensive loss attributable to us was $5,039,492 for the year ended June 30, 2024, as compared to $22,952,349 for the year ended June 30, 2023.
Liquidity and Capital Resources
Cash Flows and Working Capital
As of June 30, 2024, we had $14,641,967 in cash (including cash on hand and cash in bank) and $3,094,092 in restricted cash. Our cash position improved in the year ended June 30, 2024 due to the receipt of $9.8 million from the year-end private placement. The majority of our cash is in banks located in the Djibouti a country in East Africa and the restricted cash is in banks located in U.S.
The following table sets forth a summary of our cash flows for the periods as indicated:
For the Years Ended
June 30,
Net cash used in operating activities $ (4,408,691 ) $ (33,643,405 )
Net cash provided by (used in) investing activities $ 75,580 $ (2,225,708 )
Net cash provided by (used in) financing activities $ 4,456,576 $ (2,125,420 )
Effect of exchange rate fluctuations on cash $ 222,438 $ (448,593 )
Net increase (decrease) in cash $ 345,903 $ (38,443,126 )
Cash at the beginning of period $ 17,390,156 $ 55,833,282
Cash at the end of period $ 17,736,059 $ 17,390,156
The following table sets forth a summary of our working capital:
June 30, June 30,
Variation %
Total Current Assets $ 18,247,523 $ 18,192,716 $ 54,807 0.3 %
Total Current Liabilities $ 5,343,001 $ 5,031,769 $ 311,232 6.2 %
Working Capital $ 12,904,522 $ 13,160,947 $ (256,425 ) (1.9 )%
Current Ratio 3.42 3.62 (0.20 ) (5.5 )%
In assessing the liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations. As of June 30, 2024, our working capital was $12,904,522 and we had cash and restricted cash of approximately $17,736,059 (including $14,641,967 in cash and $3,094,092 in restricted cash). We believe our current working capital is sufficient to support our operations and debt obligations as they become due within one year from the date of this Report.
Operating Activities
Our net cash used in operating activities was approximately $4.4 million for the year ended June 30, 2024. The operating cash outflow for the year ended June 30, 2024 was primarily attributable to our net loss of approximately $5.5 million.
Our net cash used in operating activities was approximately $33.6 million for the year ended June 30, 2023. The operating cash outflow for the year ended June 30, 2023 was primarily attributable to our net loss of approximately $23.1 million which included a $8.4 million lawsuit settlement. Our cash outflow also included deferred revenue of approximately $6.9 million where we realized revenue from the sale of crypto mining equipment and a decrease in refund payable of $13.0 million as a result of the settlement payment to SOSNY, offset by cash inflow consisting of advance to a related party supplier of approximately $6.2 million which we realized as the cost for the sale of cryptocurrency equipment.
Investing Activities
Net cash provided by investing activities was $0.1 million for the year ended June 30, 2024 due to repayments from related parties from Zhejiang Jinbang, which is owned by Mr. Qinggang Wang.
Net cash used in investing activities was approximately $2.2 million for the year ended June 30, 2023. This is mainly due to an amount of $3.0 million paid to Goalowen Inc. with an operating income right transfer contract. We also had cash inflows from repayment of a loan receivable of approximately $0.5 million from Qinggang Wang and Lei Cao, who are related parties, and $0.09 million from the sale of property and equipment, and repayments from related parties of approximately $0.3 million.
Financing Activities
Net cash provided by financing activities for the year ended June 30, 2024 was $4.5 million due to proceeds from issuance of common stock of 9.9 million and the repayment of $5 million of convertible notes and accrued interest of $0.4 million.
Financing activities for the year ended June 30, 2023 was mainly payment of $2.1 million for fair value of shares to be cancelled in our legal settlement.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies” of the notes to the financial statements included elsewhere in this Report describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the date of this Report.
