GMEX 6-K 2025 - Equibles

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C. 20549

FORM6-K

REPORTOF FOREIGN PRIVATE ISSUER

PURSUANTTO RULE 13a-16 OR 15d-16 OF THE

SECURITIESEXCHANGE ACT OF 1934

For the month of April 2025

Commission File Number 001-41774

FitellCorporation

(Translation of registrant’s name into English)

23-25Mangrove Lane

TarenPoint, NSW 2229

Australia

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐

OTHERINFORMATION

Attached hereto as Exhibit 99.1 is the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Fitell Corporation (the “Company”) for the six months ended December 31, 2024 and 2023; and hereto as Exhibit 99.2 are the unaudited consolidated financial statements of the Company for the six months ended December 31, 2024 and 2023.

EXHIBITINDEX

Exhibit No.	Description
99.1	Management’s<br> Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended December 31, 2024 and 2023
99.2	Unaudited<br> Consolidated Financial Statements for the Six Months Ended December 31, 2024 and 2023

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:<br> April 28, 2025	FITELL CORPORATION
	By:	/s/ Yinying Lu
		Yinying<br> Lu
		Chief<br> Executive Officer and Director
		(Principal<br> Executive Officer)

Exhibit 99.1

MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Youshould read the following discussion and analysis of our financial condition and results of operations in conjunction with our unauditedconsolidated financial statements and the related notes for the six-months periods ended December 31, 2024 and 2023 and the audited consolidatedfinancial statements and accompanying notes for the year ended June 30, 2024 included in our annual report on Form 20-F (“2024Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on November 15, 2024. This discussioncontains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events coulddiffer materially from those anticipated in these forward-looking statements as a result of various factors. “We,” “us,”“our,” or the “Company” refers to Fitell Corporation and its subsidiaries, unless the context requires otherwise.

CautionaryNote Regarding Forward-Looking Statements

This report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements include statements relating to:

●	the<br> timing of the development of future services;
●	projections<br> of revenue, earnings, capital structure and other financial items;
●	statements<br> regarding the capabilities of our business operations;
●	statements<br> of expected future economic performance;
●	statements<br> regarding competition in our market; and
●	assumptions<br> underlying statements regarding us or our business.

These forward-looking statements are subject to a number of risks and uncertainties, including:

●	our<br> dependence on macroeconomic conditions and consumer discretionary spending;
●	the<br> intense competition in the gym and fitness equipment industry;
●	the<br> impacts of the COVID-19 pandemic on our business and results of operations;
●	fluctuations<br> in product costs and availability;
●	international<br> risks and costs associated with our supply chain;
●	changes<br> in consumer demand;
●	risks<br> associated with operating our own online platform, including confidential consumer data;
●	reputational<br> harms which could adversely impact our ability to attract and retain customers;

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These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” and elsewhere in our 2024 Annual Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations.

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Resultsof Operations

Comparisonof the Six-months Periods Ended December 31, 2024 and 2023

The following table summarizes the results of our operations during the six-months periods ended December 31, 2024 and 2023, and provides information regarding the dollar and percentage increase (or decrease) during such periods.

	For the Six Months Periods Ended December 31,
	2024					2023					Variance
	US		% of revenue			US		% of revenue			US		%
REVENUE				100.0	%				100.0	%				24.7	%
COST OF GOODS SOLD				61.7	%				60.1	%				27.9	%
GROSS PROFIT				38.3	%				39.9	%				19.8	%
OPERATING EXPENSES
Personnel expenses				21.9	%				19.8	%				37.3	%
Consulting fees				21.7	%				59.9	%		)		-54.8	%
General and administrative expenses				25.7	%				59.7	%		)		-46.3	%
Sales and marketing expenses				7.9	%				8.3	%				19.0	%
Amortization of operating right of use asset				5.2	%				6.3	%				4.4	%
Depreciation expenses				0.2	%				0.2	%				16.2	%
Total operating expenses				82.6	%				154.3	%		)		-33.2	%
INCOME FROM OPERATION		)		-44.3	%		)		-114.4	%				-51.7	%
OTHER INCOME (EXPENSE)
IPO related-expenses		)		-11.3	%		)		-2.4	%		)		496.6	%
Unrealized gain (loss) from marketable securities				2.9	%		)		-14.7	%				-124.8	%
Other income (expense)				N/A					5.4	%		)		-100.0	%
Interest income				4.9	%				0.0	%				16823.0	%
Interest expense		)		-2.8	%		)		-3.1	%		)		11.1	%
Total other income (expenses)		)		-6.3	%		)		-14.8	%				-46.7	%
INCOME BEFORE TAX		)		-50.6	%		)		-129.2	%				-51.1	%
INCOME TAX EXPENSE (CREDIT)				12.9	%		)		-3.8	%				-522.4	%
NET LOSS		)		-63.5	%		)		-125.4	%				-36.9	%

All values are in US Dollars.

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Revenues

Revenues were $2,647,039 for the six-months period ended December 31, 2024, and $2,123,119 for the six-months period ended December 31, 2023, representing an increase of $523,920, or 24.7%. Revenues consist primarily of (i) merchandise revenues of $2,647,039 for the six-months period ended December 31, 2024, and $2,007,562 for the six-months period ended December 31, 2023; (ii) no licensing income for the six-months period ended December 31, 2024, and licensing income of $115,557 for the six-months period ended December 31, 2023.

The following table summarizes the breakdown of revenues by categories for the periods indicated.

	For the Six Months Periods Ended December 31,
	2024				2023				Change		Change
	US	%			US	%			US		%
Merchandise revenue			100.0	%			94.6	%				31.9	%
Licensing income			0.0	%			5.4	%		)		-100.0	%
Total Revenue			100.0	%			100.0	%				24.7	%

All values are in US Dollars.

