TREASURE GLOBAL INC
For the period ended Jun 30, 2025. Filed Oct 14, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Oct 14, 2025
TGL$0.18-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-06-30; filed 2024-09-30.
0001213900-24-083395
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-06-30; filed 2025-10-14.
0001213900-25-098882
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsFinancial Statements and Supplementary DataThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 156 current paragraphs.
83 unchanged; 33 reworded; 40 added; 20 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
-TADAA Technologies Operation
Current report
-Customized Software development service
Current report
During the fiscal year, the Company initiated a new revenue stream in the ordinary course of business by offering customized software development services, primarily targeting enterprise clients. As of January 2025, we have entered into a new service partnership with Reveillon Group Limited to design, develop, and implement a comprehensive digital system. This initiative involves the creation of integrated modules focused on improving administrative processes, data analysis, and user engagement. The system is being built with scalability, customization, and long-term performance in mind, ensuring it meets evolving business needs. This collaboration underscores our ongoing commitment to delivering robust and adaptable digital solutions across various industries. The project is scheduled for completion within 12 months of the agreement’s start date.
Current report
- Corporate Development
Current report
On February 11, 2025, we signed a share purchase agreement to acquire a 51% stake in Tien Ming Distribution Sdn Bhd to expand FMCG fulfilment and logistics capabilities. The transaction was subsequently terminated and no business combination was recognized for the year ended June 30, 2025.
Current report
- Reverse Stock Splits
Current report
On February 27, 2024, we effected a 1:70 reverse stock split of its shares of common stock. Upon execution of the 1-for-70 reverse stock split (“February 2024 split”). On April 7, 2025, the Company effected a 1:50 reverse stock split of its shares of common stock (“April 2025 split”).
Current report
On October 10, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP (“Alumni Capital”), a Delaware limited partnership which was subsequently amended by the Modification Agreement on January 21, 2025 . Pursuant to the Purchase Agreement, we have the right, but not the obligation to cause Alumni Capital to purchase up to $50,000,000 common stock, par value $0.00001 (the “Commitment Amount”), at certain purchase Price during the period beginning on the execution date of the Purchase Agreement and ending on the earlier of (i) the date on which Alumni Capital has purchased $50,000,000 of the Company’s common stock pursuant to the Purchase Agreement or (ii) December 31, 2025. As of June 30, 2025, Alumni Capital has purchased approximately $11.7 million worth of the Company’s common stock, totaling 3,163,680 shares. The Company has received approximately $11.7 million in net proceeds as of June 30, 2025.
Current report
On November 27, 2024, we entered into a subscription agreement (the “Subscription Agreement”) with certain investors (the “Investors”). Pursuant to the Subscription Agreement, the Investors agreed to invest an aggregate amount of $1,177,000 (the “Investment Amount”) into us for 71,333 shares of the Company’s common stock (the “Offered Shares”), par value $0.00001 at a negotiated purchase price of $16.5 (the “Offering”). As of June 30, 2025, the Company has issued 71,333 shares of Offered Shares to the Investors and received aggregate net proceed of $1,177,000.
Current report
Since July 2024, we formalized agreements to develop and implement a Smart Campus System at ELMU University in Nilai, Malaysia. Leveraging our expertise in infrastructure management, we worked with ELMU University to deploy an automated smart campus system that will enhance resource management across the campus, with a strong focus on optimizing electricity usage through integrated software and hardware solutions. During fiscal 2025, following further discussions on program priorities and timing, the parties concluded the engagement. We have ceased work and demobilized. No further performance obligation remains under this engagement.
Current report
Since September 2024, we have been driving the development of credit services within the ZCity App through a strategic partnership with Credilab Sdn Bhd (“CLSB”). We are in the midst of facilitating the integration of CLSB’s credit services platform into the ZCity App and developing the customer base for these services. Through the partnership, we intend to collaborate on the creation of a digital wallet, AI-driven chatbot, and customer support systems. The collaboration is designed to drive user engagement and enhance the overall credit services offering within the ZCity App ecosystem. The partnership is scheduled to conclude on September 19, 2029, during which CLSB has also granted TGL a non-exclusive right to use its brand in marketing materials for five years.
Current report
Since October 2024, we have been advancing our user engagement strategy by partnering with Octagram Investment Limited (“OCTA”) to develop and integrate mini-game modules into the ZCity App. We have worked closely with OCTA to design and customize these interactive modules, ensuring they align with our specifications for game mechanics, branding, and user experience. The integration is optimized for cross-platform compatibility and smooth performance across devices, as well as ensuring ongoing support and timely updates, maintaining the seamless functionality of the mini-games with future ZCity App updates. We believe that this initiative is key to enhancing the app’s interactive features and driving user engagement.
Current report
In October 2024, we have also been developing a cutting-edge Live Streaming Platform enhanced by AI Digital Human Solutions by partnering with V Gallant Sdn Bhd. We will be overseeing the customization of the platform to meet specific requirements, ensuring seamless integration with third-party platforms and optimizing performance across devices. Ongoing support and updates will also be prioritized to maintain consistent functionality. This initiative is central to our efforts to expand our interactive streaming capabilities and elevate user experiences. The development is scheduled to be completed on December 31, 2025.
Current report
On October 29, 2024, we entered into a service agreement with V Gallant Sdn Bhd to provide generative AI solutions and AI digital human technology services. On March 24, 2025, we executed a supplemental letter expanding the scope of that agreement to require V Gallant to provide and manage GPU servers, network infrastructure, cloud integration, security measures, AI tools, and user environments to support AI cloud infrastructure.
Current report
On March 24, 2025, we executed a supplemental letter expanding the scope of that agreement to require V Gallant to provide and manage GPU servers, network infrastructure, cloud integration, security measures, AI tools, and user environments to support AI cloud infrastructure. During fiscal 2025 we advanced software and AI infrastructure development.
Current report
Transaction revenue primarily consists of fees charged to merchants for participating in our ZCITY platform upon successful sales and service transactions, as well as for payment services facilitated between merchants and their customers online. Our transaction revenue increased by 107.6%, reaching approximately $127,000 for the years ended June 30, 2025, compared to approximately $61,000 for the same period in 2024. This growth was driven by our recent partnership with Credilab Sdn. Bhd. (“CLSB”), a third-party credit services provider. Through this partnership, we introduced our portfolio clients from TADAA Technologies to CLSB’s credit service platform. In return, CLSB agreed to pay us a transaction fee upon successful transactions and share 50% of the revenue derived from these Portfolio Clients.
