EDGAR 10-K Filing

Company CIK: 1422892
Filing Year: 2023
Filename: 1422892_10-K_2023_0001213900-23-017859.json

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ITEM 1. BUSINESS
Item 1. Business.
Overview
We are a global logistics integrated solution provider that was founded in the United States in 2001. We primarily focus on providing freight logistics services, which mainly include shipping, warehouse, resources, equipment, and other logistical support to steel companies and e-commerce businesses.
We previously focused on providing customized freight logistic services until 2017 when 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 business, we expanded our services to include warehousing services provided by our U.S. subsidiary Brilliant Warehouse Service Inc since August 2021. 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 were engaged in purchases and sales of cryptocurrency mining machines through our U.S. subsidiaries and ceased this line of business in December 2022 following our settlement with SOSNY, as more fully described below under the heading “- Recent Developments - Settlement with SOS Information Technology New York, Inc.”
We are currently engaged in providing freight logistics services including warehouse services, which are operated by our subsidiaries Trans Pacific Shipping Limited and Ningbo Saimeinuo Supply Chain Management Ltd in China and Gorgeous Trading Ltd and Brilliant Warehouse Service Inc in the United States. Our range of services include transportation, warehouse, collection, first-mile delivery, drop shipping, customs clearance, and overseas transit delivery.
Since the publication of the Hindenburg Report (as defined below), we have devoted substantial resources and efforts in the cooperation with the investigation of the Special Committee and U.S. governmental authorities, as well as the settlements with investors and vendor and the defense of lawsuits, which are fully described below. As a result, our business operations have been materially and adversely impacted, including suspension of our business developments in North America. We are currently exploring new business opportunities while continuing to provide freight logistics services, which include shipping and warehouse services.
Recent Developments
Special Committee Investigation
On May 5, 2022, an entity named Hindenburg Research issued a report (the “Hindenburg Report”) regarding the Company alleging, among other things, that the Company’s then Chief Executive Officer, Yang Jie, was a fugitive on the run from Chinese authorities for running an alleged $300 million Ponzi scheme that lured in over 20,000 victims. The report also raised questions regarding the Company’s joint venture to produce crypto mining equipment announced in October 2021, as well as a $200 million order purportedly received by the joint venture in January 2022. Further, the report was critical of the Company’s April 2022 announcement of a $250 million partnership with an entity named Golden Mainland Inc. On May 6, 2022, the Board of Directors of the Company (the “Board”) formed a special committee of its Board of Directors (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 the Hindenburg Report and other related matters. The Special Committee then retained Blank Rome LLP to serve as independent legal counsel and advise the Committee on the investigation. The Special Committee completed the fact-finding portion of its investigation prior to December 31, 2022. The Special Committee’s preliminary findings corroborate certain of the allegations made in the Hindenburg Report and the investigation has resulted in the terminations and resignations of certain executive officers and directors of the Company, including but not limited to, the following:
On June 16, 2022, Ms. Tuo Pan, Chief Financial Officer of the Company, without proper authorization by the Board, directed that funds be wired to satisfy an invoice for legal services that were rendered or to be rendered to Ms. Pan personally. Ms. Pan was suspended by the Board for cause and without pay effective June 20, 2022. On August 31, 2022, Ms. Tuo 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 in accordance with the terms of her Employment Agreement dated November 9, 2021 and will not receive any salary or benefits from the Company except those earned through August 31, 2022.
On August 9, 2022, Mr. Yang Jie tendered his resignation from his positions as the Chief Executive Officer and director of the Company to the Board, following the Board’s decision on August 8, 2022, which adopted the Special Committee’s recommendation that Mr. Jie be suspended immediately as the Company’s Chief Executive Officer, pending the Special Committee’s further investigation into allegations raised in the report of Hindenburg Report and other related matters.
On August 16, 2022, the Staff and attorneys from Blank Rome LLP, counsel for the Special Committee, held a conference call, during which counsel represented that Yang Jie had provided documentation to the SEC that indicated that the charges against him in China had been dropped, but the Special Committee’s investigation raised questions regarding the authenticity of such documents. The Special Committee has concluded that Mr. Jie was in fact issued a “Red Notice” in China. In terms of remediating this issue, after being suspended by the Special Committee on August 8, 2022, Mr. Yang Jie had resigned from his positions as Chief Executive Officer and as a director of the Company on August 9, 2022.
On January 9, 2023, the Company entered into an Executive Separation Agreement and General Release (the “Separation Agreement”), with Lei Cao, an employee of the Company and a member of the Board, setting forth the terms and conditions related to (1) the termination of Mr. Cao’s employment with the Company and the termination of the employment agreement dated as of November 1, 2021 as well as cancellation and/or termination of certain other agreements relating to Mr. Cao’s employment with the Company; and (2) Mr. Cao’s resignation from the Board, effective as of January 9, 2023.
Pursuant to the Separation Agreement, Mr. Cao submitted a letter of resignation from the Board on January 9, 2023. In addition, he agreed to forfeit and return to the Company the 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 “2021 Shares”). Mr. Cao also agreed to cooperate with the Company regarding certain investigations and proceedings set forth in the Separation Agreement, and/or any other matters arising out of or related to Mr. Cao’s relationship with or service to the Company. In consideration, the Company agreed to provide the following benefits to which Mr. Cao was not otherwise entitled: (1) payment of reasonable attorneys’ fees and costs incurred by Mr. Cao up through January 9, 2023 associated with Mr. Cao’s personal legal representation in matters relating to Mr. Cao’s tenure with the Company, the investigations and proceedings set forth in the Separation Agreement, and the negotiation and drafting of the Separation Agreement; (2) the release of claims in Mr. Cao’s favor contained in the Separation Agreement; and (3) payment of Mr. Cao’s reasonable and necessary legal fees to the extent incurred by Mr. Cao as a result of his cooperation as required by the Company under the terms of the Separation Agreement. Additionally, the Separation Agreement contains mutual general releases and waiver of claims from Mr. Cao and the Company.
On February 23, 2023, the Board approved the dissolution of the Special Committee upon conclusion of the committee’s investigation. On the same day, John Levy resigned as a director and member of the Audit Committee, Compensation Committee and Nominating Committee of the Board, effective immediately.
Nasdaq Listing Deficiencies
On May 24, 2022, the Company received a delinquency notice from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its delay in filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. The Company was provided 60 days to submit a plan to regain compliance. On July 25, 2022 and September 14, 2022, the Company submitted its plan to regain compliance and supplementary information related to the plan, respectively (collectively, the “Compliance Plan”). Based on the review of the Compliance Plan as well as telephone conversations with outside counsel to the Company and counsel to the Company’s Special Committee, the Staff has determined that the Company did not provide a definitive plan evidencing its ability to file the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and the Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (collectively, the “Reports”) within the 180 calendar day period available to the Staff under the Nasdaq Listing Rules.
Specifically, the delisting determination referenced several aspects of the Compliance Plan that raise substantial doubts about the Company’s ability to regain compliance: (i) the unreasonably short timeframe for the Company to file the Reports based on the anticipated timeframe the Special Committee needs to substantially complete its investigation; (ii) the Company’s ability to engage a new independent registered public accounting firm; and (iii) the departure of both the Company’s Chief Executive Officer and Chief Financial Officer.
On November 16, 2022, the Company received an additional staff determination notice from Nasdaq, advising that it had not received the Company’s Form 10-Q for the quarterly period ended September 30, 2022, which served as an additional basis for delisting the Company’s securities and that the Nasdaq Hearings Panel (the “Panel”) will consider the additional deficiency in rendering a determination regarding the Company’s continued listing on The Nasdaq Capital Market. The Company has submitted to the Panel a plan to regain compliance with the continued listing requirements, including the filing of the Form 10-Q for the quarterly period ended September 30, 2022.
On January 5, 2023, the Company received a deficiency notice from Nasdaq informing the Company that its common stock, no par value, fails to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) based upon the closing bid price of the common stock for the 30 consecutive business days prior to the date of the notice from Nasdaq. The Company has been provided an initial compliance period of 180 calendar days, or until July 5, 2023, to regain compliance with the minimum bid price requirement.
On February 21, 2023, the Company received an additional staff determination notice from Nasdaq, advising that it had not received the Company’s Form 10-Q for the quarterly period ended December 31, 2022, which served as an additional basis for delisting the Company’s securities. The notice stated that the Nasdaq Hearings Panel will consider the additional deficiency in rendering a determination regarding the Company’s continued listing on Nasdaq. The Company has submitted to the Panel a plan to regain compliance with the continued listing requirements and has been granted a grace period to file all the delinquent reports, including the filing of the Form 10-Q for the quarterly period ended December 31, 2022, on or before February 28, 2023.
Settlement with SOS Information Technology New York, Inc.
SOS Information Technology New York, Inc. (“SOSNY”), a company incorporated under the laws of state of New York and a wholly owned subsidiary of SOS Ltd., filed a lawsuit in the New York State Supreme Court on December 9, 2022 against Thor Miner, Inc., which is the Company’s joint venture (“Thor Miner,” together with the Company, referred to as the “Corporate Defendants”), Lei Cao, Yang Jie, John F. Levy, Tieliang Liu, Tuo Pan, Shi Qiu, Jing Shan, and Heng Wang (jointly referred to as the “Individual Defendants”) (collectively, the Individual Defendants and the Corporate Defendants are the “Defendants”). SOSNY and Thor Miner entered into a Purchase and Sale Agreement dated January 10, 2022 (the “PSA”) for the purchase of $200,000,000 in crypto mining rigs, which SOSNY claims was breached by the Defendants.
SOSNY and Defendants entered into a certain settlement agreement and general mutual release with an Effective Date of December 28, 2022 (the “Settlement Agreement”). Pursuant to the Settlement Agreement, Thor Miner agreed to pay a sum of $13,000,000 (the “Settlement Payment”) to SOSNY in exchange for SOSNY dismissing the lawsuit with prejudice as to the settling Defendants and without prejudice as to all others. The full Settlement Payment was received by SOSNY on December 28, 2022. SOSNY dismissed the lawsuit with prejudice against Singularity (and other Defendants) on December 28, 2022.
The Company and Thor Miner further covenanted and agreed that if they receive additional funds from HighSharp (Shenzhen Gaorui) Electronic Technology Co., Ltd. (“HighSharp”) related to the PSA, they will promptly transfer such funds to SOSNY in an amount not to exceed $40,560,569 (which is the total amount paid by SOSNY pursuant to the PSA less the price of the machines actually received by SOSNY pursuant to the PSA). The Settlement Payment and any payments subsequently received by SOSNY from HighSharp shall be deducted from the total amount of $40,560,569 previously paid by, and now due and owing to SOSNY. In further consideration of the Settlement Agreement, Thor Miner agreed to execute and provide to SOSNY, within seven (7) business days after SOSNY’s receipt of the Settlement Payment, an assignment of all claims it may have against HighSharp or otherwise to the proceeds of the PSA.
Litigations
Lawsuits in connection with the Securities Purchase Agreement
On September 23, 2022, Hexin Global Limited and Viner Total Investments Fund filed a lawsuit against the Company and other defendants in the United States District Court for the Southern District of New York (the “Hexin lawsuit”). On December 5, 2022, St. Hudson Group LLC, Imperii Strategies LLC, Isyled Technology Limited, and Hsqynm Family Inc. filed a lawsuit against the Company and other defendants in the United States District Court for the Southern District of New York (the “St. Hudson lawsuit,” and together with the Hexin lawsuit, the “Investor Actions”). The plaintiffs in the Investor Actions are investors that entered into a securities purchase agreement with the Company in December 2021 as more fully described below. Each of these plaintiffs asserts causes of action for, among other things, violations of federal securities laws, breach of fiduciary duty, fraudulent inducement, breach of contract, conversion, and unjust enrichment, and seeks monetary damages and specific performance to remove legends from certain securities sold pursuant to the Securities Purchase Agreement. The Hexin lawsuit claims monetary damages of “at least $6 million,” plus interest, costs, fees, and attorneys’ fees. The St. Hudson lawsuit claims monetary damages of “at least $4.4 million,” plus interest, costs, fees, and attorneys’ fees.