Off-Balance Sheet Arrangements
None.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
The Company’s financial statements and the related notes, together with the report of Audit Alliance LLP, are set forth following the signature pages of this Report.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As of June 30, 2024, the Company carried out an evaluation, under the supervision of and with the participation of its management, including the Company’s Chief Operating Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing evaluation, the Chief Operating Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective to ensure that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms due to ineffective internal controls over financial reporting as more fully described below.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:
● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of its management and directors; and
● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was not effective due to the following material weaknesses for the year ended and as of June 30, 2024:
● Lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries in some of the subsidiaries within the consolidation, lack of supervision, coordination and communication of financial information between different entities within the Group;
● Lack of a full time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions which led to error in revenue recognition in previously issued financial statements;
● Lack of resources with technical competency to address, review and record non-routine or complex transactions under U.S. GAAP;
● Lack of management control reviews of the budget against actual with analysis of the variance with a precision that can be explained through the analysis of the accounts;
● Lack of proper procedures in identifying and recording related party transactions which led to restatement of previously issued financial statements (See Note 1 of the accompanying consolidated financial statement footnotes);
● Lack of proper procedures to maintain supporting documents for accounting record; and
● Lack of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive.
A material weakness is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
In order to remediate the material weaknesses stated above, we intend to implement the following measures, policies and procedures:
● Hiring additional accounting staff to report the internal financial timely;
● Reporting other material and non-routine transactions to the Board and obtain proper approval;
● Recruiting additional qualified professionals with appropriate levels of U.S. GAAP knowledge and experience to assist in resolving accounting issues in non-routine or complex transactions;
● Developing and conducting U.S. GAAP knowledge, SEC reporting and internal control training to senior executives, management personnel, accounting departments and the IT staff, so that management and key personnel understand the requirements and elements of internal control over financial reporting mandated by the U.S. securities laws;
● Setting up budgets and developing expectations based on understanding of the business operations, compare the actual results with the expectations periodically and document the reasons for the fluctuations with further analysis. This should be done by CFO and reviewed by CEO upon their communications with the Board;
● Strengthening our corporate governance;
● Setting up policies and procedures for the Company’s related party identification to properly identify, record and disclose related party transactions; and
● Setting up proper procedures for the Company’s fund disbursement process to ensure that cash is disbursed only upon proper authorization, for valid business purposes, and that all disbursements are properly recorded.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

---

ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
During the quarter ended June 30, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
Name
Age
Positions Held
Ziyuan Liu
Chief Executive Officer, Chairman of the Board
Ying Cao
Chief Financial Officer
Xu Zhao
Director
Jia Yang
Director, Vice President
Zhongliang Xie
Director
Yangyang Xu
Director
Ziyuan Liu
Mr. Ziyuan Liu has been our Chief Executive Officer since April 2023 and a director and chairman of the Board since May 2023. Before joining the Company, Mr. Liu served as the manager of the North American market development department in Fulongma Group Co., Ltd., a comprehensive environmental sanitation solutions provider in China, from July 2022 to April 2023. Prior to that, he worked for Ningbo Shunxiang Group Co., Ltd., a polyester film manufacturer in China, as the chief operating officer from July 2019 to July 2022. From July 2018 to June 2019, he served as the project manager for Shouhang New Energy, a solar photovoltaics and energy storage solutions supplier in China. Prior to that, he worked for Hongkun Group, a real estate developer based in China, as the general manger for the Shenzhen area from July 2015 to June 2018. Mr. Liu graduated from Wuhan Institute of Technology with a major in project management.
Ying Cao
Mr. Ying Cao has been our Chief Financial Officer since August 2023. He has served as the department manager and quality control manager at Shaanxi Huaqiang Certified Public Accountants Co., Ltd. since 2015. Prior to that, he served as a project manager in Sigma Accounting Firm from 2007 to 2014. Mr. Cao obtained his bachelor’s degree in accounting from Xi’an University of Finance and Economics. Mr. Ying Cao is a Certified Public Accountant in China.
