Sangrix Inc 20-F for FY2026
Sangrix Inc. (SGRX)
About this 20-F
Sangrix Inc filed this 20-F on September 18, 2026, covering the fiscal year ended June 30, 2026 (FY2026).
Headline figures
Fiscal year ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $14.29M
- compared with a net loss of $4.37M a year earlier
- Diluted EPS
- -$70.43
- compared with -$84.84 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission file number:
(Exact name of Registrant as specified in its charter)
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
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| The |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ | |
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| Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☒ | | International Financial Reporting Standards as issued | | Other ☐ |
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| by the International Accounting Standards Board ☐ |
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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Table of Contents
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 83 | |
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 85 | |
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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 87 | |
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Conventions Used in this Annual Report
Unless otherwise indicated or the context requires otherwise, references in this annual report on Form 20-F to:
| ● | “SANGRIX,” “our company,” the “Company,” “we,” “us,” and “our” are to SANGRIX INC. (formerly known as BIT ORIGIN LTD and China Xiangtai Food Co., Ltd.), an exempted company incorporated in the Cayman Islands with limited liability; |
| ● | “Bit Origin SG” are to Bit Origin Pte. Ltd., a Singapore company and a subsidiary of SANGRIX; and |
| ● | “China” or the “PRC” are to the People’s Republic of China, excluding Taiwan for the purposes of this annual report only; |
| ● | “Class A Ordinary Shares” are to the Class A ordinary shares, par value $0.0003 per share, of the Company; |
| ● | “Class B Ordinary Shares” are to the Class B ordinary shares, par value $0.0003 per share, of the Company; |
| ● | “RMB” are to the legal currency of China; |
| ● | “SEC” are to the United States Securities and Exchange Commission; |
| ● | “Sonic Auspice” are to Sonic Auspice DC LLC, a Delaware limited liability company and a subsidiary of SANGRIX; |
| ● | “SonicHash Canada” are to SonicHash Inc., a company organized under the laws of Alberta, Canada, and a subsidiary of SANGRIX; |
| ● | “SonicHash US” are to SonicHash LLC, a Delaware limited liability company and a subsidiary of SANGRIX; |
| ● | “U.S. dollars,” “$,” “US$,” and “dollars” are to the legal currency of the United States; |
We have relied on statistics provided by a variety of publicly-available sources regarding the industry we are involved in. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.
We have sought to provide current information in this annual report and believe that the statistics provided in this annual report remain up-to-date and reliable, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this report may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “aim,” “will,” “project,” “target,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to identify such forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements regarding future economic conditions or performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under “Item 3-Key Information-Risk Factors,” “Item 4-Information on the Company,” “Item 5-Operating and Financial Review and Prospects,” and elsewhere in this report, as well as factors which may be identified from time to time in our other filings with the Securities and Exchange Commission (the “SEC”) or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.
The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable for annual reports on Form 20-F.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable for annual reports on Form 20-F.
ITEM 3. KEY INFORMATION
3.A. [Reserved]
3.B. Capitalization and Indebtedness
Not applicable for annual reports on Form 20-F.
3.C. Reasons for the Offer and Use of Proceeds
Not applicable for annual reports on Form 20-F.
3.D. Risk Factors
Summary Risk Factors
You should carefully consider all of the information in this annual report before making an investment in our Class A Ordinary Shares. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings.