Lawsuit in connection with the Financial Advisory Agreement
On October 6, 2022, Jinhe Capital Limited (“Jinhe”) filed a lawsuit against the Company in the United States District Court for the Southern District of New York, asserting causes of actions for, among other things, breach of contract, breach of the covenant of good faith and fair dealing, conversion, quantum meruit, and unjust enrichment, in connection with a financial advisory agreement entered into by and between Jinhe and the Company on November 10, 2021. Jinhe claims monetary damages of “at least $575,000” and “potentially exceeding $1.8 million,” plus interest, costs, and attorneys’ fees.
On January 10, 2023, St. Hudson lawsuit was consolidated with this lawsuit and Hexin lawsuit; on February 24, 2023, all three consolidated actions were dismissed without prejudice by the court, in furtherance of the parties having reached an agreement in principle to settle their disputes.
Putative Class Action
On December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired publicly traded securities of the Company between February 2021 and November 2022, filed a putative class action against the Company and other defendants in the United States District Court for the Eastern District of New York, alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings. The plaintiff seeks unspecified damages, plus interest, costs, fees, and attorneys’ fees. On February 7, 2023, two additional plaintiffs moved to be appointed as the lead class plaintiff in this action; those motions remain under the Court’s consideration. As this action is still in the early stage, the Company cannot predict the outcome.
In addition to the above litigations, the Company is also subject to additional contractual litigations as to which it is unable to estimate the outcome.
Government Investigations
Following a publication 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 Company is cooperating with the government regarding these matters. At this early stage, the Company is not able to estimate the outcome or duration of the government investigations.
Recent Financings
December 2021 Securities Purchase Agreement
On December 14, 2021, the Company entered into a securities purchase agreement (the “December 2021 SPA”) with certain non-U.S. investors and accredited investors (the “Investors”) pursuant to which the Company sold to the Investors an aggregate of 3,228,807 shares of common stock and warrants to purchase 4,843,210 shares of common stock. The purchase price for each share of common stock and one and a half warrants is $3.26, and the exercise price per warrant is $4.00. The warrants will be exercisable at any time during the period beginning on or after June 14, 2022 and ending on or prior to 5:00 p.m. (New York City time) on December 13, 2026; provided, however, that the total number of the Company’s issued and outstanding shares of common stock, multiplied by the Nasdaq official closing bid price of the common stock shall equal or exceed $150,000,000 for a three consecutive month period prior to an exercise. This transaction is the subject of the Investor Actions described above.
On December 14, 2021, the transaction contemplated by the December 2021 SPA closed because all the closing conditions of the agreement were satisfied. The issuance and sale of the shares and warrants issued by the December 2021 SPA are exempt from the registration requirements of the Securities Act pursuant to Regulation S promulgated thereunder.
December 2021 Convertible Notes
On December 19, 2021, the Company issued two senior convertible notes (the “December 2021 Convertible Notes”) to two non-U.S. investors for an aggregate purchase price of $10,000,000. The December 2021 Convertible Notes bear interest at 5% annually and may be converted into shares of the Company’s common stock per share at a conversion price of $3.76 per share, the closing price of the common stock on December 17, 2021. The December 2021 Convertible Notes are unsecured senior obligations of the Company, and the maturity date of the convertible notes is December 18, 2023. The Company may repay any portion of the outstanding principal, accrued and unpaid interest, without penalty for early repayment. The Company may make any repayment of principal and interest in (a) cash, (b) common stock at the conversion price or (c) a combination of cash or common stock at the conversion price. The investors may convert any conversion amount into common stock on any date beginning on June 19, 2022.
At the investors’ request, the Company prepaid $5,000,000 in aggregate of the principal amount, without interest, of the December 2021 Convertible Notes on March 8, 2022. On March 8, 2022, the Company issued two Amended and Restated Senior Convertible Notes (the “March 2022 Amended and Restated Convertible Notes”) to the investors to change the principal amount of the December 2021 Convertible Notes to $5,000,000. The terms of the March 2022 Amended and Restated Convertible Notes are the same as that of the December 2021 Convertible Notes, except for the reduced principal amount and the waiver of interest for the $5,000,000 payment made on March 8, 2022.
January 2022 Warrant Purchase Agreement
On January 6, 2022, the Company entered into warrant purchase agreements with certain warrant holders (the “Sellers”) pursuant to which the Company repurchased an aggregate of 3,870,800 warrants (the “January 2022 Warrants”) from the Sellers. These warrants were sold to these Sellers in three previous transactions that closed on February 11, 2021, February 10, 2021, and March 14, 2018. The purchase price for each warrant was $2.00. Following announcement of the warrant purchase agreement, on January 6, 2022, the Company repurchase an additional 103,200 warrants from other Sellers on the same terms as the previously announced warrant purchase agreements. The aggregate number of warrants repurchased under the warrant purchase agreements was 3,974,000.
On January 7, 2022, the Company wired the purchase price to each Seller. Each Seller agreed to deliver the January 2022 Warrants to the Company for cancellation as soon as practicable following the closing date, but in no event later than January 13, 2022 . The January 2022 Warrants were deemed cancelled upon the receipt by the Sellers of the purchase price.
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.
In January 2016, 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.
In the fiscal year ended June 30, 2017, 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.
As an effort to further diversify our business, in the second quarter of the fiscal year ended June 30, 2018, we developed our bulk cargo container services segment. Bulk cargo container shipment refers to using containers to ship commodities that are traditionally shipped by freight cargo. Freight cargo rates are usually lower than container freight rates; however, the transit time is much longer and has high minimum quantity requirements. We temporarily suspended this service in the fiscal year ended June 30, 2019 due to market environment factors in 2019, and we have discontinued this service in light of the worldwide impact of the coronavirus pandemic.
In the fiscal year ended June 30, 2018, we established a wholly owned subsidiary, Ningbo Saimeinuo Supply Chain Management Ltd., which is 100% owned by Sino-Global Shipping New York Inc. (“SG Shipping NY”), a New York corporation and a wholly owned subsidiary of the Company, and primarily engages in transportation management and freight logistics services, including overseas shipping.
Since the fiscal year ended June 30, 2019, trade dynamics have made it more expensive for shipping carrier clients to cost-effectively move cargo into U.S. ports, and as a result, we realized lower shipping volumes, which has caused us to shift our focus back to the shipping agency business.
On January 10, 2020, the Company entered into a cooperation agreement with Mr. Shanming Liang, a stockholder of the Company and set up a joint venture with Mr. Liang in New York named LSM Trading Ltd., in which the Company holds a 40% equity interest. For the year ended June 30, 2022, the Company invested $210,000. The joint venture has not commenced any business operations as of the date of this Report.
On July 7, 2020, the Company effected a l-for-5 reverse stock split of its issued and outstanding shares of common stock. The split did not change the number of authorized shares of common stock or preferred stock, or the par value of common stock or preferred stock. As a result, all the issued and outstanding common stock share amounts included in this filing have been retroactively reduced by a factor of five, and all common stock per share amounts have been increased by a factor of five.
On December 14, 2020, the Company incorporated a new entity named Blumargo IT Solution Ltd. (“Blumargo”) in the U.S. SG Shipping NY held an 80% ownership interest in Blumargo, which was established in partnership with Tianjin Anboweiye Technology Co., to build up hi-tech and information-based logistics services to meet the demand of its customers. On June 30, 2021, SG Shipping NY acquired the additional 20% from Tianjin Anboweiye Technology Co. and increased its ownership to 100%.
From March to June 2021, the Company engaged in cryptocurrency mining in China. On March 2, 2021, the Company entered into a purchase agreement with Hebei Yanghuai Technology Co., Ltd. (“Yanghuai”) for the purchase of 2,783 digital currency mining machines for a total purchase price of approximately $4.6 million. After the purchase, Yanghuai would manage and operate the servers at its site with no further charge from March 10, 2021 to March 9, 2022, after which time the Company may engage Yanghuai to continue providing service for a fee. The first cash payment of approximately $0.9 million was paid within 15 days after the date of signing the Agreement.
Over the last two months of the Company’s 2021 fiscal year, national and local governments in China started to restrict and ban cryptocurrency mining operations, causing owners of mining machines to cease mining operations. Based on the amended agreement signed by the Company and Yanghuai on September 17, 2021, the Company is not liable to perform under the remainder of the contract and has title to half of the products. The Company recorded impairment for the mining equipment in the last quarter of 2021 in the amount of approximately $0.9 million. the two parties have restructured the Purchase Agreement to reduce the purchase price from RMB 30 million to RMB 6 million and to allocate the purchased mining equipment between the Company and the Seller. The Seller transported digital currency mining machines representing half of the agreed 50,440 terahashes per second (th/s) in computing power (or a total of 25,220 th/s in computing power) to Ningbo, China first, and then shipped to the U.S.
On April 21, 2021, the Company set up a joint venture in Texas, U.S. under the name of “Brilliant Warehouse Service Inc.” to support its freight logistics services in the U.S., pursuant to a cooperation agreement with Mr. Bangpin Yu. SG Shipping NY has a 51% equity interest in the joint venture.
In July 2021, the Company registered a new company, Gorgeous Trading Ltd. (“Gorgeous Trading”), which is 100% owned by SG Shipping NY. Gorgeous Trading is mainly engaged in smart warehouse and related business in Texas.
On August 31, 2021, the Company formed a joint venture, Phi Electric Motor, Inc. in New York, which is 51% owned by SG Shipping NY. Phi Electric Motor, Inc. had no operations as of the date of this Report.
On September 29, 2021, the Company formed a 100% owned subsidiary, SG Shipping & Risk Solution Inc., in New York. On December 23, 2021, SG Shipping & Risk Solution Inc. formed SG Link LLC in New York, of which it is a 100% owner. As of the date of this Report, the two companies have had no operations.
On October 3, 2021, the Company entered into a Strategic Alliance Agreement with HighSharp to establish a joint venture for collaborative engineering, technical development and commercialization of a bitcoin mining machine under the name Thor Miner Inc., granting Thor Miner exclusive rights covering design production, intellectual property, branding, marketing and sales. On October 11, 2021, Thor Miner was formed in Delaware, which is 51% owned by the Company and 49% owned by HighSharp.
On December 31, 2021, the Company entered into a series of agreements to terminate its variable interest entity (“VIE”) structure and deconsolidated its formerly controlled entity Sino-Global Shipping Agency Ltd. (“Sino-China”). The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Shipping Limited. The Company made the decision to dissolve the VIE structure and Sino-China because Sino-China has no active operations and the Company wanted to remove any potential risks associated with any VIE structures. In addition, the Company dissolved its subsidiary Sino-Global Shipping LA, Inc.
On April 10, 2022, the Company entered into a joint venture agreement with Golden Mainland Inc., a Georgia corporation (“Golden Mainland”) to establish a joint venture for building Bitcoin mining sites in Texas, Ohio, and other states. The joint venture has not been set up as of the date of this Report. The Company has no plan to pursue this business.
Our Corporate Structure
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.
Our Customers
Our main customers for the two fiscal years ended June 30, 2022 and 2021 is Chongqing Iron & Steel Ltd. and SOSNY. For the years ended June 30, 2022 and 2021, Chongqing Iron & Steel Ltd. accounted for 45.6% and 94.4% of the Company’s revenues, respectively. For the year ended June 30, 2022, SOSNY accounted for 27.9% 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, 2022, two suppliers accounted for approximately 26.3% and 24.1% of our total purchases, respectively. For the year ended June 30, 2021, two suppliers accounted for approximately 55.4% and 28.6% of our total purchases, respectively.
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 39 full-time employees, 13 of whom are based in China and 26 are based in the United States. Of the total full-time employees, nine are in management, 17 are in operations, nine are in finance and accounting related and four 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 other than two pending trademark applications for “Thor” and “Thor Miner.” We have seven registered domain names, including our corporate website https://www.singularity.us/.

