Annual Report for Fiscal Year Ending June 30, 2026 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our results of operations and financial condition should be read together with our consolidated financial statements and the notes thereto and other financial information, which are included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in other sections of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our financial statements have been prepared in accordance with U.S. GAAP. In addition, our financial statements and the financial information included in this Report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.

Overview

Treasure Global Inc is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware. TGL has no substantive operations other than holding all of the outstanding shares of TADAA Technologies Sdn. Bhd. ("TADAA Technologies"), (formerly known as ZCity Sdn Bhd and Gem Reward Sdn. Bhd, underwent a name change on July 31, 2025 and July 20, 2023, respectively) and TADAA Ventures Sdn. Bhd. (formerly known as VWXYZ Venture Sdn Bhd, underwent a name change on July 29, 2025). It was originally established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization.

Prior to March 11, 2021, TGL and TADAA Technologies were separate companies under the common control of Kok Pin "Darren," Tan which resulted from Mr. Tan's prior 100% ownership of TGL and his prior 100% voting and investment control over TADAA Technologies pursuant to the Beneficial Shareholding Agreements. For a more detailed description of the Beneficial Shareholding Agreements and Mr. Tan's common control over TGL and TADAA Technologies see Part I, Item 1. "Business - Corporate Structure."

On March 11, 2021, TGL and TADAA Technologies were reorganized into a parent subsidiary structure pursuant to the Share Swap Agreement in which TGL exchanged the swap shares for all of the issued and outstanding equity of TADAA Technologies. Pursuant to the Share Swap Agreement, the purchase and sale of the swap shares was completed on March 11, 2021, but the issuance of the swap shares did not occur until October 27, 2021 when TGL amended its certificate of incorporation to increase the number of its authorized common stock to a number that was sufficient to issue the swap shares. As a result of the Share Swap Agreement, (i) TADAA Technologies became the 100% subsidiary of TGL and Kok Pin "Darren" Tan no longer had any control over the TADAA Technologies ordinary shares and (ii) Kok Pin "Darren" Tan the Initial TADAA Technologies Stockholders and Chong Chan "Sam" Teo owned 100% of the shares of TGL common stock (Kok Pin "Darren" Tan owning approximately 97%). Subsequent to the date of the Share Swap Agreement, Kok Pin "Darren" Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock.

-	TADAA Technologies Operation

We have created an innovative online-to-offline e-commerce platform business model offering consumers and merchants instant rebates and affiliate cashback programs, while providing a seamless e-payment solution with rebates in both e-commerce (i.e., online) and physical retailers/merchant (i.e., offline) settings.

Our proprietary product is an application branded "ZCITY App," which was developed through TADAA Technologies. The ZCITY App was successfully launched in Malaysia on June 2020. TADAA Technologies is equipped with the know-how and expertise to develop additional/add-on technology-based products and services to complement the ZCITY App, thereby growing its reach and user base.

Through simplifying a user's e-payment gateway experience, as well as by providing great deals, rewards and promotions with every use, we aim to make the ZCITY App Malaysia's top reward and loyalty platform. Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of October 13, 2026, we had 2,715,386 registered users and 2,027 registered merchants.

Southeast Asia ("SEA") consumers have access to a plethora of smart ordering, delivery and "loyalty" websites and apps, but in our experience, SEA consumers very rarely receive personalized deals based on their purchases and behavior.

The ZCITY App targets consumer through the provision of personalized deals based on consumers' purchase history, location and preferences. Our technology platform allows us to identify the spending trends of our customers (the when, where, why, and how much). We are able to offer these personalized deals through the application of our proprietary artificial intelligence (or "AI") technology that scours the available database to identify and create opportunities to extrapolate the greatest value from the data, analyze consumer behavior and roll out attractive rewards-based campaigns for targeted audiences. We believe this AI technology is currently a unique market differentiator for the ZCITY App.

We operate our ZCITY App on the hashtag: "#RewardsOnRewards." We believe this branding demonstrates to users the ability to spend ZCITY App-based Reward Points (or "RP") and "ZCITY Cash Vouchers" with discount benefits at checkout. Additionally, users can earn rewards from selected e-Wallet or other payment methods.

ZCITY App users do not require any on-going credit top-up or need to provide bank card number with their binding obligations. We have partnered with Malaysia's leading payment gateway, iPay88, for secure and convenient transactions. Users can use our secure platform and enjoy cashless shopping experiences with rebates when they shop with e-commerce and retail merchants through trusted and leading e-wallet providers such as Touch'n Go eWallet, Boost eWallet, GrabPay eWallet and credit card/online banking like the "FPX" (the Malaysian Financial Process Exchange) as well as more traditional providers such as Visa and Mastercard.

Recent Development

-	Corporate Development

On February 11, 2025, we signed a share purchase agreement to acquire a 51% stake in Tien Ming Distribution Sdn Bhd to expand FMCG fulfilment and logistics capabilities. The transaction is expected to be terminated following the lack of control or significant influence over Tien Ming Distribution Sdn Bhd and no business combination was recognized for the year ended June 30, 2026.

