Singularity Future Technology Ltd.

SINGULARITY FUTURE TECHNOLOGY, LTD. AND AFFILIATES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. ORGANIZATION AND NATURE OF BUSINESS

The Company is an integrated logistics solution provider that was founded in 2001. On September 18, 2007, the Company merged into Sino-Global Shipping America, Ltd., a Virginia corporation. On January 3, 2022, the Company changed its corporate name from Sino-Global Shipping America, Ltd. to Singularity Future Technology Ltd. to reflect its then expanded operations into the digital assets business. Currently, the Company primarily focus on providing freight logistics services, which include shipping, and other logistical support to steel companies, through subsidiary, Trans Pacific Shipping Limited.

To date, the Company has not generated any revenues from entry into the solar panel production and distribution business.

On September 25, 2025, the Company entered into a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $2.7 million.

As of June 30, 2026, the Company’s subsidiaries included the following:

Liquidity

In evaluating the Company’s liquidity position and the existence of substantial doubt about its ability to continue as a going concern, management regularly monitors and analyzes its on-hand cash balances and contractual operating expenditure commitments. The Company’s primary liquidity needs are to satisfy ongoing working capital requirements and settle all current operating expense obligations. Since inception, the Company has historically funded its operations principally through cash generated from operating activities, issuances of common equity securities, and third-party indebtedness.

The accompanying consolidated financial statements have been prepared on the going concern basis, which contemplates the realization of assets and the discharge of liabilities in the ordinary course of business. These financial statements do not include any adjustments or reclassifications that might become necessary should the Company be unable to continue as a going concern. For the fiscal years ended June 30, 2026 and 2025, the Company incurred net losses of $5.9 million and $3.3 million, respectively, and recorded net cash used in operating activities of $21.6 million and $2.7 million, respectively. These conditions, together with the Company’s limited on-hand cash position as of June 30, 2026 of $57,275, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The consolidated financial statements do not reflect any adjustments related to the eventual outcome of this uncertainty.

Subsequent to the fiscal year ended June 30, 2026, the Company completed four separate equity financing transactions to strengthen its consolidated balance sheet and materially expand its available operating capital base:

In performing its going concern assessment required under ASC 205-40, management has developed and is implementing formal mitigation plans designed to alleviate the substantial doubt previously identified as of June 30, 2026. These plans principally consist of:

Nevertheless, the Company may require incremental capital in future periods to fund its planned business expansion. If the Company determines that its projected cash requirements will exceed its then-current cash and cash equivalent balances, it may elect to raise additional capital through the issuance of equity or debt securities, or by securing new credit facilities. Any issuance of additional equity securities would result in incremental dilution to the existing shareholders of the Company.

Based on management’s comprehensive evaluation, which incorporates the aggregate ~$38.8 million gross proceeds raised from the four completed subsequent equity financings and the planned execution of the mitigation measures described above, management has concluded that it is probable that the Company will have sufficient liquidity to meet its obligations as they come due within one year after the financial statements are issued, and that the previously identified substantial doubt about the Company’s ability to continue as a going concern has been fully alleviated. Accordingly, the accompanying consolidated financial statements have been prepared on the going concern basis. There can be no assurance, however, that the Company’s mitigation plans will be executed exactly as currently contemplated. The consolidated financial statements do not include any adjustments that might arise from the outcome of this residual operational and financing uncertainty.

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:

The carrying value of notes receivable, accounts receivable, and advances to suppliers, approximate their fair values because of the short-term nature of these instruments.

(c) Use of Estimates and Assumptions

The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include revenue recognition, cost of revenues, allowance for credit losses, impairment loss, valuation allowance for deferred tax assets, and income tax expense. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

(d) Translation of Foreign Currency

The accounts of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Company’s functional currency is the U.S. dollar (“USD”) while its subsidiaries in the PRC, including Trans Pacific Beijing and Trans Pacific Logistic Shanghai Ltd. report their financial positions and results of operations in Renminbi (“RMB”). The accompanying consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the exchange rates in effect at the time of the transaction. Generally, foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations. The Company translates the foreign currency financial statements in accordance with ASC 830-10, “Foreign Currency Matters”. Assets and liabilities are translated at current exchange rates quoted by the Federal Reserve at the balance sheets’ dates and revenues and expenses are translated at average exchange rates in effect during the year. The resulting translation adjustments are recorded as other comprehensive loss and accumulated other comprehensive loss as a separate component of equity of the Company and also included in non-controlling interests.

The exchange rates in effect as of June 30, 2026, and 2025 were US$1 for RMB 6.7851 and RMB 7.1636, respectively. The average exchange rates for the fiscal years ended June 30, 2026, and 2025 were US$1 for RMB 6.9940 and RMB 7.2143, respectively.

(e) Cash

Cash consists of cash on hand and cash in bank which are unrestricted as to withdrawal or use. The Company maintains cash with various financial institutions mainly in the PRC, the U.S., and Djibouti. As of June 30, 2026 and 2025, cash balances of $50,230 and $62,773, respectively, were maintained at financial institutions in the PRC, of whichnil andnil of these balances are not covered by insurance as the deposit insurance system in China only insured each depositor at one bank for a maximum of approximately $70,000 (RMB 500,000). As of June 30, 2026, and 2025, cash balances of $2,100,835 and $3,119,012, respectively, were maintained at U.S. financial institutions, of which $1,833,224 and $2,782,355 of these balances are not covered by insurance, as each U.S. account was insured by the Federal Deposit Insurance Corporation or other programs subject to $250,000 limitations. As of June 30, 2026, and 2025, a cash balance of $165 and $14,404,155 was maintained in financial institutions in Djibouti which are uninsured. As of June 30, 2026, and 2025, amount of deposits had been covered by insurance amounted to $317,840 and $461,870, respectively.

Restricted Cash

As of June 30, 2026 and 2025, the Company’s total restricted cash was approximately $2.09 million and $3.12 million, respectively. The components of restricted cash are as follows:

All restricted cash balances are excluded from cash and cash equivalents on the consolidated balance sheets, as their withdrawal or use is contractually or legally restricted from immediate general operating use by the Company.

(f) Receivables and Allowance for Credit Losses

The carrying amounts of notes, accounts and other receivable are reduced by an allowance for credit losses that reflects the Company’s best estimate of the amounts that will not be collected. The Company makes estimations of the collectability of notes, accounts and other receivable. Many factors are considered in estimating the general allowance, including reviewing delinquent notes and accounts receivable, performing a customer credit analysis, and analyzing historical bad debt records and current and future economic trends. Notes, accounts and other receivable represent historical balances recorded with less related cash applications, less allowance for credit losses and any write-offs of any receivables not previously provided for.

(g) Credit losses

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The ASU introduced a new credit loss methodology, the current expected credit losses (“CECL”) methodology, which requires earlier recognition of credit losses while also providing additional disclosure about credit risk. The Company adopted the ASU as of January 1, 2023.