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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 is 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, 2022 and 2021, one customer, Chongqing Iron & Steel Ltd., accounted for 60.8% and 89.7% 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, 2022, two suppliers accounted for approximately 26.3% and 24.1% of our total purchases, respectively. For the year ended June 30, 2021, two suppliers accounted for approximately 55.4% and 28.6% 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.
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, 2022. 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, 2022:
● 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;
● Hiring of CEO and CFO to properly set up the Company’s internal control and oversight process;
● 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 May 24, 2022, the Company received a delinquency notice from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its delay in filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. The Company was provided 60 days to submit a plan to regain compliance. On July 25, 2022 and September 14, 2022, the Company submitted its Compliance Plan. Based on the review of the Compliance Plan as well as telephone conversations with outside counsel to the Company and counsel to the Company’s Special Committee, the Staff has determined that the Company did not provide a definitive plan evidencing its ability to file the Reports within the 180 calendar day period available to the Staff under the Nasdaq Listing Rules.
On November 16, 2022, the Company received an additional staff determination notice from Nasdaq, advising that it had not received the Company’s Form 10-Q for the quarterly period ended September 30, 2022, which served as an additional basis for delisting the Company’s securities and that the Panel will consider the additional deficiency in rendering a determination regarding the Company’s continued listing on Nasdaq. The Company has submitted to the Panel a plan to regain compliance with the continued listing requirements, including the filing of the Form 10-Q for the quarterly period ended September 30, 2022.
On January 5, 2023, the Company received a deficiency notice from Nasdaq informing the Company that its common stock, no par value, fails to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) based upon the closing bid price of the common stock for the 30 consecutive business days prior to the date of the notice from Nasdaq. The Company has been provided an initial compliance period of 180 calendar days, or until July 5, 2023, to regain compliance with the minimum bid price requirement.
On February 21, 2023, the Company received an additional staff determination notice from Nasdaq, advising that it had not received the Company’s Form 10-Q for the quarterly period ended December 31, 2022, which served as an additional basis for delisting the Company’s securities. The notice stated that the Panel will consider the additional deficiency in rendering a determination regarding the Company’s continued listing on Nasdaq. The Company has submitted to the Panel a plan to regain compliance with the continued listing requirements and has been granted a grace period to file all the delinquent reports, including the filing of the Form 10-Q for the quarterly period ended December 31, 2022, on or before February 28, 2023.Given we did not file all the Reports within the grace period granted by the Panel, we may be delisted from Nasdaq. 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 March 3, 2021 and other filings we file with the SEC from time to time.