-	Reverse Stock Splits

On April 7, 2025, we effected a 1:50 reverse stock split of its shares of common stock ("April 2025 Reverse Split").

On December 5, 2025, we further effected a 1:20 reverse stock split of its shares of common stock ("December 2025 Reverse Split").

We believed it is appropriate to reflect the above transactions on a retroactive basis similar to those after a stock split or dividend pursuant to ASC 260. All shares and per share amounts used herein Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations have been retroactively stated to reflect the effect of the April 2025 Reverse Split and December 2025 Reverse Split.

-	Financing Development

On March 22, 2024, We entered into a marketing offering agreement ("Marketing Offering Agreement") with H.C. Wainwright & Co., LLC, (the "Manager"). Pursuant to the Marketing Offering Agreement, we intend to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the our common stock at the Market Offering. As of June 30, 2026, the Company received an aggregated net proceed of approximately $2.9 million, net of broker fee from issuance of common stock which sell through or to the Manager.

On October 10, 2024, we entered into a Share Purchase Agreement (the "Purchase Agreement") with Alumni Capital LP ("Alumni Capital"), a Delaware limited partnership which was subsequently amended by the Modification Agreement on January 21, 2025. Pursuant to the Purchase Agreement, we have the right, but not the obligation to cause Alumni Capital to purchase up to $50,000,000 common stock, par value $0.00001 (the "Commitment Amount"), at certain purchase Price during the period beginning on the execution date of the Purchase Agreement and ending on the earlier of (i) the date on which Alumni Capital has purchased $50,000,000 of the Company's common stock pursuant to the Purchase Agreement or (ii) December 31, 2025. As of June 30, 2026, Alumni Capital has purchased aggregated total of 644,956 shares of our common stock, while we received an aggregated net proceed of approximately $18.8 million.

On October 7, 2025, we entered into a subscription agreement (the "Agreement") with two investors for the purchase of 17,242 shares of our common stock for aggregate cash consideration of $400,000.

On December 12, 2025, we closed a registered direct offering with certain institutional investors for the purchase and sale of 250,000 shares of its common stock, resulting in net proceeds of $2,160,000, after deducting offering-related costs of $340,000.

On May 26, 2026, we entered into a subscription agreement with an investor for an aggregate investment of $1,200,000 in the Company's common stock. As of June 30, 2026, we had received $600,000 in proceeds and issued 149,695 shares of common stock.

-	Business Development

Since July 2024, we formalized agreements to develop and implement a Smart Campus System at ELMU University in Nilai, Malaysia. Leveraging our expertise in infrastructure management, we worked with ELMU University to deploy an automated smart campus system that will enhance resource management across the campus, with a strong focus on optimizing electricity usage through integrated software and hardware solutions. During fiscal 2025, following further discussions on program priorities and timing, the parties concluded the engagement. We have ceased work and demobilized. No further performance obligation remains under this engagement.

Since October 2024, we have been advancing our user engagement strategy by partnering with Octagram Investment Limited ("OCTA") to develop and integrate mini-game modules into the ZCity App. We have worked closely with OCTA to design and customize these interactive modules, ensuring they align with our specifications for game mechanics, branding, and user experience. The integration is optimized for cross-platform compatibility and smooth performance across devices, as well as ensuring ongoing support and timely updates, maintaining the seamless functionality of the mini-games with future ZCity App updates. We believe that this initiative is key to enhancing the app's interactive features and driving user engagement.

In October 2024, we have also been developing a cutting-edge Live Streaming Platform enhanced by AI Digital Human Solutions by partnering with V Gallant Sdn Bhd. We will be overseeing the customization of the platform to meet specific requirements, ensuring seamless integration with third-party platforms and optimizing performance across devices. Ongoing support and updates will also be prioritized to maintain consistent functionality. This initiative is central to our efforts to expand our interactive streaming capabilities and elevate user experiences. The development was completed on December 31, 2025.

On October 29, 2024, we entered into a service agreement with V Gallant Sdn Bhd to provide generative AI solutions and AI digital human technology services.

On March 24, 2025, we executed a supplemental letter expanding the scope of that agreement to require V Gallant to provide and manage GPU servers, network infrastructure, cloud integration, security measures, AI tools, and user environments to support AI cloud infrastructure. During fiscal 2025 we advanced software and AI infrastructure development.

Since January 2026, we have expanded our technology ecosystem through the acquisition and development of Tazte Technology Sdn. Bhd. ("Tazte"). On February 23, 2026, we entered into a Share Sale Agreement for the acquisition of Tazte and subsequently provided funding support for its operational needs, working capital and development of the Tazte Apps platform. On March 11, 2026, we entered into a Software Enhancement Agreement on behalf of Tazte with Apexcode Innovations Sdn. Bhd. for technology development and enhancement services relating to the Tazte Apps platform for total contract consideration of $2,866,242.