Merchandiserevenue

Merchandise revenue represents the sales of our various gym and fitness equipment and products. Merchandise revenue increased by 31.9% or $639,477 to $2,647,039 in the six-months period ended December 31, 2024 from $2,007,562 in the six-months period ended December 31, 2023. The increase in merchandise revenue was primarily attributable to the net effects of: (i) a slight increase of 3.3% in sales orders from 10,364 in the six-months period ended December 31, 2023, to 10,711 in the six-months period ended December 31, 2024 due to our management team’s increased efforts on our promotional campaign and exploring new channels to solicit new customers; and (ii) increase in the average revenue per order from $193.71 in the six-months period ended December 31, 2023 to $247.13, or an increase of 27.6%, in the six-months period ended December 31, 2024. The increase in average revenue per order is mainly due to the recovery in consumers’ confidences in Australia. By the end of the calendar year 2024, the inflation rate in Australia has dropped to 2.4% from 4.1% as at the end of calendar year 2023. In addition, the Reserve Bank of Australia has stabilized the case rate at 4.25% throughout the six-months period ended December 31, 2024.

Licensingincome

Licensing income refers to the services provided to gym studios in overseas markets. These services include, but are not limited to, providing the brand name and offering initial design services to gym studios. We have generated nil and $115,557 in licensing income in the six-months periods ended December 31, 2024, and 2023, respectively. The decrease was due to management temporarily suspending overseas expansions recently because market sentiments are negatively affected by inflation and the rise in interest rates in the global market. Nevertheless, we will expand these services again, especially to the Asia market, when the time is right.

Costof goods sold

Cost of goods sold were $1,632,280 for the six-months period ended December 31, 2024, and $1,275,967 for the six-months period ended December 31, 2023, representing an increase of $356,313, or 27.9%. Cost of goods sold consist primarily of merchandise costs, freight costs, and other related purchase costs such as custom duties. The increase was in line with the increase in merchandise revenues. Our cost of goods sold remains stable in terms of ratio, and accounted for 61.7% and 60.1% of our total revenue for the six-months period ended December 31, 2024 and 2023, respectively.

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GrossProfit

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Gross Profit		1,014,759			847,152			167,607		19.8	%
Gross Profit Margin		38.3	%		39.9	%				-1.6	%

Gross profit was $1,014,759 for the six-months period ending December 31, 2024, and $847,152 for the six-months period ending December 31, 2023, representing an increase of $167,607, or 19.8%. The increase is in-line with the growth in revenue. Gross profit margin was 38.3% and 39.9% for the six-months period ended December 31, 2024 and 2023, respectively, which was very stable.

PersonnelExpenses

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Personnel expenses		578,649			421,364			157,285		37.3	%
as percentage of revenue		21.9	%		19.8	%				2.0	%

Personnel expenses were $578,649 for the six-months period ended December 31, 2024, and $421,364 for the six-months period ended December 31, 2023, representing an increase of $157,285, or 37.3%. Personnel expenses consist primarily of employee salaries, superannuation, external consulting expenses and other employment expenses. Personnel expenses and headcount were relatively stable as a percentage of revenue, and the ratio was 21.9% and 19.8% in the six-months periods ended December 31, 2024 and 2023, respectively. Management targets to hire the right persons for each different task in order to maintain an effective and efficient operational team of the right size.

Consultingfees

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount			%
Consulting fees		574,659			1,272,468			(697,809	)		-54.8	%
as percentage of revenue		21.7	%		59.9	%					-38.2	%

Consulting fees were $574,659 for the six-months period ended December 31, 2024, and $1,272,468 for the six-months period ended December 31, 2023, representing a decrease of $697,809, or 54.8%. Since the successful listing of the Company’s securities on Nasdaq, management has proactively engaged various consulting firms to assist us in setting long-term business development plans and to identify new business growth opportunities. The decrease in consulting fees in the six-months period ended December 31, 2024, was due to there were relatively more consulting engagements incurred around the time the Company was successfully listed in August 2023.

Generaland Administrative Expenses

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount			%
General and administrative expenses		680,818			1,268,545			(587,727	)		-46.3	%
as percentage of revenue		25.7	%		59.7	%					-34.0	%

General and administrative expenses were $680,818 for the six-months period ended December 31, 2024, and $1,268,545 for the six-months period ended December 31, 2023, representing a decrease of $587,727, or 46.3%. General and administrative expenses consist primarily of merchant fees, insurance, warehouse costs and other corporate expenses. The decrease was mainly due to a one-off research and development expense on mobile app of $798,684 in the six-months period ended December 31, 2023.

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Salesand Marketing Expenses

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Sales and marketing expenses		209,118			175,705			33,413		19.0	%
as percentage of revenue		7.9	%		8.3	%				-0.4	%

Sales and marketing expenses were $209,118 for the six-months period ended December 31, 2024, and $175,705 for the six-months period ended December 31, 2023, representing an increase of $33,413, or 19.0%. However, as a percentage of revenue, sales and marketing expenses has remained stable at 7.9% and 8.3% for the six-months period ended December 31, 2024 and 2023, respectively. Sales and marketing expenses consist primarily of advertising and marketing expenses on various online platforms.

Amortizationof operating right of use asset

Amortization of operating right of use asset refers to our office premises and warehouse, which was $138,728 for the six-months period ended December 31, 2024, and $132,867 for the six-months period ended December 31, 2023, which is relatively stable across the two aforesaid periods.

Incomefrom Operations

The Company had a loss from operations of $1,172,408 and $2,428,266 for the six-months period ended December 31, 2024 and 2023, respectively, representing a decrease of $1,255,858, or 51.7%. The decrease was mainly a result of the improvement in total revenues, plus the cost savings in consulting fees and general and administrative expenses.