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

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ITEM 2. PROPERTIES
Item 2. Properties.
We currently rent six facilities in the PRC and the United States. Our PRC headquarters is in Shanghai and our U.S. headquarters is in New York.
Office
Address
Rental Term
Space
New York, USA
98 Cutter Mill Rd
Suite 322
Great Neck, New York 11021
Expires 07/31/2026
3,033 ft2
Texas, USA
6161 Savoy Dr
Suite 409
Houston, Texas 77036
Expires 07/31/2023
2,456 ft2
Texas, USA
6161 Savoy Dr,
Suite 1040
Houston, Texas 77036
Expires 06/30/2024
954 ft2
Texas, USA
12733 Stafford Road,
Suite 400
Stafford, Texas 77477
Expires 07/31/2024
46,463 ft2
Shanghai, PRC
Rm 12D & 12E, No.359
Dongdaming Road,
Hongkou District,
Shanghai, PRC 200080
Expires 12/31/2023
3,078 ft2
Ningbo, PRC
B 525 Hebang Building,
North Tiantong Road
Ningbo, Zhejiang, PRC 315000
Expires 07/06/2025
840 ft2

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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.

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

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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 March 3, 2023, there were 20 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.

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

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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 2021 and 2022, 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, 2022, we operated in two operating segments, including (1) freight logistics services, through our subsidiaries in the U.S and PRC; and (2) purchase and sales of crypto mining machines, through our subsidiary Thor Miner. For the year ended June 30, 2021, the Company also engaged in shipping agency and management services, which were carried out by its subsidiary in the U.S. The Company no longer operates in the shipping agency segment because it did not receive any new orders for its services due to the uncertainty of the shipping management market which was negatively impacted by the COVID-19 pandemic.
Recent Developments
The following events had a material impact on our financial statements. For other recent developments, see “Item 1. Business - Recent Developments.”
On January 10, 2022, Thor Miner entered into a purchase agreement with HighSharp. Pursuant to the agreement, Thor Miner agreed to purchase certain cryptocurrency mining equipment from HighSharp. In January and April 2022, Thor Miner made a total prepayment of $35,406,649 for the order. Thor Miner also entered into a PSA with SOSNY for the purchase of $200,000,000 in crypto mining rigs and received deposit form SOSNY in the amount of $48,930,000.
Due to production issue from HighSharp, Thor Miner was not able to timely deliver the products to SOSNY according to the delivery terms of the PSA and was sued by SOSNY for breach of contract on December 9, 2022. On December 23, 2022, the Company entered into the Settlement Agreement with SOSNY pursuant to which the Company paid $13.0 million to SOSNY in exchange for SOSNY dismissing the lawsuit and will transfer any additional funds it receives from HighSharp to SOSNY in an amount not to exceed $40,560,569.
As of December 22, 2022, the balance of advance to HighSharp and deposit from SOSNY amounted to $27,927,583 and $40,560,569, respectively. Thor Miner paid $13.0 million on December 28, 2022 to SOSNY and wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp.
Restatement of Previously Issued Financial Statements
From March to June 2019, the Company’s subsidiary Trans Pacific Logistic Shanghai Ltd (“Trans Pacific Shanghai”) received approximately $6.2 million (RMB 40 million) from a related party, Shanghai Baoyin Industrial Co., Ltd. (“Shanghai Baoyin”), to pay for accounts receivable of six different customers totaling RMB 40 million. Shanghai Baoyin is 30% owned by Wang Qinggang, the CEO and legal representative of Trans Pacific Shanghai. Trans Pacific Shanghai subsequently paid RMB 20 million and RMB 10 million to Zhangjiakou Baoyu Trading Co. Ltd. (“Baoyu”), a third party, in April 2019 and July 2019, respectively, and it made an additional payment of RMB 10 million to Hebei Baoxie Trading Co., Ltd. (“Hebei Baoxie”), a third party, in July 2019.
As such, for the fiscal year ended June 30, 2019, accounts receivable was understated by RMB 40 million, advance to supplier was overstated by RMB 20 million, and other payables from Shanghai Baoyin, a related party, were understated by RMB 20 million. There was an overstatement of RMB 20 million in total assets and an understatement of total liabilities of RMB 20 million.
During the fiscal year ended June 30, 2021, Hebei Baoxie repaid a total of RMB 10 million to Trans Pacific Shanghai, and Trans Pacific Shanghai advanced the RMB 10 million to Shanghai Baoyin. The RMB 10 million paid to Shanghai Baoyin was recorded as other receivable, and the RMB 30 million advance to Baoyu was reclassified from an advance to supplier to other receivable. The Company provided a full allowance of its receivables totaling RMB 40 million. The Company evaluated this transaction and determined there is no impact on its assets, liabilities, or retained earnings as of June 30, 2020.
During the fiscal year ended June 30, 2021, Baoyu repaid a total of RMB 30 million to Trans Pacific Shanghai. The RMB 30 million received was recorded as recovery of bad debt. Trans Pacific Shanghai then loaned the same amount to Shanghai Baoyin. Shanghai Baoyin subsequently repaid RMB 4 million to Trans Pacific Shanghai, and Trans Pacific Shanghai loaned the same amount to Wang Qinggang. The RMB 30 million received was recorded as recovery of bad debt for other receivable and the RMB 30 million paid was recorded as a related party loan receivable.
The Company analyzed the transactions and determined the RMB 30 million was originally from Shanghai Baoyin and eventually paid back to the same related parties. Recovery of bad debt and related party loan receivable was overstated by RMB 30 million for the fiscal year 2021.
The Company restated its fiscal year 2021 financial statements to restate related party loans receivable and bad debt recovery.
Effects of the restatement are as follows:
As
Previously
Reported Adjustments As Restated
Consolidate balance sheet as of June 30, 2021
Loan receivable - related parties $ 4,644,969 $ (4,644,969 ) $ -
Total assets $ 52,803,116 $ (4,644,969 ) $ 48,158,147
As
Previously
Reported Adjustments As Restated
Consolidated Statement of Stockholder’s Equity as of June 30, 2021
Accumulated deficit $ (30,244,937 ) $ (4,076,825 ) $ (34,321,762 )
Accumulated other comprehensive income (loss) (625,449 ) (103,647 ) (729,096 )
Non-controlling Interest (6,951,134 ) (464,497 ) (7,415,631 )
Total equity $ 47,069,142 $ (4,644,969 ) $ 42,424,173
As
Previously
Reported Adjustments As Restated
Consolidated statement of oeprations for the year ended June 30, 2021
Recovery (provision) for doubtful accounts, net $ 321,168 $ (4,529,806 ) $ (4,208,638 )
Net loss $ (6,773,047 ) $ (4,529,806 ) $ (11,302,853 )
Other comprehensive loss - foreign currency (488 ) (115,163 ) $ (115,651 )
Comprehensive loss $ (6,773,535 ) $ (4,644,969 ) $ (11,418,504 )
As
Previously
Reported Adjustments As Restated
Consolidated statement of cash flow for the year ended June 30, 2021
Cash flows from operating activities:
Net loss $ (6,773,047 ) $ (4,529,806 ) $ (11,302,853 )
(Recovery)/ Provision for doubtful accounts (321,168 ) 4,529,806 4,208,638
Other receivable 4,227,239 (4,529,806 ) (302,567 )
Cash flows from investing activities:
Loan receivable - related parties $ (4,529,806 ) $ 4,529,806 $ -
Impact of COVID-19
The outbreak of the COVID-19 starting from late January 2020 in the PRC has spread rapidly to many parts of the world. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the continually expanding of COVID-19 pandemic in China and United States, our business, results of operations, and financial condition are still adversely affected.
In early December 2022, Chinese government eased the strict control measure for COVID-19, which has led to surge in increased infections and disruption in our business operations. Any future impact of COVID-19 on the Company’s China operation results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which are beyond our control.
The impacts 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%.
● 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 have been impacted by the constrained supply of the semiconductors used in the production of the highly specialized crypto mining machines; COVID-related issues have exacerbated port congestion and intermittent supplier shutdowns and delays, resulting 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 cancellation of orders and partial refund of purchase price, as evident from the settlement in SOSNY.
We have been, and may continue to be, negatively impacted by the ongoing COVID-19, which may continually impact our cost of freight, or result in higher cost of revenue, which may in turn materially adversely affect our financial condition and operating results in coming months.