Current report
Customized software development services
Current report
During the fiscal year, the Company initiated a new revenue stream in the ordinary course of business by offering customized software development services, primarily targeting enterprise clients. As of January 2025, we have entered into a new service partnership with Reveillon Group Limited to design, develop, and implement a comprehensive digital system. This initiative involves the creation of integrated modules focused on improving administrative processes, data analysis, and user engagement. The system is being built with scalability, customization, and long-term performance in mind, ensuring it meets evolving business needs. This collaboration underscores our ongoing commitment to delivering robust and adaptable digital solutions across various industries. The project is scheduled for completion within 12 months of the agreement’s start date
Current report
The increase in gross profit and gross profit margin for the years ended June 30, 2025, was primarily attributable to our engagement in a customized software development project during the period, which generated approximately $1.0 million in gross profit. This project carried a relatively high gross profit margin of approximately 77.8%, which boosted our overall gross profit margin for the year ended June 30, 2025.
Current report
Research and development expense amounted to approximately $0.2 million and $0.5 million for the years ended June 30, 2025 and 2024, respectively, representing 58.0% increase as we incurred more spending in A.I related infrastructure development. The increase primarily reflects costs for software engineering, cloud infrastructure and GPU-related development supporting the live-streaming/AI program described in “Business Development.”
Current report
Long-live assets impairment
Current report
Long-live assets impairment amounted to approximately $19.5 million and $0 for the years ended June 30, 2025 and 2024, respectively, representing 100.0% increase as we incurred $19.5 million impairment in our intangible assets.
Current report
Other income (expense), net
Current report
Net loss
Current report
We generated net loss of approximately $23.4 million and $6.6 million for the years ended June 30, 2025 and 2024, respectively, representing a change of approximately $6.4 million. The change was primarily attributable to the factors discussed above.
Current report
On October 10, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP (“Alumni Capital”), a Delaware limited partnership which was subsequently amended by the Modification Agreement on January 21, 2025. Pursuant to the Purchase Agreement, we have the right, but not the obligation to cause Alumni Capital to purchase up to $50,000,000 common stock, par value $0.00001 (the “Commitment Amount”), at certain purchase Price during the period beginning on the execution date of the Purchase Agreement and ending on the earlier of (i) the date on which Alumni Capital has purchased $50,000,000 of the Company’s common stock pursuant to the Purchase Agreement or (ii) December 31, 2025. As of June 30, 2025, Alumni Capital has purchased approximately $11.7 million worth of the Company’s common stock, totaling 3,163,680 shares. The Company has received approximately $11.7 million in net proceeds as of June 30, 2025.
Current report
On November 27, 2024, we entered into a subscription agreement (the “Subscription Agreement”) with certain investors (the “Investors”). Pursuant to the Subscription Agreement, the Investors agreed to invest an aggregate amount of $1,177,000 (the “Investment Amount”) into us for 71,333 shares of the Company’s common stock (the “Offered Shares”), par value $0.00001 at a negotiated purchase price of $16.5 (the “Offering”). As of June 30, 2025, the Company has issued 71,333 shares of Offered Shares to the Investors and received aggregate net proceed of $1,177,000.
Current report
Net cash used in operating activities for the years ended June 30, 2025 was approximately $9.3 million and was mainly comprised of the net loss of approximately $23.4 million, non-cash item of gain in change in fair value of derivative liabilities of approximately $1.8 million, increase in accounts receivable of approximately $1.6 million due to additional sales to new service partnership with Reveillon Group Limited but not yet collected, increase of other receivable and other assets of approximately $7.0 million which mainly includes approximately $3.6 million prepayment to certain vendors for technical and maintenance service and approximately $5.7 million of collaboration deposit made to Credilab Sdn. Bhd. (“CLSB”), decrease in customer deposits of approximately $75,000, as we recognized member service revenue in the current period from certain merchant prepayments made in the prior period, and decrease in contract liabilities of approximately $0.2 million, primarily as a result of increased revenue recognized from the ZCITY reward program due to a higher volume of customer reward redemptions, offset by non-cash items of depreciation, amortization, allowance for credit losses, stock-based compensation, long-live assets impairment and unrealized loss on marketable securities amounted to approximately $21.6 million, decrease of prepayment of approximately $0.1 million due to the utilization of prior-period prepayments for inventory purchases, and (iii) increase of approximately $2.9 million in other payables and accrued liabilities as we made approximately $2.7 million provision related to settlement of cash compensation requested by V Gallant Sdn. Bhd. pursuant to the Service Agreement dated October 29, 2024, as supplemented on March 28, 2025, to reflect the decline in our share price.
Current report
Net cash used in investing activities for the year ended June 30, 2025 was approximately $5.9 million which mainly due to remittance of approximately $5.7 million to CLSB as a collaboration deposit to support CLSB’s credit service activities for the Portfolio Clients, and approximately $0.2 million prepayment of purchase consideration for acquisition of Tien Ming Distribution Sdn Bhd.
Current report
Net cash provided financing activities the years ended June 30, 2025 was approximately $15.4 million, which mainly comprised of approximately $15.4 million net proceeds received from issuance of common stock through market offering, subscription agreement and share purchase agreement, approximately $64,000 proceed received from exercised of warrants, and loan proceed of approximately $51,000, offset by payments of insurance loan and related party loan of approximately $54,000.
Current report
Customized Software development Service revenue
Current report
We recognize revenue from customized software development services over time using the cost-to-cost input method to measure progress toward satisfaction of our performance obligations. This approach requires us to make critical estimates and judgments, including determining total estimated costs to complete each contract and assessing progress toward completion. Changes in project scope, complexity, or estimated costs may significantly impact the timing and amount of revenue we recognize. We also evaluate whether we have an enforceable right to payment for performance completed to date and whether control is transferred continuously to the customer. Any revisions to total estimated contract costs or anticipated losses are recorded in the period in which the changes are identified.
Current report
We account for stock-based compensation awards to officers in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. In June 2024, we executed executive employment agreements (“Employment Agreements”) with three individuals, appointing them as the Company’s executive officers. Under the terms of the Employment Agreements, each executive officer is entitled to receive a predetermined monetary value of the Company’s common stock as annual compensation for the first year, with stock compensation for subsequent years contingent upon performance. The stock compensation is prorated on a monthly basis and is subject to the restrictions of Securities Act Rule 144. The fair value of the stock-based compensation which included common stock issued were equivalent to the predetermined monetary value. For the years ended June 30, 2025 and 2024, we have incurred stock-based compensation from our officer amounted to approximately $0.3 million and $0.1 million, respectively based on the vesting schedule from the Employment Agreements.