Xu Zhao
Mr. Xu Zhao has been a director since September 2023. Mr. Zhao has worked as the president of Shijiazhuang Juminhui Technology Co., Ltd., a Chinese trading company since March 2023. He was the regional manager for Hebei Province of Jiangsu Hengrui Pharmaceuticals Co., Ltd., a Chinese pharmaceutical company from September 2009 to July 2022. Mr. Zhao received his bachelor’s degree in marketing from Nankai University Binhai College in 2009.
Jia Yang
Ms. Jia Yang has served as a vice president of the Company and a director of the Board since August 2024. Ms. Yang was the chief operating office at Beijing Angda Yingchuang Innovative Materials Technology Co., Ltd. since January 2023. Prior to that, she was an executive officer at Zhongjian Tianxia Beijing Investment Management Co., Ltd. from October 2021 to December 2022. From November 2019 to November 2021, Ms. Yang was the executive assistant to hotel manager/marketing executive at The Ritz-Carlton Xi’an. Ms. Yang graduated from Xi’an International Studies University in 2016 with a major in English education.
Zhongliang Xie
Mr. Zhongliang Xie has been a director since July 2023. He has served as the General Manager of Zhongxing Cai Guanghua Certified Public Accountants, Shaanxi Branch since January 2019. He has also served as the vice president of Shanxi NEEQ Federation since January 2017, and an Internal Committee member of Shanxi Provincial Equity Exchange Center since August 2021. From April 2008 to December 2018, he worked as the General Manager of Beijing Xinghua Certified Public Accountants, Xi’an Branch. From May 2005 to April 2008, he was the Controller of Zhongyi Far East Import & Export Co., Ltd. Mr. Xie graduated from Bao Ji University majoring in Enterprise Management. He is a Certified Public Accountant, Certified Public Valuer and Registered Cost Engineer in China.
Yangyang Xu
Ms. Yangyang Xu has served as an independent director of the Company since October 2023. Ms. Xu was as a senior customer manager at Beijing Sensetime Technology Development Co., Ltd., a leading AI software company focused on innovating for a better AI-empowered future, from May 2018. Prior to that, from February 2011 to April 2018, she served as the general manager of communications at Bus Online Technology Co., Ltd., a company primarily involved in the manufacture and distribution of electronic components. Before that, Ms. Xu held managerial positions with Beijing Sumavision Technology Co., Ltd, and Beijing Gallop Horse Film and Culture Development Group. Ms. Xu received a bachelor’s degree in management from Harbin University of Commerce in 2006.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our current directors or executive officer has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement.
Board Diversity Matrix
Pursuant to the Nasdaq’s Board Diversity Rules, below is the Company’s board diversity matrix outlining diversity statistics regarding our Board.
Board Diversity Matrix as of October 15, 2024
Total Number of Directors
Female
Male
Non-Binary
Did Not
Disclose
Gender
Part I: Gender Identity
Directors
Part II: Demographic Background
Asian
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than ten percent of our common stock, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. Based solely on our review of the copies of the forms received by us and written representations from certain reporting persons that they have complied with the relevant filing requirements, we believe that, during the year ended June 30, 2024, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements, except that, due to administrative errors, the following forms were filed late:
Code of Ethics
We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics is available at our website at www.singularity.us. We expect that any amendments to the code, or any waivers of its requirement, will be disclosed on our website.
Committees of the Board of Directors
Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition and function of each committee are described below.
