SEC Form 10-Q filed by Singularity Future Technology Ltd.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from __________ to __________.
Commission File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| Incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No
As of February 13, 2026,
the Company had
SINGULARITY FUTURE TECHNOLOGY LTD.
FORM 10-Q
TABLE OF CONTENTS
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | ii | |
| PART I. | FINANCIAL INFORMATION | 1 |
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 |
| Item 4. | Controls and Procedures | 31 |
| PART II. | OTHER INFORMATION | 33 |
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 34 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 34 |
| Item 3. | Defaults Upon Senior Securities | 34 |
| Item 4. | Mine Safety Disclosures | 34 |
| Item 5. | Other Information | 34 |
| Item 6. | Exhibits | 34 |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains certain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements, including but not limited to statements regarding our projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond our control. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “will,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of business risks and uncertainties we face that could cause our actual results to differ materially from those projected or anticipated, including but not limited to the following:
| ● | our ability to timely and properly deliver our services; |
| ● | our dependence on a limited number of major customers and suppliers; |
| ● | current and future political and economic factors in the United States and China and the relationship between the two countries; |
| ● | our ability to explore and enter into new business opportunities and the acceptance in the marketplace of our new lines of business; |
| ● | unanticipated changes in general market conditions or other factors which may result in cancellations or reductions in the need for our services; |
| ● | the demand for warehouse, shipping and logistics services; |
| ● | the foreign currency exchange rate fluctuations; |
| ● | possible disruptions in commercial activities caused by events such as natural disasters, health epidemics, terrorist activity and armed conflict; |
| ● | the impact of quotas, tariffs or safeguards on our customer products that we service; |
| ● | our ability to attract, retain and motivate qualified management team members and skilled personnel; |
| ● | relevant governmental policies and regulations relating to our businesses and industries; |
| ● | developments in, or changes to, laws, regulations, governmental policies, incentives and taxation affecting our operations; |
| ● | our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners; and |
| ● | the outcome of litigation or investigations in which we are involved is unpredictable, and an adverse decision in any such matter could have a material adverse effect on our financial condition, results of operations, cash flows and equity. |
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update the forward-looking statements. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
ii
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS)
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| (unaudited) | (audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Notes receivable | ||||||||
| Accounts receivable | ||||||||
| Advances to suppliers | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Non-Current Assets | ||||||||
| Right-of-use assets | ||||||||
| Other long-term assets - deposits | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Loans from third parties | ||||||||
| Deferred revenue | ||||||||
| Accounts payable | ||||||||
| Lease liabilities - current | ||||||||
| Taxes payable | ||||||||
| Due to related parties | ||||||||
| Judgment debt payable | ||||||||
| Class action settlement | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Loans from third parties | ||||||||
| Lease liabilities - non-current | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity: | ||||||||
| Preferred share, | ||||||||
| Common share, | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficits | ( | ) | ( | ) | ||||
| Accumulated other comprehensive losses | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity attributable to controlling shareholders of the Company | ||||||||
| Non-controlling Interest | ( | ) | ( | ) | ||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(IN U.S. DOLLARS)
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross (loss) profit | ( | ) | ( | ) | ( | ) | ||||||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain from disposal of subsidiaries | ( | ) | ( | ) | ||||||||||||
| Interest expenses | ( | ) | ( | ) | ||||||||||||
| Class action settlement expenses | ( | ) | ||||||||||||||
| Other (expenses) income, net | ( | ) | ( | ) | ||||||||||||
| Net loss before income tax expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to controlling shareholders of the Company. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive loss | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss) - foreign currency | ( | ) | ||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Comprehensive loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive loss attributable to controlling shareholders of the Company. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per share | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares used in computation | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(IN U.S. DOLLARS)
(UNAUDITED)
| Additional | Accumulated other | Total | ||||||||||||||||||||||||||||||||||||||
| Preferred Share | Common Share | paid-in | Accumulated | comprehensive | Shareholders’ | Noncontrolling | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficits | loss | Equity | interest | Equity | |||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | ) | $ | $ | ($ | ) | $ | ||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Issuance of common shares | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for judgment debts | - | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Disposal of subsidiaries | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
(UNAUDITED)
| For the Six Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Non-cash lease expense | ||||||||
| Loss on disposal of property and equipment | ||||||||
| Gain on disposal of subsidiaries | ( | ) | ||||||
| Gain on disposal of ROU | ( | ) | ||||||
| Changes in assets and liabilities | ||||||||
| Notes receivable | ( | ) | ||||||
| Accounts receivable | ( | ) | ||||||
| Other receivables | ( | ) | ( | ) | ||||
| Advances to suppliers | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ||||||
| Other long-term assets - deposits | ||||||||
| Deferred revenue | ||||||||
| Accounts payable | ( | ) | ||||||
| Taxes payable | ( | ) | ||||||
| Lease liabilities | ( | ) | ||||||
| Judgment debt payable | ( | ) | ||||||
| Class action settlement | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Investing Activities | ||||||||
| Proceeds from disposal of subsidiaries, net of cash | ||||||||
| Net cash provided by investing activities | ||||||||
| Financing Activities | ||||||||
| Advance from related party | ||||||||
| Proceeds from issuance of common shares | ||||||||
| Proceeds from third parties’ loans | ||||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash, beginning of period | ||||||||
| Effect of changes of foreign exchange rate on cash and restricted cash | ||||||||
| Cash and restricted cash, end of period | $ | $ | ||||||
| Representing: | ||||||||
| Cash, end of period | $ | $ | ||||||
| Restricted cash, end of period | $ | |||||||
| Total cash and restricted cash, end of period | $ | $ | ||||||
| Supplemental information | ||||||||
| Income taxes paid | ||||||||
| Interest paid | ||||||||
| Non-cash operating activities | ||||||||
| Issuance of common shares for judgment debts | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc.