Current report
We account for the purchase warrants issued to Alumni Capital LP (“Alumni Capital”) as liabilities, which are remeasured at fair value at each reporting period, with changes in fair value recognized in our consolidated statements of operations. The fair value of these warrants is estimated using the Black-Scholes option pricing model, which requires the use of significant judgment and assumptions, including expected stock price volatility, risk-free interest rate, expected life of the warrant, and the market price and exercise price of our common stock. These assumptions are highly subjective and inherently uncertain, and changes in any of these inputs can materially affect the estimated fair value of the warrant liability.
Current report
The fair value of the warrants issued to Alumni Capital which was determined on grant dates by using the Black Scholes model using the following assumptions: (1) expected volatility of 160.20% to 171.88%, (2) risk-free interest rate of 3.72% to 4.37%, (3) expected life of 2.4 years to 2.8 years, (4) exercise price of $2.22 to $5.15 and (5) stock price of $1.62 to $19.50 on grant date, the date of which the warrants were issued. Based on above assumption, the fair value of the warrants was estimated to be $2,450,227.
Current report
The fair value of the warrants issued to Alumni Capital which was determined on June 30, 2025 by using the Black Scholes model using the following assumptions: (1) expected volatility of 162.92% to 167.27%, (2) risk-free interest rate of 3.71%, (3) expected life of 2.3 years, (4) exercise price of $1.20 to $2.05 and (5) stock price of $1.10 on June 30, 2025. Based on above assumption, the fair value of the warrants were estimated to be $383,885.
Current report
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Current report
**TREASURE GLOBAL INC. AND SUBSIDIARIES
Current report
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Removed paragraphs (20)
Previous report
-ZCITY Operation
Previous report
On August 15, 2022, we had closed our initial underwritten public offering of 32,858 (2,300,000 pre reverse split) shares of common stock, par value $0.00001 per share, at $280 ($4.00 pre reverse split) per share. Meanwhile we received net proceeds of approximately $8.2 million, net of underwriting discounts and commissions and fees, and other estimated offering expenses amounted to approximately $1.0 million.
Previous report
The transaction revenue primarily consists of fees charged to merchants for participating in our ZCITY platform upon successful sales transaction and payment service taken place between the merchants and their customers online. Our transaction revenue decreased by 18.6% to approximately $61,000 for the year ended June 30, 2024 from approximately $75,000 for the same period in 2023 due to lack of new enrolment of merchant client. Our average percentage of growth of new merchants was approximately 0.2% throughout the quarters as of June 30, 2024.
Previous report
The increase in both gross profit and gross margin were mainly attributed to our decision to reduce spending on customer rewards within our ZCITY platform, resulting in a decrease in deferred revenue and consequently leading to higher gross profit and gross margin in the current period.
Previous report
Research and development expense amounted to approximately $0.5 million for the years ended June 30, 2024 and 2023, representing 6.5% decrease as we incurred less spending in mobile application or website development.
Previous report
Other expense, net
Previous report
Net losses
Previous report
Our net losses decreased by approximately $5.1 million predominately due to the reasons as discussed above.
Previous report
On August 15, 2022, we had closed our initial underwritten public offering of 2,300,000 shares of common stock, par value $0.00001 per share, at $4.00 per share. We received aggregate net proceeds from the closing of approximately $8.2 million, after deducting underwriting discounts and commissions and fees, and other estimated offering expenses which amounted to approximately $1.0 million.
Previous report
From February to June 2023, we issued two convertible notes to a third party in an aggregate principal amount of $5,500,000. We received $5,060,000 in proceeds from the third-party net of discount. The convertible notes accrued interest at 4% per annum and had a 12-month term. On December 6, 2023, we paid a total of $2,102,909.59 which represented the outstanding balance of one of the convertible notes issued pursuant to the securities purchase agreement. The other convertible note had already been fully converted into shares of our common stock prior to December 6, 2023.
Previous report
From July to September 2024, the Company received net proceed of $2,457,456, net of broker fee from issuance of 1,583,418 shares of common stock which sell through or to the Manager related to the Marketing Offering Agreement.
Previous report
Net cash used in operating activities for the years ended June 30, 2023 was approximately $9.6 million and were mainly comprised of the net loss of approximately $11.7 million, increase of prepayments of approximately $0.1 million as our vendors required us to make deposit to secure the purchase, increase of accounts receivable of approximately $0.2 million as a result of offering credit terms to our corporate customers engaged in the sales of nutrition products, and food and beverage products, increase in inventory of approximately $0.2 million as we increase our inventory level on June 30, 2023 to meet with the demand of our product, and increase of approximately $0.4 million in other receivables and other current assets as we prepaid IT maintenance fee to a third party service provider, offset by amortization of debt discount of approximately $1.3 million, stock-based compensation of approximately $0.8 million, increase of approximately $0.1 million in customer deposits as we incurred deferred revenue related to member subscription revenue for the remaining subscribed period as of June 30, 2023, increase of approximately $0.1 million in contract liability as we deferred more revenue due to increase of our customer’s redemption rate in spending related reward point, and increase of approximately $0.5 million in other payables and accrued liabilities mainly related to the accrued professional expenses.
Previous report
Net cash used in investing activities for the year ended June 30, 2023 was approximately $61,000, which mainly due to purchase of equipment of approximately $87,000 for our operations used, and offset with proceeds of approximately $26,000 received from disposal of our office equipment.
Previous report
Net cash provided by financing activities for the year ended June 30, 2023 was approximately $12.7 million, which mainly comprised of proceeds received from the issuance of convertible notes to third parties of approximately $7.7 million, proceeds received from our initial public offering of approximately $8.2 million, and proceeds received from third parties loans of approximately $0.6 million, offset by repayment to related parties, third parties loans, and insurance loan of approximately $3.8 million, repayment of senior note of $65,000, and $15,000 payment of deferred offering costs.
Previous report
Prepayments
Previous report
Prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any prepayments determined by management that such advances will not be in receipt of inventories, services or refundable, we will recognize an allowance account to reserve such balances. Management reviews our prepayments on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Our management continues to evaluate the reasonableness of the valuation allowance policy and updates it if necessary. No allowance of prepayments was recorded as of June 30, 2024 and June 30, 2023.
Previous report
We recognize compensation costs resulting from the issuance of stock-based awards to third party consultant and former director as an expense in the statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each warrants granted are estimated as of the grant date using the Black-Scholes-Merton option-pricing model while the fair value of each common stock granted are estimated using the Company’s closing stock price on the grant date. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of the common stock of the Company, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. The fair value of the stock-based compensation which included warrants and common stock issued were estimated to be $11,111 and $819,332 for the years ended June 30, 2024 and 2023, respectively.