The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, receivables, contract assets and other financial assets measured at amortized cost at the time the financial asset is originated or acquired. The CECL is adjusted each period for changes in expected lifetime credit losses. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior multiple existing impairment methods, which generally required that a loss be incurred before it was recognized. Within the life cycle of a loan or other financial asset, the methodology generally results in the earlier recognition of the provision for credit losses and the related ACL than prior U.S. GAAP.

The CECL methodology’s impact on expected credit losses, among other things, reflects the Company’s view of the current state of the economy, forecasted macroeconomic conditions.

Under the CECL methodology, the allowance for credit losses is model based and utilizes a forward-looking macroeconomic forecast in estimating expected credit losses. The model of the allowance for credit losses would be considered the uncertainty of forward-looking scenarios based on the likelihood and severity of a possible recession as another possible scenario.

The following table presents the aging analysis of accounts receivable and allowance for credit losses as of June 30, 2026 and 2025.

Other receivables represent mainly customer advances, prepaid employee insurance and welfare benefits, which will be subsequently deducted from the employee payroll, project advances as well as office lease deposits. Management reviews its receivables on a regular basis to determine if the credit loss allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. Other receivables are written off against the allowances only after exhaustive collection efforts.

(h) Revenue Recognition

The Company recognizes revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.

The Company uses a five-step model to recognize revenue from customer contracts. The five-step model requires the Company to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

For the Company’s freight logistic and shipping agency services revenue, the Company enters into contracts with customers to provide scheduled Yangtze River segment waterway transportation services for iron ore and coal, with a fixed monthly contracted volume of 30,000 metric tons. Each contract contains a single distinct performance obligation, and is negotiated bilaterally, with fixed route-specific tariff rates explicitly defined for each origin loading port to designated unloading port pair. No separate distinct goods or services are promised within the scope of the transportation arrangement.

Revenue for each individual shipment is fully recognized at the point in time when the vessel arrives at the designated unloading port, reports to the customer’s dispatch team, and formal acknowledgment of cargo delivery is completed. At this point, the customer obtains full physical possession, legal control, and the significant risks and rewards of ownership of the delivered cargo, and the Company has satisfied all performance obligations under the contract, with the unconditional right to invoice and collect the corresponding consideration for the completed voyage service, per the metered arrival quantity confirmed through the customer’s water gauge or belt scale measurement system. The Company concludes that each transportation service contract contains one single distinct performance obligation: the full completion of the contracted cargo delivery from the agreed loading port to the customer’s specified destination terminal. There are no separate distinct promises for port agency, cargo handling, or insurance services, as these activities are integrated components required to fulfill the end-to-end delivery commitment to the customer.

Under ASC 606, the Company recognizes transportation service revenue at a point in time, rather than over time. This determination is supported by the following assessment:

The transaction price for each contract is fixed and contractually defined, with rates set per designated port-to-port routes. An additional fixed premium of RMB 5 per metric ton is added to the base tariff only when the customer issues a formal written confirmation to use the Three Gorges Navigation Administration priority passage slot for urgent material deliveries. All tariff rates include 9% value-added tax, which is presented as a current tax liability on the statement of financial position and fully excluded from reported revenue.

Contract terms contain standardized short-shipment (over-loss) adjustment provisions that create variable consideration:

Since all transportation contracts contain only one single distinct performance obligation, the entire transaction price is allocated directly to this delivery performance obligation. No relative standalone selling price allocation across multiple promised goods or services is required.

The Company elects the ASC 606 permitted practical expedient to expense all incremental costs of obtaining a contract immediately when incurred, as the expected amortization period for these costs is 12 months or less. Vessel operating expenses, port dues, mandatory cargo insurance premiums, and crew related costs are recognized in transportation operating expense as incurred, in alignment with the point-in-time revenue recognition for the corresponding completed shipments.

A trade receivable is recorded in the statement of financial position on the date of successful cargo delivery, as this is the date the Company obtains an unconditional legal right to invoice and collect the full contracted consideration from the customer. Standard contractual payment terms require the customer to settle the valid submitted invoice within 30 days of receipt, with 50% of consideration paid via bank acceptance draft and 50% via commercial note or irrevocable letter of credit. No significant financing component exists within these standard contract payment terms.

The Company’s disaggregated revenue streams are described as follows:

Disaggregated information of revenues by geographic location is as follows:

(i) Cost of revenues

Cost of revenues consist of costs directly attributable to the performance of freight logistic services which are mainly services provided by third parties.

(j) Leases

The Company adopted FASB ASU 2016-02, “Leases” (Topic 842) for the year ended June 30, 2020, and elected the practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption, the Company recognized right of use (“ROU”) assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 10.74% based on the duration of lease terms.

Operating lease ROU assets and lease liabilities are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.

Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term.

The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.

(k) Taxation

Because the Company and its subsidiaries and Sino-China were incorporated in different jurisdictions, they file separate income tax returns. The Company uses the asset and liability method of accounting for income taxes in accordance with U.S. GAAP. Deferred taxes, if any, are recognized for the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. A valuation allowance is provided against deferred tax assets if it is more likely than not that the asset will not be utilized in the future.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense. The Company hadno uncertain tax positions as of June 30, 2026 and 2025.

Income tax returns for the years prior to 2020 are no longer subject to examination by U.S. tax authorities.

PRC Enterprise Income Tax

PRC enterprise income tax is calculated based on taxable income determined under the PRC Generally Accepted Accounting Principles (“PRC GAAP”) at 25%. Subsidiaries incorporated in the PRC are subject to the Enterprise Income Tax Laws of the PRC.

PRC Value Added Taxes and Surcharges

The Company is subject to value added tax (“VAT”). Revenue from services provided by the Company’s PRC subsidiaries are subject to VAT at rates ranging from 9% to 13%. Entities that are VAT general taxpayers are allowed to offset qualified VAT paid to suppliers against their VAT liability. Net VAT liability is recorded in taxes payable on the consolidated balance sheets.

In addition, under the PRC regulations, the Company’s PRC subsidiaries are required to pay city construction tax (7%) and education surcharges (3%) based on the net VAT payments.

(l) Earnings (loss) per Share

Basic earnings (loss) per share are computed by dividing net income (loss) attributable to holders of common stock of the Company by the weighted average number of shares of common stock of the Company outstanding during the applicable period. Diluted earnings (loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock of the Company were exercised or converted into common stock of the Company. Common stock equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive.

For the years ended June 30, 2026 and 2025, there was no dilutive effect of potential shares of common stock of the Company because the Company generated net loss.

(m) Comprehensive Income (Loss)

The Company reports comprehensive income (loss) in accordance with the authoritative guidance issued by Financial Accounting Standards Board (the “FASB”) which establishes standards for reporting comprehensive income (loss) and its component in financial statements. Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.

(n) Segment reporting

An operating segment is defined as a distinct component of the Company that engages in business activities from which it may earn revenue and incur expenses, for which discrete internal financial information is regularly produced. Internal segment financial information must be routinely measured by the Company’s management and presented to the chief operating decision maker as part of formal, recurring performance review and resource allocation cycles to qualify as a reportable unit under U.S. GAAP.