On April 23, 2026, we completed the acquisition of Tazte, and Tazte became our wholly owned subsidiary. The acquisition expands our technology capabilities and supports the continued development of the Tazte Apps platform. During fiscal 2026, we continued to fund the development of the platform. As of June 30, 2026, Phase 1 of the software development project had been completed, and $955,414 of related development costs had been capitalized as intangible assets, while $110,240 related to development services not yet completed remained recorded as a prepayment.

Key Factors that Affect Operating Results

We believe the key factors affecting our financial condition and results of operations include the following:

Our Ability to Create Value for Our Users and Generate Revenue

Our ability to create value for our users and generate our revenues from merchants is driven by the factors described below:

Number and volume of transactions completed by our consumers.

Consumers are attracted to TADAA Technologies by the breadth of personalized deals/rewards and the interactive user experience our platform offers. The number and volume of transaction completed by our member consumers is affected by our ability to continue to enhance and expand our product and service offerings and improve the user experience.

Empowering data and technology.

Our ability to engage our member consumers and empower our merchants and their brands is affected by the breadth and depth of our data insights, such as the accuracy of our members' shopping preferences, and our technology capabilities and infrastructure, and our continued ability to develop scalable services and upgrade our platform user experience to adapt to the quickly evolving industry trends and consumer preferences.

Our Investment in User Base, Technology, People and Infrastructure

We have made, and will continue to make, significant investments in our platform to attract consumers and merchants, enhance user experience and expand the capabilities and scope of our platform. We expect to continue to invest in our research and development team as well as in our technology capabilities and infrastructure, which will lower our margins but deliver overall long-term growth.

Inflation

Although Malaysia is experiencing a high inflation rate, we do not believe that inflation has had a material adverse effect on our business as June 30, 2026, but we will continue to monitor the effects of inflation on our business in future periods.

Supply Chain Disruptions

Although there have been Russia's February 2022 invasion of Ukraine and the 2023 Middle East conflicts that may have affected the operations of some of our online and offline merchants, these disruptions have not had a material adverse effect on our business as of June 30, 2026, but we will continue to monitor the effects of above mentioned disruptions on our business in future periods.

Key Operating Metrics

Our management regularly reviews a number of metrics to evaluate our business, measures our performance, identifies trends, formulates financial projections and makes strategic decisions. The main metrics we consider, and our results for last five quarters, are set forth in the table below:

		For the Quarters Ended
		June 30,				September 30,				December 31,				March 31,				June 30,
		2025				2025				2025				2026				2026
Number of new registered user (1)			88				517				507				536				570
Number of active users (2)			4,887				4,378				3,754				3,462				3,054
Number of new participating merchants			-				-				-				-				-

(1)	Registered are persons who have registered on the ZCITY App.

(2)	Active users are users who have logged into the ZCITY App at least once.

		As of				As of				As of				As of				As of
		June 30,				September 30,				December 31,				March 31,				June 30,
		2025				2025				2025				2026				2026
Accumulated registered users			2,708,053				2,708,570				2,709,077				2,709,613				2,710,183
Accumulated Participating merchants			2,027				2,027				2,027				2,027				2,027

We have experienced a decrease in growth rate in registered users, and a decline of active users over our last five quarters as of June 30, 2026. As of June 30, 2026, we recorded 2,710,183 registered users and 3,054 active users on the ZCITY platform. On average, our registered user base has grown by approximately 0.02% over the past five quarters, while our active user numbers have experienced an average decrease of 21.8%.

The decline in growth of registered users and active users over the past five quarters, as of June 30, 2026, is primarily attributed to reduced E-voucher purchases from our vendor, resulting in fewer E-vouchers available for sale. Additionally, we've implemented reductions in marketing spending and customer rewards to enhance cost-effectiveness and operational profitability. Consequently, this has led to a decrease in new user registrations and lower retention rates among active users on our ZCITY platform.

We continuously monitor the development and participation of active users as a proportion of its total registered user base to ensure the effectiveness of our marketing and feature implantation strategies. Accordingly, the proportion of total registered users that we consider active users at the end last five quarters as of June 30, 2026 is as follows:

Starting		Ending		Total registered users				Total active users				Total active users to total registered users
April 1, 2025		June 30, 2025			2,708,053				4,887				0.2	%
July 1, 2025		September 30, 2025			2,708,570				4,378				0.2	%
October 1, 2025		December 31, 2025			2,709,077				3,754				0.1	%
January 1, 2026		March 31, 2026			2,709,613				3,462				0.1	%
April 1, 2026		June 30, 2026			2,710,183				3,054				0.1	%

We continuously monitor the development of the churn and retention rates of the active user base. Active users churn rate is the percentage of customers who had stop subscribing in our platform while retention rate is the percentage of customers who is retained in our platform. Accordingly, our churn and retention rates of the active user base at the end of last five quarters as of June 30, 2026 is as follows:

Starting		Ending		Total active users				New active users (registered within the quarter)				Existing active users				Active users churn rate				Active users retention rate
April 1, 2025		June 30, 2025			4,887				88				4,799				54.9	%			45.1	%
July 1, 2025		September 30, 2025			4,378				517				3,861				21.0	%			79.0	%
October 1, 2025		December 30,2025			3,754				507				3,247				25.8	%			74.2	%
January 1, 2026		March 31, 2026			3,462				536				2,926				22.1	%			77.9	%
April 1, 2026		June 30, 2026			3,054				570				2,484				28.2	%			71.8	%

The retention rate and churn rate for our active users are calculated as follows:

Retention rate of active users for any quarter	=	Existing active users
		Total active users in the past quarter

Churn rate of active users for any quarter	=	Total active users from past quarter minus current quarter existing active users
		Total active users in the past quarter

We have used different strategies to build and maintain our users and increase their engagement. Initially, we focused on mass marketing strategies to attract registered users. Subsequently, we have shifted to a more targeted approach focused on increasing user engagement and user spending.

Results of Operation

For the years ended June 30, 2026 and 2025

Revenue

Our breakdown of revenues by categories for the years ended June 30, 2026 and 2025, respectively, is summarized below:

		For the Years Ended June 30,																Change
		2026				%				2025				%				%
Product and loyalty program revenue		$	5,157,597				99.8	%		$	619,897				26.6	%			732.0	%
Transaction revenue			12,187				0.2	%			127,127				5.5	%			(90.4	)%
Member subscription revenue			-				-	%			103,533				4.4	%			(100.0	)%
Customized software development service			-				-	%			1,480,000				63.5	%			(100.0	)%
Total revenues		$	5,169,784				100.0	%		$	2,330,557				100.0	%			121.8	%

Total revenues increased by approximately $2.8 million, or 121.8%, to approximately $5.2 million for the year ended June 30, 2026, from approximately $2.3 million for the same period in 2025, primarily attributable to an increase in product and loyalty program revenue, partially offset by a decrease in transaction revenue and the absence of member subscription revenue and customized software development service revenue for the year ended June 30, 2026, compared to approximately $0.1 million and $1.5 million, respectively, recognized for the same period in 2025.

Product and loyalty program revenue

Product revenue was generated from sales of e-vouchers, healthcare products, and other products through our ZCITY platform, while loyalty program revenue was recognized upon redemption of previously earned reward points or upon expiration of such points. Product and loyalty program revenue increased by approximately $4.5 million, or 732.0%, to approximately $5.2 million for the years ended June 30, 2026, from approximately $0.6 million for the same period in 2025. The increase was attributable to higher demand for our e-voucher products, resulting in a significant increase in sales volume.

Transaction revenue

Transaction revenue primarily consists of fees charged to merchants for participating in our ZCITY platform upon successful sales and service transactions, as well as for payment services facilitated between merchants and their customers online. In addition, transaction revenue includes fees earned through our recent partnership with Credilab Sdn. Bhd. ("CLSB"), a third-party credit services provider. Under that agreement, we refer our portfolio clients from TADAA Technologies Sdn. Bhd. (ZCITY's operating subsidiary) to CLSB's credit service platform; in return CLSB pays us a transaction fee for each successful transaction and agrees to share 50 % of the revenue derived from those portfolio clients.

Our transaction revenue decreased by 90.4% to approximately $12,000 for the years ended June 30, 2026, compared to approximately $127,000 for the same period in 2025. The decline attributable to lower usage by merchants on our ZCITY platform and reduced transaction volume resulting from fewer successful referrals through our partnership with CLSB.

Customized software development services

During the fiscal year ended June 30, 2025, the Company initiated a new revenue stream by offering customized software development services, primarily targeting enterprise clients. In January 2025, the Company entered into a service partnership with Reveillon Group Limited to design, develop, and implement a comprehensive digital system, including integrated modules to enhance administrative processes, data analysis, and user engagement. The project is designed with scalability and customization to support long-term performance and evolving business needs, and is expected to be completed within 12 months from the commencement date.

No revenue from customized software development services was recognized for the years ended June 30, 2026.

Cost of revenue

Our breakdown of cost of revenue by categories for the years ended June 30, 2026, and 2025, respectively, is summarized below:

		For the Years Ended June 30,								Change
		2026				2025				%
Product and loyalty program revenue		$	5,161,042			$	206,106				2,404.1	%
Customized software development service			-				454,626				(100.0	)%
Total cost of revenue		$	5,161,042			$	660,732				681.1	%

Cost of revenue primarily consists of purchases of gift cards or "E-voucher" PIN codes, and healthcare products, which are directly attributable to our product revenue. Total cost of revenue increased by approximately $4.5 million, or 681.1%, for the years ended June 30, 2026 compared to the same period in 2025. The increase was mainly due to increase of product and loyalty program revenue and higher product cost.