Audit Committee
The Audit Committee consists of Zhongliang Xie, Yangyang Xu and Xu Zhao, who are each independent. Mr. Xie chairs the Audit Committee and qualifies as the audit committee financial expert. Our Audit Committee has adopted a written charter, and a copy of this charter is posted on the Company’s website, at www.singularity.us. Under such charter, our Audit Committee is authorized to:
● prepare and publish an annual Committee report as required by the SEC to be included in the Company’s annual proxy statement;
● discuss with management and the independent auditor the annual audited financial statements and quarterly financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other matters required to be reviewed under applicable legal, regulatory, professional or NASDAQ requirements;
● discuss with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response;
● discuss with management the Company’s risk assessment and risk management policies, including the Company’s major financial risk exposure and steps taken by management to monitor and mitigate such exposure;
● review the Company’s financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application and the key accounting decisions affecting the Company’s financial statements, including alternatives to, and the rationale for, the decisions made;
● review and approve the internal corporate audit staff functions, including: (i) purpose, authority and organizational reporting lines; (ii) annual audit plans, budget and staffing; and (iii) concurrence in the appointment, termination, compensation and rotation of the audit staff;
● review, with such members of management as the Committee deems appropriate, the Company’s internal system of audit and financial controls and the results of internal audits;
● obtain and review at least annually a formal written report from the independent auditor delineating: the auditing firms internal quality-control procedures; any material issues raised within the preceding five years by the auditing firms internal quality-control reviews, by peer reviews of the firm, or by any governmental or other inquiry or investigation relating to any audit conducted by the firm. The Committee will also review steps taken by the auditing firm to address any findings in any of the foregoing reviews. Also, in order to assess auditor independence, the Committee will review at least annually all relationships between the independent auditor and the Company;
● set policies for the hiring of employees or former employees of the Company’s independent auditor and, at least annually, evaluate the qualifications, performance and independence of the independent auditors, including an evaluation of the lead audit partner; and to assure the regular rotation of the lead audit partner at our independent auditors and consider regular rotation of the accounting firm serving as our independent auditors;
● review and investigate any matters pertaining to the integrity of management, including conflicts of interest, or adherence to standards of business conduct as required in the policies of the Company. This should include regular reviews of the compliance processes in general. In connection with these reviews, the Committee will meet, as deemed appropriate, with the general counsel and other Company officers or employees;
● retain such outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion;
● review at least annually the adequacy of this charter and recommend any proposed changes to the Board for approval and assume additional responsibilities and take additional actions as may be delegated to it by the Board;
● establish procedures for the receipt, retention and treatment of complaints on accounting, internal accounting controls or auditing matters, as well as for confidential, anonymous submissions by Company employees of concerns regarding questionable accounting or auditing matters;
● conduct any investigation appropriate to fulfilling its responsibilities contained in this charter, communicate directly with the independent audit firm and any employee of the Company, and conduct its activities in accordance with the policies and principles contained in the Company’s Corporate Governance Principles.
Compensation Committee
The Compensation Committee is composed of three independent directors including Zhongliang Xie, Yangyang Xu and Xu Zhao. Ms. Yangyang Xu serves as the chairwoman of the Compensation Committee. Our Compensation Committee has adopted a written charter, and a copy of this charter is posted on our website, at www.singularity.us. Our Compensation Committee is authorized to:
● review and determine the compensation arrangements for management;
● establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals;
● review and determine our stock incentive and purchase plans;
● oversee the evaluation of the board of directors and management; and
● review the independence of any compensation advisers.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is composed of three independent directors including Zhongliang Xie, Yangyang Xu and Xu Zhao. Xu Zhao serves as the chair of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee has adopted a written charter, and a copy of this charter is posted on our website, at www.singularity.us. The functions of our Governance Committee, among other things, include:
● identifying individuals qualified to become board members and recommending directors;
● nominating board members for committee membership;
● developing and recommending to our board corporate governance guidelines;
● reviewing and determining the compensation arrangements for directors; and
● overseeing the evaluation of our Board and its committees and management.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, at any time has at any time, been one of our officers or employees, or, during the last two fiscal years, a participant in a related-party transaction that is required to be disclosed. None of our executive officers currently serves, or in the past year has served, as a member of our Board or Compensation Committee of any entity that has one or more executive officers on our Board or Compensation Committee.