Previous report
We account for warrants as equity-classified instruments in accordance with ASC 480 and ASC 815. The fair value of each warrant granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of our common stock, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside our control. Based on the above assumption, the fair value of the warrants issued during the years ended June 30, 2024 and 2023 were estimated to be $0 and $175,349, respectively.
Previous report
Recent Accounting Pronouncements
Previous report
See Note 2 of the notes to the consolidated financial statements included elsewhere in this report for a discussion of recently issued accounting standards.
Reworded paragraphs (33)
Previous wording
Treasure Global Inc is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware. TGL has no substantive operations other than holding all of the outstanding shares of ZCity Sdn Bhd (“ZCITY”), (formerly known as Gem Reward Sdn. Bhd, underwent a name change on July 20, 2023). It was originally established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization.
Current wording
Treasure Global Inc is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware. TGL has no substantive operations other than holding all of the outstanding shares of TADAA Technologies Sdn. Bhd. (“TADAA Technologies”), (formerly known as ZCity Sdn Bhd and Gem Reward Sdn. Bhd, underwent a name change on July 31, 2025 and July 20, 2023, respectively) and TADAA Ventures Sdn. Bhd. (formerly known as VWXYZ Venture Sdn Bhd, underwent a name change on July 29, 2025). It was originally established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization.
Previous wording
Prior to March 11, 2021, TGL and ZCITY were separate companies under the common control of Kok Pin “Darren,” Tan which resulted from Mr. Tan’s prior 100% ownership of TGL and his prior 100% voting and investment control over ZCITY pursuant to the Beneficial Shareholding Agreements. For a more detailed description of the Beneficial Shareholding Agreements and Mr. Tan’s common control over TGL and ZCITY see Part I, Item 1.“Business – Corporate Structure.”
Current wording
Prior to March 11, 2021, TGL and TADAA Technologies were separate companies under the common control of Kok Pin “Darren,” Tan which resulted from Mr. Tan’s prior 100% ownership of TGL and his prior 100% voting and investment control over TADAA Technologies pursuant to the Beneficial Shareholding Agreements. For a more detailed description of the Beneficial Shareholding Agreements and Mr. Tan’s common control over TGL and TADAA Technologies see Part I, Item 1.“Business – Corporate Structure.”
Previous wording
On March 11, 2021, TGL and ZCITY were reorganized into a parent subsidiary structure pursuant to the Share Swap Agreement in which TGL exchanged the swap shares for all of the issued and outstanding equity of ZCITY. Pursuant to the Share Swap Agreement, the purchase and sale of the swap shares was completed on March 11, 2021, but the issuance of the swap shares did not occur until October 27, 2021 when TGL amended its certificate of incorporation to increase the number of its authorized common stock to a number that was sufficient to issue the swap shares. As a result of the Share Swap Agreement, (i) ZCITY became the 100% subsidiary of TGL and Kok Pin “Darren” Tan no longer had any control over the ZCITY ordinary shares and (ii) Kok Pin “Darren” Tan the Initial ZCITY Stockholders and Chong Chan “Sam” Teo owned 100% of the shares of TGL common stock (Kok Pin “Darren” Tan owning approximately 97%). Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock.
Current wording
On March 11, 2021, TGL and TADAA Technologies were reorganized into a parent subsidiary structure pursuant to the Share Swap Agreement in which TGL exchanged the swap shares for all of the issued and outstanding equity of TADAA Technologies. Pursuant to the Share Swap Agreement, the purchase and sale of the swap shares was completed on March 11, 2021, but the issuance of the swap shares did not occur until October 27, 2021 when TGL amended its certificate of incorporation to increase the number of its authorized common stock to a number that was sufficient to issue the swap shares. As a result of the Share Swap Agreement, (i) TADAA Technologies became the 100% subsidiary of TGL and Kok Pin “Darren” Tan no longer had any control over the TADAA Technologies ordinary shares and (ii) Kok Pin “Darren” Tan the Initial TADAA Technologies Stockholders and Chong Chan “Sam” Teo owned 100% of the shares of TGL common stock (Kok Pin “Darren” Tan owning approximately 97%). Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock.
Previous wording
Our proprietary product is an application branded “ZCITY App,” which was developed through ZCITY. The ZCITY App was successfully launched in Malaysia on June 2020. ZCITY is equipped with the know-how and expertise to develop additional/add-on technology-based products and services to complement the ZCITY App, thereby growing its reach and user base.
Current wording
Our proprietary product is an application branded “ZCITY App,” which was developed through TADAA Technologies. The ZCITY App was successfully launched in Malaysia on June 2020. TADAA Technologies is equipped with the know-how and expertise to develop additional/add-on technology-based products and services to complement the ZCITY App, thereby growing its reach and user base.
Previous wording
Through simplifying a user’s e-payment gateway experience, as well as by providing great deals, rewards and promotions with every use, we aim to make the ZCITY App Malaysia’s top reward and loyalty platform. Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of September 25, 2024, we had 2,704,306 registered users and 2,027 registered merchants.
Current wording
Through simplifying a user’s e-payment gateway experience, as well as by providing great deals, rewards and promotions with every use, we aim to make the ZCITY App Malaysia’s top reward and loyalty platform. Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of February 10, 2025, we had 2,707,610 registered users and 2,027 registered merchants.
Previous wording
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
We believed it is appropriate to reflect the above transactions on a retroactive basis similar to those after a stock split or dividend pursuant to ASC 260. All shares and per share amounts used herein Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations have been retroactively stated to reflect the effect of the February 2024 Split and April 2025 Split.
Previous wording
On November 30, 2023, we closed our underwritten public offering (the “November 2023 Offering”) of (i) 371,629 (26,014,000 pre reverse split) shares of common stock, at a public offering price of $7 ($0.10 pre reverse split) per share of Common Stock and (ii) 14,000,000 pre-funded warrants (the “Pre-Funded Warrants”), each with the right to purchase 0.01 (one share pre reverse split) of Common Stock, at a public offering price of $0.0999 per Pre-Funded Warrant. Upon closing of the November 2023 Offering, we received aggregate net proceed of approximately $3.5 million, after deducting underwriting discounts and commission, andnon-accountable expense.
Current wording
On November 30, 2023, we closed our underwritten public offering (the “November 2023 Offering”) of (i) 7,433 shares of common stock, at a public offering price of $350 per share of Common Stock and (ii) 4000 pre-funded warrants (the “Pre-Funded Warrants”), each with the right to purchase one of Common Stock, at a public offering price of $350 per Pre-Funded Warrant. Upon closing of the November 2023 Offering, we received aggregate net proceed of approximately $3.5 million, after deducting underwriting discounts and commission, and non-accountable expense.