Gross profit

Our gross profit from our major revenue categories is summarized as follows:

		For the Year Ended June 30, 2026				For the Year Ended June 30, 2025				Change				Percentage Change
Product and loyalty program revenue
Gross profit		$	(3,445	)		$	413,791			$	(417,236	)			(100.8	)%
Gross margin			(0.1	)%			66.8	%			(66.9	)%
Transaction revenue
Gross profit		$	12,187			$	127,127			$	(114,940	)			(90.4	)%
Gross margin			100.0	%			100.0	%			-	%
Member subscription revenue
Gross profit		$	-			$	103,533			$	(103,533	)			(100.0	)%
Gross margin			-	%			100.0	%			(100.0	)%
Customized software development service revenue
Gross (loss) profit		$	-			$	1,025,374			$	(1,025,374	)			(100.0	)%
Gross margin			-	%			69.3	%			(69.3	)%
Total
Gross profit		$	8,742			$	1,669,825			$	(1,661,083	)			(99.5	)%
Gross margin			0.2	%			71.6	%			(71.4	)%

Our gross profit for the year ended June 30, 2026 was approximately $9,000, compared to approximately $1.7 million for the year ended June 30, 2025, representing a decrease of approximately $1.7 million, or 99.5%. Our gross margin decreased to approximately 0.2% for the year ended June 30, 2026 from approximately 71.6% for the year ended June 30, 2025.

The decrease in gross profit and gross margin was primarily attributable to the absence of customized software development service revenue and member subscription revenue during the year ended June 30, 2026, which contributed approximately $1.0 million and $0.1 million of gross profit, respectively, during the prior year. The decrease was also attributable to lower gross profit from transaction revenue and a decline in gross profit from product and loyalty program revenue. Product and loyalty program revenue generated a gross loss of approximately $3,000 for the year ended June 30, 2026, compared to gross profit of approximately $0.4 million in the prior year. The decrease was primarily attributable to an increase in the portion of revenue deferred in connection with the ZCITY reward program, which reduced revenue recognized relative to the related cost of revenue during the period.

Operating expenses

Our operating expenses consist of selling expenses, general and administrative expenses, research and development expenses and stock-based compensation expenses.

Selling expenses

Selling expenses amounted to approximately $1.3 million and $0.1 million for the years ended June 30, 2026 and 2025, respectively, representing an increase of approximately $1.1 million, or 876.3%. The increase was mainly attributable to an increase in digital marketing expense of approximately $1.1 million and other marketing and promotion expense related to promoting our ZCITY platform. Marketing and promotion expense consists of redemptions of reward points which is generated from non-spending related activities (registration as a new user, referral of a new user and Spin & Win eligibility to receive reward points) in exchange for discounted credit of purchasing our products upon conversion of using the reward points. For the years ended June 30, 2026 and 2025, we incurred approximately $26,000 and $34,000, respectively, in marketing and promotion expense, and recognized the same amount of product revenue at the time of redemption of the non-spending related activities reward points by our customers.

General and administrative expenses

General and administrative expenses amounted to approximately $5.2 million and $2.8 million for the years ended June 30, 2026 and 2025, respectively, representing an increase of approximately $2.4 million, or 85.7%. The increase was primarily attributable to an approximately $2.0 million increase in professional fees and an approximately $0.4 million increase in salary and related payroll expenses to support the Company's operations, partially offset by the absence of approximately $0.8 million of amortization expense related to intangible assets recognized in the prior year.

Allowance for credit losses

Allowance for credit losses amounted to approximately $3.4 million and $0.8 million for the years ended June 30, 2026 and 2025, respectively, representing an increase of approximately $2.6 million. The increase was primarily attributable to higher expected credit losses on outstanding receivables, driven by an increase in aged receivable balances and management's assessment of the collectability of certain customer accounts based on their payment history and current financial condition.

Research and development expenses

Research and development expense amounted to approximately $1.6 million and $0.2 million for the years ended June 30, 2026 and 2025, respectively, representing a 662.5% increase as we incurred more spending in A.I related infrastructure development. The increase primarily reflects costs for software engineering, cloud infrastructure and GPU-related development supporting the live-streaming/AI program described in "Business Development."

Long-lived assets impairment

Long-lived asset impairment amounted to approximately $3.0 million and $19.5 million for the years ended June 30, 2026 and 2025, respectively, representing a decrease of approximately $16.5 million, or 84.4%. The impairment charges in both periods primarily related to intangible assets, with the decrease in the current year primarily attributable to a lower amount of intangible assets determined to be impaired compared to the prior year.

Stock-based compensation expenses

Stock-based compensation expenses amounted to approximately $1.8 million and $0.2 million for the years ended June 30, 2026 and 2025, respectively, representing an increase of approximately $1.6 million, or 785.6%. The stock-based compensation incurred for the years ended June 30, 2026 and 2025, was related to compensation paid to our executive officers and other employees as part of their compensation plan and third party for professional service.