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 $
As of December 31, 2025, the Company’s subsidiaries included the following:
| Name | Background | Ownership | |||
| Artificial Intelligence Regeneration Technology Co., Ltd (Cayman Islands) | ● | ||||
| ● | |||||
| ● | |||||
| Artificial Intelligence Regeneration Technology Co., Ltd (BVI) | ● | ||||
| ● | |||||
| ● | |||||
| Sino-Global Shipping New York Inc. (“SGS NY”) | ● | ||||
| ● | |||||
| ● | |||||
| Sino-Global Shipping HK Ltd. (“SGS HK”) | ● | ||||
| ● | |||||
| ● | |||||
| Trans Pacific Shipping Ltd. (“Trans Pacific Beijing”) | ● | ||||
| ● | |||||
| ● | |||||
| Trans Pacific Logistic Shanghai Ltd. (“Trans Pacific Shanghai”) | ● | ||||
| ● | |||||
| ● | |||||
| Gorgeous Trading Ltd (“Gorgeous Trading”) | ● | ||||
| ● | |||||
| ● | |||||
| SG Shipping & Risk Solution Inc, (“SGSR”) | ● | ||||
| ● | |||||
| ● | |||||
| Singularity (Shenzhen) Technology Ltd. | ● | ||||
| ● | |||||
| ● |
5
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying condensed 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 condensed 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.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the SEC for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended June 30, 2025. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.
(b) Fair Value of Financial Instruments
The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
| Level 1 — | Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. |
| Level 2 — | Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. |
| Level 3 — | Unobservable inputs that reflect management’s assumptions based on the best available information. |
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.
6
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
(c) Use of Estimates and Assumptions
The preparation of the Company’s condensed 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 condensed 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 Shanghai report their financial positions and results of operations in Renminbi (“RMB”). The accompanying condensed consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the fixed 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 December 31,
2025 and June 30, 2025 were US$1 for RMB
(e) Cash
Cash consists of cash on hand and cash in banks
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 December 31, 2025 and June 30, 2025, cash balances of $
Restricted Cash
As of December 31, 2025 and June 30, 2025, our
restricted balance was approximately $
7
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
(f) Receivables and Allowance for Credit Losses
The carrying value 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 less related cash applications, less allowance for credit losses and any write-offs of any receivables not previously provided for.
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.
| Accounts receivable balance as of December 31, 2025 | CECL | Allowance for credit | ||||||||||
| Aging group | (USD) | Rate | losses | |||||||||
| <1 year | $ | % | ||||||||||
| 1-2 years | % | |||||||||||
| 2-3 years | % | |||||||||||
| >3 years | % | |||||||||||
| Total | $ | |||||||||||
| Accounts receivable balance as of June 30, 2025 | CECL | Allowance for credit | ||||||||||
| Aging group | (USD) | Rate | losses | |||||||||
| <1 year | $ | % | ||||||||||
| 1-2 years | % | |||||||||||
| 2-3 years | % | |||||||||||
| >3 years | % | |||||||||||
| Total | $ | |||||||||||
8
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
(g) 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, the Company provides transportation services which include mainly shipping services. The Company derives transportation revenue from sales contracts with its customers with revenues being recognized upon performance of services. Sales price to the customer are fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. The Company’s revenues are recognized at a point in time after all performance obligations were satisfied
Accordingly, the Company generally identifies one performance obligation in its contracts, which is a series of distinct services that remain substantially the same over time and possess the same pattern of transfer. Revenue is recognized over the period in which services are provided under the terms of the Company’s contractual relationships with its clients.
The transaction price is based on the amount specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration in a contract represents facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract. The variable consideration is comprised of cost reimbursement determined based on the costs incurred. Revenue relating to variable pricing is estimated and included in the consideration if it is probable that a significant revenue reversal will not occur in the future. The estimate of variable consideration is determined by the expected value or most likely amount method and factors in current, past and forecasted experience with the customer. Customers are billed based on terms specified in the revenue contract and they pay us according to approved payment terms.
9
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Revenue for the above services is recognized on a gross basis when the Company controls the services as it has the obligation to (i) provide all services (ii) bear any inventory risk for warehouse services. In addition, the Company has control to set its selling price to ensure it would generate profit for the services.
The Company’s performance obligation was to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control of products or services are transferred to customers. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in ASC 606-10-55-39. The Company considers this guidance in conjunction with the terms in the Company’s arrangements with both suppliers and customers.