Previous wording
On March 22, 2024, we have entered into a marketing offering agreement (“Marketing Offering Agreement”) with H.C. Wainwright & Co., LLC, (the “Manager”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. For the year ended June 30, 2024, we have received an aggregated net proceed of $431,811, net of broker fee from issuance of 94,889 shares of common stock which sell through or to the Manager.
Current wording
On March 22, 2024, we entered into a marketing offering agreement (“Marketing Offering Agreement”) with H.C. Wainwright & Co., LLC, (the “Manager”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. As of June 30, 2025, we have received an aggregated net proceed of approximately $2.9 million, net of broker fee from issuance of 33,566 shares of common stock which sell through or to the Manager.
Previous wording
Consumers are attracted to ZCITY by the breadth of personalized deals/rewards and the interactive user experience our platform offers. The number and volume of transaction completed by our member consumers is affected by our ability to continue to enhance and expand our product and service offerings and improve the user experience.
Current wording
Consumers are attracted to TADAA Technologies by the breadth of personalized deals/rewards and the interactive user experience our platform offers. The number and volume of transaction completed by our member consumers is affected by our ability to continue to enhance and expand our product and service offerings and improve the user experience.
Previous wording
We have experienced a decrease in growth rate in registered users, and a decline of active users over our last five quarters as of June 30, 2024. As of June 30, 2024, we recorded 2,701,189 registered users and 26,819 active users on the ZCITY platform. On average, our registered user base has grown by approximately 2.0% over the past five quarters, while our active user numbers have experienced an average decline of 38.3%.
Current wording
We have experienced a decrease in growth rate in registered users, and a decline of active users over our last five quarters as of June 30, 2025. As of June 30, 2025, we recorded 2,708,053 registered users and 4,887 active users on the ZCITY platform. On average, our registered user base has grown by approximately 0.1% over the past five quarters, while our active user numbers have experienced an average decrease of 32.0%.
Previous wording
Total revenues decreased by approximately $47.3 million or 68.2% to approximately $22.1 million for the year ended June 30, 2024 from approximately $69.4 million for the year ended June 30, 2023. The decrease was mainly attributable to the decrease in product and loyalty program revenue.
Current wording
Total revenues decreased by approximately $19.7 million or 89.4% to approximately $2.3 million for the years ended June 30, 2025 from approximately $22.1 million for the years ended June 30, 2024. The decrease was mainly attributable to the decrease in product and loyalty program revenue offset by increase in revenue from customized software development service .
Previous wording
Product revenue was generated through sales of our e-voucher, health care products and other products through our ZCITY platform while loyalty program revenue was recognized when our customers redeem their previously earned reward points from our loyalty program or upon expiration of the reward point. In addition, we also engage in sales of food and beverage products through our subsidiaries, Morgan and AY Food, despite they were disposed in May 2024. The product and loyalty program revenue decrease by approximately $47.4 million or 68.9% to approximately $21.5 million for the year ended June 30, 2024 from approximately $68.9 million for the same period in 2023. The decrease in revenue was primarily attributable to our strategic decision to reduce spending on customer rewards and marketing campaigns in order to enhance cost-effectiveness and profitability in our operations. This reduction in customer incentives and marketing expenditures resulted in a decrease in the platform’s appeal to both existing and potential customers, ultimately leading to a decline in revenue for the current period.
Current wording
Product revenue was generated through sales of our e-voucher, health care products and other products through our ZCITY platform while loyalty program revenue was recognized when our customers redeem their previously earned reward points from our loyalty program or upon expiration of the reward point. In addition, we also engage in sales of food and beverage products through our subsidiaries, Morgan and AY Food, despite they were disposed in May 2024. The product and loyalty program revenue decrease by approximately $20.8 million or 97.1% to approximately $0.6 million for the years ended June 30, 2025 from approximately $21.5 million for the same period in 2024. The decline in revenue was primarily driven by the company’s strategic decision to streamline its product line, with a particular focus on eliminating lower-margin products, mainly e-vouchers. In addition, the decrease was attributable our strategic decision to reduce spending on customer rewards and marketing campaigns in order to enhance cost-effectiveness and profitability in our operations. This reduction in customer incentives and marketing expenditures resulted in a decrease in the platform’s appeal to both existing and potential customers, ultimately leading to a decline in revenue for the current period.
Previous wording
Member subscription revenue primarily consists of fees charged to customers who sign up for Zmember, our membership program that offers exclusive savings, bonuses, and referral rewards. For the year ended June 30, 2024, member subscription revenue decreased by 2.0% to approximately $376,000, from approximately $384,000 for the same period in 2023. The decrease was primarily due to we experienced slowdown in acquiring new customers to participate in our Zmember program . As of June 30, 2024 and 2023, we had 28,927 and 22,861 customers who subscribed to our Zmember program, respectively.
Current wording
Member subscription revenue primarily consists of fees charged to customers who sign up for Zmember, our membership program that offers exclusive savings, bonuses, and referral rewards. For the years ended June 30, 2025, member subscription revenue decreased by 72.5% to approximately $0.1 million, from approximately $0.4 million for the same period in 2024. The decrease was primarily due to we experienced slowdown in acquiring new customers to participate in our Zmember program. As of June 30, 2025 and 2024, we had 27,620 and 28,927 customers who subscribed to our Zmember program, respectively.
Previous wording
As we acquired exclusive worldwide license for right of use in Morganfield’s Trademark, and Abe Yus’s Trademark on May 1, 2023, and June 6, 2023, respectively, for a period of five years, we have generated sublicense revenue consisting of fee charged to the customers who sublicensed the right of use of the Trademark from us. For the years ended June 30, 2024 and 2023, sublicense revenue was amounted to approximately $174,000 and $50,000, respectively. As we had disposed Foodlink and its subsidiaries along with the food distribution and sublicensing operation in May 2024, we would no longer generate revenue from sublicense going forward.
Current wording
As we acquired exclusive worldwide license for right of use in Morganfield’s Trademark, and Abe Yus’s Trademark on May 1, 2023, and June 6, 2023, respectively, for a period of five years, we have generated sublicense revenue consisting of fee charged to the customers who sublicensed the right of use of the Trademark from us. As we had disposed Foodlink and its subsidiaries along with the food distribution and sublicensing operation in May 2024, we would no longer generate revenue from sublicense going forward.
Previous wording
Cost of revenue mainly consists of the purchases of the gift card or “E-voucher” pin code, health care product and food and beverage products which is directly attributable to our product revenue. Cost of revenue also consists of monthly license payment made to our licensor to maintain our good standing for the right of use the Trademark which is attributable to our sublicense revenue. Total cost of revenue decreased by approximately $47.6 million or 69.2% for the year ended June 30, 2024 compared with the same period in 2023. The decrease was in line with our decrease in revenue.