Risks Related to Our Digital Asset Holding Business
| ● | If we are unable to successfully implement our business plan or other business strategies as implemented in the future, it would affect our financial and business condition and results of operations; |
| ● | Our results of operations are expected to be impacted by significant fluctuation of Bitcoin price and Dogecoin price; |
| ● | The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate; |
| ● | Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by banks and other financial institutions, may indirectly adversely affect our business operations, financial condition and results of operations; |
| ● | We may face risks of internet disruptions, which could have an adverse effect on the price of cryptocurrencies; |
| ● | The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain; |
| ● | There is a lack of liquid markets for cryptocurrencies, and blockchain-based assets are susceptible to potential manipulation; |
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| ● | Our Dogecoin may be subject to loss, theft or restriction on access. We have policy to safeguard our crypto assets, however, our business and financial condition may be affected if the policies and procedures surrounding the safeguarding of crypto assets are not effective; |
| ● | The limited rights of legal recourse available to us expose us and our investors to the risk of loss of our Dogecoin for which no person is liable, and our lack of insurance protection for risk of loss of our digital assets exposes us and our shareholders to the risk of loss of our digital assets for which no person may ultimately be held liable and we may not be able to recover our losses.; |
| ● | Regulatory actions in one or more jurisdictions could restrict our ability to hold, transfer, pledge or dispose of Dogecoin and could adversely affect its value. |
| ● | Our business growth and Dogecoin treasury strategy depend on access to external financing, which may not be available on acceptable terms, or at all. |
| ● | Even if we can raise additional funding, we may be required to do so on terms that are dilutive to you. |
| ● | We may pursue additional opportunities to acquire complementary businesses, which could further increase leverage and debt service requirements and could adversely affect our financial situation if we fail to successfully integrate the acquired business. |
| ● | Our indebtedness could adversely affect our ability to raise additional capital to fund operations. |
| ● | New lines of business or new products and services may subject us to additional risks. |
| ● | Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted. |
| ● | We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our share price, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets. |
| ● | The recent disruption in the crypto asset markets may harm our reputation. |
| ● | Regulatory developments in the United States or internationally may restrict the use, transfer, custody, acquisition, or legal status of cryptocurrencies, including Dogecoin (“DOGE”), which could adversely affect our business. |
| ● | Our cryptocurrency holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. |
| ● | Our board of management has experience in risk management and we have risk management policies in place in light of current crypto asset market conditions. However, if we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected. |
| ● | We may face financing, liquidity, or other risks related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets we use as collateral or the value of our crypto assets used by others as collateral. |
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Risks Related to Our Graphics Processing Unit (“GPU”) and AI Computing Infrastructure Business
| ● | Our GPU infrastructure business is new, and we may not realize the anticipated benefits of our acquisition. |
| ● | Our GPU servers have not yet been delivered or deployed, and their delivery and deployment may be delayed. |
| ● | We depend on a third-party manager to deploy, operate and commercialize our GPU servers. |
| ● | Our net rental income will be affected by the operating expenses associated with the GPU servers. |
| ● | Rapid technological development may cause our GPU servers to become obsolete or less competitive. |
| ● | Equipment failures or data center interruptions could adversely affect our GPU operations. |
| ● | Operations in Malaysia expose us to foreign operational and regulatory risks. |
| ● | Export controls affecting advanced GPUs could adversely affect our business. |
| ● | The pre-funded warrant issued as consideration may substantially dilute our existing shareholders. |
Risks Related to Our Corporate Structure
| ● | The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States; |
| ● | You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law; |
| ● | Certain judgments obtained against us by our shareholders may not be enforceable; |
| ● | The economic substance legislation of the Cayman Islands may adversely impact us or our operations; and We may rely on dividends or distributions from subsidiaries for our cash needs, and any limitations on such payments could adversely affect our liquidity. |
| ● | We may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares. |
Risks Related to United States Government Regulations
| ● | We are subject to an extensive and rapidly evolving regulatory landscape relating to digital assets, and adverse changes to, or failure to comply with, applicable laws and regulations could materially harm our business, reputation and financial condition; |
| ● | A determination that Dogecoin is a security could adversely affect the value and liquidity of our Dogecoin holdings and subject us to additional regulatory requirements; |
| ● | We could be required to register as an investment company under the Investment Company Act, which could materially restrict our business and adversely affect our financial condition and results of operations; |
| ● | Enactment of the Infrastructure Investment and Jobs Act of 2021 (the “Infrastructure Act”) may have an adverse impact on our business and financial condition; |
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| ● | Our interactions with a blockchain and mining pools may expose us to SDN or blocked persons or cause us to violate provisions of law that did not contemplate distributive ledger technology. |
| ● | If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, we may incur significant compliance costs, which could be substantial or cost- prohibitive. If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations. |
| ● | Ongoing regulatory developments may affect the treatment of digital assets and materially and adversely affect our business, financial condition and results of operations. |