---

ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The following table shows the annual compensation paid by us to Mr. Lei Cao, our former Chief Executive Officer and Chairman, Ms. Yang Jie, our former Chief Executive Officer and director, Ms. Tuo Pan, our former Chief Financial Officer, Mr. Zhikang Huang, our former Vice President, Mr. Jing Shan, our former Chief Operating Officer, Ziyuan Liu, our Chief Executive Officer and Chairman, Dianjiang Wang, our former Chief Financial Officer, and Ying Cao, our Chief Financial Officer for the years ended June 30, 2023 and 2024.
Name Year Salary Bonus Securities- based
Compensation All other
Compensation Total
Lei Cao, - - - - -
Former Chief Executive Officer (1)(6) $ 261,364 - - - $ 261,364
Tuo Pan, - - - - -
Former Chief Financial Officer (2)(7) $ 66,667 - - - $ 66,667
Zhikang Huang, $ 50,000 - - - $ 50,000
Former Vice President and Director(3)(8) $ 150,000 $ 666 - - $ 150,666
Jing Shan, - - - - -
Former Chief Operating Officer(4) $ 223,185 $ 92,332 - - $ 315,517
Yang Jie,(5) - - - - -
Former Chief Executive Officer and director(9) $ 52,536 - - - $ 52,536
Ziyuan Liu $ 180,000 - - - $ 180,000
Chief Executive Officer(10) $ 49,000 - - - $ 49,000
Dianjiang Wang $ 7,391 - - - 7,391
Former Chief Financial Officer(11) $ 10,000 - - - $ 10,000
Ying Cao $ 46,957 - - - $ 46,957
Chief Financial Officer(12) - - - - -
(1) According to the Employment Agreement dated January 1, 2019, Mr. Cao’s annual salary was $260,000, effective January 1, 2019. According to the Employment Agreement dated November 1, 2021, Mr. Cao’s annual salary was $500,000, effective November 1, 2021.
(2) According to the Employment Agreement dated January 1, 2019, Ms. Pan’s annual salary was $100,000, effective January 1, 2019. According to the Employment Agreement dated November 1, 2021, Ms. Pan’s annual salary was $400,000, effective November 1, 2021.
(3) According to the Employment Agreement dated January 1, 2019, Mr. Huang’s annual salary was $150,000, effective January 1, 2019.
(4) According to the Employment Agreement dated August 5, 2021, Ms. Shan’s annual salary was $120,000, effective August 5, 2021. According to the Employment Agreement dated February 8, 2022, Ms. Shan’s annual salary was $200,000, effective February 8, 2022 and was raised to $250,000 since August 15, 2022. Pursuant to the cancellation agreement entered into on December 28, 2022, Ms. Shan agreed to return to the Company for cancellation 100,000 shares of common stock of the Company granted to her for her services as an officer of the Company. The shares are being cancelled.
(5) Pursuant to the cancellation agreement entered into on December 19, 2022, Mr. Jie agreed to return to the Company for cancellation 300,000 shares of common stock of the Company granted to him for his services as an officer of the Company. The shares have been cancelled.
(6) On November 1, 2021, Mr. Cao, retired from his position as the Company’s Chief Executive Officer. Mr. Cao resigned from the Board on January 9, 2023. Pursuant to the separation agreement entered into on January 9, 2023, Mr. Cao agreed to forfeit and return to the Company for cancellation 600,000 shares of common stock of the Company granted to him on August 13, 2021 under the terms of the 2014 Equity Incentive Plan of the Company. The shares are being cancelled.
(7) On August 31, 2022, Ms. Pan was terminated for cause as an employee and Chief Financial Officer of the Company and from any other position at any subsidiary of the Company to which she has been appointed. Ms. Pan was terminated for cause in accordance with the terms of her Employment Agreement dated November 9, 2021 and did not receive any salary or benefits from the Company except those earned through August 31, 2022.
(8) On November 1, 2021, Mr. Huang resigned from his position as a member of the Board of the Company.