Current wording
Cost of revenue primarily consists of purchases of gift cards or “E-voucher” PIN codes, healthcare products, and food and beverage products, which are directly attributable to our product revenue. It also includes monthly license payments made to our licensor to maintain our right to use the Trademark, which supports our sublicense revenue. In addition, cost of revenue includes both in-house labor and outsourced labor costs related to customized software development services. Total cost of revenue decreased by approximately $21.0 million, or 96.9%, for the years ended June 30, 2025, compared to the same period in 2024. The decrease was consistent with the decline in our revenue.
Previous wording
Our gross profit for the year ended June 30, 2024, amounted to approximately $0.8 million as compared to approximately $0.5 million for the same period in 2023, reflecting an increase of approximately $0.3 million or 56.0%. Our gross margin improved from 0.8% for the year ended June 30, 2023 from 3.7% for the same period in 2024, representing an enhancement of 2.9% in our gross margin percentage.
Current wording
Our gross profit for the year ended June 30, 2025, amounted to approximately $1.7 million as compared to approximately $0.8 million for the same period in 2024, reflecting an increase of approximately $0.8 million or 104.6%. Our gross margin improved to 71.6% for the year ended June 30, 2025 from 3.7% for the same period in 2024, representing an enhancement of 67.9% in our gross margin percentage.
Previous wording
Selling expenses amounted to approximately $1.8 million and $4.7 million for the years ended June 30, 2024 and 2023, respectively, representing a decrease of approximately $3.0 million or 62.7%. The decrease was mainly attributable to a decrease in marketing and promotion expense of approximately $2.8 million related to promoting our ZCITY platform. Marketing and promotion expense consists of redemptions of reward points which is generated from non-spending related activities (registration as a new user, referral of a new user and Spin & Win eligibility to receive reward points) in exchange for discounted credit of purchasing our products upon conversion of using the reward points. For the years ended June 30, 2024 and 2023, we incurred approximately $0.4 million and $1.8 million, respectively, in marketing and promotion expense, and recognized the same amount of product revenue at the time of redemption of the non-spending related activities reward points by our customers. The decrease in marketing and promotion expenses was primarily driven by our strategic goal to optimize the promotional activities, enhance our cost effectiveness, and increase profitability in our operations.
Current wording
Selling expenses amounted to approximately $0.1 million and $1.8 million for the years ended June 30, 2025 and 2024, respectively, representing a decrease of approximately $1.6 million or 92.6%. The decrease was mainly attributable to a decrease in marketing and promotion expense of approximately $1.2 million related to promoting our ZCITY platform. Marketing and promotion expense consists of redemptions of reward points which is generated from non-spending related activities (registration as a new user, referral of a new user and Spin & Win eligibility to receive reward points) in exchange for discounted credit of purchasing our products upon conversion of using the reward points. For the years ended June 30, 2025 and 2024, we incurred approximately $34,000 and $0.4 million, respectively, in marketing and promotion expense, and recognized the same amount of product revenue at the time of redemption of the non-spending related activities reward points by our customers. The decrease in marketing and promotion expenses was primarily driven by our strategic goal to optimize the promotional activities, enhance our cost effectiveness, and increase profitability in our operations.
Previous wording
General and administrative expenses amounted to approximately $4.5 million and $4.7 million for the years ended June 30, 2024 and 2023, respectively, representing a decrease of approximately $0.2 million or 3.4%. The decrease was primarily attributed to decrease in salary expenses and professional fee expense of approximately $0.6 million and $0.7 million, respectively, to promote our operation effectiveness, offset by the increase in depreciation and amortization expense of approximately $0.6 million as we acquired more intangible assets during the year ended June 30, 2024, and incurred more bad debts expense of approximately $0.4 million due to increase of allowance for credit loss against accounts receivable and other receivables.
Current wording
General and administrative expenses amounted to approximately $3.6 and $4.5 million for the years ended June 30, 2025 and 2024, respectively, representing a decrease of approximately $0.9 million or 19.5%. The decrease was primarily attributed to decrease salary expenses of approximately $0.8 million, decrease of professional fee of approximately $0.4 million, decrease of D&O insurance of approximately $0.6 million, and decrease of depreciation and amortization expense of approximately $0.2 million to promote our operation effectiveness.
Previous wording
Stock-based compensation expenses amounted to approximately $0.1 million and $0.8 million for the years ended June 30, 2024, and 2023, respectively. The stock-based compensation incurred for the years ended June 30, 2024, was related to compensation paid to our executive officer as part of their compensation plan and third party for professional service.
Current wording
Stock-based compensation expenses amounted to approximately $0.3 million and $0.1 million for the years ended June 30, 2025, and 2024, respectively. The stock-based compensation incurred for the years ended June 30, 2025 and 2024, was related to compensation paid to our executive officer as part of their compensation plan and third party for professional service. The increase in stock-based compensation during the year ended June 30, 2025, was primarily attributable to the our decision to grant additional equity incentives to our executive officer in order to align their interests with those of our shareholders and to encourage their continued commitment toward supporting the our long-term growth.
Previous wording
Other expense, net, amounted to approximately $0.5 million and $1.4 million for the years ended June 30, 2024 and 2023, respectively, representing a decrease of approximately $0.9 million which was primarily attributable to we incurred other income from software developing service, net of cost of approximately $0.7 million, other income of approximately $0.2 million from disposal of Foodlink and its subsidiaries, and a decrease of amortization of debt discount of approximately $0.9 million related to our convertible note payable as we had fewer convertible notes containing debt discount that needed to be amortized for the year ended June 30, 2024 compare to the same period in 2023, offset by an unrealized loss approximately $0.8 million from marketable securities we received as service consideration in development of an artificial intelligence powered travel platform, redemption premium of approximately $0.3 million remit to our convertible note holder as a result of floor price triggering event.
Current wording
Other expense, net, amounted to approximately $1.0 million and $0.5 million for the year ended June 30, 2025 and 2024, respectively. This change was primarily attributable to (i) an increase in the gain from the change in fair value of derivative liabilities of approximately $1.8 million, (ii) a decrease in unrealized loss of approximately $0.7 million on marketable securities received as service consideration in connection with the development of an artificial intelligence–powered travel platform, (iii) a decrease in amortization of debt discount of approximately $0.4 million as the convertible notes were fully converted during the year ended June 30, 2024. These increases were partially offset by a decrease in other income of approximately $0.7 million, as we recognized other income from software development services, net of cost, during the year ended June 30, 2024, but did not recognize similar income in the same period of 2025, and (v) and increase in share-based compensation adjustment of approximately $2.7 million which was attributable to our agreement to settle additional share compensation requested by V Gallant Sdn. Bhd. pursuant to the Service Agreement dated October 29, 2024, as supplemented on March 28, 2025, to reflect the decline in our share price.