| ● | The application of financial accounting standards to our digital-asset holdings could materially affect our reported results of operations. |
| ● | Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business. |
Risks Related to Singaporean Government Regulations
| ● | Current and future laws and regulations approved by the Singaporean government may have an adverse impact on our operations in Singapore. |
Risks Related to Our Ordinary Shares
| ● | The dual-class structure of our Class A and Class B ordinary shares has the effect of concentrating voting power with the holders of Class B ordinary shares, which could limit the ability of holders of Class A ordinary shares to influence corporate matters; |
| ● | The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies; |
| ● | The market price of our Class A ordinary shares has recently declined significantly, and our Class A ordinary shares could be delisted from the Nasdaq or trading could be suspended; |
| ● | Any future reverse share split may not achieve its intended effects and could result in increased volatility, reduced liquidity and additional dilution to our shareholders; |
| ● | In the event that our Class A ordinary shares are delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in our Class A ordinary shares because they may be considered penny stocks and thus be subject to the penny stock rules; |
| ● | We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects; |
| ● | As a company incorporated in the Cayman Islands, we are permitted to adopt certain home-country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards; |
| ● | We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company”; |
| ● | The requirements of being a public company may strain our resources and divert management’s attention; |
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| ● | The market price of our Class A ordinary shares may be volatile or may decline regardless of our operating performance; |
| ● | Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A ordinary shares for return on your investment; |
| ● | Future issuances or sales, or perceived issuances or sales, of substantial amounts of Class A ordinary shares in the public market could materially and adversely affect the prevailing market price of the Class A ordinary shares and our ability to raise capital in the future; |
| ● | Future financing may cause dilution in your shareholding or place restrictions on our operations; |
| ● | We have material weaknesses in our internal control over financial reporting. If any material weakness persists or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately report our financial results could be adversely affected; |
| ● | There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class A ordinary shares to significant adverse U.S. income tax consequences; |
| ● | Securities analysts may not cover our Class A ordinary shares and this may have a negative impact on the market price of our Class A ordinary shares; and Techniques employed by short sellers may drive down the market price of our Class A ordinary shares. |
| ● | Techniques employed by short sellers may drive down the market price of our Class A ordinary shares. |
Risks Related to Our Business and Industry
If we are unable to successfully implement our business plan or other business strategies as implemented in the future, it would affect our financial and business condition and results of operations.
In December 2021, we decided to enter the Bitcoin mining business. In December 2023, we ceased the Bitcoin mining business in the United States due to the high operating costs. In July 2025, we introduced a dedicated Dogecoin treasury program to advance our strategic development. As of the issuance date of this annual report, we have 67,543,745 Dogecoin, and we also had supplier prepayments for 617 Aethir Cloud rendering miners and 134 MicroBT WhatsMiner M60S ASIC miners, which are available for delivery to customers through our sales representative arrangement. In 2026, we began expanding our business focus toward AI computing and digital infrastructure. We intend to evaluate additional opportunities involving GPU computing, server leasing, data center infrastructure and related services.
There are various risks related to these efforts to implement and adapt our evolving business plan, including by transitioning, expanding and diversifying our business operations, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. Our intentions and expectations with regard to the execution of our business plan, and the timing of any related initiatives, are subject to change at any time based on management’s subjective evaluation of our overall business needs. If we are unable to successfully execute our business plan, whether due to failure to realize the anticipated benefits from our business initiatives in the anticipated time frame or otherwise, we may be unable to achieve our financial targets.
Our results of operations are expected to be impacted by significant fluctuation of Dogecoin price.
The prices of Dogecoin (“DOGE”) and, to a lesser extent, Bitcoin have experienced significant volatility, and fluctuations in the price of DOGE may materially and adversely affect our results of operations, financial condition, and liquidity.
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Digital assets have historically exhibited substantial price volatility. For example, according to CoinMarketCap, the price of Bitcoin ranged from approximately US$62,678 as of June 30, 2024 to US$107,135.34 as of June 30, 2025, US$ 58,558.86 as of June 30, 2026, and the price of Dogecoin ranged from approximately US$0.1243 as of June 30, 2024 to US$0.1651 as of June 30, 2025 and US$ 0.0720 as of June 30, 2026. These price ranges illustrate the significant fluctuations that can occur in digital-asset markets. Any future material decrease in the price of DOGE, which is the focus of our treasury strategy, would directly reduce the value of our assets and may impair our liquidity, financial condition, and ability to fund operations.
Because our treasury strategy is concentrated in DOGE, we are particularly exposed to DOGE-specific volatility, liquidity constraints, and market dislocation risks.
If DOGE prices decline, we may be required to record significant impairment charges. In addition, our ability to liquidate DOGE to meet operational needs could be constrained during periods of heightened volatility, thin order-book depth, exchange outages, or adverse market sentiment. There is no assurance that DOGE can be sold at prevailing market prices, or at all, when liquidity is required.
DOGE trading markets may be less developed, less liquid, and more susceptible to volatility than markets for other cryptocurrencies.