(9) On August 9, 2022, Mr. Jie resigned as Chief Executive Officer and director, following the Board’s decision on August 8, 2022, which adopted the Special Committee’s recommendation that Mr. Jie be suspended immediately.
(10) According to the Employment Agreement dated April 18, 2023, Mr. Liu’s compensation consists of an annual base salary of $240,000 in cash and a discretionary annual bonus, effective April 18, 2023.
(11) According to the Employment Agreement dated May 1, 2023, Mr. Wang’s compensation consists of an annual base salary of $60,00, and a discretionary annual bonus, effective May 1, 2023. Mr. Wang resigned as Chief Financial Officer on August 21, 2023.
(12) According to the Employment Agreement dated August 21, 2023, Mr. Cao’s compensation consists of an annual base salary of $60,00, and a discretionary annual bonus, effective August 21, 2023.
Outstanding Equity Awards of Named Executive Officers at Fiscal Year-End
None.
Director Compensation
The table below sets forth the compensation received by our directors in the year ended June 30, 2024.
Name(1) Fees earned or
paid in cash
($) Stock
awards
($) Option
awards
($) All other
compensation
($) Total
($)
Zhongliang Xie 45,968 - - - 45,968
Xu Zhao 38,333 - - - 38,333
Yangyang Xu 36,944 - - - 36,944
Jia Yang - - - - -
Heng Wang (2) 11,250 - - - 11,250
Tieliang Liu(3) - - -
Ling Jiang(4) 12,222 - - - 12,222
Haotian Song (5) 52,667 - - - 52,667
(1) This table does not include Mr. Ziyuan Liu, our Chief Executive Officer and director whose compensation is fully reflected in the Summary Compensation Table.
(2) On September 21, 2023, Mr. Heng Wang resigned as a director.
(3) On July 3, 2023, Mr. Tieliang Liu resigned as a director.
(4) On September 28, 2023, Ms. Ling Jiang resigned as a director.
(5) On July 31, 2024, Mr. Haitian Song resigned as a director.
Employment Agreements
The Company has an employment agreement with Mr. Ziyuan Liu, our Chief Executive Officer. The employment agreement began on April 18, 2022, with a term of one year. The term shall automatically be extended for a one-year period in the absence of notice of non-renewal provided at least 30 days prior to the anniversary date of the employment agreement. Under the terms of the employment agreement, Mr. Liu will receive an annual base salary of $240,000 in cash, and a discretionary annual bonus.
The Company had an employment agreement with Mr. Dianjiang Wang, our Former Chief Financial Officer. The employment agreement began on May 1, 2023, with a term of one year. Mr. Dianjiang Wang resigned in August 2023.
The Company has an employment agreement with Mr. Ying Cao, our Chief Financial Officer. The employment agreement began on August 21, 2023, with a term of one year. The term shall automatically be extended for a one-year period in the absence of notice of non-renewal provided at least 30 days prior to the anniversary date of the employment agreement. Under the terms of the employment agreement, Mr. Cao will receive an annual base salary of $60,000 in cash, and a discretionary annual bonus.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding our shares of common stock beneficially owned as of October 15, 2024, for (i) each named executive officer and director, and (ii) all executive officers and directors as a group. As of October 15, 2024, there was no stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. In the table below, percentage ownership is based on 3,503,492 shares of our common stock issued and outstanding as of October 15, 2024.
Name and Address of Beneficial Owner (1) Number of
Shares
Beneficially
Owned Approximate
Percentage of
Outstanding
Shares of
Common
Stock
Ziyuan Liu -
Ying Cao - -
Yangyang Xu -
Jia Yang -
Zhongliang Xie -
Xu Zhao -
All directors and executive officers as a group (Six individuals) - - %
(1) The individual’s address is c/o Singularity Future Technology, Ltd., 98 Cutter Mill Road, Suite 311, Great Neck, New York 11021.