In general, revenue was recognized on a gross basis when the Company controls the products as it has the obligation to (i) fulfill the products delivery and custom clearance (ii) bear any inventory risk as legal owners. In addition, when establishing the selling prices for delivery of the resale products, the Company has control to set its selling price to ensure it would generate profit for the products delivery arrangements. If the Company is not responsible for provision of product and does not bear inventory risk, the Company recorded revenue on a net basis.
Contract balances
The Company records receivables related to revenue when the Company has an unconditional right to invoice and receive payment.
Deferred revenue consists primarily of customer
billings made in advance of performance obligations being satisfied and revenue being recognized. Deferred revenue amounted to $
The Company’s disaggregated revenue streams are described as follows:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Freight logistic services | $ | $ | $ | $ | ||||||||||||
Disaggregated information of revenues by geographic locations are as follows:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| PRC | $ | $ | $ | $ | ||||||||||||
10
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
(h) 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.
(i) Leases
The Company adopted FASB ASU 2016-02, “Leases”
(Topic 842) for the year ended June 30, 2020, and elected the practical expedients that do 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
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 use 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.
(j) 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 unaudited condensed 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 had uncertain tax positions as of December 31, 2025.
Income tax returns for the years prior to 2019 are no longer subject to examination by U.S. tax authorities.
11
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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
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
In addition, under the PRC regulations, the Company’s
PRC subsidiaries are required to pay city construction tax (
(k) Earnings (loss) per Share
Basic earnings (loss) per share is 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 six months ended December 31, 2025 and 2024, there was no dilutive effect of potential shares of common stock of the Company because the Company generated a net loss.
(l) 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 stockholders’ 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.
(m) Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.
In accordance with ASC 280, Segment Reporting,
operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated
regularly by the chief operating decision maker (“CODM”), or decision-making Company, in deciding how to allocate resources
and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The
management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making
operating decisions and assessing performance as the source for determining the Company’s reportable segments.
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SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
(n) 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.
(o) 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.
(p) 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.
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SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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 July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05)”, simplifies credit loss calculations by introducing a practical expedient (available to all entities) that allows entities to assume current conditions won’t change over an asset’s life, removing the need for complex macroeconomic forecasts. Additionally, a new accounting policy election (for non-public business entities) allows these entities to consider post-balance sheet collection activity to estimate expected credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025. Early adoptions are permitted. The Company’s management does not believe the adoption of ASU 2025-05 will have a material impact on its financial statements and disclosures.
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SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
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SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
16
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
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.
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SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 3. NOTES RECEIVABLE
Notes receivable related to bank acceptance notes
issued by third party companies and backed by financial institutions which can be either encashed upon maturity, or encashed by discounting,
or reassigned to suppliers. As of December 31, 2025 and June 30, 2025, the maturity date of these notes ranged from
Note 4. ACCOUNTS RECEIVABLE
The Company’s accounts receivable are as follows:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Trade accounts receivable | $ | $ | ||||||
Note 5. ADVANCES TO SUPPLIERS
Advances to suppliers related to prepayment for various shipping costs
for shipments and commodity trading.
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Commodity trading (1) | $ | |||||||
| Freight fees | ||||||||
| Advances to suppliers | $ | $ | ||||||
| (1) |
Note 6. LOANS FROM THIRD PARTIES
The Company’s loans from third parties are as follows:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Loans from third parties - current | $ | $ | ||||||
| Loans from third parties - non-current | ||||||||
| Total loans from third parties | $ | $ | ||||||
As of December 31, 2025 and June 30, 2025, loans
from third parties amounted to approximately $
For the six months ended December 31, 2025 and
2024, interest expenses were $
18
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 7. LEASES
The Company leases its office in Shanghai City from a third party for its operations.
As of December 31, 2025 and June 30, 2025,
the remaining lease term was
Supplemental balance sheet information related to operating leases was as follows:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Right-of-use assets | $ | $ | ||||||
| Lease liabilities, current | ||||||||
| Lease liabilities, non-current | ||||||||
| Total lease liabilities | $ | $ | ||||||
As of December 31, 2025, maturities of lease liability were as follows:
| As of | ||||
| December 31, | ||||
| Twelve months ended June 30, | 2025 | |||
| For the remaining fiscal year of 2026 | $ | |||
| Total future minimum lease payments | ||||
| Less: Imputed interest | ( | ) | ||
| Total lease liabilities | $ | |||
Note 8. JUDGMENT DEBT PAYABLE
Judgment debt payable mainly relates 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. In the complaint, Zhikang Huang claimed
that the Company failed to compensate him for the severance payment, his two months’ salary and the incentive-based bonus. On January
31, 2025, a judgment from the Circuit Court for the City of Richmond was entered in favor of Zhikang Huang and against the Company in
the amount of $
On December 12, 2025, the Company and Jing Shan
reached an agreement to resolve and settle all claims, controversies, and disputes that the Company agrees to pay to Ms. Shan $
19
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 9. CLASS ACTION SETTLEMENT
On December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired the publicly traded common stock of the Company between February 2021 and November 2022, brought a putative class action, Crivellaro v. Singularity Future Technology Ltd., 22-cv-7499-BMC, against the Company and a dozen related person and entities in the United States District Court for the Eastern District of New York (the “Court”). Plaintiffs alleged violations of the U.S. federal securities laws by the Company. Plaintiffs seek damages, plus interest, costs, fees, and attorneys’ fees. The Company filed a motion to dismiss on November 20, 2023.