Dogecoin market depth is materially lower than that of larger digital assets such as Bitcoin and Ethereum. As a result, large transactions may have a greater market impact, preventing us from executing sales at desired prices and increasing our vulnerability to adverse market movements. In addition, DOGE markets may be more susceptible to market manipulation, rapid shifts in sentiment, and liquidity fragmentation across exchanges.
The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate.
The use of cryptocurrencies to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs cryptocurrency assets based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale acceptance of cryptocurrencies as a means of payment has not occurred, and may never occur. The growth of this industry in general, and the use of Bitcoin, in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably. The factors include, but are not limited to:
| ● | continued worldwide growth in the adoption and use of cryptocurrencies as a medium to exchange; |
| ● | governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar cryptocurrency systems; |
| ● | changes in consumer demographics and public tastes and preferences; |
| ● | the maintenance and development of the open-source software protocol of the network; |
| ● | the increased consolidation of contributors to the cryptocurrency blockchain through mining pools; |
| ● | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; |
| ● | the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; |
| ● | general economic conditions and the regulatory environment relating to cryptocurrencies; and negative consumer sentiment and perception of Bitcoin specifically and cryptocurrencies generally. |
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The outcome of these factors could have negative effects on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations as well as potentially negative effect on the value of any Bitcoin, DOGE coin or other cryptocurrencies we acquire or hold for our own account, which would harm investors in our securities.
Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by banks and other financial institutions, may indirectly adversely affect our business operations, financial condition and results of operations.
A number of companies that engage in cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action. As of the date hereof, we have not experienced any service disruptions with or have our accounts closed by any banks or other financial institutions. To the extent that such events may happen to us, they could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.
The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial institutions were to close the accounts of businesses engaging in cryptocurrency-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which, if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial institutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect on our ability to continue as a going concern or to pursue our strategy at all, which could have a material adverse effect on our business, prospects or operations and harm investors.
In addition, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. We do not have any cash or other assets on deposit with the banks named above.
However, such events could lead to losses or defaults by parties with whom we conduct business, which in turn, could have an indirect adverse effect on our current and/or projected business operations and results of operations and financial condition.
We may face risks of internet disruptions, which could have an adverse effect on the price of cryptocurrencies.
A disruption of the Internet may affect the use of cryptocurrencies and subsequently the value of our securities. Generally, cryptocurrencies, our business of mining cryptocurrencies and Dogecoin treasury program is dependent upon the Internet. A significant disruption in Internet connectivity could disrupt a currency’s network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies and our ability to mine cryptocurrencies.
The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain.
Geopolitical crises may motivate large-scale purchases of Bitcoin, Dogecoin and other cryptocurrencies, which could increase the price of Bitcoin, Dogecoin and other cryptocurrencies rapidly. This may increase the likelihood of a subsequent price decrease, as crisis-driven purchasing behavior dissipates, adversely affecting the value of our inventory following such downward adjustment. Such risks are similar to the risks of purchasing commodities in general uncertain times, such as the risk of purchasing, holding or selling gold. Alternatively, as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage investment in cryptocurrencies as investors focus their investment on less volatile asset classes as a means of hedging their investment risk.
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As an alternative to fiat currencies that are backed by central governments, cryptocurrencies, which are relatively new, are subject to supply and demand forces. How such supply and demand will be impacted by geopolitical events is largely uncertain but could be harmful to us and investors in our ordinary shares. Political or economic crises may motivate large-scale acquisitions or sales of cryptocurrencies either globally or locally. Such events could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or any other cryptocurrencies we mine or otherwise acquire or hold for our own account.
There is a lack of liquid markets for cryptocurrencies, and blockchain-based assets are susceptible to potential manipulation.
Cryptocurrencies, including Dogecoin (“DOGE”), generally trade on platforms that do not provide the same level of regulatory oversight, investor protections, listing standards, or surveillance mechanisms as national securities exchanges. As a result, cryptocurrency markets may exhibit fragmented liquidity, inconsistent price discovery, limited market-making support, and sudden volatility. DOGE markets, in particular, may be less liquid and more vulnerable to abrupt price movements than markets for larger digital assets such as Bitcoin or Ethereum. These conditions increase the risk that large transactions may have a disproportionate market impact or that we may be unable to sell DOGE at anticipated prices or within required timeframes. In addition, the absence of uniform vetting standards and surveillance tools on certain digital-asset trading platforms creates heightened susceptibility to fraud, manipulation, wash trading, spoofing, cyberattacks, and other market-integrity issues. Any such events could materially and adversely affect the liquidity, value, or tradability of DOGE, the value of our digital-asset holdings, and our ability to execute our business and treasury strategy.
