Singularity Future Technology .(SGLY) - 2024 Q4 - Annual Report

Financial Performance - For the fiscal year ended June 30, 2024, revenues decreased by $1,402,042, or approximately 30.9%, to $3,136,681 from $4,538,723 in the previous year[115] - Revenue from logistics services decreased by $669,477, or approximately 17.6%, to $3,136,681 for the year ended June 30, 2024[117] - The Company ceased selling crypto-mining equipment since January 1, 2023, contributing to the revenue decline[117] - The gross margin for the year ended June 30, 2024 was reported at (15.2)%, a significant decrease from 12.1% in the previous year[115] - Total revenues for the year ended June 30, 2024, were $3,136,681, a decrease of approximately 17.6% from $3,806,158 for the year ended June 30, 2023[121] - Revenue from the PRC operation increased by approximately $156,854 due to the acquisition of several new customers, while U.S. subsidiary revenue decreased by approximately $826,331[121] Costs and Expenses - Total costs and expenses for the year ended June 30, 2024 were $9,058,885, a decrease of $10,074,632 or 52.7% from $19,133,517 in 2023[115] - Cost of revenues for freight logistics services was $3,614,947 for the year ended June 30, 2024, a decrease of approximately 9.4% from $3,990,654 for the year ended June 30, 2023[123] - General and administrative expenses decreased by approximately 56.5% to $5,031,852 for the year ended June 30, 2024, down from $11,572,888 for the year ended June 30, 2023[127] Net Loss and Cash Position - The net loss for the year ended June 30, 2024, was $5,471,774, compared to a net loss of $23,098,342 for the year ended June 30, 2023[139] - Cash position improved to $14,641,967 as of June 30, 2024, due to the receipt of $9.8 million from a year-end private placement[140] - Net cash used in operating activities was approximately $4.4 million for the year ended June 30, 2024, significantly reduced from $33.6 million for the year ended June 30, 2023[143] Assets and Working Capital - Total current assets as of June 30, 2024, were $18,247,523, a slight increase of 0.3% from $18,192,716 as of June 30, 2023[141] - Working capital decreased by approximately 1.9% to $12,904,522 as of June 30, 2024, compared to $13,160,947 as of June 30, 2023[141] - The company recorded no impairment loss for fixed assets and right of use assets for the year ended June 30, 2024, compared to $33,469 for the year ended June 30, 2023[129] Internal Controls and Governance - As of June 30, 2024, the company's internal control over financial reporting was not effective due to material weaknesses identified, including lack of segregation of duties and insufficient supervision[150] - The company plans to hire additional accounting staff and recruit qualified professionals to improve internal controls and ensure timely financial reporting[151] - The company has adopted a code of business conduct and ethics applicable to all employees, officers, and directors[165] - The company intends to strengthen corporate governance and improve procedures for related party transactions[151] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2024, that materially affected the controls[152] Board and Committees - The board consists of 5 directors, with 2 females and 3 males, reflecting a diverse gender representation[164] - The Chief Executive Officer, Ziyuan Liu, has been in position since April 2023, bringing experience from various roles in market development and operations[155] - The Chief Financial Officer, Ying Cao, has been with the company since August 2023, previously working in accounting and quality control[156] - The Audit Committee consists of three independent members, with Mr. Zhongliang Xie serving as the chair and qualifying as the financial expert[168] - The Compensation Committee is composed of three independent directors, with Ms. Yangyang Xu as the chair, focusing on compensation arrangements for management and stock incentive plans[170] - The Nominating and Corporate Governance Committee includes three independent directors, chaired by Xu Zhao, responsible for identifying board member candidates and developing corporate governance guidelines[170] Audit and Compensation - The Audit Committee is authorized to review the company's financial reporting and accounting standards, including significant changes and key accounting decisions[168] - The Compensation Committee aims to attract and retain superior talent while rewarding individual performance to achieve financial goals[170] - The Audit Committee will review the independence of the independent auditor and assess their performance annually[168] - The Audit Committee is responsible for discussing the company's risk assessment and management policies, focusing on major financial risk exposure[168] - The Compensation Committee reviews and determines stock incentive and purchase plans to align with the company's objectives[170] Miscellaneous - The Company executed a 1-for-10 reverse stock split to meet the $1.00 minimum bid price requirement for NASDAQ listing on February 9, 2024[106] - The Company received a formal notification from NASDAQ on March 12, 2024, confirming compliance with the bid price requirement[108] - The Company entered into a joint venture agreement on August 22, 2024, to engage in commodity trading and expand into solar panel sales[110] - The audit committee concluded that approximately $4.6 million of related party loan receivable was incorrectly accounted for in the fiscal year ended June 30, 2021[109] - The impact of COVID-19 resulted in a revenue decline of approximately $1.2 million, or 22.6%, for the year ended June 30, 2022[112] - The Compensation Committee has no members who have been officers or employees of the company or participated in related-party transactions in the last two fiscal years[171] - No disagreements with accountants on accounting and financial disclosure have been reported[148]