On December 17, 2024, the Court issued an order that partially denied the motions to dismiss filed by the Company and its former chief executive officer, Yang Jie, arising from various statements made by Yang Jie about two allegedly fraudulent transactions. The rest of the motions are granted. On January 2, 2025, the Company filed an answer to the Second Amended Class Action complaint.
On May 29, 2025, the Company and the lead plaintiffs
in the class action executed a binding term sheet (the “Settlement Term Sheet”) setting forth the material terms of their
proposed settlement on a class wide basis. On July 13, 2025, the parties executed a Stipulation and Agreement of Settlement (“Settlement
Agreement”). Pursuant to the Settlement Agreement, in exchange for the Settlement payment and subject to final approval by the Court,
all plaintiffs in the Class Action will release the Company and the other defendants on all claims. The Settlement Payment include cash
payment of $
As of and for the quarter ended September 30,
2025, the class action settlement liability and expenses amounted to $
Note 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
The Company’s accrued expenses and other current liabilities are as follows:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Salary and reimbursement payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Interest payable | ||||||||
| Professional fees and other expense payable | ||||||||
| Total | $ | $ | ||||||
20
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 11. EQUITY
Share issuances:
2020 warrants
On September 17, 2020, the Company entered into
certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of
1933, as amended, pursuant to which the Company sold an aggregate of
2021 warrants
On January 27, 2021, the Company entered into
a securities purchase agreement with certain non-U.S. investors thereto pursuant to which the Company sold to the investors, and the investors
purchased from the Company, an aggregate of
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
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
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
21
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
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
Following is a summary of the status of warrants outstanding and exercisable as of December 31, 2025
| Weighted | ||||||||
| Average | ||||||||
| Exercise | ||||||||
| Warrants | Price | |||||||
| Warrants outstanding, as of June 30, 2025 | $ | |||||||
| Issued | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Warrants outstanding, as of December 31, 2025 | $ | |||||||
| Warrants exercisable, as of December 31, 2025 | $ | |||||||
| Weighted | Average | |||||||||
| Average | Remaining | |||||||||
| Warrants | Exercise | Contractual | ||||||||
| Exercisable | Price | Life | ||||||||
| 2020 warrants - | $ | |||||||||
| 2021 warrants - | $ | |||||||||
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
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 $
22
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 12. NON-CONTROLLING INTEREST
The Company’s non-controlling interest consists of the following:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Trans Pacific Shanghai | $ | ( | ) | $ | ( | ) | ||
| Brilliant Warehouse | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | ||
Note 13. COMMITMENTS AND CONTINGENCIES
Contingencies
Crivellaro v. Singularity Future Technology Ltd.
As previously disclosed, on December 17, 2024,
the Court issued an order that partially denied the motions to dismiss filed by the Company and its former chief executive officer, Yang
Jie, arising from various statements made by Yang Jie about two allegedly fraudulent transactions. The rest of the motions are granted.
On January 2, 2025, the Company filed an answer to the Second Amended Class Action complaint. On July 13, 2025, the parties executed a
Stipulation and Agreement of Settlement (“Settlement Agreement”). Pursuant to the Settlement Agreement, in exchange for the
Settlement payment and subject to final approval by the Court, all plaintiffs in the Class Action will release the Company and the other
defendants on all claims. The Settlement Payment include cash payment of $
On September 22, 2025, the Court imposed a temporary
restraining order on the Company, pursuant to which the Company and the Ms. Jia Yang, CEO of the Company, (i) were mandated to transfer
$
As of the date of this report, the Company has
requested that Silkroad International Bank S.A. (“Silkroad”) transfer a total of $
On October 31, 2025, Lead Plaintiff filed a Motion for Final Approval of Class Action Settlement. A Fairness Hearing was initially set by the Court for December 7, 2025. However, the Fairness Hearing has been adjourned to March 9, 2026. On January 20, 2026, the Company filed a letter motion for a pre-motion conference with the Court regarding its unopposed motion for approval of issuance of shares pursuant to 15 U.S.C. § 77c(a)(10) in connection with the Settlement Agreement. The Court has ordered that it will hear the Company's motion on March 9, 2026.
23
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
As of and for the quarter ended September 30,
2025, the class action settlement liability and expenses amounted to $
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.
In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the severance payment, his two months’ salary
and the incentive-based bonus. On January 31, 2025, a judgment from the Circuit Court for the City of Richmond was entered in favor of
Zhikang Huang and against the Company in the amount of $
As of the date of this report, the Company has
completed the $
Except as set forth above, there have 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, 2025.
Civil Monetary Penalty
In March 2023, as a result of the incorrect accounting
treatment of approximately $
On June 17, 2024, the Company received a subpoena issued by the Securities and Exchange Commission, requesting the production of certain documents related to the investigation by the SEC regarding the Restatements. On January 17, 2025, after cooperating with the SEC’s 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 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 will pay
a civil monetary penalty of $
24
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
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.