Other income (expenses), net

Total other income (expense), net, amounted to approximately $5.5 million of net other income for the year ended June 30, 2026, compared to approximately $1.0 million of net other expense for the same period in 2025. This change was primarily attributable to (i) an increase of approximately $2.8 million in the gain from the change in fair value of derivative assets and warrant liabilities, (ii) a gain on disposal of subsidiaries of approximately $1.0 million recognized in the current year, and (iii) the absence of the approximately $2.7 million loss from settlement of the share price decrease recognized in the prior year, and (iv) the absence of the approximately $0.2 million unrealized holding loss on marketable securities recognized in the prior year, partially offset by (a) a decrease of approximately $0.2 million in other (expense) income, net, mainly due to an approximately $0.3 million loss on disposal of fixed assets, and (b) an approximately $35,000 loss in the fair value of crypto assets.

Provision for income taxes

Provision for income taxes amounted to approximately $200,000 and $349,000 for the years ended June 30, 2026 and 2025, respectively. The amount was mainly attributable to tax imposed on us from the State of Delaware, as we are required to remit franchise tax to the State of Delaware on an annual basis. We also were subject to controlled foreign corporations Subpart F income ("Subpart F") tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 35%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income ("GILTI") tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended June 30, 2026 and 2025, our foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.

Net loss

We generated net loss of approximately $11.1 million and $23.4 million for the years ended June 30, 2026 and 2025, respectively, representing a decrease of approximately $12.3 million. The change was primarily attributable to the factors discussed above.

Liquidity and Capital Resources

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our liquidity needs are to meet working capital requirements and operating expense obligations. To date, we financed our operations primarily through cash flows from contribution from stockholders, issuance of convertible notes, related party loans and our completion of initial underwritten public offering.

As of June 30, 2026 and June 30, 2025, we had approximately $1.6 million and 0.2 million, respectively, in cash and cash equivalent which primarily consists of bank deposits, which are unrestricted as to withdrawal and use. As of June 30, 2026 and June 30, 2025, we had working capital of approximately $4.6 million and $1.9 million, respectively.

We have raised additional capital through various equity financing arrangements. Under our March 2024 at-the-market offering program with H.C. Wainwright & Co., LLC, we had received aggregate net proceeds of approximately $2.9 million as of June 30, 2026. Under our equity financing arrangement with Alumni Capital LP, we received aggregate net proceeds of approximately $18.8 million through June 30, 2026. We also received $1.2 million pursuant to our November 2024 subscription agreement, $0.4 million pursuant to subscription agreements entered into in October 2025, and net proceeds of approximately $2.2 million from a registered direct offering completed in December 2025.

In addition, in May 2026, we entered into a subscription agreement with an investor for an aggregate investment of $1.2 million in our common stock. As of June 30, 2026, we had received $0.6 million of the investment amount and issued 149,695 shares of common stock.

Despite receiving the proceeds from various offerings, management is of the opinion that we will not have sufficient funds to meet the working capital requirements and debt obligations as they become due starting from one year from the date of this report due to our recurring loss. Therefore, management has determined there is substantial doubt about our ability to continue as a going concern. If we are unable to generate significant revenue, we may be required to curtail or cease our operations. Management is trying to alleviate the going concern risk through equity financing to support its working capital.

However, there is no guarantee that the substantial doubt about our ability to continue as a going concern will be alleviated.

The following summarizes the key components of our cash flows for the years ended June 30, 2026 and 2025:

		For the Years Ended
		June 30, 2026				June 30, 2025
Net cash used in operating activities		$	(6,884,451	)		$	(9,481,499	)
Net cash used in investing activities			(3,078,195	)			(5,771,193	)
Net cash provided by financing activities			11,610,278				15,433,587
Effect of exchange rate on cash and cash equivalents			(293,165	)			(144,013	)
Net change in cash and cash equivalents		$	1,354,467			$	36,882

Operating Activities

Net cash used in operating activities for the year ended June 30, 2026 was approximately $6.9 million and was mainly comprised of (i) the net loss of approximately $11.1 million, and (ii) non-cash gains from the change in fair value of derivative assets and derivative liabilities, gain from disposal of subsidiaries, and interest income on short-term investment amounting to approximately $5.8 million, offset by (i) non-cash items of depreciation, allowance for credit losses, long-lived assets impairment, loss from disposal of equipment and motor vehicle, stock-based compensation, and change in fair value of crypto assets amounting to approximately $8.8 million, (ii) a decrease in accounts receivable of approximately $0.6 million due to timely collection, and (iii) an increase in other payables and accrued liabilities of approximately $0.6 million reflecting higher accrued expenses during the period.