IPO-relatedexpenses

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount			%
IPO related-expenses		(300,000	)		(50,286	)		(249,714	)		496.6	%
as percentage of revenue		-11.3	%		-2.4	%					-9.0	%

IPO-related expenses include the accounting fee, auditing fee, legal fee, and consulting fee, which were incurred due to the initial public offering process and is not related to the daily operations of the Company. The IPO on Nasdaq was completed in August 2023, but there are still IPO-related expenses which are amortised over a period of three years.

Unrealizedgain (loss) from marketable securities

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Unrealized gain (loss) from marketable securities		77,681			(312,831	)		390,512		-124.8	%
as percentage of revenue		2.9	%		-14.7	%				17.7	%

The Company had purchased certain equity securities on the Stock Exchange of Hong Kong for investment purposes in 2021. It has recorded an unrealized gain of $77,681 for the six-months period ended December 31, 2024, and an unrealized loss of $312,831 for the six-months period ended December 31, 2023, due to the fluctuation of the share prices of such equity securities.

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OtherIncome (expenses)

Other income was nil for the six-months ended period December 31, 2024 and $115,190 for the six-months period ended December 31, 2023. The decrease was mainly due to a one-off gain on disposal generated during the disposal of the existing office and warehouse lease of $76,869 in the six-months period ended December 31, 2023.

InterestIncome

Interest income was $129,292 for the six-months period ended December 31, 2024, and $764 for the six-months period ended December 31, 2023, representing an increase of $128,528, or 168 times. The increase in interest income is due to the interest income generated from the note receivables.

InterestExpense

Interest expense was $74,256 for the six-months period ended December 31, 2024, and $66,844 for the six-months period ended December 31, 2023, representing an increase of $7,412, or 11.1%. The increase was a result of the increase in tax payable to the Australian Taxation Office.

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IncomeTax Expense

	For the Six Months Periods Ended December 31,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Income tax expense (credit)		340,351			(80,566	)		420,917		522.4	%
effective tax rate		-25.4	%		2.9	%				-28.3	%

Income tax expense was $340,351 for the six-months period ended December 31, 2024, and income tax credit was $80,566 for the six-months period ended December 31, 2023, representing an increase of $420,917, or 522.4%. The increase was mainly due to the full valuation allowance that was applied for the deferred tax asset of $345,515 as there is uncertainty that whether the timing differences benefits in tax could be recognized eventually in the near future. The effective tax rate decreased from 2.9% for the six-months period ended December 31, 2023 to a negative 25.4% for the six-months period ended December 31, 2024. This was also mainly due to the aforesaid reversal of deferred tax asset.

NetLoss and Comprehensive Loss

Net loss was $1,680,042 and $2,661,707 for the six-months period ended December 31, 2024 and 2023, respectively, or a decrease of $981,665, or 36.9%.

Comprehensive loss was $1,609,656 and $2,749,711 for the six-months period ended December 31, 2024 and 2023, respectively, or a decrease of $1,140,055 or 41.4%.

The net loss and comprehensive loss were mainly due to the aforesaid decrease in total revenues and the increase in consulting fees, plus the increase in general and administrative expenses.

CurrentLiquidity and Capital Resources for the Six-months Period Ended December 31, 2024 compared to the Six-monthsPeriod Ended December 31, 2023

	2024			2023
Summary of Cash Flows:
Net cash used in operating activities	$	(743,957	)	$	(7,108,927	)
Net cash used in investing activities		-			(2,500,000	)
Net cash provided by (used in) financing activities		476,412			13,623,327
Foreign currency translation		70,386			(88,004	)
Net increase in cash and cash equivalents		(197,159	)		3,926,396
Beginning cash and cash equivalents		939,014			236,821
Ending cash and cash equivalents	$	741,855		$	4,163,217

OperatingActivities

Cash used by operations of $743,957 during the six-months period ended December 31, 2024 was primarily a result of our $1,680,042 net loss reconciled with the depreciation of $5,195, the amortisation of right of use asset of $138,728, the net gain from investments of $77,681, and changes in operating assets and liabilities, which include primarily (i) a decrease in capital receivables of convertible notes of $1,472,000 due to the settlement of capital injection receivable from our investor (ii) a decrease of prepaid offering costs of $300,000 which was due to the amortization of prepaid offering cost during the aforesaid period; (iii) a decrease in deferred tax asset due to the full valuation allowance was applied during the six-months period ended December 31, 2024; (iv) an increase of deferred revenue of $189,909 which was in-line with our growth in revenues; (v) a decrease of accounts payable and accrued expenses of $344,392 which mainly due to the net payments to our suppliers and services providers; (vi) an increase of inventories of $658,057 which was mainly due to increase of procurements in-line with the growth in revenue; and (vii) the decrease in income tax payable of $120,295 which was due to tax payments during the period.

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Cash used by operations of $7,108,927 during the six-months period ended December 31, 2023 was primarily a result of our $2,661,707 net loss reconciled with our non-cash net loss from investments of $328,139, and changes in operating assets and liabilities, which include primarily (i) an increase in prepaid offering costs of $2,549,524 due to the increase in prepayment for our potential new offerings subsequent to our IPO (ii) an increase of inventory of $1,577,049 due to business expansion plans and introduction of more new products; (iii) an increase of deposits and prepaids of $210,250 mainly due to stock procurement prepayment of approximately $200,000; (iv) a decrease of accounts payable and accrued expenses of $97,345 which was mainly due to reduction in tax payable caused by tax payment; (v) the increase in deferred tax assets of $82,309 which was mainly due to accumulated tax loss has increased; and (vi) the increase in other non-current assets of $81,092 due to increase in rental deposits after the renewal of office and warehouse lease.

InvestingActivities

There was no net cash used or received in investing activities for the six-months period ended December 31, 2024.