The Company’s income tax expenses for three and six months ended December 31, 2025 and 2024 are as follows:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Current | ||||||||||||||||
| U.S. | ||||||||||||||||
| PRC | ||||||||||||||||
| Total income tax expenses | ||||||||||||||||
The Company’s deferred tax assets are comprised of the following:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Allowance for credit losses | ||||||||
| U.S. | ||||||||
| PRC | ||||||||
| Net operating loss | ||||||||
| U.S. | ||||||||
| PRC | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net - long-term | ||||||||
As of December 31, 2025 and June 30, 2025, the
Company incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $
As of December 31, 2025 and June 30, 2025, the
Company’s operations in China incurred a cumulative NOL of approximately $
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
The Company’s taxes payable consists of the following:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Corporate income tax payable | $ | $ | ||||||
| VAT tax payable | ||||||||
| Taxes payable | ||||||||
| Total | $ | $ | ||||||
The corporate income tax payable amount changed was as a result of changes in exchange rates.
25
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Note 15. CONCENTRATIONS
Major Customers
For the three months and six months ended December 31, 2025, one customer accounted for 100% of the Company’s net revenues, respectively.
For the three months ended December 31, 2024,
one customer accounted for
As of December 31, 2025, one customer accounted
for
Major Suppliers
For the three months ended December 31, 2025,
four suppliers accounted for approximately
For the three months ended December 31, 2024,
three suppliers accounted for approximately
As of December 31, 2025, two suppliers accounted
for approximately
Note 16. RELATED PARTY BALANCES AND TRANSACTIONS
Set forth below are balances and transactions with related parties for the three months ended, for the six months ended, and as of December 31, 2025, and as of June 30, 2025.
Due from related party, net
As of December 31, 2025 and June 30, 2025, the outstanding amounts due from related parties consist of the following:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Shanghai Baoyin Industrial Co., Ltd (1) | $ | $ | ||||||
| Zhejiang Jinbang Fuel Energy Co., Ltd (2) | ||||||||
| Less: impairment for credit losses | ( | ) | ( | ) | ||||
| Total | ||||||||
Movements of allowance for credit losses were as follows:
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Less: Write-off | ( | ) | ||||||
| Exchange rate effect | ||||||||
| Ending balance | $ | $ | ||||||
| (1) |
| (2) |
26
SINGULARITY FUTURE TECHNOLOGY LTD. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Six Months Ended December 31, 2025
Due to related parties
As of December
31, 2025 and June 30, 2025, the Company owed $
As of December
31, 2025 and June 30, 2025, the Company owed $
The balance of due to related parties was interest-free, unsecured, and due upon demand.
Note 17. Disposition of subsidiaries
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc.
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 $
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:
| As of | ||||
| date of | ||||
| disposition | ||||
| Carrying amount of major classes of assets | ||||
| Cash | ||||
| Restricted cash | ||||
| Prepaid expenses | ||||
| Total assets of disposed entity | $ | |||
| Carrying amount of major classes of liabilities | ||||
| Loans from third parties | ||||
| Due to intercompany | ||||
| Accrued expenses and other current liabilities | ||||
| Total liabilities of disposed entity | $ | |||
| Net liabilities disposed of | $ | ( | ) | |
| Cash outflow arising from disposal: | ||||
| Net liabilities disposed of (as above) | $ | ( | ) | |
| Less: Consideration | ( | ) | ||
| Gain from disposal of subsidiaries | $ | |||
| Cash proceeds on disposal | $ | |||
| Less: Cash and bank balances in subsidiary disposed of | ( | ) | ||
| Net cash inflow on disposal | $ | |||
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.
| From July 1, 2025 | ||||
| to the date of | ||||
| disposition | ||||
| Operating expenses | ||||
| Net loss | $ | |||
Note 18. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through February 13, 2026, the date the financial statements were issued and filed with the U.S. Securities and Exchange Commission. Except for the developments in legal proceedings disclosed above in Note 13, no additional events occurred subsequent to December 31, 2025 that would require adjustment or disclosure.
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
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.
We have not generated any revenues to date with respect to our entry into the solar panel production and distribution business.
Recent Developments
Disposition of New Energy Tech Ltd.
On August 22, 2024, New Energy Tech Ltd., (“New Energy”) a New York corporation and wholly owned subsidiary of the Company, entered into a certain joint venture agreement (the “JV Agreement”) with Market One Service Corp., a corporation organized under the laws of Wyoming, (“Market One”). Pursuant to the JV Agreement, among other things and subject to the terms and conditions contained therein, New Energy and Market One agreed to establish a limited company under the laws of Ohio, SG Campbells Creek Commodities (the “JV”), to engage in the business of commodity trading.
On September 25, 2025, the Company entered into a share transfer agreement with Qingmin Sun, pursuant to which the equity ownership of New Energy was transferred to Qingmin Sun for consideration of $2,700,000 in cash. This disposition was closed on September 25, 2025.