In accordance with ASC 280,Segment Reporting, as updated by ASU 2023-07Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company strictly applies the management approach to identify and evaluate its reportable operating segments. Under this framework, all reportable segments are fully aligned with the Company’s formal organizational structure and the standardized internal financial reporting packages that are regularly compiled, distributed, and reviewed by the chief operating decision maker (“CODM”) for the explicit, primary purposes of allocating capital and operating resources to business activities, and assessing the ongoing financial performance of the Company’s operations.

The Company has designated itsfull-time Chief Executive Officer (CEO) as the CODM, consistent with the SEC and U.S. GAAP definition of the individual who holds ultimate responsibility for operational resource allocation and performance assessment decisions. The CEO reviews complete, consolidated company-wide operating results on a recurring basis as the exclusive basis for making resource allocation decisions and evaluating overall business performance, and does not manage, govern, or make operational decisions using disaggregated financial information for multiple separate operating segments. There are no segment heads, regional operational management teams, or separate business unit leaders that report segment-specific financial performance directly to the CODM outside of the consolidated enterprise-wide reporting package. As a result, management has performed a formal, documented assessment of ASC 280 criteria and concluded that the Company operates underone single reportable operating segment, focused on providing freight logistics services.

For the fiscal years ended June 30, 2026 and 2025,100% of the Company’s revenue was generated within the People’s Republic of China. No separate geographic segment disclosure is presented, as all of the Company’s operations are concentrated in this single jurisdiction.

(o) Risks and Uncertainties

The Company’s business, financial position and results of operations may be influenced by the political, economic, health and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, health and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(p) Related parties

Parties, which can be a corporation or individuals, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

(q) Commitments and contingencies

The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s audited consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

(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 Master Glossary definition of the term performance condition for share-based consideration payable to a customer. The revised definition incorporates conditions (such as vesting conditions) that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the grantor (including over a specified period of time). The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. Although it is expected that entities will conclude that fewer awards contain service conditions, for those that are determined to have service conditions, the amendments in this Update eliminate the policy election permitting a grantor to account for forfeitures as they occur. Therefore, when measuring share-based consideration payable to a customer that has a service condition, the grantor is required to estimate the number of forfeitures expected to occur. Separate policy elections for forfeitures remain available for share-based payment awards with service conditions granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. The amendments in this Update clarify that share-based consideration encompasses the same instruments as share-based payment arrangements, but the grantee does not need to be a supplier of goods or services to the grantor. Finally, the amendments in this Update clarify that a grantor should not apply the guidance in Topic 606 on constraining estimates of variable consideration to share-based consideration payable to a customer. Therefore, a grantor is required to assess the probability that an award will vest using only the guidance in Topic 718. Collectively, these changes improve the decision usefulness of a grantor’s financial statements, improve the operability of the guidance, and reduce diversity in practice for accounting for share-based consideration payable to a customer. Under the amendments in this Update, revenue recognition will no longer be delayed when an entity grants awards that are not expected to vest. This is expected to result in estimates of the transaction price that better reflect the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer and, therefore, more decision-useful financial reporting.

The amendments in this Update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted for all entities. The amendments in this Update permit a grantor to apply the new guidance on either a modified retrospective or a retrospective basis. When applying the amendments in this Update on a modified retrospective basis, a grantor should recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of 4 equity or net assets in the statement of financial position) as of the beginning of the period of adoption and should not recast any financial statement information before the period of adoption. A grantor should apply the amendments as of the date of initial application to all share-based consideration payable to a customer. When applying the amendments in this Update on a retrospective basis, a grantor should recast comparative periods and recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest period presented. Additionally, an entity that elects to apply the guidance retrospectively should use the actual outcome, if known, of a performance condition or service condition as of the beginning of the annual reporting period of adoption for all prior-period estimates. If actual outcomes are unknown as of the beginning of the annual reporting period of adoption, an entity should use its estimate of the probability of achieving a service condition or performance condition as of the beginning of the annual reporting period of adoption for all prior-period estimates.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software”, the amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”). The two factors to consider in determining whether there is significant development uncertainty are whether: 1. The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing. 2. The entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The amendments in this Update specify that the disclosures in Subtopic 360- 10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Additionally, the amendments clarify that the intangibles disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs. Furthermore, the amendments in this Update supersede the website development costs guidance and incorporate the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40. 4 within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this Update permit an entity to apply the new guidance using any of the following transition approaches: 1. A prospective transition approach 2. A modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption 3. A retrospective transition approach. Under a prospective transition approach, an entity should apply the amendments in this Update to new software costs incurred as of the beginning of the period of adoption for all projects, including in-process projects. Under a modified transition approach, an entity should apply the amendments in this Update on a prospective basis to new software costs incurred (for all projects, including costs incurred for in-process projects), except for in-process projects that, as of the date of adoption, the entity determines do not meet the capitalization requirements under the amendments but meet the capitalization requirements under current guidance. For those in-process projects, an entity should derecognize any capitalized costs through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the date of adoption. Under a retrospective transition approach, an entity should recast comparative periods and recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the first period presented.

In September 2025, the FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) - Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract”, the amendments in this Update exclude from derivative accounting nonexchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. An entity is permitted to apply the amendments in this Update either (1) prospectively to new contracts entered into on or after the date of adoption or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption. If an entity applies the modified retrospective transition method described in the preceding paragraph, upon adoption the entity may elect on an instrument-by-instrument basis to (1) measure contracts previously accounted for as derivatives that are no longer accounted for as derivatives in their entirety under the amendments in this Update at fair value with changes in fair value recognized in earnings and (2) stop applying the fair value option for contracts that contained embedded features that otherwise would have been bifurcated but are no longer accounted for as derivatives under the amendments in this Update.

The amendments in this Update clarify that an entity should apply the guidance in Topic 606, including the guidance on noncash consideration in paragraphs 606-10-32-21 through 32-24, to a contract with share-based noncash consideration (for example, shares, share options, or other equity instruments) from a customer for the transfer of goods or services. The guidance in other Topics (including Topic 815 on derivatives and hedging and Topic 321 on equity securities) does not apply to share-based noncash consideration from a customer for the transfer of goods or services unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under Topic 606. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. An entity is permitted to apply the amendments in this Update either (1) prospectively to new contracts entered into on or after the date of adoption, including modified contracts accounted for as separate contracts in accordance with paragraph 606-10-25-12, or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption.

In November 2025, the FASB issued ASU 2025-08, “Financial Instruments—Credit Losses (Topic 326) Purchased Loans”, the amendments in this update expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this Update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” (defined below) are purchased seasoned loans and accounted for using the gross-up approach at acquisition. Specifically, after an entity determines that a loan is a non-PCD asset based on its assessment of credit deterioration experienced since origination, the entity should apply the guidance described in the amendments to determine whether the loan is seasoned and, therefore, should be accounted for using the gross-up approach. All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this Update should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period.