There was net cash of $2,500,000 being used in investing activities for the six-months period ended December 31, 2023, which was attributed to the note receivables lent out to an independent third party.

FinancingActivities

Net cash provided by financing activities was $476,412 for the six-months period ended December 31, 2024, which was mainly due to the working capital raised from note payables during the period.

Net cash provided by financial activities in the six-months period ended December 31, 2023, was $13,623,327 which was mainly due to the proceeds raised from the IPO of the Company in August 2023.

FutureCapital Requirements

Our capital requirements for 2025 and future years will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures, acquisitions, and/or partnerships), we expect to incur reasonable amount of expenditures to carry out our business plan, as well as costs associated with our capital raising efforts and being a public company.

Inflation

The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-BalanceSheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Exhibit 99.2

FitellCorporation

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended

December 31, 2024 and 2023

FITELLCORPORATION

FORTHE SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023

INDEXTO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements
Consolidated Balance Sheet at December 31, 2024 (Unaudited) and June 30, 2024	F-2
Consolidated Statement of Operations and Comprehensive Income for the six months ended December 31, 2024 and 2023 (Unaudited)	F-3
Consolidated Statement of Stockholders’ Equity for the six months ended December 31, 2024 and 2023 (Unaudited)	F-4
Consolidated Statement of Cash Flows for the six months ended December 31, 2024 and 2023 (Unaudited)	F-5
Notes to Consolidated Financial Statements (Unaudited)	F-6

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FITELLCORPORATION

CONSOLIDATEDBALANCE SHEETS

			June 30,
			2024

ASSETS
Current assets
Cash and cash equivalents	741,855		$	939,014
Investment in marketable securities	193,374			124,963
Accounts receivable, net	162,379			60,042
Inventory, at cost	3,097,850			2,439,793
Capital receivables of convertible notes	-			1,472,000
Deposits and prepaids	397,780			316,869
Prepaid offering costs	900,000			1,200,000
Total current assets	5,493,238			6,552,681
Property and equipment, net	22,584			27,133
Operating right of use asset, net	398,417			557,798
Note receivables	2,500,000			2,500,000
Deferred tax asset	-			342,122
Brand names	337,504			337,504
Goodwill	1,161,052			1,161,052
Total assets	9,912,795		$	11,478,290
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	866,564		$	1,210,956
Note payables	503,052			-
Deferred revenue	399,009			209,100
Income tax payable	288,386			408,681
Due to related parties	12,168			38,808
Current portion of operating lease liability	276,212			278,432
Total current liabilities	2,345,391			2,145,977
Accrued employee benefits, non-current	22,626			21,520
Operating lease liability, less current portion	145,562			301,921
Total liabilities	2,513,579			2,469,418
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, 0.0001 par value; 500,000,000 shares authorized, 20,123,386 shares issued and outstanding at December 31, 2024 and June 30, 2024	2,012			2,012
Additional paid-in capital	19,014,389			19,014,389
Accumulated other comprehensive income (loss)	56,649			(13,737	)
Accumulated deficit	(11,673,834	)		(9,993,792	)
Total stockholders’ equity	7,399,216			9,008,872
Total liabilities and stockholders’ equity	9,912,795		$	11,478,290

All values are in US Dollars.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

| F-2 |

| --- |

FITELLCORPORATION

CONSOLIDATEDSTATEMENT S OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED )

	For the six months ended
	December 31,			December 31,
	2024			2023
Revenues:
Merchandise revenues	$	2,647,039		$	2,007,562
Licensing income		-			115,557
Total revenues		2,647,039			2,123,119
Cost of goods sold		1,632,280			1,275,967
Gross profit		1,014,759			847,152
Operating expenses
Personnel expenses		578,649			421,364
Consulting fees		574,659			1,272,468
General and administrative expenses		680,818			1,268,545
Sales and marketing expenses		209,118			175,705
Amortization of operating right of use asset		138,728			132,867
Depreciation expenses		5,195			4,469
Total operating expenses		2,187,167			3,275,418
Loss from operations		(1,172,408	)		(2,428,266	)
Other income (expenses):
IPO related-expenses		(300,000	)		(50,286	)
Unrealized gain (loss) from marketable securities		77,681			(312,831	)
Other income, net		-			115,190
Interest income		129,292			764
Interest expense		(74,256	)		(66,844	)
Total net other income (expenses) , net		(167,283	)		(314,007	)
Loss before taxes		(1,339,691	)		(2,742,273	)
Income tax expense (credit)		340,351			(80,566	)
Net loss		(1,680,042	)		(2,661,707	)
Foreign currency adjustment		70,386			(88,004	)
Comprehensive loss	$	(1,609,656	)	$	(2,749,711	)
Basic and diluted net loss per share	$	(0.08	)	$	(0.25	)
Weighted average shares outstanding - basic and diluted		20,123,368			10,487,568

The accompanying notes are an integral part of these unaudited consolidated financial statements.

| F-3 |

| --- |

FITELLCORPORATION

CONSOLIDATEDSTATEMENTS OF STOCKHOLDERS’ EQUITY

FORTHE SIX MONTHS ENDED DECEMBER 31, 2024

(UNAUDITED)

	Common Stock				Subscription Receivable				Additional<br> <br>Paid-in		Accumulated<br> <br>Other<br> <br>Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			Total
Balance June 30, 2024	****	20,123,386	$	2,012	****	-	$	-	$	19,014,389	$	(13,737	)	$	(9,993,792	)	$	9,008,872	****
Foreign currency translation adjustment		-		-		-		-		-		70,386			-			70,386
Net loss		-		-		-		-		-		-			(1,680,042	)		(1,680,042	)
Balance December 31, 2024		20,123,386	$	2,012		-		-	$	19,014,389	$	56,649		$	(11,673,834	)	$	7,399,216