Securities Authorized for Issuance to Our Officers, Directors, Employees and Consultants under Equity Compensation Plans
The below table reflects, as of October 15, 2024, the number of shares of common stock authorized by our stockholders to be issued (directly or by way of issuance of securities exercisable for or convertible into) as incentive compensation to our officers, directors, employees and consultants.
Plan category Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights (a) Weighted-
average exercise
price of
outstanding
options,
warrants and
rights
(b) Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a)) (c)
Equity compensation plans under the 2008 Incentive Plan approved by security holders 2,000 $ 10.05 47,781 (1)
Equity compensation plans under the 2014 Incentive Plan approved by security holders - - 110,000 (1)
Equity compensation plans under the 2021 Incentive Plan approved by security holders - - 9,800,000 (1)
Equity compensation plans not approved by security holders - - -
(1) Pursuant to our 2008 Incentive Plan, we are authorized to issue options to purchase 60,581 shares of our common stock. The 2,000 outstanding options disclosed in the above table are taken from the 2008 Incentive Plan. Pursuant to our 2014 Incentive Plan, we are authorized to issue, in the aggregate, 2,000,000 shares of common stock or other securities convertible or exercisable for common stock. We granted options to purchase an aggregate of 30,000 shares of common stock under the 2014 Incentive Plan in July 2016, among which, options to purchase 15,000 shares of common stock have been exercised. In addition, we have issued, in the aggregate, 120,000 shares of common stock to consultants to our Company in 2014, 132,000 shares of common stock to our officers and directors in 2016, 132,000 shares of common stock to our officers and directors in 2018, 26,000 to three employees in 2017 and 316,000 shares of common stock to employees in 2018. On September 2021, the board granted 1,020,000 shares of common stock to our officers and directors under the 2014 Incentive Plan.
Accordingly, we may issue options to purchase 47,781 shares under the 2008 Incentive Plan, and we may issue 110,000 and 9,800,000 shares of common stock or other securities convertible or exercisable for common stock under the 2014 Incentive Plan and the 2021 Incentive plan respectively. Pursuant to certain agreements, the 600,000 shares issued to Lei Cao under the 2014 Incentive Plan, and the 300,000 and 100,000 shares issued to Yang Jie and Jing Shan, respectively, under the 2021 Incentive Plan, have been canceled.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Transactions
Set forth below are our transactions with related persons for the years ended June 30, 2023 and 2024.
Due from Related Party
As of June 30, 2024 and June 30, 2023, the outstanding amounts due from related parties consist of the following:
June 30, June 30,
Zhejiang Jinbang Fuel Energy Co., Ltd (1) 382,949 458,607
Shanghai Baoyin Industrial Co., Ltd (2) 1,066,003 1,068,014
LSM Trading Ltd (3) 570,000 570,000
Rich Trading Co. Ltd (4) 103,424 103,424
Lei Cao - 13,166
Less: allowance for doubtful accounts (2,122,376 ) (2,138,276 )
Total $ - $ 74,935
(1) As of June 30, 2024 and 2023, the Company advanced $382,949 and $458,607 to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing and due on demand. The Company provided allowances of $382,949 and $383,672 for the balance of the receivable as of June 30, 2024 and 2023. The amount of the allowance changed as a result of changes in exchange rates.
(2) As of June 30, 2024 and 2023, the Company advanced $1,066,003 and $1,068,014 to Shanghai Baoyin Industrial Co., Ltd. which is 30% owned by Qinggang Wang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable.
(3) As of June 30, 2024 and 2023, the Company advanced $570,000 to LSM Trading Ltd, which is 40% owned by the Company. The advance is non-interest bearing and due on demand. The Company evaluated the collection possibility and decided to provide full credit losses for the balance of the receivable.