In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815) Hedge Accounting Improvements”, Issue 1: Similar Risk Assessment for Cash Flow Hedges - the amendments in this Update expand the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge by changing the requirement to designate a group of individual forecasted transactions from having a shared risk exposure to having a similar risk exposure. Entities are required to assess risk similarity both at hedge inception and on an ongoing basis. The amendments also clarify that a group of individual forecasted transactions can be considered to have a similar risk exposure if the derivative used as the hedging instrument is highly effective against each hedged risk in the group. In addition, in some cases, entities are permitted to perform an ongoing qualitative assessment of whether a group of individual forecasted transactions has a similar risk exposure. The amendments in this Update improve GAAP by expanding the hedged risks permitted to be aggregated in a group of individual forecasted transactions, thereby enabling entities to apply hedge accounting to potentially broader portfolios of forecasted transactions. Entities that aggregate larger groups of individual forecasted transactions in accordance with the amendments can achieve hedge accounting in a more efficient, cost-effective manner while reducing the risk of missed forecasts for highly effective economic hedges. Furthermore, the amendments improve operability and foster consistent application of the similar risk assessment. Therefore, an entity’s financial statements can provide more relevant information to investors about the entity’s risk management activities related to cash flow hedges of groups of forecasted transactions. 4 The amendments in this Update improve GAAP because the application of hedge accounting will not be limited by whether the execution of the nonfinancial purchase or sale transaction is in the spot or forward market. Relative to current GAAP, which limits designation of nonfinancial components to those that are contractually specified, a model based on the clearly-and-closely-related criteria permits hedge accounting for eligible components of forecasted spot-market transactions, forward-market transactions, and subcomponents of explicitly referenced components in an agreement’s pricing formula. Furthermore, the amendments also may enable entities to reduce missed forecasts for highly effective economic hedges, more closely aligning hedge accounting with the economics of entities’ risk management activities. The amendments in this Update also clarify that entities may designate a variable price component in a contract that is accounted for as a derivative as the hedged risk if all other hedge criteria are satisfied. That clarification improves GAAP because it resolves diversity in practice about whether hedge accounting may be applied in those situations and allows hedge accounting to be applied to highly effective economic hedges. Issue 4: Net Written Options as Hedging Instruments The amendments in this Update on the use of net written options as hedging instruments improve GAAP by updating the hedge accounting guidance to accommodate differences in the loan and swap markets that developed after the cessation of the London Interbank Offered Rate. Specifically, the amendments in this Update eliminate the requirement to apply the net written option test to a compound derivative comprising a swap and a written option designated as the hedging instrument in a cash flow hedge or a fair value hedge of interest rate risk. Issue 5: Foreign-Currency-Denominated Debt Instrument as Hedging Instrument and Hedged Item (Dual Hedge) The amendments in this Update eliminate the recognition and presentation mismatch related to a dual hedge strategy (that is, a hedge for which a foreign currency-denominated debt instrument is both designated as the hedging instrument in a net investment hedge and designated as the hedged item in a fair value hedge of interest rate risk). The amendments require that an entity exclude the debt instrument’s fair value hedge basis adjustment from the net 5 investment hedge effectiveness assessment. As a result, an entity immediately recognizes in earnings the gains and losses from the remeasurement of the debt instrument’s fair value hedge basis adjustment at the spot exchange rate. Entities are prohibited from applying this guidance by analogy to other circumstances. The amendments in this Update improve GAAP by enabling entities that utilize dual hedging strategies to reflect the economic offset of changes attributable to both interest rate risk and foreign exchange risk. For public business entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. For entities other than public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of this Update. Entities should apply the amendments in this Update on a prospective basis for all hedging relationships. An entity may elect to adopt the amendments in this Update for hedging relationships that exist as of the date of adoption. Upon adoption of the amendments in this Update, entities are permitted to modify certain critical terms of certain existing hedging relationships without dedesignating the hedge.

In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832) Accounting for Government Grants Received by Business Entities”, The amendments in this Update establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. A grant related to an asset is a government grant, or part of a government grant, that is conditioned on the purchase, construction, or acquisition of an asset (for example, a long-lived asset or inventory). A grant related to income is a government grant, or part of a government grant, other than a grant related to an asset (for example, a grant that reimburses a business entity for operating expenses). The amendments in this Update require that a government grant received by a business entity should not be recognized until: 1. It is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received. 2. A business entity meets the recognition guidance for a grant related to an asset or a grant related to income. 3 The amendments in this Update require that a grant related to an asset be recognized on the balance sheet as a business entity incurs the related costs for which the grant is intended to compensate, either as: 1. Deferred income (the deferred income approach) 2. An adjustment to the cost basis in determining the carrying amount of the asset (the cost accumulation approach). A grant related to income and a grant related to an asset for which the deferred income approach is elected should be recognized in earnings on a systematic and rational basis over the periods in which a business entity recognizes as expenses the costs for which the grant is intended to compensate. When a business entity elects the cost accumulation approach for a grant related to an asset, there is no separate subsequent recognition of the government grant proceeds in earnings. The carrying amount of the asset that reflects the government grant proceeds would be used to determine depreciation or other subsequent accounting for that asset. The amendments in this Update require that a business entity present a grant related to income and a grant related to an asset for which the deferred income approach is elected as part of earnings either (1) separately under a general heading such as other income or (2) deducted from the related expense. In addition, the amendments in this Update require, consistent with current disclosure requirements, that a business entity provide disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. 5 Under a modified prospective approach, prior-period results should not be restated and there is no cumulative-effect adjustment. 2. A modified retrospective approach to both: a. Government grants that are entered into on or after the beginning of the earliest period presented b. Government grants that are not complete as of the beginning of the earliest period presented. A government grant is complete when substantially all of the government grant proceeds have been recognized before the beginning of the earliest period presented. Under a modified retrospective approach, all prior period results should be restated for government grants that are not complete as of the beginning of the earliest period presented through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the earliest period presented. 3. A retrospective approach to all government grants through a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the earliest period presented.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270) Narrow-Scope Improvements”, the amendments in this Update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the Board focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this Update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The Board expects that these clarifications will enhance consistency in interim reporting for all entities. The Board considers the amendments in this Update to be necessary to reflect the development of interim reporting over time. The amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting 3 periods beginning after December 15, 2028, for entities other than public business entities. Early adoption is permitted for all entities. The amendments in this Update can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements.

In December 2025, the FASB issued ASU 2025-12, “Codification Improvements”, thirty-three issues are addressed in this Update. Generally, the amendments in this Update are not intended to result in significant changes for most entities. However, the Board recognizes that changes to guidance may result in accounting changes for some entities. Therefore, the Board is providing transition guidance for the amendments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. 12 Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: 1. Prospectively to all transactions recognized on or after the date that the entity first applies the amendments 2. Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. An entity may elect the transition method on an issue-by-issue basis. For example, it may apply certain amendments prospectively while applying others retrospectively. For the amendments in this Update to Topic 260 (that is, Issue 4), an entity should apply the amendments retrospectively to each prior reporting period presented in the period of adoption.