Previous wording
Provision for income taxes amounted to approximately $40,000 and $98,000 for the years ended June 30, 2024 and 2023, respectively. The amount was mainly attributable to tax imposed on us from the State of Delaware, as we are required to remit franchise tax to the State of Delaware on an annual basis. We also were subject to controlled foreign corporations Subpart F income (“Subpart F”) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 35%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (“GILTI”) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended June 30, 2024 and 2023, our foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.
Current wording
Provision for income taxes amounted to approximately $349,000 and $40,000 for the years ended June 30, 2024 and 2023. The amount was mainly attributable to tax imposed on us from the State of Delaware, as we are required to remit franchise tax to the State of Delaware on an annual basis. We also were subject to controlled foreign corporations Subpart F income (“Subpart F”) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 35%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (“GILTI”) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended June 30, 2025 and 2024, our foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.
Previous wording
As of June 30, 2024 and 2023, we had approximately $0.2 million and $4.6 million, respectively, in cash and cash equivalent which primarily consists of bank deposits, which are unrestricted as to withdrawal and use.
Current wording
As of June 30, 2025 and 2024, we had approximately $0.2 million, in cash and cash equivalent which primarily consists of bank deposits, which are unrestricted as to withdrawal and use.
Previous wording
On November 30, 2023, we closed our November 2023 Offering of (i) 26,014,000 shares of common stock, at a public offering price of $0.10 per share, and (ii) 14,000,000 Pre-Funded Warrants, each with the right to purchase one share of Common Stock, at a public offering price of $0.0999 per Pre-Funded Warrant. Upon closing of the November 2023 Offering, we received aggregate net proceed of approximately $3.5 million, after deducting underwriting discounts, andnon-accountable expense.
Current wording
On November 30, 2023, we closed our November 2023 Offering of (i) 7,433 shares of common stock, at a public offering price of $350 per share of Common Stock and (ii) 4000 pre-funded warrants (the “Pre-Funded Warrants”), each with the right to purchase one of Common Stock, at a public offering price of $350 per Pre-Funded Warrant. Upon closing of the November 2023 Offering, we received aggregate net proceed of approximately $3.5 million, after deducting underwriting discounts and commission, and non-accountable expense.
Previous wording
On March 22, 2024, we have entered into a marketing offering agreement (“Marketing Offering Agreement”) with H.C. Wainwright & Co., LLC, (the “Manager”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. For the year ended June 30, 2024, we have received an aggregated net proceed of $431,811, net of broker fee from issuance of 94,889 shares of common stock which sell through or to the Manager.
Current wording
On March 22, 2024, we entered into a marketing offering agreement (“Marketing Offering Agreement”) with H.C. Wainwright & Co., LLC, (the “Manager”). Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering. As of June 30, 2025, we have received an aggregated net proceed of approximately $2.9 million, net of broker fee from issuance of 33,566 shares of common stock which sell through or to the Manager.
Previous wording
Despite receiving the proceeds from offerings, and issuance of convertible notes, management is of the opinion that we will not have sufficient funds to meet the working capital requirements and debt obligations as they become due starting from one year from the date of this report due to our recurring loss. Therefore, management has determined there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue, we may be required to curtail or cease our operations. Management is trying to alleviate the going concern risk through the following sources:
Current wording
Despite receiving the proceeds from various offerings, management is of the opinion that we will not have sufficient funds to meet the working capital requirements and debt obligations as they become due starting from one year from the date of this report due to our recurring loss. Therefore, management has determined there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue, we may be required to curtail or cease our operations. Management is trying to alleviate the going concern risk through the following sources:
Previous wording
Net cash used in operating activities for the year ended June 30, 2024 was approximately $4.7 million and was mainly comprised of the net loss of approximately $6.6 million, non-cash other incomes of approximately $1.0 million from software developing service related to VCI’s project, and approximately $0.2 million from disposal of Foodlink and its subsidiaries as mentioned above in other expense, net, increase of prepayments of approximately $0.1 million as our vendors required us to make deposit to secure the purchase, decrease of customer deposit of approximately $0.1 million as we realized more membership subscription revenue from the customer deposit collected from prior period, and decrease of other payables and accrued liabilities of approximately $0.1 million as made timely payment to our service providers, offset by non-cash items of depreciation, amortization, allowance for credit losses, stock-based compensation and unrealized loss on marketable securities amounted to approximately $2.4 million, decrease of inventories of approximately $0.3 million as we reduced our purchase and intended to maintain a more effective inventory level, decrease of approximately $0.4 million in other receivables and other current assets is attributed to the utilization of prepaid information technology and insurance expenses from previous periods in the current period, andincrease of approximately $0.3 million in accounts payable as we made more purchases on account.
Current wording
Net cash used in operating activities for the year ended June 30, 2024 was approximately $4.7 million and was mainly comprised of the net loss of approximately $6.6 million, non-cash other incomes of approximately $1.0 million from software developing service related to VCI’s project, and approximately $0.2 million from disposal of Foodlink and its subsidiaries as mentioned above in other expense, net, increase of prepayments of approximately $0.1 million as our vendors required us to make deposit to secure the purchase, decrease of customer deposit of approximately $0.1 million as we realized more membership subscription revenue from the customer deposit collected from prior period, and decrease of other payables and accrued liabilities of approximately $0.1 million as made timely payment to our service providers, offset by non-cash items of depreciation, amortization, allowance for credit losses, stock-based compensation and unrealized loss on marketable securities amounted to approximately $2.4 million, decrease of inventories of approximately $0.3 million as we reduced our purchase and intended to maintain a more effective inventory level, decrease of approximately $0.4 million in other receivables and other current assets is attributed to the utilization of prepaid information technology and insurance expenses from previous periods in the current period, and increase of approximately $0.3 million in accounts payable as we made more purchases on account.
Previous wording
Accounts receivable are recorded at the invoiced amount, net of an allowance for uncollectible accounts and do not accrue interest. We offer various payments terms to customers from cash due on delivery to 90 days based on their credit history. Accounts receivable encompass amounts due from sales of healthcare products on our ZCITY platform, sublicensing revenue and sales of food and beverage products. Starting from July 1, 2023, we adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). We used a modified retrospective approach, and the adoption does not have an impact on our unaudited condensed consolidated financial statements. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance when all collection efforts have been exhausted, and recovery potential is deemed remote. Our management reviews historical accounts receivable collection rates across all aging brackets and has made 100% provision of credit loss for customer balances aged above 120 days for sales of healthcare products on our ZCITY platform and 100% provision for customer balances aged above 60 days for sublicensing revenue and sales of food and beverage products. Our management continuously assesses the reasonableness of the credit loss allowance policy and updates it as needed. As of June 30, 2024 and 2023, we recorded $1,100 and $214 of provision for estimated credit losses, respectively.