Any future impact of COVID-19 on the Company’s operation results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which are beyond our control.
Results of Operations
Comparison of the Years Ended June 30, 2022 and 2021
The following table sets forth the results of our operations for the periods indicated:
For the Years Ended June 30,
2021(restated) Change
US $ % US $ % US $ %
Revenues 3,988,415 100.0 % 5,151,032 100.0 % （1,162,617 ） (22.6 )%
Cost of revenues 4,136,474 103.7 % 4,974,394 96.6 % (837,920 ) (16.8 )%
Gross margin (3.7 )% N/A 3.4 % N/A (7.1 )% N/A
Selling expenses 385,890 9.7 % 297,906 5.8 % 87,984 29.5 %
General and administrative expenses 9,301,784 233.2 % 5,605,670 108.8 % 3,696,114 65.9 %
Impairment loss of Cryptocurrencies 170,880 4.3 % - 0.0 % 170,880 100.0 %
Impairment loss of fixed assets and right of use asset 1,006,305 25.2 % 855,230 16.6 % 151,075 17.7 %
Provision for doubtful accounts, net of recovery 1,613,504 40.5 % 4,208,638 81.7 % (2,595,134 ) (61.7 )%
Stock-based compensation 10,064,622 252.3 % - 0.0 % 10,064,622 100.0 %
Total costs and expenses 26,679,459 668.9 % 15,941,838 309.5 % 10,737,621 67.4 %
Revenues
Revenues decreased by $1,162,617, or approximately 22.6%, to $3,988,415 for the year ended June 30, 2022 from $5,151,032 for the year ended June 30, 2021. The decrease was primarily due to decrease in shipping agency and management services and freight logistics services.
The following tables present summary information by segments for the years ended June 30, 2022 and 2021:
For the Year Ended June 30, 2022
Shipping
Agency and
Management
Services Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues* $ - $ 3,830,615 $ 157,800 $ 3,988,415
Cost of revenues $ - $ 4,136,474 $ - $ 4,136,474
Gross profit $ - $ (305,859 ) $ 157,800 $ (148,059 )
Depreciation and amortization $ - $ 512,586 $ 21,052 $ 533,638
Total capital expenditures $ - $ 840,319 $ 34,199 $ 874,518
Gross margin - % (8.0 )% 100.0 % (3.7 )%
* Including related party revenue of $222,963 from Zhejiang Jinbang Fuel Energy Co., Ltd for the year ended June 30, 2022.
For the Year Ended June 30, 2021
Shipping
Agency and
Management
Services Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues $ 206,845 $ 4,944,187 $ - $ 5,151,032
Cost of revenues $ 176,968 $ 4,797,427 $ - $ 4,974,394
Gross profit $ 29,878 $ 146,760 $ - $ 176,638
Depreciation and amortization $ 299,934 $ 36,300 $ - $ 336,234
Total capital expenditures $ 136,076
$ 407,954 $ - $ 554,030
Gross margin 14.4 % 3.0 - % 3.4 %
% Changes For the Years Ended June 30, 2022 and 2021
Shipping
Agency and
Management
Services Freight
Logistics
Services Sales of
Crypto
Mining
Machines Total
Net revenues (100.0 )% (22.5 )% - (22.6 )%
Cost of revenues (100.0 )% (13.8 )% - (16.8 )%
Gross profit (100.0 )% (308.4 )% - (183.8 )%
Depreciation and amortization (100.0 )% 1312.1 % - 58.7 %
Total capital expenditures (100.0 )% 106.0 % 100.0 % 57.8 %
Gross margin (14.4 )% (11.0 )% 100.0 % (7.1 )%
Disaggregated information of revenues by geographic locations are as follows:
For the Years Ended
June 30, June 30,
PRC 2,982,691 4,921,022
U.S. 1,005,724 230,010
Total revenues $ 3,988,415 $ 5,151,032
Revenues
Shipping Agency and Management Services
For the years ended June 30, 2022 and 2021, we did not generate any revenue from shipping agency and management services as we did not receive any new orders for our services due to the uncertainty of the shipping management market which was negatively impacted by the COVID-19 pandemic.
Freight Logistics Services
Freight logistics services primarily consist of cargo forwarding, brokerage, warehouse and other freight services. Revenues from freight logistics services were $3,830,615 for the year ended June 30, 2022, a decrease of $1,113,572, or approximately 22.5%, as compared to $4,944,187 for the year ended June 30, 2021.
This decrease in revenue was mainly due to a decrease of approximately $1.9 million from the transportation services of our PRC operations where demand was impacted by various business disruptions due to the resurgence of COVID-19 variants which caused a decrease in spending by our major customers. The decrease was offset by approximately $0.8 million of warehouse and logistics services that we started to provide in the fiscal year 2022 through our subsidiaries, Gorgeous Trading Ltd. and Brilliant Warehouse Service, Inc.
Sales of Crypto Mining Machines
On January 10, 2022, Thor Miner entered into the PSA with SOSNY, a wholly owned subsidiary of SOS Ltd. Pursuant to the PSA, Thor Miner agreed to sell to SOSNY certain cryptocurrency mining hardware and other equipment. The total purchase price was $200,000,000 and the purchase was expected to be completed under separate purchase orders. Thor Miner made two shipments in June 2022 and we recognized net revenue of $157,800. We recognized the sales of cryptocurrency mining equipment based on a net basis as the manufacturer of the products is responsible for shipping and custom clearing for the products. Gross revenue and the gross cost of revenue amounted to $1,483,320 and $1,325,520, respectively, for the year ended June 30, 2022.
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 $4,136,474 for the year ended June 30, 2022, a decrease of $660,953, or approximately 13.8%, as compared to $4,797,427 for the year ended June 30, 2021 as a result of the decrease in freight costs of our PRC operations caused by the decrease in shipping volume due to the pandemic.
Our gross margin was (3.7%) and 3.4% for the years ended June 30, 2022 and 2021, respectively. This decrease in gross margin in freight logistics segment was mainly due to rising costs for our PRC operations as we are not able to negotiate better price with our freight carrier due to decrease in volume. In addition, we started our warehouse services this year and we have higher fixed costs including warehouse rent and salaries when we are developing the business.
Our cost of revenue for the sale of crypto-mining equipment was nil as we recognized revenue on a net basis and hence the higher margin which increased the Company’s margin of (8.0)% from freight logistics segment to (3.7%).
Operating Costs and Expenses
Operating costs and expenses increased by $10,737,621 or approximately 67.4% from $26,679,459 for the year ended June 30, 2022 compared to $15,941,838 for the year ended June 30, 2021. This increase was mainly due to the increase in selling expenses, stock-based compensation, general and administrative expenses and impairment expenses as more fully discussed below.
Selling Expenses
Our selling expenses consisted primarily of salaries and travel expenses for our sales representatives. For the year ended June 30, 2022, we had $385,890 in selling expenses, as compared to $297,906 for the year ended June 30, 2021, which represents an increase of $87,984 or approximately 29.5%. The increase was due to an increase of marketing expenses of approximately $0.2 million to promote our freight logistics business.
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, 2022, we had $9,301,784 general and administrative expenses, as compared to $5,605,670 for the year ended June 30, 2021, representing an increase of $3,696,114, or approximately 65.9%. This significant increase was mainly due to the increase in salaries, wages and office related costs of approximately $3.0 million as we hired more employees and rented new warehouses for our subsidiaries Gorgeous Trading Ltd. and Brilliant Warehouse Service, Inc. This was also due to additional professional fees of approximately $0.5 million mainly fees made for the Company’s special investigation.
Impairment Loss of Cryptocurrencies
We recorded $170,880 in impairment loss for the year ended June 30, 2022 due to a recent price drop in bitcoin, which the Company deemed a triggering event for impairment testing.
Impairment Loss of Fixed Assets and Right of Use Assets
We performed our annual goodwill impairment analysis as of June 30, 2022 and concluded we had approximately $1.0 million in impairment loss for fixed assets and right of use assets, as our carrying value exceeds the fair value. The fair values are determined by income approach where projected future cash flows discounted at rates commensurate with the risks involved, (“Discounted Cash Flow” or “DCF” of the income approach). Assumptions used in a DCF analysis require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows.
We recorded impairment loss of $855,230 for the year ended June 30, 2021 primarily for our mining equipment due to a regulation change in China that banned cryptocurrency mining.
Provision for Doubtful Accounts, Net of Recovery
Our total bad debt expenses amounted to approximately $2.0 million, mostly because we estimated that we cannot timely collect the advances we made to certain related parties, which includes approximately $1.3 million to Shanghai Baoyin which is 30% owned by Wang Qinggang, and approximately $0.6 million in advances to LSM trading Ltd, of which we hold a 40% ownership interest. The advances were non-interest bearing and due on demand. We had net recovery of other receivable of approximately $0.4 million from other receivable as we continued collection of the receivables that were previously reserved. We had approximately $4.2 million of provision for the fiscal year 2021 for our accounts receivable and long-term deposits, representing a decrease of $2,595,134, or approximately 61.7%.