FITELLCORPORATION

CONSOLIDATEDSTATEMENT OF STOCKHOLDERS’ EQUITY

FORTHE SIX MONTHS ENDED DECEMBER 31, 2023

(UNAUDITED)

	Common Stock				Subscription Receivable				Additional<br> <br>Paid-in		Accumulated<br> <br>Other<br> <br>Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			Total
Balance June 30, 2023		8,120,000	$	812		-		-	$	7,097,822	$	(64	)	$	(681,647	)	$	6,416,923
Funds raised in IPO		3,000,000		300		-		-		6,297,342		-			-			6,297,642
Foreign currency translation adjustment		-		-		-		-		-		(88,004	)		-			(88,004	)
Net loss		-		-		-		-		-		-			(2,661,707	)		(2,661,707	)
Balance December 31, 2023		11,120,000	$	1,112		-		-	$	13,395,164	$	(88,068	)	$	(3,343,354	)	$	9,964,854

The accompanying notes are an integral part of these unaudited consolidated financial statements.

| F-4 |

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FITELLCORPORATION

CONSOLIDATEDSTATEMENT S OF CASH FLOWS

(UNAUDITED)

	For the six months ended
	December 31,			December 31,
	2024			2023
Cash Flows from Operating Activities
Net loss	$	(1,680,042	)	$	(2,661,707	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation		5,195			6,839
Amortization of right of use asset		138,728			132,867
Unrealized (gain) loss on investments		(77,681	)		328,139
Changes in operating assets and liabilities
Accounts receivable		(93,713	)		(59,444	)
Inventory		(658,057	)		(1,577,049	)
Capital Receivables of Convertible Notes		1,472,000			-
Deposits and prepaids		(80,911	)		(210,250	)
Prepaid offering costs		300,000			(2,549,524	)
Deferred tax asset		342,122			(82,309	)
Other non-current assets		-			(81,092	)
Accounts payable and accrued expenses		(344,392	)		(97,345	)
Deferred revenue		189,909			(6,337	)
Income tax payable		(120,295	)		(52,983	)
Operating lease liability		(137,926	)		(200,038	)
Accrued employee benefits		1,106			1,306
Net cash from operating activities		(743,957	)		(7,108,927	)
Cash Flows from Investing Activities
Investment in note receivables		-			(2,500,000	)
Net cash from investing activities		-			(2,500,000	)
Cash Flows from Financing Activities
Net activity on due to related parties		(26,640	)		8,044
Fund raised in IPO, gross		-			13,615,283
Fund raised in note payables, net		503,052			-
Net from financing activities		476,412			13,623,327
Foreign currency adjustment		70,386			(88,004	)
Change in cash and cash equivalents		(197,159	)		3,926,396
Cash and cash equivalents at beginning of period		939,014			236,821
Cash and cash equivalents at end of period	$	741,855		$	4,163,217
Supplemental Cash Flow Information
Cash paid for interest	$	27,615		$	-
Cash paid for income taxes	$	83,284		$	122,652

The accompanying notes are an integral part of these unaudited consolidated financial statements.

| F-5 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	Organization and principal activities

Fitell Corporation (the “Company”) was incorporated in the Cayman Islands on April 11, 2022 under the Companies Act as an exempted company with limited liability. The Company conducts its primary operations of selling gym and fitness equipment in Australia through its indirectly held, wholly owned subsidiaries that are incorporated and domiciled in Australia, namely GD Wellness Pty Ltd. The Company holds GD Wellness Pty Ltd (“GD”) via a wholly owned subsidiary, namely KMAS Capital and Investment Pty Ltd (“KMAS”) which was incorporated and is domiciled in Australia.

Details of the Company and its subsidiaries are set out in the table as follows:

		Percentage of <br>effective <br>ownership
Name	Date of incorporation	December 31, 2024			June 30, <br>2024			Place of incorporation	Principal activities
Fitell Corporation	April 11, 2022		Parent			Parent		Cayman Islands	Investment holdings
KMAS Capital and Investment Pty Ltd	July 26, 2016		100	%		100	%	Australia	Investment holdings
GD Wellness Pty Ltd	July 22, 2005		100	%		100	%	Australia	Sales of gym and fitness equipment

| F-6 |

| --- |

FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2.	Summary of significant accounting policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The accompany unaudited interim consolidated financial statements have been prepared using the accrual basis of accounting in accordance with US GAAP and presented in US dollars. The year end is June 30. In the opinion of management, all adjustments, consists of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year, or for any future periods.

Basic of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk. The Company establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

Use of Estimates

The preparation of 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Revenue Recognition

The Company generates it main income source from the sales of merchandise, which includes the sales of various gym equipment and fitness products. It recognizes this merchandise revenue in accordance with Accounting Standards Update 2014-09, “Revenue from contractswith customers,” (Topic 606). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company’s main revenue stream is from sales of products. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon shipment. The Company offers refunds, repairs and replacements in accordance with the Australian Consumer Law. The Company recognized the sales discount and returns against its revenues in the same period as the original sales transaction.

The Company also occasionally sells various consumable products. These products include, but not limited to, coffee and nutritional supplement products. Similar to the aforesaid merchandise revenue, it also recognizes the revenue in accordance with Topic 606 upon shipment. If the Company provided sales discount or allowed sales returns, it is recognized against its revenues in the same period as the original sales transaction.

The Company also provides licensing services to gym studios overseas. These services include, but not limited to, providing the brand name, and offer initial design services to these gym studios. Similar to the aforesaid merchandise revenue, it also recognizes the revenue in accordance with Topic 606 based on the straight-line basis over the contractual service period.

| F-7 |

| --- |

FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Stock-based Compensation

The Company records stock-based compensation in accordance with the provisions of the Accounting Standards Codification(“ASC”) 718, “Accounting for Stock Compensation,” which establishes accounting standards for the transaction in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC 718, the Company recognizes an expense for the fair value of its stock awards at the time of the grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. During the six months period ended December 31, 2024 and 2023, there was no stock-based compensation.