In April, the FASB issued ASU 2026-01, Equity (Topic 505) Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments in this Update require that PIK dividends on equity-classified preferred stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. For example, if the preferred stock agreement specifies that PIK dividends are calculated by multiplying the PIK dividend rate by the liquidation value of the preferred stock outstanding, an entity should initially measure the PIK dividend at that amount. The liquidation value (or liquidation preference) of the preferred stock is typically defined by the preferred stock agreement and specifies the value of the preferred stock upon the occurrence of a liquidation event (such as the entity becoming insolvent). When preferred stock is not issued at a discount or premium, the liquidation value upon initial issuance is typically the same as the original issuance price of the preferred stock. The amendments in this Update improve GAAP by providing authoritative guidance for the initial measurement of PIK dividends on equity-classified preferred stock. Specifically, the amendments improve the decision usefulness of the financial reporting information provided to investors by (1) enhancing the comparability of financial information reported among entities that issue PIK dividends on equity-classified preferred stock and (2) providing additional information about the liquidation value of the preferred stock, which helps investors to understand the amount and preference of relative claims on an entity. The amendments also provide clear, cost-effective guidance that will reduce complexity. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. An entity adopting the amendments in an interim reporting period should apply them as of the beginning of the annual reporting period that includes that interim reporting period. An entity is permitted to apply the amendments in this Update either (1) on a prospective basis or (2) on a modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date. Under the prospective transition approach, an issuer should apply the amendments in this Update to PIK dividends recognized on equity-classified preferred stock instruments on or after the initial application date. Under the modified retrospective transition approach, an issuer should recast prior reporting periods presented and recognize a cumulative-effect adjustment to equity as of the beginning of the earliest period presented related to previously issued PIK dividends recognized on equity-classified preferred stock that is outstanding as of the initial application date.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). The amendments in this Update apply to all entities and affect entities that: 1. Buy or receive transferable environmental credits and use those credits: a. To settle environmental credit obligations arising from regulatory compliance programs b. To transfer in an exchange transaction c. In a nonreciprocal transfer (for example, to distribute to an investor) d. To meet voluntary environmental initiatives, such as carbon neutral or net zero initiatives. 2. Generate environmental credits. 3. Have enforceable obligations resulting from regulatory compliance programs represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. The amendments in this Update improve GAAP by providing specific authoritative guidance for environmental credits and environmental credit obligations. Environmental Credits Broadly, environmental credits as defined by the amendments in this Update are enforceable rights represented to prevent, control, reduce, or remove emissions or other pollution that are separately transferable in an exchange transaction. Entities can acquire environmental credits in an exchange transaction, receive environmental credits through a grant from a regulator or its designee(s) as part of a regulatory compliance program, internally generate environmental credits, or receive environmental credits in a nonreciprocal transfer that is not a grant from a regulator or its designee(s). Recognition and Measurement An entity is required to recognize an environmental credit as an asset when it is probable that the environmental credit will be (1) used to settle an environmental credit obligation, (2) transferred in an exchange transaction, or (3) used in a nonreciprocal transfer. An entity is required to recognize costs to obtain all other environmental credits as an expense when incurred (for example, environmental credits acquired to satisfy a voluntary net zero emission initiative). Environmental credits received through a grant from a regulator or internally generated by an entity initially should be measured at the amount of transaction costs incurred to obtain those environmental credits, if any. Environmental credits that are obtained in a transaction initially measured in accordance with a Topic other than Topic 818 should follow the requirements of that Topic. All other environmental credits should be initially measured at cost in accordance with the guidance on asset acquisitions in Subtopic 805-50, Business Combinations—Related Issues. At each reporting date, an entity is required to subsequently measure its environmental credits recognized as assets considering its intended use of those environmental credits. Specifically: 1. Compliance environmental credits. Environmental credits that an entity is probable of using to settle an environmental credit obligation should be subsequently measured at cost and not tested for impairment at each reporting date. 2. Noncompliance environmental credits. All other environmental credits owned by an entity should be subsequently measured at cost, less impairment losses, if any. Noncompliance environmental credits should be tested for impairment at each reporting date. Impairment expense should be recognized when the carrying value of a noncompliance environmental credit exceeds its fair value, measured as the excess of the carrying value over fair value. Subsequent reversal of a previously recognized impairment loss is prohibited. Additionally, an entity is permitted to elect an accounting policy to measure eligible classes of noncompliance environmental credits at fair value, with subsequent changes recognized in earnings. Presentation An entity is required to present its compliance environmental credit assets separately from its environmental credit obligation liabilities on the balance sheet. Disclosure An entity is required to disclose in annual reporting periods qualitative information about how it obtained and intends to use its environmental credits, the accounting policies used to account for environmental credits, and significant estimates and judgments used in applying the guidance. An entity also is required to disclose in annual reporting periods the current and noncurrent amounts of compliance environmental credits and noncompliance environmental credits (if not separately presented on a classified balance sheet), the total expense for voluntary environmental credits, and the total impairment expense.

If an entity changes its use, or intended use, of its environmental credits, it is required for annual reporting periods to disclose the nature of that change as of the date that it occurs and the related effect on earnings on that date, if any. Environmental Credit Obligations Environmental credit obligations as defined by the amendments in this Update are enforceable obligations resulting from regulatory compliance programs represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. As a result, voluntary initiatives and similar statements of intent do not constitute an environmental credit obligation. Recognition and Measurement An entity is required to recognize an environmental credit obligation liability when events (for example, emissions) occurring on or before the reporting date result in an environmental credit obligation. In determining whether a liability should be recognized, the amendments in this Update require that an entity assume that the reporting date is the end of the compliance period regardless of whether the compliance period ends on that date. An entity is required to initially and subsequently measure an environmental credit obligation liability at each reporting date using the carrying amount of the compliance environmental credits that the entity holds and expects to use to settle that obligation at the reporting date (referred to as the funded portion of the liability). If an entity has insufficient compliance environmental credits at the reporting date to satisfy the liability, that unfunded portion should be initially and subsequently measured at the fair value of the environmental credits necessary to settle the unfunded portion at the reporting date, with certain exceptions. An environmental credit obligation liability should be derecognized when an entity remits the necessary environmental credits to a regulator. Disclosure An entity is required to disclose in annual reporting periods all of the following about regulatory compliance programs that result in the entity’s environmental credit obligation liabilities: 1. The activities or events that result in environmental credit obligation liabilities under those programs, including the nature and timing of settlement provisions 2. The accounting policies used to account for the environmental credit obligations 3. How the unfunded portion of an environmental credit obligation liability is measured 4. Significant estimates and judgments used in applying the guidance. An entity also is required to disclose in annual reporting periods: 1. The current and noncurrent amounts of the funded and unfunded portions of environmental credit obligation liabilities (if not separately presented on a classified balance sheet) 2. Total expense related to environmental credit obligation liabilities 3. Total costs associated with environmental credit obligation liabilities that are capitalized in the carrying amount of another asset during the reporting period in accordance with another Topic. For public business entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. For entities other than public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. An entity should apply the amendments in this Update on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets on the balance sheet) as of the beginning of the annual reporting period of adoption. An entity should not recast any financial statement information before the period of adoption. At the date of initial application, the entity should: 1. Recognize an environmental credit asset if it is probable that the entity will use the environmental credit to settle an environmental credit obligation, transfer the credit in an exchange transaction, or use the credit in a nonreciprocal transfer. For all other environmental credits (voluntary environmental credits), the entity should derecognize the carrying amount of those environmental credits unless that amount was capitalized as part of another asset (for example, inventory) before the date of initial application. An entity also should derecognize the carrying amount of an asset recognized for a nonrefundable deposit made to obtain voluntary environmental credits. 2. Measure environmental credits recognized as assets as follows: a. Compliance environmental credits. Using the entity’s carrying amount existing at the date of initial application. b. Noncompliance environmental credits. At the lower of the entity’s carrying amount of the environmental credits existing at the date of initial application and the fair value of the environmental credits at the date of initial application. c. Notwithstanding (a) and (b) above, an entity may elect to measure all of its environmental credits that were internally generated or received through a grant from a regulator or its designee(s) at their transaction costs, if any. d. Any class of eligible noncompliance environmental credits that an entity elects to measure at fair value. Using the fair value of those environmental credits at the date of initial application. 3. Continue to include the cost of environmental credits capitalized as part of another asset (for example, manufactured inventory) before the date of initial application as part of the carrying amount of that other asset. 4. Recognize and measure environmental credit obligation liabilities by applying the amendments at the date of initial application. 5. Apply the amendments to Topic 805, Business Combinations, prospectively to transactions occurring after the date of initial application.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial position, statements of operations, cash flows, and disclosures.