Stock-based Compensation
Stock-based compensation was $10,064,622 for the year ended June 30, 2022, an increase of $10,064,622 or 100.0%, as compared to nil for the year ended June 30, 2021 due to stock grants to our directors, employees and consultants in the fiscal year 2022.
Loss from disposal of subsidiaries and VIE
On December 31, 2021, the Company entered into a series of agreements to terminate its VIE structure and deconsolidated its formerly controlled entity Sino-China. The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Beijing. The Company made the decision to dissolve the VIE structure and Sino-China because Sino-China has no active operations and the Company wanted to remove any potential risks associated with any VIE structures. The Company also dissolved its subsidiary Sino-Global Shipping LA, Inc., and on March 14, 2022, the Company discontinued its subsidiary Sino-Global Shipping Canada, Inc. The total loss of three disposals amounted to approximately $6.1 million. 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.
Other Expenses, Net
Other expenses, net for the year ended June 30, 2022 mainly consists of interest expenses for our convertible debts of approximately $0.1 million and other finance charges, net of interest earned. Total other expenses, net was approximately $0.5 million for the year ended June 30, 2021 which mainly consisted of a settlement payment loss of a dispute on cooperative profit sharing of approximately $0.8 million, offset by the PPP loan forgiveness which we recorded as a gain of approximately $0.1 million and the income generated from cryptocurrencies mining of approximately $0.3 million.
Taxes
Our income tax expenses amounted to nil and $3,450 for the years ended June 30, 2022 and 2021, respectively.
We have incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $12,543,000 as of June 30, 2021, which may reduce future federal taxable income. During the year ended June 30, 2022, approximately $9,700,000 of NOL was generated and the tax benefit derived from such NOL was approximately 2,000,000.
Our operations in China incurred a cumulative a cumulative NOL of approximately $6,026,000 as of June 30, 2021, which was mainly from Sino-China which we disposed of during the year ended June 30, 2022. During the year ended June 30, 2022, we generated an additional NOL of approximately $4,845,000. As of June 30, 2022, our PRC subsidiaries’ cumulative NOL amounted to approximately $1,283,000 which may reduce future taxable income and will expire by 2026.
We periodically evaluate the likelihood of the realization of 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, expectations 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 that our deferred tax assets would not be realized due to uncertainty for future earnings due to the Company’s reorganization and venture into new businesses. We provided a 100% allowance for deferred tax assets as of June 30, 2022. The net decrease in valuation for the year ended June 30, 2022 amounted to approximately $1.0 million 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 $28,928,369 for the year ended June 30, 2022, compared to $11,302,853 for the year ended June 30, 2021. After the deduction of non-controlling interest, net loss attributable to us was $28,257,830 for the year ended June 30, 2022, compared to $10,900,168 for the same period in 2021. Comprehensive loss attributable to us was $27,482,995 for the year ended June 30, 2022, as compared to $10,545,234 for the year ended June 30, 2021.
Liquidity and Capital Resources
Cash Flows and Working Capital
As of June 30, 2022, we had $55,833,282 in cash (including cash on hand and cash in bank). The majority of our cash is in banks located in the U.S.
On December 19, 2021, the Company issued two convertible notes to two non-U.S. investors for an aggregate purchase price of $10,000,000 (the “December 2021 Convertible Notes”).
The December 2021 Convertible Notes bear interest at 5% annually and may be converted into shares of the Company’s common stock at a conversion price of $3.76 per share. At the investors’ request, we prepaid $5,000,000 in the aggregate principal amount, without interest, of the December 2021 Convertible Notes on March 8, 2022. Interest for the principal of $5,000,000 repaid was waived.
As of June 30, 2022, we had the following loans outstanding:
Loans Maturities Interest
rate June 30,
Convertible Notes December 2023 5 % $ 5,000,000
The following table sets forth a summary of our cash flows for the periods as indicated:
For the Years
Ended June 30,
Net cash provided by (used in) operating activities $ 5,918,070 $ (8,679,918 )
Net cash used in investing activities $ (3,581,676 ) $ (1,510,379 )
Net cash provided by financing activities $ 8,351,964 $ 54,200,082
Effect of exchange rate fluctuations on cash $ 307,607 $ 696,350
Net increase in cash $ 10,995,965 $ 44,706,135
Cash at the beginning of period $ 44,837,317 $ 131,182
Cash at the end of period $ 55,833,282 $ 44,837,317
The following table sets forth a summary of our working capital:
June 30, June 30,
Variation %
Total Current Assets $ 63,165,462 $ 46,867,350 $ 16,298,112 34.8 %
Total Current Liabilities $ 25,212,959 $ 5,343,649 $ 19,869,310 371.8 %
Working Capital $ 37,952,503 $ 41,523,701 $ (3,571,198 ) (8.6 )%
Current Ratio 2.51 8.77 (6.26 ) (71.4 )%
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, 2022, our working capital was approximately $38.0 million and we had cash of approximately $55.8 million. We believe our current working capital is sufficient to support our operations and debt obligations as they become due within one year from the date of this Report.
Operating Activities
Our net cash provided by operating activities was approximately $5.9 million for the year ended June 30, 2022. The operating cash outflow for the year ended June 30, 2022 was primarily attributable to our net loss of approximately $28.9 million, adjusted by non-cash stock-based compensation of approximately $10.0 million, loss on disposal of subsidiaries and VIE of approximately $6.1 million and provision for doubtful accounts of approximately $1.6 million. We had an increase in cash inflow of other receivables of approximately $1.4 million and we received a total of $47.0 million from SOSNY, approximately $34.1 million was advanced payment for the sale of cryptocurrency mining machines while we are to refund SOSNY $13.0 million in December 2022. Our cash inflow was decreased by an advance to a related party supplier of approximately $34.1 million which was for the purchase of cryptocurrency mining machines.
Our net cash used in operating activities was approximately $8.7 million for the year ended June 30, 2021. The operating cash outflow for the year ended June 30, 2021 was primarily attributable to our net loss of approximately $11.3 million, consisting of non-cash items including approximately $0.4 million in depreciation and amortization, approximately $0.9 million in impairment and approximately $4.2 million in allowance for deposit. We had an increase in advances to suppliers - third parties as we made deposits to our freight carriers of approximately $0.8 million, and a decrease in accrued expenses and other current liabilities of approximately $1.1 million offset by a decrease in other receivables of approximately $0.3 million as we collected our outstanding balances.
Investing Activities
Net cash used in investing activities was approximately $3.5 million for the year ended June 30, 2022 due to the acquisition of property and equipment of approximately $0.9 million and an investment of approximately $0.2 million to a 40% owned joint venture. We made an additional loan of $0.5 million to Wang Qinggang, a related party to the Company, and CEO and legal representative of Trans Pacific Shanghai which is due in June 2024. We also made related party advances of approximately $1.9 million, which includes $1.3 million to Shanghai Baoyin which is 30% owned by Wang Qinggang, and approximately $0.6 million in advances to LSM Trading Ltd, of which we hold a 40% ownership interest.
Net cash used in investing activities was approximately $1.5 million for the year ended June 30, 2021 due to the acquisition of property and equipment.
Financing Activities
Net cash provided by financing activities was approximately $8.3 million for the year ended June 30, 2022 due to issuances of common stock in private placements of approximately $10.5 million and proceeds from convertible notes of $10 million, repayment of convertible notes of $5.0 million and warrant repurchase of approximately $7.9 million. We also had cash from warrants exercise of approximately $0.9 million and repayment of Economic Injury Disaster Loan.
Net cash provided by financing activities was approximately $54.2 million for the year ended June 30, 2021 due to cash proceeds received from issuances of common stock to private investors of approximately $52.8 million and cash proceeds received from issuances of preferred stock to a private investor of approximately $1.4 million.
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.