Customer Loyalty program

For certain sales transactions, the Company offers loyalty points to its customer based on the dollar value of the transaction which gives the customer the option to acquire additional goods or services at a price that is lower than its stand-alone selling price. In accordance with Topic 606, the Company evaluates whether these loyalty points constitute separate performance obligations and the need to allocate the transaction price between revenue and performance obligation. As of December 31, 2024 and June 30, 2024, the Company does not believe that any separate performance obligation under the loyalty program is material.

Deferred Revenue

The Company recognized the deposits received from its customers as deferred revenue if the goods or service is not delivered. It would be recognized as revenue after the goods or service is delivered. During the six months ended December 31, 2024 and 2023, a total of $209,100 and $238,351, respectively, of deferred revenue was recognized into Merchandise revenue respectively. As of December 31, 2024 and June 30, 2024, a total of $399,009 and $209,100, respectively, of revenue has been deferred to be recognized in future periods as merchandise revenue.

Fair Value Measurements

Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurements, 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: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities 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: Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The estimated fair value of certain financial instruments, including all current liabilities, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

Fair Value of Financial Instruments

ASC subtopic 825-10, Financial Instruments requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

| F-8 |

| --- |

FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Marketable Securities

Marketable securities are stated at fair value in accordance with ASC Topic 321, Investments- Equity Securities. Any changes in the fair value of the Company’s marketable securities are included in net income (loss) under the caption of Unrealized gain (loss) from marketable securities. The market value of the securities is determined using prices as reflected on an established market, using Level 1 fair value inputs. Realized and unrealized gains and losses are determined on an average cost basis. The marketable securities are in investment in shares of a publicly traded security which is traded on the Hong Kong exchange. The investments in marketable securities totals $193,374 and $124,963 as of December 31, 2024 and June 30, 2024, respectively.

Advertising and Promotion

The Company follows the policy of charging the costs of advertising, marketing, and public relations to expense as incurred. The Company has $209,118 and $175,705 in advertising expenses for the six months ended December 31, 2024 and 2023, respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss, capital loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits as a component of general and administrative expenses. Our federal tax return and any state tax returns are not currently under examination.

The Company has adopted ASC 740-10, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Accounts Receivable

The Company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Account balances deemed to be uncollectible are charged to bad debt expense and included in the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and June 30, 2024, the Company has considered an allowance of $585,672 for doubtful receivable accounts.

Inventory

Inventory consists of only finished goods and are stated at the lower of cost and net realizable value on a ‘first in first out’ basis. Cost comprises of direct materials and delivery costs, direct labor, import duties and other taxes, and an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

Stock in transit is stated at the lower of cost and net realizable value. Cost comprises purchase and delivery costs, net of rebates and discounts received or receivable.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

| F-9 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note Receivable

On August 2, 2023, the Company entered into a loan agreement with an independent third party (“Borrower”), in which, the Company has lent $2,500,000 to the Borrower, with a loan period of 36 months, and at an annualized interest of 6.8%. The first eight months are interest-free-period.

Property and Equipment

Property and Equipment - Property and equipment is stated at cost, net of depreciation. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. Depreciation expense totaled $5,195 and $4,469 for the six months period ended December 31, 2024 and 2023, respectively.

Impairment Policy of Long-Lived Assets

Impairment of long lived assets – Potential impairments of long lived assets are reviewed when events or changes in circumstances indicate a potential impairment may exist. In accordance with ASC Subtopic 360-10, “Property, Plant and Equipment – Overall”, impairment is determined when estimated future undiscounted cash flows associated with an asset are less than asset’s carrying value.

Intangible Assets

The Company’s intangible assets consist of brand names and goodwill. At December 31, 2024 and June 30, 2024, the Company had brand names and goodwill with costs of approximately $337,504 and $1,161,052 respectively, which all have indefinite lives. The Company evaluates intangible assets with indefinite lives for impairment at least annually or when events or changes in circumstances indicate that an impairment may exist. The Company determined that none of its intangible assets were impaired in the six months period ended December 31, 2024 and the fiscal year ended June 30, 2024.

Net Income (Loss) Per Common Share

The Company computes income per common share, in accordance with ASC Topic 260, *Earnings Per Share,*which requires dual presentation of basic and diluted earnings per share. Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding, plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. No potential dilutive common shares are included in the computation of any diluted per share amount when a loss is reported.

Comprehensive Income (loss)

ASC Topic 220 (SFAS No. 130) establishes standards for reporting comprehensive income and its components. Comprehensive income or loss is defined as the change in equity during a period from transactions and other events from non-owner sources. The component of comprehensive gain totaling $70,386 and comprehensive loss totaling $88,004 for the six months ended December 31, 2024 and 2023, respectively, related to foreign currency translation adjustment.

Foreign Currencies

The Company determined that its functional currency is the Australian dollar since the Australian dollar is the currency of the environment in which the Company primarily generates and expends cash; however, the Company’s reporting currency is the U.S. dollar. Foreign currency transaction gains and losses represent gains and losses resulting from transactions entered into in a currency other than the functional currency of the Company. These transaction gains and losses, if any, are included in results of operations.

| F-10 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Leases

The Company accounts for leases in accordance with ASC Topic 842, Lease. Operating lease right-of-use assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the consolidated statements of operations.

As permitted under ASC Topic 842, the Company has made an accounting policy election not to apply the lease recognition provision to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term. The Company did not have any short-term leases at December 31, 2024 and June 30, 2024.

Segment Reporting

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. 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 in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer (the “CODM”), who makes resource allocation decisions and assesses performance based on financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues, gross profit and operating loss by the three identified reportable segments. The Company’s business includes only one segment, which is the trading of Gym Equipment.