Net cash used in operating activities for the year ended June 30, 2025 was approximately $9.5 million and was mainly comprised of the net loss of approximately $23.4 million, non-cash item of gain in change in fair value of derivative liabilities of approximately $1.8 million, increase in accounts receivable of approximately $1.6 million due to additional sales to new service partnership with Reveillon Group Limited but not yet collected, increase of other receivable and other assets of approximately $7.0 million which mainly includes approximately $3.6 million prepayment to certain vendors for technical and maintenance service and approximately $5.7 million of collaboration deposit made to Credilab Sdn. Bhd. ("CLSB"), decrease in customer deposits of approximately $75,000, as we recognized member service revenue in the current period from certain merchant prepayments made in the prior period, and decrease in contract liabilities of approximately $0.2 million, primarily as a result of increased revenue recognized from the ZCITY reward program due to a higher volume of customer reward redemptions, offset by non-cash items of depreciation, amortization, allowance for credit losses, stock-based compensation, long-live assets impairment and unrealized loss on marketable securities amounted to approximately $21.6 million, decrease of prepayment of approximately $0.1 million due to the utilization of prior-period prepayments for inventory purchases, and (iii) increase of approximately $2.9 million in other payables and accrued liabilities as we made approximately $2.7 million provision related to settlement of cash compensation requested by V Gallant Sdn. Bhd. pursuant to the Service Agreement dated October 29, 2024, as supplemented on March 28, 2025, to reflect the decline in our share price.

Investing Activities

Net cash used in investing activities for the years ended June 30, 2026 was approximately $3.1 million which was mainly due to approximately $1.7 million in purchases of intangible assets, approximately $1.1 million in purchases of property and equipment, approximately $0.3 million used to acquire crypto assets that were placed in a one-year yield arrangement to earn returns in USDT, and the remittance of approximately $53,000 to CLSB as a collaboration deposit to support CLSB's credit service activities for the Portfolio Clients.

Net cash used in investing activities for the year ended June 30, 2025 was approximately $5.8 million which mainly due to remittance of approximately $5.7 million to CLSB as a collaboration deposit to support CLSB's credit service activities for the Portfolio Clients, and approximately $0.2 million prepayment of purchase consideration for acquisition of Tien Ming Distribution Sdn Bhd.

Financing Activities

Net cash provided by financing activities for the year ended June 30, 2026 was approximately $11.6 million, which mainly comprised of approximately $7.1 million of proceeds received under the Share Purchase Agreement, approximately $2.5 million of proceeds received from the direct offering, approximately $1.4 million of proceeds received from the exercise of warrants into common stock, approximately $1.0 million of proceeds received under subscription agreements, and approximately $73,000 of proceeds received from an insurance loan, offset by payment of offering costs of approximately $0.3 million and payments of insurance loan and related party loan of approximately $81,000.

Net cash provided financing activities the years ended June 30, 2025 was approximately $15.4 million, which mainly comprised of approximately $15.4 million net proceeds received from issuance of common stock through market offering, subscription agreement and share purchase agreement, approximately $64,000 proceed received from exercised of warrants, and loan proceed of approximately $51,000, offset by payments of insurance loan and related party loan of approximately $54,000.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

Critical Accounting Estimate

Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting estimates that are significant to the preparation of our financial statements. These estimates are important for an understanding of our financial condition and results of operation. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following critical accounting estimates involve the most significant estimates and judgments used in the preparation of our financial statements.

The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in our consolidated financial statements include impairment of long-lived assets, provision for estimated credit losses, realization of deferred tax assets, fair value of the stock-based compensation, , fair value of the warrants issued, derivative assets and derivative liabilities. Actual results could differ from these estimates.

Accounts receivable, net

Accounts receivable are recorded at the invoiced amount, net of an allowance for uncollectible accounts and do not accrue interest. We offer various payments terms to customers from cash due on delivery to 90 days based on their credit history. Accounts receivable encompass amounts due from sales of healthcare products on our ZCITY platform. Management also periodically evaluates individual customer's financial condition, credit history and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance when all collection efforts have been exhausted, and recovery potential is deemed remote. Our management reviews historical accounts receivable collection rates across all aging brackets and has made 100% provision of credit loss for customer balances aged above 120 days for sales of healthcare products on our ZCITY platform. Our management continuously assesses the reasonableness of the credit loss allowance policy and updates it as needed. As of June 30, 2026 and June 30, 2025, we recorded $735,214 and $9,924 of provision for estimated credit losses, respectively.

Other receivables and other current assets, net

Other receivables and other current assets consist of prepayment to third parties for cyber security service, director & officer liability insurance ("D&O Insurance"), and other professional fee. Other receivables and other current assets also include refundable advance to third party service provider, and other deposits. Starting from July 1, 2023, we had adopted ASC Topic 326 on our other receivables using the modified retrospective approach. The new credit loss guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses rather than incurred losses. Under the new accounting guidance, we measure credit losses on its other receivables using the current expected credit loss model under ASC 326. As of June 30, 2026 and 2025, we have provided allowance for credit loss of $3,794,619 and $1,078,353, respectively.