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

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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.

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

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As of June 30, 2022, 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, 2022:
● 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;
● Hiring of CEO and CFO to properly set up the Company’s internal control and oversight process;
● 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, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
Name Age Positions Held
Jing Shan Chief Operating Officer
Heng Wang Non-executive Vice Chairman of the Board
Tieliang Liu Director
Jing Shan
Ms. Shan has been our Chief Operating Officer since her appointment in August 2021. From July 2019 to July 2021, Ms. Shan was a financial service professional at Northwestern Mutual, an insurance company. Prior to that, she was the COO at LineMoney Inc., a financial technology company, from December 2016 to July 2019. From August 2016 to December 2016, she was an analyst at Wall Street IPO Consultation Inc. Ms. Shan received a Master of Science in Public Relations and Corporate Communication from New York University and a Bachelor’s degree in Landscape Architecture from Beijing Forestry University.
Heng Wang
Mr. Wang has been our director since 2021. Mr. Wang has served as the Senior Manager of Charles Schwab Corporation, an investment management and financial services company, since October 2020. From July 2006 to October 2020, Mr. Wang served as a Consultant for TD Ameritrade Inc, a financial services company. From November 2017 to July 2018, he served as the Director at Longfin Corp., a financial technology consulting and service firm. Mr. Wang received a Master’s degree in Computer Information Science from the New Jersey Institute of Technology in July 1991, and he received a Bachelor’s degree in Computer Science from Fudan University in Shanghai, PRC in July 1990. Mr. Wang has been selected to serve as our director because of his expertise in financial technology.
Tieliang Liu
Dr. Liu has been our director since 2013. Since 2001, he has served as the vice president in charge of accounting and finance to China Sun-Trust Group Ltd., a state-owned investment company in China. Dr. Liu was a financial controller for Huaxing Group Ltd, a state-owned material trading company in China, from 1998 to 2001. From 1996 through 1998, he was the chief accountant of China Enterprise Consulting Co., Ltd., a state-owned investment consulting company in China. Before working in the finance and accounting industry, Dr. Liu taught accounting and finance in a university for more than ten years and has published dozens of books and articles. He received a PhD, master’s and bachelor’s degrees in accounting from Tianjin University of Finance and Economics. Dr. Liu has been chosen to serve as a director because of his accounting and business knowledge and experience in working with small and medium-sized companies.
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 March 3, 2023
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, 2022, 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:
● Qiu Shi filed a Form 4 on February 25, 2022 to report transactions that occurred on February 9, 2022.
● Jing Shan filed a Form 4 on February 16, 2022 to report transactions that occurred on February 9, 2022.
● Lei Nie filed a Form 4 on August 20, 2021 to report transactions that occurred on August 13, 2021.
● Tieliang Liu filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
● Zhikang Huang filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
● Xiaohuan Huang filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
● Tuo Pan filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
● Lei Cao filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
● Jing Wang filed a Form 4 on August 19, 2021 to report transactions that occurred on August 13, 2021.
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 Tieliang Liu and Heng Wang, who are each independent. Mr. Liu 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 has two members who are independent directors, including Heng Wang and Tieliang Liu. 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 has two members that are independent directors, Heng Wang and Tieliang Liu. Heng Wang 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 been one of our officers or employees, or, during the last fiscal year, was 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.

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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, and Mr. Jing Shan, our Chief Operating Officer for the years ended June 30, 2022 and 2021.
Name Year Salary Bonus Securities- based Compensation All other Compensation Total
Lei Cao, $ 425,000 (1) $ 300,000 - - $ 725,000
Former Chief Executive Officer (1)(6) $ 426,609 (2) $ 800 - - $ 427,409
Tuo Pan, $ 175,999 $ 100,000 $ 574,000 - $ 849,999
Former Chief Financial Officer (2)(7) $ 302,973 $ 800 - - $ 303,773
Zhikang Huang, $ 125,000 $ 50,000 $ 495,200 - $ 634,200
Former Vice President and Director(3)(8) $ 275,000 $ 800 - - $ 275,800
Jing Shan, - - - - -
Chief Operating Officer(4) $ 143,333 $ 800 - - $ 144,133
Yang Jie,(5) $ 208,333 - - - $ 208,333
Former Chief Executive Officer and director(9) $ 500,000 $ 800 - - $ 500,800
(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.
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, 2022.
Name(1)
Fees earned or
paid in cash
($)
Stock
awards
($)
Option
awards
($)
All other
compensation
($)
Total
($)
John Levy(3)
33,333
-
-
30,435 (2)
63,768
Heng Wang
30,000
-
-
21,304 (2)
51,304
Tieliang Liu
35,000
57,400
-
-
92,400
Xiaohuan Huang(4)
25,000
57,400
-
-
82,400
Jing Wang(5)
20,000
434,400
-
-
454,400
(1) This table does not include Mr. Lei Cao, our former Chief Executive Officer and former director, Mr. Zhikang Huang, our former director and Vice President, and Mr. Yang Jie, our former Chief Executive Officer and director whose compensation is fully reflected in the Summary Compensation Table.
(2) Represents compensation paid to Mr. Levy and Mr. Wang for their services as Chairman and member of the Special Committee, respectively, for May and June, 2022.
(3) On February 23, 2023, Mr. John Levy resigned as a director of the Board and member of the Audit Committee, Nominating and Corporate Governance Committee and the Compensation Committee.
(4) On November 1, 2021, Ms. Huang resigned as a director.
(5) On November 18, 2021, Mr. Wang resigned as a director.
Employment Agreements
The Company has an employment agreement with Jing Shan, our Chief Operating Officer. The employment agreement began on February 8, 2022 and will terminate on August 4, 2024. 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, Ms. Shan will receive a base salary of $200,000 per year. Her performance and salary are subject to review at any time, and any increases in her salary that our Board may determine, shall be made on a basis consistent with the standard practices of our Company. On August 15, 2022, the Board approved an increase of Ms. Shan’s annual salary from $200,000 to $250,000 and a cash bonus of $50,000 upon conclusion of the investigation of the Special Committee.

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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 March 3, 2023, for (i) each named executive officer and director, and (ii) all executive officers and directors as a group. As of March 3, 2023, there was no stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. In the table below, percentage ownership is based on 21,944,333 shares of our common stock issued and outstanding as of March 3, 2023.
Name and Address of Beneficial Owner (1) Number of
Shares
Beneficially
Owned Approximate
Percentage of
Outstanding
Shares of
Common
Stock
Jing Shan - -
Tieliang Liu 38,000 *
Heng Wang - -
All directors and executive officers as a group (three individuals) 38,000 *
* Less than 1%.
(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 June 30, 2022, 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 have 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 under the 2014 Incentive Plan. 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 10,000,000 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, were canceled or being canceled.