October 2025 Private Placement
On October 15, 2025, the Company entered into a securities purchase agreement with certain investors, under which the Company agrees to sell to the investors an aggregate of 3,000,000 shares of the Company’s 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, for an aggregate purchase price of approximately $2.1 million.
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 this offering for working capital and general corporate purposes.
28
Results of Operations
Comparison of the Three Months Ended December 31, 2025 and 2024
The following table sets forth the results of our operations for the periods indicated:
| For the Three Months Ended December 31, | Variance | |||||||||||||||
| 2025 | 2024 | Amount | % | |||||||||||||
| Net revenues | $ | 147,574 | $ | 474,624 | ($ | 327,050 | ) | (68.9 | )% | |||||||
| Cost of revenues | (169,037 | ) | (464,100 | ) | (295,063 | ) | (63.6 | )% | ||||||||
| Gross (loss) profit | (21,463 | ) | 10,524 | (31,987 | ) | (303.9 | )% | |||||||||
| Selling expenses | (48,460 | ) | (62,769 | ) | (14,309 | ) | (22.8 | )% | ||||||||
| General and administrative expenses | (530,733 | ) | (632,262 | ) | (101,529 | ) | (16.1 | )% | ||||||||
| Operating loss | (600,656 | ) | (684,507 | ) | (83,851 | ) | (12.2 | )% | ||||||||
| Gain from disposal of subsidiaries | - | (1,030 | ) | (1,030 | ) | (100.0 | )% | |||||||||
| Interest expenses | (75,530 | ) | - | 75,530 | 100.0 | % | ||||||||||
| Other (expenses) income, net | (195 | ) | 348,207 | (348,402 | ) | (100.1 | )% | |||||||||
| Net loss before income tax expenses | (676,381 | ) | (337,330 | ) | 339,051 | 100.5 | % | |||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net loss | $ | (676,381 | ) | $ | (337,330 | ) | $ | 339,051 | 100.5 | % | ||||||
Revenues from Freight Logistics Services
Freight logistics services primarily consist of cargo forwarding, brokerage, warehouse and other freight services. Revenues from freight logistics services decreased by approximately $0.3 million, or approximately 68.9%, to approximately $0.1 million for the quarter ended December 31, 2025 from approximately $0.5 million for the quarter ended December 31, 2024. The decrease was mainly caused by shipping revenue declined from our PRC subsidiaries as the tariff wars caused significant decline in business volume. For the quarter ended December 31, 2025, the Company generated all of its revenue in PRC.
Cost of Revenues
Cost of revenues for our freight logistics services mainly consisted of freight costs to various freight carriers, cost of labor, warehouse rent and other overhead and sundry costs. Cost of revenues for our freight logistics services decreased by approximately $0.3 million, or 63.6%, to approximately $0.2 million for the quarter ended December 31, 2025 from approximately $0.5 million for the same period of last year, which mainly contributed by decline in business volume as a result of tariff wars.
Our gross loss was 14.5% from our PRC subsidiaries for the quarter ended December 31, 2025 which declined by 16.8% from 2.2% for the quarter ended December 31, 2024 due to the increase in freight costs.
29
Selling Expenses
Our selling expenses consisted primarily of salaries, meals and entertainment and travel expenses for our sales representatives. Our selling expenses decreased by approximately $14,309, or 22.8%, to $48,460 for the quarter ended December 31, 2025 from $62,769 for the same period of last year. The decrease was mainly attributable in the decrease in freight volume which, in turn, reduced selling activities and the related selling expenses.
General and Administrative Expenses
Our general and administrative expenses consist primarily of salaries and benefits, travel expenses for our administration department, office expenses, and regulatory filing and professional service fees for auditing, and legal services. Our general and administrative expenses decreased by approximately $101,529, or 16.1%, to $0.53 million for the quarter ended December 31, 2025 from $0.63 million for the same period of last year. Since closure of business operation in U.S., the management undertook significant cost cutting initiatives reducing all categories of general administrative expenses across the board.
Interest expenses
Interest expenses increased to $0.08 million, or 100%, to approximately $0.08 million for the quarter ended December 31, 2025 from nil for the same period of last year. As of December 31, 2025, loans from third parties amounted to $3.4 million with a weighted average interest rate of 12% per annum and a weighted average maturity of 0.8 year.
Other (expenses) incomes, Net
Other income net was $348,207 for the three months ended December 31, 2024, as compared to other expense of $195 for the same period of 2025. Gain on disposal of ROU of $354,108 is recognized this period due to the early termination of a lease agreement in Great Neck, New York, accordingly, the impairment of ROU recognized in previous years is reversed. No such gain on disposal of ROU in 2025.
Income tax expenses
Our income tax expenses amounted to nil and nil for the quarter ended December 31, 2025 and 2024, respectively.
Net Loss
As a result of the foregoing, we had a net loss of approximately $0.7 million and $0.3 million for the quarter ended December 31, 2025 and 2024, respectively.
Liquidity and Capital Resources
Cash Flows and Working Capital
As of December 31, 2025, we had $13.1 million in cash (including cash on hand, cash in bank and restricted cash). The majority of our cash is in banks located in the Djibouti a country in East Africa and the restricted cash is in banks located in U.S.