Our Dogecoin may be subject to loss, theft or restriction on access. We have policy to safeguard our crypto assets, however, our business and financial condition may be affected if the policies and procedures surrounding the safeguarding of crypto assets are not effective.
We store our Dogecoin holdings in both hot and cold wallets with BitGo Trust Company, Inc. (“BitGo Trust”), a regulated institutional digital-asset custodian. Hot wallets, which are connected to the Internet, facilitate transactions but are more susceptible to hacking attempts, malware, phishing, and other cyber incidents. Cold wallets, which remain offline, provide greater protection from external attacks but may result in delayed access to assets during periods of market volatility or elevated transaction demand. Cold- storage arrangements also carry risks of internal operational error, misdelivery, misappropriation, or hardware failures.
BitGo Trust provides SOC-2-certified, multi-signature, hardware-secured custody designed to safeguard digital assets. However, no custodial arrangement is immune from defects, system vulnerabilities, cyber-attacks, operational failures, or other disruptions. BitGo’s commercial crime insurance may not cover all types of losses, may be subject to exclusions and limits, and may not be sufficient to compensate us in the event of a significant breach or incident. Any loss, theft, freeze, seizure, or material restriction on access to our Dogecoin assets held with BitGo Trust could materially and adversely affect our business, financial condition, and results of operations.
Cybersecurity threats and vulnerabilities in the broader Dogecoin ecosystem may further increase the risk of loss. Hackers or malicious actors may attempt to exploit weaknesses in the Dogecoin network, third-party exchanges, mining infrastructure, smart-contract ecosystems, or storage systems. Because we may hold a significant amount of Dogecoin, we could become a more attractive target for cyber-attacks, social- engineering schemes, or extortion attempts.
The loss or destruction of a private key required to access our wallets could permanently prevent us from accessing our Dogecoin holdings. Cryptocurrencies are controlled exclusively through the possession of public and private keys. If a private key is lost, stolen, corrupted, compromised, or destroyed, we may be unable to access or transfer the associated Dogecoin permanently, without recourse. Although BitGo uses multi-signature key management, failures in internal controls or multi-party authorization systems could result in irreversible loss.
Any such incident could have a material adverse impact on our liquidity, treasury strategy, and overall operations.
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The limited rights of legal recourse available to us expose us and our investors to the risk of loss of our Dogecoin for which no person is liable, and our lack of insurance protection for risk of loss of our digital assets exposes us and our shareholders to the risk of loss of our digital assets for which no person may ultimately be held liable and we may not be able to recover our losses.
We do not have any insurance that covers our Dogecoin in the event of loss or fraud.
Further, banking institutions will not accept our digital assets and such digital assets are, therefore, not insured by the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, a loss may be suffered with respect to our digital assets which is not covered by insurance and we may not be able to recover any of our carried value in these digital assets if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material negative impact on our share price. Currently, we do not have any insurance to cover our digital assets or mining equipment. The market for such insurance is in the early stages and we intend to purchase such insurance in the future. Any losses may have an adverse effect on our results of operations.
Regulatory actions in one or more jurisdictions could restrict our ability to hold, transfer, pledge or dispose of Dogecoin and could adversely affect its value.
Governments and regulatory authorities in one or more jurisdictions may adopt laws, regulations, policies or enforcement measures that restrict or prohibit the acquisition, ownership, custody, transfer, pledge, sale, exchange or other use of digital assets, including Dogecoin. Certain jurisdictions have imposed restrictions on digital-asset trading platforms, financial institutions that provide services to digital-asset businesses, the use of digital assets in payment transactions, and the transfer of digital assets across borders. Other jurisdictions may impose licensing, registration, reporting, taxation, anti-money laundering, sanctions, custody or capital requirements that materially increase the cost or complexity of holding or transacting in digital assets.
Regulatory restrictions affecting digital-asset exchanges, custodians, banks, market makers or other service providers could limit the availability of services necessary to hold, transfer or dispose of Dogecoin. Such restrictions could also reduce trading volume and market liquidity, increase price volatility, delay or prevent transactions, or limit our ability to convert Dogecoin into fiat currency when required. Even if a particular regulatory action does not apply directly to us, it may adversely affect the Dogecoin network, the trading markets for Dogecoin, our custodian or other counterparties on which we rely.