Impairment for long-lived assets

Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assessed the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. $3,044,877 and $19,517,303 impairment for long-lived assets were recorded as of June 30, 2026 and 2025, respectively.

Goodwill impairment

The Company performs an annual impairment test of goodwill and evaluates goodwill for impairment whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value. Based on the Company's impairment assessments, no impairment loss on goodwill was recognized for the years ended June 30, 2026 and 2025.

Income taxes

Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded.

Stock-based compensation

We account for stock-based compensation awards in accordance with FASB ASC Topic 718, "Compensation - Stock Compensation", which requires that stock-based payment transactions with employees and service providers be measured based on the fair value of the equity instruments issued and recognized as compensation expense over the requisite service period or as the related services are received. Certain stock-based compensation awards represent a predetermined monetary value to be settled in a variable number of shares of the Company's common stock and are accounted for as liability-classified awards. Such awards are remeasured at fair value until settlement, with changes in fair value recognized as stock-based compensation expense. The fair value of the Company's common stock used in measuring these awards is determined based on the quoted market price of the Company's common stock in an active market, which is a Level 1 input in accordance with ASC Topic 820, "Fair Value Measurement." For the years ended June 30, 2026 and 2025, we incurred stock-based compensation expense related to our officers and third-party service providers of approximately $1.8 million and $0.2 million, respectively.

Derivative assets

In connection with the settlement of certain receivables and contractual arrangements, we hold contractual rights to receive equity securities of V Gallant Limited ("V Gallant") and Reveillon Group Limited ("RG"). The underlying shares are held in escrow and subject to certain contractual conditions and restrictions that prevent us from obtaining present control of the shares. Accordingly, we account for these contractual rights as derivative assets under ASC 815, Derivatives and Hedging, and remeasure the derivative assets at fair value at each reporting date in accordance with ASC 820, Fair Value Measurement.

The fair value of the derivative assets was determined with reference to independent third-party valuations using primarily the discounted cash flow ("DCF") method. The fair value measurements are classified within Level 3 of the fair value hierarchy because the valuations utilize significant unobservable inputs. Accordingly, the determination of fair value requires significant estimates and assumptions, and changes in the underlying valuation assumptions could materially affect the fair value of the derivative assets and the resulting gain or loss recognized in earnings.

As of June 30, 2026, the fair value of the contractual right to receive 1,300,000 ordinary shares of V Gallant was determined using the DCF method, which indicated a value of $1.71 per underlying share, resulting in an estimated fair value of $2,223,000. The fair value of the contractual right associated with 700,000 ordinary shares of RG was determined using the DCF method, which indicated a value of $2.06 per underlying share, resulting in an estimated fair value of $1,442,000. Accordingly, the aggregate fair value of the derivative assets was $3,665,000 as of June 30, 2026.

Warrants

-	Fair value of Alumni Capital warrants

We account for the purchase warrants issued to Alumni Capital LP ("Alumni Capital") as liabilities, which are remeasured at fair value at each reporting period, with changes in fair value recognized in our consolidated statements of operations. The fair value of these warrants is estimated using the Black-Scholes option pricing model, which requires the use of significant judgment and assumptions, including expected stock price volatility, risk-free interest rate, expected life of the warrant, and the market price and exercise price of our common stock. These assumptions are highly subjective and inherently uncertain, and changes in any of these inputs can materially affect the estimated fair value of the warrant liability.

The fair value of the warrants issued to Alumni Capital which was determined on grant dates by using the Black Scholes model using the following assumptions: (1) expected volatility of 160.20% to 182.34%, (2) risk-free interest rate of 3.52% to 4.37%, (3) expected life of 2.0 years to 2.8 years, (4) exercise price of $23.37 to $103.00 and (5) stock price of $21.60 to $390.00 on grant date, the date of which the warrants were issued. Based on above assumption, the fair value of the warrants on grant date were estimated to be $13,247,339.

The fair value of the warrants issued to Alumni Capital was determined as of June 30, 2026 using the Black-Scholes model with the following assumptions: (1) expected volatility of 173.06%, (2) risk-free interest rate of 4.02%, (3) expected life of 1.3 years, (4) exercise price of $5.07, and (5) stock price of $3.91 as of June 30, 2026. Based on the above assumptions, the fair value of the warrants was estimated to be $1,187,876.

The fair value of the warrants issued to Alumni Capital was determined as of June 30, 2025 using the Black-Scholes model with the following assumptions: (1) expected volatility of 162.92% to 167.27%, (2) risk-free interest rate of 3.71%, (3) expected life of 2.3 years, (4) exercise price of $24.00 to $41.00, and (5) stock price of $22.00 as of June 30, 2025, as adjusted to give retroactive effect to the 1-for-20 reverse stock split effected on December 5, 2025. Based on the above assumptions, the fair value of the warrants was estimated to be $383,886.