Current wording
Accounts receivable are recorded at the invoiced amount, net of an allowance for uncollectible accounts and do not accrue interest. We offer various payments terms to customers from cash due on delivery to 90 days based on their credit history. Accounts receivable encompass amounts due from sales of healthcare products on our ZCITY platform. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance when all collection efforts have been exhausted, and recovery potential is deemed remote. Our management reviews historical accounts receivable collection rates across all aging brackets and has made 100% provision of credit loss for customer balances aged above 120 days for sales of healthcare products on our ZCITY platform. Our management continuously assesses the reasonableness of the credit loss allowance policy and updates it as needed. As of June 30, 2025 and 2024, we recorded $9,924 and $1,100 of provision for estimated credit losses, respectively.
Previous wording
Our inventories are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out (FIFO) method. These costs encompass gift cards or ‘E-voucher’ pin codes, which are acquired from our suppliers as merchandise goods or store credit, as well as healthcare products. Management conducts regular comparisons between the cost of inventories and their net realizable value. If the net realizable value is lower than the cost, an allowance is made for inventory write-down. Ongoing assessments of inventories are carried out to identify potential write-downs due to estimated obsolescence or unmarketability. This determination is based on the difference between the inventory costs and the estimated net realizable value, considering forecasts for future demand and market conditions. Once inventories are written down to the lower of cost or net realizable value, they are not subsequently marked up based on changes in underlying facts and circumstances. Our management has reviewed the aforementioned factors and has applied a 100% write-down for inventories aged above 180 days related to our E-voucher and health care products. For the years ended June 30, 2024 and 2023, $483 and $0 write down for inventories were recorded, respectively. .
Current wording
Our inventories are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out (FIFO) method. These costs encompass gift cards or ‘E-voucher’ pin codes, which are acquired from our suppliers as merchandise goods or store credit, as well as healthcare products. Management conducts regular comparisons between the cost of inventories and their net realizable value. If the net realizable value is lower than the cost, an allowance is made for inventory write-down. Ongoing assessments of inventories are carried out to identify potential write-downs due to estimated obsolescence or unmarketability. This determination is based on the difference between the inventory costs and the estimated net realizable value, considering forecasts for future demand and market conditions. Once inventories are written down to the lower of cost or net realizable value, they are not subsequently marked up based on changes in underlying facts and circumstances. Our management has reviewed the aforementioned factors and has applied a 100% write-down for inventories aged above 180 days related to our E-voucher and health care products. For the years ended June 30, 2025 and 2024, $0 and $483 write-downs for estimated obsolescence or unmarketable inventories were recorded.
Previous wording
Other receivables and other current assets consist of prepayment to third parties for cyber security service, director & officer liability insurance (“D&O Insurance”), and other professional fee. Other receivables and other current assets also include refundable advance to third party service provider, and other deposits. Starting from July 1, 2023, we had adopted ASC Topic 326 on our other receivables using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new accounting guidance, we measure credit losses on its other receivables using the current expected credit loss model under ASC 326. As of June 30, 2024 and 2023, we have provided allowance for credit loss of $212,759 and $0, respectively.
Current wording
Other receivables and other current assets consist of prepayment to third parties for cyber security service, director & officer liability insurance (“D&O Insurance”), and other professional fee. Other receivables and other current assets also include refundable advance to third party service provider, and other deposits. Starting from July 1, 2023, we had adopted ASC Topic 326 on our other receivables using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new accounting guidance, we measure credit losses on its other receivables using the current expected credit loss model under ASC 326. As of June 30, 2025 and 2024, we have provided allowance for credit loss of $1,078,353 and $212,758, respectively.
Previous wording
Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assessed the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment for long-lived assets were recorded as of June 30, 2024 and 2023.
Current wording
Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assessed the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. $19,517,303 and $0 impairment for long-lived assets were recorded as of June 30, 2025 and 2024, respectively.
Previous wording
Investments in marketable securities, net, consist of investments in listed shares, which are listed on Nasdaq. Marketable securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges with changes in fair value recorded in other (expense) income in the consolidated statements of operations and comprehensive loss. All changes in a marketable security’s fair value are reported in earnings as they occur, as such, the sale of a marketable security does not necessarily give rise to a significant gain or loss. Unrealized gains/(losses) due to fluctuations in fair value are recorded in the consolidated statements of operations and comprehensive loss. Declines in fair value below cost deemed to be other-than-temporary are recognized as impairments in the consolidated statements of comprehensive income. For the years ended June 30, 2024 and 2023, we incurred unrealized holding loss on marketable securities amounted to approximately $828,367 and $0, respectively.
Current wording
Investments in marketable securities, net, consist of investments in listed shares, which are listed on Nasdaq. Marketable securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges with changes in fair value recorded in other (expense) income in the consolidated statements of operations and comprehensive loss. All changes in a marketable security’s fair value are reported in earnings as they occur, as such, the sale of a marketable security does not necessarily give rise to a significant gain or loss. Unrealized gains/(losses) due to fluctuations in fair value are recorded in the consolidated statements of operations and comprehensive loss. Declines in fair value below cost deemed to be other-than-temporary are recognized as impairments in the consolidated statements of comprehensive income. For the years ended June 30, 2025 and 2024, we recorded an unrealized holding loss on marketable securities of approximately $0.2 million and 0.8 million, respectively.
Previous wording
Our ZCITY reward loyalty program allows members to earn points on purchases that can be redeemed for rewards that include discounts on future purchases. When members purchase our product or make purchase with our participated vendor through ZCITY, we allocate the transaction price between the product or service, and the reward points earned based on the relative stand-alone selling prices and expected point redemption. The portion allocated to the reward points is initially recorded as contract liability and subsequently recognized as revenue upon redemption or expiration.
Current wording
Our TADAA Technologies reward loyalty program allows members to earn points on purchases that can be redeemed for rewards that include discounts on future purchases. When members purchase our product or make purchase with our participated vendor through TADAA Technologies, we allocate the transaction price between the product or service, and the reward points earned based on the relative stand-alone selling prices and expected point redemption. The portion allocated to the reward points is initially recorded as contract liability and subsequently recognized as revenue upon redemption or expiration.
Previous wording
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.
Current wording
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.