Note 3. NOTES RECEIVABLE

Notes receivable related to bank acceptance notes issued by third party companies and backed by financial institutions which can be encashed upon maturity, encashed by discounting, or reassigned to suppliers. As of June 30, 2026, the maturity date of these notes ranging from July 5, 2026 to September 24, 2026.

Note 4. ACCOUNTS RECEIVABLE

The Company’s accounts receivable are as follows:

Note 5. ADVANCES TO SUPPLIERS

Advances to suppliers related to prepayment for various shipping costs associated with shipments and commodity trading activities. The Company’s advances to suppliers as of the respective balance sheet dates are presented below:

Note 6. LOANS FROM THIRD PARTIES

The Company’s loans from third parties are as follows:

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 andone 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:

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 Company’s 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 Company’s 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 June 30, 2026, maturities of lease liability were as follows:

Note 8. JUDGMENT DEBT PAYABLE

As of June 30, 2025, judgment debt payable related to a judgment passed in January 2025 against the Company and in favor of plaintiff. In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond, Virginia, alleging that the Company failed to pay certain severance compensation, salary and incentive-based bonus. On January 31, 2025, the court entered a judgment in favor of Mr. Huang and against the Company in the amount of approximately $469,000, plus interest.

However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.

On August 23, 2025, the Company and Mr. Huang entered into a settlement agreement to resolve the claims, pursuant to which the Company agreed to pay Mr. Huang $300,000 and issue 90,000 shares of common stock in exchange for a release of his claims, including the Virginia judgment. The Company subsequently completed the cash payment and share issuance in accordance with the settlement agreement in August and October 2026, respectively.

On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.

As of June 30, 2026, pursuant to ASC 450-20-25-2, the Company reassessed Jing Shan legal matter and determined that a probable settlement liability should be around $150,000. The Company’s subsidiary, SG Shipping & Risk Solution, Inc. (“Plaintiff”), was party to a lawsuit it filed on July 13, 2023, in the United States District Court for the Eastern District of New York (Case No. 2:23-cv-05332-NJC-ARL) (the “SG Shipping Action”), wherein Plaintiff sought an award of monetary damages in connection with the conversion of Plaintiff’s corporate funds that Plaintiff alleges its former chief operations officer, Angela Shan (“Shan”), converted from Plaintiff. The Company dismissed the SG Shipping Action without prejudice on May 30, 2025, reserving the right to refile the case.

On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).

On May 3, 2024, the Circuit Court of Virginia entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity to pay Shan her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order, ordering the Company to pay Shan $82,586.51 (the “Virginia Contempt Judgment”). On September 5, 2025, Shan moved to enforce the Virginia Judgment in New York (the “Enforcement Action”) and incurred attorneys’ fees (the “Enforcement Action Attorneys’ Fees”). Following a trial, on July 13, 2026, the Circuit Court of Virginia entered an additional Final Judgment Order against the Company in favor of Shan in the Virginia Action in the amount of $380,349.66 (the “Virginia Fee Judgment”). The parties have been negotiating a resolution of the Virginia Action and the Enforcement Action, including the Enforcement Action Attorneys’ Fees and the Virginia Fee Judgment. The Company is currently unable to reasonably estimate the total ultimate loss associated with these combined matters, in excess of amounts already accrued, and accordingly no additional liability has been recognized in the consolidated financial statements as of June 30, 2026. The Company will adjust its accruals for these matters in future periods as additional information becomes available to evaluate the probability and estimated range of potential loss.

Note 9. CLASS ACTION SETTLEMENT

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 the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), which amended and superseded the Original Settlement Agreement. Pursuant to the Amended Settlement Agreement 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.

As of the date of this Annual Report, EDNY has not yet granted final approval of the Amended Settlement Agreement, and the Class Action remains pending. The ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive EDNY approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.

Note 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The details of accrued expenses and other current liabilities are as follows:

Note 11. EQUITY

Share issuances:

2021 warrants

On February 6, 2021, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold to the investors, and the investors purchased from the Company, in a registered direct offering, an aggregate of 1,998,500 shares of the common stock of the Company, no par value per share, at a purchase price of $6.805 per share. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, were approximately $12.4 million. The Company also sold to the investors warrants to purchase up to an aggregate of 1,998,500 shares of common stock at an exercise price of $6.805 per share. The warrants are exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices.

On February 9, 2021, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold to the investors, and the investors purchased from the Company, in a registered direct offering, an aggregate of 3,655,000 shares of the common stock of the Company, no par value per share, at a purchase price of $7.80 per share. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, were approximately $26.1 million. The Company also sold to the investors warrants to purchase up to an aggregate of 3,655,000 shares of common stock at an exercise price of $7.80 per share. The warrants are exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices.

On December 14, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with non-U.S. investors and accredited investors pursuant to which the Company sold to the investors, and the investors agreed to purchase from the Company, an aggregate of 3,228,807 shares of common stock, no par value, and warrants to purchase 4,843,210 shares. The purchase price for each share of common stock and one and a half warrants was $3.26, and the exercise price per warrant is $4.00. The Company received net proceed of $10,525,819 and issued 3,228,807 shares and 4,843,210 warrants. In connection with the issuance, the Company issued 500,000 shares to a consultant in assisting the Company in finding potential investors. The warrants will be exercisable at any time during the Exercise Window. The “Exercise Window” means 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 but not thereafter; 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.