The following table sets forth a summary of our cash flows for the periods as indicated:
| For the Six Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash (used in) provided by operating activities | $ | (9,877,753 | ) | $ | 397,878 | |||
| Net cash provided by investing activities | 108,331 | - | ||||||
| Net cash provided by financing activities | 5,200,294 | - | ||||||
| Effect of changes of foreign exchange rate on cash and restricted cash | 878 | 131,504 | ||||||
| Cash and restricted cash, beginning of period | 17,651,896 | 17,736,059 | ||||||
| Cash and restricted cash, end of period | $ | 13,083,646 | $ | 18,265,441 | ||||
Operating Activities
Our net cash used in operating activities was approximately $9.9 million for the six months ended December 31, 2025. The operating cash outflow for the six months ended December 31, 2025 was primarily attributable to our net loss of approximately $10.2 million, payment of approximately $8.3 million to suppliers for commodity trading, as partially offset by class action settlement of approximately $8.9 million.
30
Our net provided by in operating activities was $397,878 for the six months ended December 31, 2024. The operating cash inflow for the six months ended December 31, 2024 was primarily attributable to accrued expenses and other current liabilities increased $1,511,975 and partial offset by net loss cash outflow of $1,341,665.
Investing Activities
Net cash provided by investing activities was approximately $0.1 million for the six months ended December 31, 2025 due to proceeds from disposal of subsidiaries, net of cash.
We did not have any investing activities for the six months ended December 31, 2024.
Financing Activities
Net cash provided by financing activities for the six months ended December 31, 2025 was approximately $5.2 million due to approximately $3.0 million of loans from third parties and approximately $2.1 million proceeds from issuance of common shares.
We did not have any financing activities for the six months ended December 31, 2024.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies” of the Notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, describing the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2025 Form 10-K.
Off-Balance Sheet Arrangements
None.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of December 31, 2025, the Company carried out an evaluation, under the supervision of and with the participation of its management, including the Company’s Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing evaluation, the Chief Executive Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms due to effective internal controls over financial reporting as more fully described below.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; |
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| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of its management and directors; and |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). The following material weaknesses identified for the year ended and as of June 30, 2024 were individually rectified as of September 5, 2025.
| Material weaknesses identified as of June 30, 2024 | Rectification actions taken | ||
| ● | Lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries in some of the subsidiaries within the consolidation, lack of supervision, coordination and communication of financial information between different entities within the Group; | The Company has implemented segregation of incompatible duties. The preparation of journal entries is handled by the financial export, while review is conducted by the CFO. Furthermore, the CFO is responsible for overseeing, coordinating, and communicating financial information among different entities within the group. | |
| ● | Lack of a full time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions which led to error in revenue recognition in previously issued financial statements; | The Company has replaced part of its management team, and the current management is familiar with U.S. GAAP. Additionally, the Company has provided training on U.S. GAAP to the current management team. | |
| ● | Lack of resources with technical competency to address, review and record non-routine or complex transactions under U.S. GAAP; | The Company has revised its control procedures for significant unusual transactions (“SUT”). For SUT, dedicated processes are in place to identify, document, and review the related accounting treatments. | |
| ● | Lack of management control reviews of the budget against actual with analysis of the variance with a precision that can be explained through the analysis of the accounts; | The Company has revised its expense budgeting process and established a budget management system. Under the new system, quarterly reviews will be conducted to compare budgets against actual results. Account analysis will be used to explain the reasons for significant variances between budgeted and actual figures. | |
| ● | Lack of proper procedures in identifying and recording related party transactions which led to restatement of previously issued financial statements (See Note 1 of the accompanying consolidated financial statement footnotes); | The Company has revised its related-party control procedures, establishing clear provisions for the identification of related parties, the formation and approval of related-party lists, the identification of related-party transactions, and the approval and disclosure of related-party transactions. | |
| ● | Lack of proper procedures to maintain supporting documents for accounting record; and | The Company has revised its accounting bookkeeping procedures, establishing requirements for approval, and retention of supporting documents corresponding to accounting records. The CFO will be responsible for reviewing whether the supporting documents in accounting records comply with the Company’s latest regulations. | |
| ● | Lack of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive. | The Company dismissed the executive who misused funds and replaced the corresponding executive. Additionally, the Company revised its cash disbursement procedures, implementing strict segregation of duties for incompatible roles such as applicants, approvers, and cashiers involved in cash disbursements. | |
Changes in Internal Control over Financial Reporting
On April 24, 2025, we engaged Marcum Asia CPAs LLP to provide internal control over financial reporting best practices consulting services to the Company and the Company made changes in its internal control over financial reporting as discussed in the Management’s Annual Report on Internal Control over Financial Reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Litigations
Crivellaro v. Singularity Future Technology Ltd.