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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, 2022 and 2021.
Advance to Related Party Suppliers
The Company’s advances to suppliers - related party are as follows:
June 30, June 30,
Bitcoin mining hardware and other equipment (1) $ 6,153,546 $ -
Total Advances to suppliers-related party $ 6,153,546 $ -
(1) On January 10, 2022, the Company’s joint venture, Thor Miner, entered into a Purchase Agreement with HighSharp. Pursuant to the Purchase Agreement, Thor Miner agreed to purchase certain crypto mining equipment. In January and April 2022, Thor Miner made a total prepayment of $35,406,649 for the order. Thor Miner also entered into a PSA with SOSNY for the purchase of $200,000,000 in crypto mining rigs and received deposit form SOSNY in the amount of $48,930,000.
The Company shipped crypto mining machines worth $1,325,520 to SOSNY for the year ended June 30, 2022 and $6,153,546 from July to December 2022. Due to production issues from HighSharp, Thor Miner was not able to timely deliver the full quantity of crypto mining machines to SOSNY pursuant to the PSA and was sued by SOSNY for breach of contract on December 9, 2022.
The Company entered into a settlement agreement SOSNY effective on December 28, 2022, under which the Company repaid $13.0 million to SOSNY and terminated the PSA and balance of the deposits. The Company also assigned to SOSNY the right for the deposit that Thor Miner has paid to HighSharp.
As of December 22, 2023, the balance of advance to HighSharp and deposit from SOSNY amounted to $27,927,583 and $40,560,569, respectively. Thor Miner paid $13.0 million on December 23, 2022 to SOSNY which was received by SOSNY on December 28, 2023 and wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp resulting in net bad debt expenses of $367,014.
Due From Related Party, Net
As of June 30, 2022 and June 30, 2021, the outstanding amounts due from related parties consist of the following:
June 30, June 30,
Tianjin Zhiyuan Investment Group Co., Ltd. (1) $ - $ 384,331
Zhejiang Jinbang Fuel Energy Co., Ltd (2) 415,412 430,903
Shanghai Baoyin Industrial Co., Ltd (3) 1,306,004 -
LSM Trading Ltd (4) 570,000 -
Rich Trading Co. Ltd (5) 103,424 -
Cao Lei (6) 54,860
Less: allowance for doubtful accounts (2,449,700 ) (384,331 )
Total $ - $ 430,903
(1) In June 2013, the Company signed a five-year global logistic service agreement with Tianjin Zhiyuan Investment Group Co., Ltd. (“Zhiyuan Investment Group”) and TEWOO Chemical& Light Industry Zhiyuan Trade Co., Ltd. (together with Zhiyuan Investment Group, “Zhiyuan”). Zhiyuan Investment Group is owned by Mr. Zhong Zhang, a former stockholder of the Company. In September 2013, the Company executed an inland transportation management service contract with the Zhiyuan Investment Group whereby it would provide certain advisory services and help control potential commodities loss during the transportation process. Starting in late 2020, Mr. Zhang started selling off his shares of the Company and did not own shares of the Company as of June 30, 2021 and was no longer a related party. Management’s reassessed the collectability and decided to provide full allowance for doubtful accounts as of June 30, 2021. The Company wrote off the balance in the first quarter of fiscal year 2022.
(2) During third fiscal quarter of 2021, the Company advanced $477,278 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 and Zhejiang Jinbang returned $39,356 for the year ended June 30, 2021. The advance is non-interest bearing and due on demand. There has been no change in the balance other than changes as a result of changes in exchange rates. The Company provided allowance of $415,412 for the year ended June 30, 2022.
(3) From July to December 2021, the Company advanced approximately $1.6 million to Shanghai Baoyin which is 30% owned by Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. Shanghai Baoyin repaid approximately $0.3 million in December 2022. The advance is non-interest bearing and due on demand. The Company provided allowance of $1,306,004 for the year ended June 30, 2022.
(4) The Company advanced $570,000 to LSM Trading Ltd, which is 40% owned by the Company for the year ended June 30, 2022. The advance is non-interest bearing and due on demand. The Company provided allowance of $570,000 for the year ended June 30, 2022.
(5)
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 operates by Rich Trading and the Company would be entitled to 90% of profit generated by the trading business. The Company advanced $3,300,000 for this project. $3,200,000 has been returned to the Company. The Company provided allowance of $100,000 for the year ended June 30, 2022. As of June 30, 2022, the Company also paid for expenses of Rich Trading for $3,424 and provided full allowance for the advance.
(6) The amount represents advance for business expenses to Mr. Cao Lei, former Chairman of the Board. The Company provided allowance of $54,860 for the year ended June 30, 2022. Business expenses incurred by Cao Lei amounted to $66,842 and $120,934 for the years ended June 30, 2022 and 2021.
Loan Receivable- Related Parties (Restated)
As of June 30, 2022 and June 30, 2021, the outstanding loan receivable from related parties consists of the following:
June 30,
June 30,
Wang Qinggang (1)
$ 552,285
$ -
(1) On June 10, 2021, the Company entered into a loan agreement with Wang Qinggang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The loan is non-interest bearing for loan amount up to $630,805 (RMB 4 million). In February 2022, Wang Qinggang, borrowed and repaid $232,340 of the loan amount. In June 2022, additional $552,285 (RMB 3,700,000) was loaned to Wang Qinggang with due date of June 7, 2024. The outstanding loan was fully repaid in December 2022.
Other Payable - Related Party
As of June 30, 2021, the Company had payable to former Chief Executive Officer of $11,303 and to the acting Chief Financial Officer of $2,516 which were included in other current liabilities. These payments were made on behalf of the Company for the daily business operational activities.
Revenue - Related Party
For the year ended June 30, 2022, revenue from related party, Zhejiang Jinbang, amounted to $222,963. There was no related party revenue for the year ended June 30, 2021.
Director Independence
Our Board has determined that each of Messrs. Tieliang Liu and Heng Wang is an “independent director” as defined by the applicable SEC rules and Nasdaq Listing Rules.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services.
Audit Fees
During the fiscal year of 2022, Audit Alliance’s fees for the annual audit of our financial statements and the quarterly reviews of the financial statements included in our periodic reports were $458,000.
During the fiscal year of 2021, Audit Alliance’s fees for the annual audit of our financial statements and the quarterly reviews of the financial statements included in our periodic reports were $325,000.
Audit-Related Fees
None.
Tax Fees
None.
All Other Fees
None.
Audit Committee Pre-Approval Policies
Before Audit Alliance LLP was engaged by the Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered by Audit Alliance LLP have been preapproved by the Company’s audit committee.

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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)
4.2
Form of Series A Warrant to purchase Common Stock dated March 12, 2018 (5)
4.3
Form of Series B Warrant to purchase Common Stock dated March 12, 2018 (6)
4.4
Form of Common Stock Purchase Warrant dated September 2020 (7)
4.5
Form of Warrant to purchase Common Stock (8)
4.6
Form of Warrant, dated December 14, 2021 (9)
10.1
Employment Agreement by and between Ms. Jing Shan and Sino-Global Shipping America, Ltd., dated as of August 5, 2021 (10)
10.2
The Company’s 2021 Stock Incentive Plan (11)
10.3
Strategic Alliance Agreement by and between Shenzhen HighSharp Electronic Ltd. And the Company, dated October 3, 2021 (12)
10.4
Offer Letter by and between Mr. Heng Wang and the Company, dated as of November 1, 2021 (13)
10.5
Form of Warrant, dated as of December 2021 (14)
10.6
Form of Securities Purchase Agreement, dated as of December 2021 (15)
10.7
Form of Senior Convertible Note, dated as of December 2021 (16)
10.8
Form of Warrant Purchase Agreement, dated as of January 2022 (17)
10.9
Purchase and Sale Agreement by and between Thor Miner, Inc. and the Company, dated January 10, 2022 (18)
10.10
Employment Agreement by and between Ms. Jing Shan and the Company, dated February 8, 2022 (19)
10.11
Form of Amended and Restated Senior Convertible Note, dated as of March 2022 (20)
10.12
Joint Venture Agreement by and between Golden Mainland Inc. and the Company, dated April 10, 2022 (21)
10.13
Form of Settlement Agreement by and between SOS Information Technology New York, Inc. and Thor Miner, Inc., the Company, Lei Cao, Yang Jie, John F. Levy, Tieliang Liu, Tuo Pan, Shi Qiu, Jing Shan, and Heng Wang (22)
10.14
Separation Agreement by and between the Company and Lei Cao, dated as of January 9, 2023 (23)
10.15
Placement Agreement by and between Sino-Global Shipping America, Ltd. and Maxim Group LLC, dated as of February 5, 2021 (24)
10.16
Form of Services Agreement by and between the Company and Chongqing Iron & Steel Ltd *
14.1
Code of Ethics of the Company (25)
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**
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 herein by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 12, 2018.
(6) Incorporated herein by reference to exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 12, 2018.
(7) Incorporated herein by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 18, 2020.
(8) Incorporated herein by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on Form 8-K filed on February 8, 2021.
(9) Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021.
(10) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 9, 2021.
(11) Incorporated by reference to exhibit 99.2 to the Company’s Form S-8 filed on August 27, 2021.
(12) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2021.
(13) Incorporated by reference to exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 1, 2021.
(14) Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021.
(15) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 14, 2021.
(16) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 23, 2021.
(17) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 6, 2022.
(18) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 14, 2022.
(19) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2022.
(20) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 10, 2022.
(21) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 14, 2022.
(22) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 5, 2023.
(23) Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 13, 2023.
(24) Incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 8, 2021.
(25) 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).