2025 warrants

On November 15, 2023, the Company entered into a subscription agreement with ten individual investors, under which the Company agreed to sell an aggregate of 1,700,000 shares of its Common Stock and 1,700,000 warrants, with each warrant initially exercisable to purchaseone share of Common Stock at an exercise price of $6.07 per share, at an aggregate price of $9,860,000 in a private placement. On December 13, 2023, the Company issued an aggregate of 1,700,000 shares of its common stock to the investors. The Company received $9,860,000 but subsequently returned the funds to the investors because the 1,700,000 warrants, issuable as part of the transaction, could not be issued timely due to certain outstanding warrant terms. The investors returned the funds to the Company on January 4, 2024 after the warrant terms were finalized. On January 26, 2024, the Company entered into an amendment to the subscription agreement which provides, among other things, that Nasdaq’s authorization must be obtained for the issuance of the securities under the subscription agreement and the Company stockholders’ approval shall be obtained before the 1,700,000 warrants are issued to the investors. Nasdaq has authorized the issuance of the Common Stock and the conditional issuance of the warrants. The Company obtained stockholders’ approval for issuance of the warrants on November 7, 2025 and has thereafter issued the 1,700,000 warrants (or 121,429 warrants after reverse stock split of 14 shares to 1) at an exercise price of $6.07 per share (or $84.98 after reverse stock split of 14 shares to 1) with expiry date on November 6, 2030.

The Company’s outstanding warrants are classified as equity since they qualify for exception from derivative accounting as they are considered to be indexed to the Company’s own stock and require net share settlement. The fair value of the warrants was recorded as additional paid-in capital from common stock.

Following is a summary of the status of warrants outstanding and exercisable as of June 30, 2026

On January 24, 2025 the Company entered into securities purchase agreements with several institutional investors to sell an aggregate of 700,000 shares (or 50,000 shares after reverse stock split of 14 shares to 1) of the Company’s common stock in a registered direct offering at an offering price of $1.63 per share. The Company received $1,141,000 from the registered direct offering. The offering was closed on January 27, 2025.

On October 15, 2025, the Company entered into a securities purchase agreement (the “SPA”) with certain investors, under which the Company agrees to sell to the investors an aggregate of 3,000,000 shares (or 214,286 shares after reverse stock split of 14 shares to 1) of the Company’s common stock, without par value (the “Common Stock”) at a price of $0.70 per share, 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”), for an aggregate purchase price of approximately $2.1 million (the “Offering”).

The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (d) the absence of any undisclosed material adverse effects, and (e) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.

On October 20, 2025, upon satisfaction of the closing conditions, the Offering was consummated, and the shares were issued in reliance on the exemption from registration provided by Regulation S. The Company currently intends to use the net proceeds from the Offering for working capital and general corporate purposes.

On August 23, 2025, a settlement agreement was signed between the Company and Zhikang Huang to fully settled all claims by paying $300,000 to Zhikang Huang by August 25, 2025 and issuance of 90,000 shares to Zhikang Huang by October 22, 2025. By October 20, 2025, the Company has completed the full payment of cash and 90,000 shares (or 6,429 shares after reverse stock split of 14 shares to 1) to Zhikang Huang.

Reverse stock split and amended and restated authorized shares

On July 27, 2026, the Company effected a one-for-fourteen (1-for-14) reverse stock split of its outstanding common stock and amended and restated the number of share of common stock which the Company shall have authority to issue shall be 50 billion shares, without par value per share. All share and per-share amounts, including basic and diluted net income (loss) per share, have been retrospectively adjusted for all periods presented to reflect the reverse stock split. The reverse stock split did not affect the Company’s net loss or shareholders’ equity.

Note 12. NON-CONTROLLING INTEREST

The Company’s non-controlling interest consists of the following:

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 the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), which amended and superseded the Original Settlement Agreement. Pursuant to the Amended Settlement Agreement 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.

As of the date of this Annual Report, EDNY has not yet granted final approval of the Amended Settlement Agreement, and the Class Action remains pending. The ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive EDNY approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.

Huang v. Singularity Future Technology Ltd.

As previously disclosed, In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond, Virginia, alleging that the Company failed to pay certain severance compensation, salary and incentive-based bonus. On January 31, 2025, the court entered a judgment in favor of Mr. Huang and against the Company in the amount of approximately $469,000, plus interest.

However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.

On August 23, 2025, the Company and Mr. Huang entered into a settlement agreement to resolve the claims, pursuant to which the Company agreed to pay Mr. Huang $300,000 and issue 90,000 shares of common stock in exchange for a release of his claims, including the Virginia judgment. The Company subsequently completed the cash payment and share issuance in accordance with the settlement agreement in August and October 2026, respectively.

On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.

Jing Shan v. Singularity Future Technology Ltd.

The Company’s subsidiary, SG Shipping & Risk Solution, Inc. (“Plaintiff”), was party to a lawsuit it filed on July 13, 2023, in the United States District Court for the Eastern District of New York (Case No. 2:23-cv-05332-NJC-ARL) (the “SG Shipping Action”), wherein Plaintiff sought an award of monetary damages in connection with the conversion of Plaintiff’s corporate funds that Plaintiff alleges its former chief operations officer, Angela Shan (“Shan”), converted from Plaintiff. The Company dismissed the SG Shipping Action without prejudice on May 30, 2025, reserving the right to refile the case.

On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).

On May 3, 2024, the Circuit Court of Virginia entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity to pay Shan her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order, ordering the Company to pay Shan $82,586.51 (the “Virginia Contempt Judgment”). On September 5, 2025, Shan moved to enforce the Virginia Judgment in New York (the “Enforcement Action”) and incurred attorneys’ fees (the “Enforcement Action Attorneys’ Fees”). Following a trial, on July 13, 2026, the Circuit Court of Virginia entered an additional Final Judgment Order against the Company in favor of Shan in the Virginia Action in the amount of $380,349.66 (the “Virginia Fee Judgment”). The parties have been negotiating a resolution of the Virginia Action and the Enforcement Action, including the Enforcement Action Attorneys’ Fees and the Virginia Fee Judgment.

Haotian Song Arbitration

Haotian Song, a former employee and director of the Company, commenced an employment-related arbitration before the American Arbitration Association against the Company and certain individual respondents, Case No. 01-26-0001-3574. The dispute concerns, among other matters, Mr. Song’s employment agreements, a reduction in his compensation, allegedly unpaid compensation, the termination of his health insurance coverage and related continuation coverage issues, and the circumstances surrounding his resignation in July 2024. On September 4, 2026, the arbitrator issued rulings concerning discovery disputes and directed the production of certain documents and information. These rulings did not determine the merits of any claim or defense. The arbitration remains pending.

Shilun Dai Litigation

On June 17, 2026, Shilun Dai, a former employee of the Company, filed a lawsuit against the Company and Jia Yang, the Company’s Chief Executive Officer, in the United States District Court for the Eastern District of New York, Case No. 1:26-cv-03653. The complaint alleges violations of the Fair Labor Standards Act and the New York Labor Law relating to unpaid overtime and wages, accrued leave compensation, unreimbursed business expenses, wage payment frequency, wage notices and statements, and alleged retaliation. Mr. Dai seeks unpaid compensation, liquidated and statutory damages, back pay, front pay, compensatory damages, interest, attorneys’ fees and costs, and other relief. The litigation remains pending.

Except as set forth above, there has been no other material development in the legal proceedings that the Company is a party. For a discussion of all of our legal proceedings, see the information in Part I, “Item 1. Business - Recent Developments” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.