As previously disclosed, on December 17, 2024, the Court issued an order that partially denied the motions to dismiss filed by the Company and its former chief executive officer, Yang Jie, arising from various statements made by Yang Jie about two allegedly fraudulent transactions. The rest of the motions are granted. On January 2, 2025, the Company filed an answer to the Second Amended Class Action complaint. On July 13, 2025, the parties executed a Stipulation and Agreement of Settlement (“Settlement Agreement”). Pursuant to the Settlement Agreement, in exchange for the Settlement payment and subject to final approval by the Court, all plaintiffs in the Class Action will release the Company and the other defendants on all claims. The Settlement Payment include cash payment of $3,000,000 and 6,500,000 freely tradable shares of the Company’s Common Stock (the “Settlement Shares”), which shall be issued pursuant to Section 3(a)(10) of the Securities Act of 1933, subject to the Court’s approval of the Settlement. In the event of a reverse stock split prior to the effectiveness of the Settlement, the number of Settlement Shares and/or the put option purchase price (described below) shall be reformulated so that the value of the Settlement Shares/put option shall not be less than $5,850,0000 as of the effectiveness of the Settlement. The settlement class has the right to sell all or a portion of the unsold Settlement Shares back to the Company at $0.85 per share if the 10-trading day average closing price immediately prior to the exercise of the put option falls below $0.85 before the class lead counsel sells the Settlement Shares. The Company agreed to maintain a cash balance $3,250,000 in a dedicated escrow account to mitigate the risk that it is unable to satisfy the put option.
On September 22, 2025, the Court imposed a temporary restraining order on the Company, pursuant to which the Company and the Ms. Jia Yang, CEO of the Company, (i) were mandated to transfer $6,250,000 amount, plus interest, from the Company’s Silk Road Bank account in Djibouti to the Company’s Bank of America account in the United States by September 23, 2025; (ii) were mandated to file a status report which identifies the balance of the Bank of America account every Friday until October 9, 2025; and (iii) are prohibited from taking any further steps toward consummating the merger described in the Company’s Schedule 14-A filed with the SEC and from participating in any other transaction which might have the effect of divesting this Court’s jurisdiction over the Company and its assets.
As of the date of this report, the Company has requested that Silkroad International Bank S.A. (“Silkroad”) transfer a total of $6.3 million to the Company’s Bank of America account. The Company has requested an input from Silkroad as to the initial $3,000,000 that the Company requested that Silkroad transfer to the Company’s Bank of America account in August 2025. Silkroad indicated that it expects the funds to be credited to the Company’s Bank of America account “within 3-5 business days, subject to the completion of intermediary and central bank procedures.” As of the date of this report, the Company has wired $2,000,000, which are loans from unrelated parties, as part of the settlement cash payment to the Escrow Account set forth in the Settlement Agreement and continues to keep the Court updated as to the status of the Bank of America account.
On October 31, 2025, Lead Plaintiff filed a Motion for Final Approval of Class Action Settlement. A Fairness Hearing was initially set by the Court for December 7, 2025. However, the Fairness Hearing has been adjourned to March 9, 2026. On January 20, 2026, the Company filed a letter motion for a pre-motion conference with the Court regarding its unopposed motion for approval of issuance of shares pursuant to 15 U.S.C. § 77c(a)(10) in connection with the Settlement Agreement. The Court has ordered that it will hear the Company's motion on March 9, 2026.
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. In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the severance payment, his two months’ salary and the incentive-based bonus. On January 31, 2025, a judgment from the Circuit Court for the City of Richmond was entered in favor of Zhikang Huang and against the Company in the amount of $468,956.75, with interest accruing from the date of the judgment. On April 23, 2025, said Virginia judgment was filed in the Supreme Court of New York, County of Westchester and entered in New York in favor of Zhikang Huang and against the Company in the amount of $468,956.75, with interest accruing from January 31, 2025. On August 23, 2025, a settlement agreement was signed between the Company and Zhikang Huang to fully settle 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.
As of the date of this report, the Company has completed the $300,000 settlement payment and issued 90,000 shares of the Company’s common stock to Zhikang Huang. However, on June 15, 2025, Zhikang Huang filed a petition against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney's fees. After the Company completed the $300,000 settlement payment, but before the transfer of the Company's common stock was due, Zhikang Huang's counsel caused the Court to enter an order against the Company and certain Company individuals to enforce the payment of the Virginia judgment and attorney's fees, on September 25, 2025. On October 10, 2025, the Company filed a motion to vacate the September 25, 2025, order and to impose sanctions. On October 13, 2025, upon learning funds were transferred from the Company secretary's account in the amount of the award for attorney's fees, the Company filed a proposed Order to Show Cause seeking among other things, staying further enforcement of the Virginia judgment. On October 15, 2025, the Court entered the Order to Show Cause and provided that pending the resolution of the Order to Show Cause, all further collection proceedings in the action are stayed. A hearing the Company's motion to vacate and Order to Show Cause are currently set to be heard on February 18, 2026.
Except as set forth above, there have 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, 2025.
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Item 1A. Risk Factors
As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as filed with the SEC on October 14, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
N/A
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:
| * | Filed herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SINGULARITY FUTURE TECHNOLOGY, LTD. | ||
| February 13, 2026 | By: | /s/ Jia Yang |
| Jia Yang | ||
| Chief Executive Officer | ||
| February 13, 2026 | By: | /s/ Chee Jiong Ng |
| Chee Jiong Ng | ||
| Chief Financial Officer | ||
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