Financial Analysis

Note 13. COMMITMENTS AND CONTINGENCIES Contingencies Crivellaro v. Singularity Future Technology Ltd. On December 9, 2022, a securities class action, Crivellaro v. Singularity Future Technology Ltd., et al. , No. 22-cv-7499-BMC, was commenced against the Company and certain other defendants in the United States District Court for the Eastern District of New York (the EDNY), alleging violations of the federal securities laws (the Class Action). On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the Amended Settlement Agreement), pursuant to which and subject to approval by EDNY, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $5.8 million, including $2.0 million previously deposited into escrow. The Company completed an additional payment of $1.5 million in July 2026. The Company subsequently paid the remaining $2.3 million on September 8, 2026. The Court granted preliminary approval of the Amended Settlement Agreement and approved the settlement schedule on September 10, 2026. The Court set the Fairness Hearing for January 25, 2027. Until the conclusion of the Fairness Hearing, the ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive final approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action. On June 22, 2026, the Company and …

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Note 6. LOANS FROM THIRD PARTIES The Companys loans from third parties are as follows: As of As of June 30, June 30, 2026 2025 Loans from third parties - current $ 863,221 $ 999,940 Loans from third parties - non-current 2,918,200 466,321 Total loans from third parties $ 3,781,421 $ 1,466,261 As of June 30, 2026 and 2025, loans from third parties amounted to approximately $3.8 million, and approximately $1.5 million with a weighted average interest rate of 12%, and 12% and a weighted average maturity of 1.83 years and one year, respectively. For the years ended June 30, 2026 and 2025, interest expenses were $306,367 and $146,370, respectively. The aggregate scheduled principal repayments due on the third-party loans for each of the next two fiscal years ending June 30 are as follows: As of June 30, Twelve months ended June 30, 2026 Fiscal year 2027 $ 863,221 Fiscal year 2028 2,918,200 Total $ 3,781,421 …

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The Companys disaggregated revenue streams are described as follows: For the Years Ended June 30, June 30, 2026 2025 Freight logistic services $ 1,693,264 $ 1,813,193 …

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Note 14. INCOME TAXES On March 27, 2020, the CARES Act was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods and alternative minimum tax credit refunds. The Company does not at present expect the provisions of the CARES Act to have a material impact on its tax provision given the amount of net operating losses currently available. For the years ended June 30, 2026 and 2025, total pre-tax income, disaggregated by U.S. and foreign sources, is presented below: For the Years Ended June 30, 2026 2025 Pre-tax loss from U.S, operations $ (5,667,830 ) $ (2,935,846 ) Pre-tax loss from PRC operations (242,801 ) (348,455 ) Net loss before income tax expenses $ (5,910,631 ) $ (3,284,301 ) The Companys income tax expenses for years ended June 30, 2026 and 2025 are as follows: For the Years Ended June 30, June 30, June 30, 2026 2025 Current U.S. - $ 30,230 PRC - - Total income tax expenses - $ 30,230 Total cash payments for income taxes, disaggregated by taxing jurisdiction for the respective fiscal years, are as follows: For the Years Ended June 30, 2026 2025 Federal income tax paid (U.S.) - $ 21,000 State income tax paid (U.S.) - 9,230 Foreign (PRC) income tax paid - - Total cash income tax paid - $ 30,230 No U.S. federal or U.S. state income tax payments were made for the year ended June 30, 2026, as the U.S. entities recorded operating losses with no tax …

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Note 7. LEASES The Company leases its office in Shanghai City from a third party for its operations. As of June 30, 2026 and 2025, the remaining average lease term was an average of 0.5 and 1.5 years, respectively. The Companys lease agreements do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates its incremental borrowing rate based on actual incremental borrowing interest rates from financial institutions in order to discount lease payments to present value. The discount rate of the Companys operating leases was 10.74% and 10.74% per annum, as of June 30, 2026, and 2025, respectively. Supplemental balance sheet information related to operating leases was as follows: As of As of June 30, June 30, 2026 2025 Right-of-use asset $ 31,293 $ 84,370 Lease liability, current 31,293 53,286 Lease liability, non-current - 31,084 Total lease liability $ 31,293 $ 84,370 As of June 30, 2026, maturities of lease liability were as follows: As of June 30, Twelve months ended June 30, 2026 Fiscal year 2027 $ 32,281 Less: Imputed interest (988 ) Total lease liability $ 31,293 …

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(r) Recent Accounting Pronouncements Recent accounting pronouncements The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU may be applied either on a prospective or retrospective basis. We are currently evaluating the impact of this standard on our disclosures. In January 2025, the FASB issued ASU 2025-01, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40),which clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted. In May 2025, the FASB issued ASU 2025-04, Compensation Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606), Clarifications to Share-Based Consideration Payable to a Customer, which revised the Maste …

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Note 16. RELATED PARTY BALANCES AND TRANSACTIONS Set forth below are transactions with related persons for the years ended June 30, 2026 and 2025. Due from Related Party As of June 30, 2026 and 2025, the outstanding amounts due from related parties consist of the following: As of As of June 30, June 30, 2026 2025 Shanghai Baoyin Industrial Co., Ltd (1) $ 1,145,307 $ 1,084,793 Zhejiang Jinbang Fuel Energy Co., Ltd (2) 410,168 388,496 Less: impairment for credit losses (1,555,475 ) (1,473,289 ) Total - - Movements of allowance for credit losses were as follows: June 30, June 30, 2026 2025 Beginning balance $ 1,473,289 $ 2,122,376 Less: Write-off - (675,063 ) Exchange rate effect 82,186 25,976 Ending balance $ 1,555,475 $ 1,473,289 (1) As of June 30, 2026, and 2025, the Company advanced $1,145,307 and $1,084,793 to Shanghai Baoyin Industrial Co., Ltd. (Shanghai Baoyin) which is 30% owned by Qinggang Wang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable. The amount due from Shanghai Baoyin changed was as a result of changes in exchange rates. (2) As of June 30, 2026, and 2025, the Company advanced $410,168 and $388,496 to Zhejiang Jinbang Fuel Energy Co., Ltd (Zhejiang Jinbang) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing. The Company provided fu …

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Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. (b) Fair Value of Financial Instruments The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3 Unobservable inputs that reflect managements assumptions based on the best available information. The carrying value of notes rece …

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Note 18. SUBSEQUENT EVENTS 1. On July 6, 2026, Singularity Future Technology Ltd. (the Company) entered into a securities purchase agreement (the SPA) with certain investors, under which the Company agreed to sell to the investors an aggregate of 5,263,158 units (the Unit), each Unit consisting of one share of the Companys common stock, without par value (the Common Stock) and three warrants, with each warrant initially exercisable to purchase one share of the Common Stock at an exercise price of $0.418 (the Warrants), in a private placement to certain non-U.S. Persons as defined in Regulation S of the Securities Act of 1933, as amended (the Regulation S), at a price of $0.38 per Unit for an aggregate purchase price of approximately $2,000,000 (the Offering). The Warrants are exercisable immediately upon the date of issuance at an initial exercise price of $0.418, for cash. The Warrants may also be exercised cashlessly if at any time after the one-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of Common Stock underlying the Warrant. The Warrants shall expire five years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting capitalizations and subdivisions or other similar transactions. The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Pur …

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