Civil Monetary Penalty

Following the publication of the Hindenburg Report, the Company received subpoenas from the United States Attorney’s Office for the Southern District of New York and the United States Securities and Exchange Commission (the “SEC”). The Company cooperated with these governmental authorities regarding these matters. The Company is not able to estimate the outcome or duration of the government investigations. As of the date of this report, the Company has not received any updates.

On February 28, 2023, the audit committee of the Company, after discussion with the management of the Company, and in consultation with the Company’s independent registered public accounting firm, concluded that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2021 (the “2021 Form 10-K”) should no longer be relied upon as a result of incorrect accounting treatment of approximately $4.6 million of related party eloan receivable. The audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30, 2021 and six months ended December 31, 2021. The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K (the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the Amended Form 10-K, the “Restatements”).

On June 17, 2024, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation.

On January 17, 2025, after cooperating with the Investigations, the Company reached a resolution with the SEC regarding the aforementioned matters.

The SEC approved the Company’s Offer of Settlement and issued its Cease-and-Desist Order (the “SEC Order”) dated January 17, 2025, with respect to certain violations related to the Company’s financial reporting, accounting, books and records, and internal controls. Pursuant to the terms of the SEC Order, the Company paid a civil monetary penalty of $350,000 to the SEC, complied with certain undertakings to remediate its material weaknesses in the internal control and disclosure deficiencies by June 30, 2026, and ceased and desisted any violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-15 thereunder.

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:

The Company’s income tax expenses for years ended June 30, 2026 and 2025 are as follows:

Total cash payments for income taxes, disaggregated by taxing jurisdiction for the respective fiscal years, are as follows:

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 taxable U.S.-source income generated. No PRC income tax payments were made for both fiscal years, as the PRC entities recorded operating losses with no taxable PRC-source income generated.

The following table reconciles the expected income tax expense calculated by applying the U.S. federal statutory corporate tax rate of 21% to the Company’s consolidated pre-tax profit, to the actual total income tax expense recorded in the statements of operations for the respective periods:

The Company’s deferred tax assets are comprised of the following:

As of June 30, 2026 and 2025, the Company incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $112.1 million and $109.5 million, which may be available for reducing future taxable income.

As of June 30, 2026 and 2025, the Company’s operations in China incurred a cumulative NOL of approximately $1.2 million and approximately $0.9 million, which may be available for reducing future taxable income.

The Company periodically evaluates the likelihood of the realization of deferred tax assets (“DTA”) and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not that its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the company’s reorganization and venture into new businesses. The Company provided a 100% allowance for its DTA as of June 30, 2026.

The Company’s taxes payable consists of the following:

Note 15. CONCENTRATIONS

Major Customers

For the year ended June 30, 2026, one customer accounted for 100% of the Company’s gross revenues. As of June 30, 2026, one customer accounted for 100% of the Company’s accounts receivable, net.

For the year ended June 30, 2025, one customer accounted for 94.4% of the Company’s gross revenues. As of June 30, 2025, one customer accounted for 100% of the Company’s accounts receivable, net.

Major Suppliers

For the year ended June 30, 2026, two suppliers accounted for approximately 28.5% and 18.2% of the total gross purchases. As of June 30, 2026, two suppliers accounted for approximately 37.7%, and 14.0% of the Company’s accounts payable balance.

For the year ended June 30, 2025, three suppliers accounted for approximately 34.4%,16.3% and 10.5% of the total gross purchases, respectively. As of June 30, 2025, two suppliers accounted for 45.5%, and 14.8% of the Company’s accounts payable balance.

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:

Movements of allowance for credit losses were as follows:

Due to related parties

As of June 30, 2026 and 2025, the Company owed $27,845 and $26,373 to Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, respectively. These payments were made on behalf of the Company for the daily business operational activities.

As of June 30, 2026 and 2025, the Company owed $1,146,026 and $497,858 Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. These payments were made on behalf of the Company for the daily business operational activities.

The balance of due to related parties was interest-free, unsecured, and due upon demand.

Note 17. Disposition of subsidiaries

On September 25, 2025, the Company entered into a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $2.7 million.

The following is a reconciliation of the carrying amounts of major classes of assets and liabilities in the consolidated balance sheets as of the date of disposition of subsidiaries:

The following is a reconciliation of the amounts of major classes of operations of disposed entities in the condensed consolidated statements of income (loss) and comprehensive income (loss) for the period from July 1, 2025 to the date of disposition.

Note 18. SUBSEQUENT EVENTS

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 Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (b) the absence of any undisclosed material adverse effects, and (c) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.

On July 13, 2026, the Offering consummated upon satisfying the closing conditions as set forth in the SPA, including, among other things, accuracy of the parties’ representations and warranties. The Company issued an aggregate of 5,263,158 shares of Common Stock (the “Shares”) and 15,789,474 Warrants. The Shares were issued in reliance on the exemption from registration provided by the Regulation S.

On July 22, 2026, the Company filed Articles of Amendment to our Amended and Restated Articles of Incorporation with the Virginia State Corporation Commission (the “Articles of Amendment”), which effect the Reverse Stock Split at a ratio of 1-for-14, and such Articles of Amendment will become effective as of 12:01 a.m. ET on July 27, 2026 (the “Effective Time”).

As a result of the Reverse Stock Split, every fourteen shares of Common Stock was combined into one share of Common Stock and the total number of issued and outstanding ordinary shares was reduced from 12,556,650 shares to 896,904 shares.

On May 19, 2026, the Company was granted an additional 180-day compliance period, or until November 16, 2026, to regain compliance with the minimum bid price requirement.

On August 10, 2026, the Company received a written notification from Nasdaq, indicating that the Company has regained compliance with the Rule 5550(a)(2), based on the closing bid price of the Company’s Common Stock for the last 10 consecutive business days, from July 27, 2026 to August 7, 2026. Accordingly, Nasdaq has determined that this matter is now closed.

The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (b) the absence of any undisclosed material adverse effects, and (c) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.

As previously disclosed, on June 19, 2025, Singularity Future Technology Ltd. (the “Company”) entered into a securities purchase agreement (the “SPA”) with eighteen investors (the “Investors”), under which the Company agreed to sell to the investors an aggregate of 32,188,841 units, or 2,299,212 units on the post-1:14-reverse-split basis (the “Unit”), each Unit consisting of one share of the Company’s 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 $1.165, or $16.310 on the post-1:14-reverse-split basis (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 (“Regulation S”), for gross proceeds of approximately $30 million (the “Offering”).

On August 12, 2026, the Company and the Investors entered into an amendment to the SPA (the “Amendment to SPA”), pursuant to which the Company agreed to issue amended and restated warrants (the “Amended and Restated Warrants”), with each Amended and Restated Warrant exercisable to purchase one share of the Common Stock at an exercise price of $0.001. The issuance of the Amended and Restated Warrants is subject to the approval of the Company’s shareholders.

On August 12, 2026, the Company issued 2,299,212 shares of the Common Stock to the Investors in reliance on the exemption from registration provided by Regulation S. The Amended and Restated Warrants have not been issued and will not be issued unless and until the requisite shareholder approval is obtained.