Reclassifications

Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to confirm the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficits, net loss or net cash used in operating activities.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect.

In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU improves reportable segments disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted this standard in the current period retrospectively to all prior periods presented in the Company’s financial statements, refer to note 3.

Saved from above, the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

| F-11 |

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FITELL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Going Concern

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue trading, realize its assets and discharge its liabilities in the ordinary course of business for a period of at least 12 months from the date that these consolidated financial statements are approved.

The Directors note that:

●	The<br> Group made a loss of $1,680,042 from its continuing operations for the six-months period<br> ended December 31, 2024;
●	The<br> Group held cash and cash equivalents of $741,855 as at December 31, 2024;
●	The<br> Group incurred a net cash outflow from operating activities of $743,957 for the six-months<br> period ended December 31, 2024;
●	A<br> successful capital raising (IPO) in August 2023 arose for $13,614,983 before cost of capital,<br> and also another round of successful capital raising in February 2025 arose for $4,000,000<br> before cost of capital.

In assessing the appropriateness of using the going concern assumption, the Directors have noted:

●	There are reasonable grounds<br> to believe that the Company will be able to continue as a going concern as the Directors are satisfied that the Company will be able<br> to either secure additional working capital as required through raising additional capital or reducing the Company’s discretionary<br> spending;
●	Accordingly, the directors<br> consider it appropriate to prepare the consolidated financial statements on a going concern basis.

Whilst the Directors remain confident in the Company’s ability to access further working capital through debt, equity or asset sales if required, there remains material uncertainty as to whether the Company will continue as a going concern.

Had the going concern basis not been used, adjustments would need to be made relating to the recoverability and classification of certain assets, and the classification and measurement of certain liabilities to reflect the fact that the Company may be required to realize its assets and settle its liabilities other than in the ordinary course of business, and at amounts different from those stated in the consolidated financial statements.

Subsequent Events

In accordance with ASC Topic 855, SubsequentEvents, the Companies evaluated subsequent events through the date the consolidated financial statements were available for issue.

| F-12 |

| --- |

FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.	Segments of operations

The Company’s chief operating decision maker is the Company’s Chief Executive Officer (the “CODM”), who makes resource allocation decisions and assesses performance based on financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues, gross profit (loss) and operating loss by the two identified reportable segments.

The Company’s reportable segments consist of only one segment which is the Gym Equipment segment. Operating loss for the segment includes revenues from third parties, cost of goods sold and operating expenses directly attributable to the segment.

The accounting policies of the segment is the same as those described in Note 2, “Summary of Significant Accounting Policies.”

	For the six months ended December 31, 2024
	Gym Equipment			Total
Revenue	$	2,647,039		$	2,647,039
Cost of Goods Sold		1,632,280			1,632,280
Segment Gross Profit		(1,014,759	)		(1,014,759	)
Loss before taxes	$	1,339,691		$	1,339,691
Supplemental Segment Information:
Amortization of operating right of use asset		138,728			138,728
Depreciation expenses		5,195			5,195
IPO related-expenses		300,000			300,000
Unrealized gain from marketable securities		77,681			77,681
Interest income		129,292			129,292
Interest expense		74,256			74,256
Total Assets	$	9,912,795		$	9,912,795
	For the six months ended December 31, 2023
---	---	---	---	---
	Gym Equipment		Total
Revenue	$	2,123,119	$	2,123,119
Cost of Goods Sold		1,275,967		1,275,967
Segment Gross Profit		847,152		847,152
Loss before taxes	$	2,742,275	$	2,742,275
Supplemental Segment Information:
Amortization of operating right of use asset		132,867		132,867
Depreciation expenses		4,469		4,469
IPO related-expenses		50,286		50,286
Unrealized loss from marketable securities		312,831		312,831
Interest income		764		764
Interest expense		66,844		66,844
Total Assets	$	12,469,149	$	12,469,149

| F-13 |

| --- |

FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.	Segments of operations (continued)
	For the year ended June 30, 2024
---	---	---	---	---	---
	Gym Equipment			Total
Revenue	$	4,466,775		$	4,466,775
Cost of Goods Sold		2,881,060			2,881,060
Segment Gross Profit		1,585,715	)		1,585,715
Operating Loss	$	9,521,489		$	9,521,489
Supplemental Segment Information:
Amortization of operating right of use asset		284,169			284,169
Depreciation expenses		10,385			10,385
IPO related-expenses		50,523			50,523
Unrealized loss from marketable securities		354,781			354,781
Interest income		2,574			2,574
Interest expense		1,242,140			1,242,140
Total Assets	$	11,478,290		$	11,478,290

4.	Investment in marketable securities

As of December 31, 2024, the Company held some equity securities which are publicly traded on a registered Stock Exchange. The following table classifies the Company’s assets measures at fair value on a recurring basis into the fair value hierarchy as of December 31, 2024:

Description	Level 1		Level 2		Level 3		Total
Equity securities	$	193,374	$	-	$	-	$	193,374
Total	$	193,374	$	-	$	-	$	193,374

The equity securities being held as of June 30, 2024 are as follow:

Description	Level 1		Level 2		Level 3		Total
Equity securities	$	124,963	$	-	$	-	$	124,963
Total	$	124,963	$	-	$	-	$	124,963

| F-14 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	Property and equipment

The Company’s property and equipment at December 31, 2024 and June 30, 2024 consisted of the following:

	Estimated<br> <br>Useful Life	December 31, 2024			June<br> 30,<br><br> <br>2024
Motor Vehicle	5 years	$	51,741		$	51,741
Property and equipment, gross			51,741			51,741
Less accumulated depreciation			(29,157	)		(24,608	)
Property and equipment, net		$	22,584		$	27,133