(4) On November 16, 2021, the Company entered into a project cooperation agreement with Rich Trading Co. Ltd USA (“Rich Trading”) for the trading of computer equipment. Rich Trading’s bank account was controlled by now-terminated members of the Company’s management and was, at the time, an undisclosed related party. According to the agreement, the Company was to invest $4.5 million in the trading business operated by Rich Trading and the Company would be entitled to 90% of profits generated by the trading business. The Company advanced $3,303,424 for this project, of which $3,200,000 has been returned to the Company. The Company filed a complaint to recover the remainder of the funds advanced. The Company provided an allowance of $103,424 for the balance of the receivable as of June 30, 2024 and 2023.
Accounts payable- related parties
As of June 30, 2024 and 2023, the Company had accounts payable to Rich Trading Co. Ltd of $63,434.
Other payable - related party
As of June 30, 2024 and 2023, the Company had accounts payable to Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, of $ 25,997 and $104,962. These payments were made on behalf of the Company for the daily business operational activities.
As of June 30, 2024 and 2023, the Company had accounts payable to $ 199,034 and nil to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai.
Revenue - Related Party
The company had no revenue from a related party for the year ended June 30, 2023 and 2024.
Director Independence
Our Board has determined that each of Zhongliang Xie, Yangyang Xu and Xu Zhao is an “independent director” as defined by the applicable SEC rules and Nasdaq Listing Rules.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services.
Set forth below are the aggregate fees billed by Audit Alliance LLP, our independent registered accounting firm, for the fiscal years ended June 30, 2024 and June 30, 2023 for services rendered by them as our independent registered accounting firm for such years.
Fiscal 2024 Fiscal 2023
Audit fees $ 376,000 $ 390,100
Audit-related fees - -
Total Audit & Audit-related fees $ 376,000 $ 390,100
Tax fees - -
All other fees - -
Total fees $ 376,000 $ 390,100
Audit fees consist of fees billed for services rendered for the audit of our financial statements and review of our financial statements included in our quarterly reports on Form 10-Q and services provided in connection with other statutory or regulatory filings.
Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported under Audit fees. No such fees were billed in fiscal 2024 or 2023.
Tax fees consist of fees billed for professional services related to the preparation of our U.S. federal and state income tax returns and tax advice. No such fees were billed by Audit Alliance LLP in fiscal 2024 or 2023. The Audit Committee pre-approved all Audit-related fees. After considering the provision of services encompassed within the above disclosures about fees, the Audit Committee has determined that the provision of such services is compatible with maintaining Audit Alliance’s independence.
The Audit Committee’s policy is to pre-approve all audit and non-audit related services, tax services and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval and the fees for the services performed to date.

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
Number
Exhibit
3.1
Articles of Incorporation of Singularity Future Technology, Ltd. (1)
3.2
Certificate of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd. (2)
3.3
Articles of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd. (3)
3.4
Bylaws of Singularity Future Technology, Ltd. (4)
4.1
Specimen Certificate for Common Stock (4)
10.1
Employment Agreement by and between Mr. Ziyuan Liu and the Company, dated May 1, 2023 (5)
10.2
Employment Agreement by and between Mr. Ying Cao and the Company, dated August 21, 2023 (6)
10.3
Employment Agreement by and between Ms. Jia Yang and the Company, dated August 6, 2024 (7)
14.1
Code of Ethics of the Company (8)
21.1
List of subsidiaries of the Company*
23.1
Consent of Audit Alliance LLP*
Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934*
Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
97.1
Clawback Policy*
101.INS
Inline XBRL Instance Document*
101.SCH
Inline XBRL Taxonomy Extension Schema Document*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*
* Filed herewith.
** Furnished herewith.
(1) Incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 27, 2014.
(2) Incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 5, 2022.
(3) Incorporated herein by reference to exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 5, 2022.
(4) Incorporated by reference to the Company’s Registration Statement on Form S-1, Registration Nos. 333-150858 and 333-148611.
(5) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2023.
(6) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 21, 2023.
(7) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 6, 2024.
(8) Incorporated by reference to exhibit 14.1 to the Company’s Annual Report on Form 10-KSB filed on September 29, 2008 (File No. 001-34024).