6.	Note payables

In the six-months period ended December 31, 2024, the Company has entered into working capital loans with Paypal and Shopify. The Company has borrowed two tranches of loans from Paypal with a total amount of $313,231. The borrowed amount was not interest bearing but subjected to a total of one-off initial upfront fee of $27,504. The repayment percentage is 30% on all daily revenues which were received via Paypal’s platform with a minimum payment of 10% of the principal amount and the upfront fee for every 90 days. As of December 31, 2024, the loan balance payable to Paypal was $232,313 and is all recorded within current liabilities on the consolidated balance sheets. The Company has also borrowed two tranches of loans from Shopify with a total amount of $506,232. The borrowed amount was not interest bearing but subjected to a total of one-off initial upfront fee of $39,233. The repayment percentage is 14% on all daily revenues which were received via Shopify’s platform. As of December 31, 2024, the loan balance payable to Shopify was $270,739 and is all recorded within current liabilities on the consolidated balance sheets.

In the fiscal year ended June 30, 2024, the Company has not borrowed any equivalent working capital loan or has any such loan outstanding as of June 30, 2024.

| F-15 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.****	Lease right-of-use assets and lease liabilities

Operatingleases

The Company leases office space in Taren Point, NSW, Australia. The lease commenced on July 15, 2023 and ends on July 14, 2026. The monthly lease payments are $36,667 AUD and are subject to annual escalation rate of 3%.

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 3.70%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. During the six months ended December 31, 2024 and 2023, the Company recorded $138,728 and $132,867 as operating lease expense.

Operating right-of- use assets are summarized below:

	December 31, 2024			June<br>30, 2024
Office Lease	$	836,697		$	836,697
Less accumulated amortization		(438,280	)		(278,899	)
Right-of-use, net	$	398,417		$	557,798

Operating lease liabilities are summarized below:

	December 31, 2024		June<br>30, 2024
Office Lease	$	421,774	$	580,353
Less: current portion		276,212		278,432
Long term portion	$	145,562	$	301,921
	As of
---	---	---	---	---	---	---
	December 31, 2024			June<br>30, 2024
Year ending June 30, 2025	$	143,390		$	301,127
Year ending June 30, 2026		295,384			310,160
Total future minimum lease payments		438,774			611,287
Less imputed interest		(17,000	)		(30,934	)
PV of Payments	$	421,774		$	580,353
8.****	Commitments and contingencies
---	---

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of December 31, 2024, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

| F-16 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.****	Income taxes

A reconciliation of the effective tax rate to the statutory rate is shown below:

	December 31,<br> 2024			December 31,<br> 2023
Loss before taxes	$	(1,339,691	)	$	(2,742,273	)
Expected income tax credit at statutory rate of 25%	$	(334,923	)	$	(685,568	)
Increase (decrease) in income taxes resulting from:
Valuation allowance for deferred tax asset		345,515
IPO related-expenses		75,000			12,571
Interest income from note receivables		(31,875	)
Unrealized loss (gain) on investments		(19,420	)		78,208
Non-tax deductible personnel expenses		13,615			11,703
Non-tax deductible consulting fees		143,665			318,117
Non-tax deductible general and administrative expenses		115,953			210,413
Other items, net		32,821			(26,010	)
Income tax credit	$	340,351		$	(80,566	)

The tax effects temporary differences that gave rise to the deferred tax assets and liabilities are as follows:

	December 31, 2024			June 30, 2024
Deferred tax assets:
Accrued employee benefits	$	27,295		$	37,199
Unrealized foreign exchange gain		(2,894	)		10,294
Depreciation		(5,646	)		(6,783	)
Operating right of use assets and lease liabilities		5,839			5,639
Accumulated tax loss		263,993			238,989
Provision for bad debt		56,928			56,784
Valuation allowance for deferred tax asset		(345,515	)		-
Net deferred tax asset	$	-		$	342,122

As of December 31, 2024 and June 30, 2024, the Company had no material net operating loss or tax credit carry forwards. As of December 31, 2024 and June 30, 2024, the Company had no provision for uncertain tax positions and no provisions for penalties or interest. In addition, the Company does not believe that there are any uncertain tax benefits that could be recognized in the near future that would impact the Company’s effective tax rate.

| F-17 |

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FITELLCORPORATION

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10.	Subsequent Event

On February 10, 2025, the Company had entered into a securities purchase agreement, as amended by an amendment to securities purchase agreement dated as of February 9, 2025 with an institutional investor in connection with the issuance and sale by the Company in a registered direct offering of (i) 796,813 of the Company’s ordinary shares, par value $0.0001 per share and (ii) warrants to purchase up to 1,195,220 Ordinary Shares, at a combined purchase price of $5.02 per Ordinary Share and the associated Investor Warrant.

Each Investor Warrant has an exercise price of $5.02 per Ordinary Share, is immediately exercisable and will expire three years following the issuance date. The Investor Warrants are subject to customary adjustments; however, no such warrants contain any “ratchet” or other financial antidilution provisions. None of the Investor Warrants may be exercised if the aggregate number of Ordinary Shares beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, subject to increase to 9.99% at the option of the holder.

The gross proceeds to the Company from the offering were approximately $4.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The potential gross proceeds from the warrants, if fully exercised on a cash basis, will be approximately $6.0 million. No assurance can be given that any of the warrants will be exercised.

The net proceeds from the Offering were approximately $3.4 million after deducting the placement agent’s fees and expenses and other estimated expenses relating to the Offering. The Company intends to use the net proceeds from the Offering for the development and commercial launch of smart fitness equipment and for general corporate purposes and working capital. The Company may also use a portion of the net proceeds from the Offering to acquire or invest in complementary businesses, technologies, or other intellectual property, although the Company has no present commitments or agreements to do so.

| F-18 |

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