Differences among jurisdictions may also create uncertainty regarding the laws applicable to a particular digital-asset transaction. Cross-border transfers or dispositions of Dogecoin could implicate multiple legal and regulatory regimes, including sanctions, anti-money laundering, tax, securities, commodities, foreign-exchange and capital-control requirements. Compliance with these requirements could increase our costs, delay transactions or require us to modify our treasury-management practices.
We cannot predict the nature, scope or timing of future regulatory actions relating to Dogecoin or other digital assets. Any restriction on our ability to access, hold, transfer, pledge or dispose of our Dogecoin holdings, or any regulatory development that materially reduces the liquidity, acceptance or market value of Dogecoin, could materially and adversely affect our business, financial condition, results of operations, liquidity and the market price of our Class A ordinary shares.
Our operations, financing obligations and development of our AI infrastructure business depend on access to external financing, which may not be available on acceptable terms, or at all.
We expect to continue to rely on external sources of capital, including equity and debt financing, to fund working capital, satisfy our financing obligations and support the deployment and commercialization of our GPU servers and development of our AI computing and digital infrastructure business. We currently have no plans to make additional material purchases of Dogecoin (“DOGE”). The availability, timing and terms of financing depend on factors beyond our control, including market conditions, investor participation, our share price and trading volume, regulatory developments and satisfaction of applicable funding conditions.
On September 7, 2026, we sold 3,000,000 DOGE for approximately US$267,665 in gross proceeds. We intend to use the net proceeds for general working capital and planned AI infrastructure expenditures. However, proceeds from these sales and any future sales may not be sufficient to meet our funding requirements, and there can be no assurance that additional sales will occur. Our remaining holdings include 30,000,000 DOGE covered by redemption notices received from the three investors in our August 2025 private placement, settlement of which remained outstanding as of the date of this annual report. Our ability to generate additional liquidity from our remaining DOGE holdings is subject to these redemption obligations, market conditions, applicable collateral restrictions and any required consents.
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Our financing arrangements may impose restrictions on borrowing, asset transfers, redemptions and other activities. Additional financing may require us to pledge DOGE or other assets as collateral or accept further operational or financial restrictions. Declines in the value of pledged DOGE may reduce collateral coverage and borrowing capacity and, depending on the applicable contractual terms, trigger additional collateral requirements or enforcement rights. These circumstances could require sales of assets at unfavorable prices. Additional equity issuances or conversions of convertible debt may substantially dilute existing shareholders.
If we are unable to obtain sufficient financing on acceptable terms, or at all, we may be unable to fund our operations, meet our financing obligations, deploy and commercialize our GPU servers or develop our AI computing and digital infrastructure business. This could materially and adversely affect our business, liquidity, financial condition and ability to execute our transition toward AI computing infrastructure.
Even if we can raise additional funding, we may be required to do so on terms that are dilutive to you.
The capital markets have been unpredictable in the recent years. In addition, it is generally difficult for early-stage companies to raise capital under current market conditions. The amount of capital that a company such as ours is able to raise often depends on variables that are beyond our control. As a result, we may not be able to secure financing on terms attractive to us, or at all. If we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs and may be dilutive to our current shareholders. If adequate funds are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued viability will be materially adversely affected.
We may pursue additional opportunities to acquire complementary businesses, which could further increase leverage and debt service requirements and could adversely affect our financial situation if we fail to successfully integrate the acquired business.
As part of our growth strategy, we are focused on developing opportunities in AI computing and digital infrastructure, including GPU server leasing, management and optimization, data center hosting, storage and related infrastructure services. We may also evaluate other complementary technologies, assets, businesses and commercial arrangements that support this strategy. Separately, we maintain a Dogecoin treasury strategy; however, as of the date of this annual report, we do not currently plan to expand our historical Bitcoin mining operations, mine additional types of crypto assets, or engage in other crypto asset-related businesses or services.
We may selectively pursue acquisitions, investments, joint ventures or other strategic transactions involving complementary businesses, technologies or assets. Any such transaction could involve significant risks, including increased leverage and debt service obligations, integration difficulties, potential disruption to our existing operations, challenges in integrating personnel, systems and corporate cultures, and the diversion of management attention and resources. These risks could materially and adversely affect our business, financial condition and results of operations, particularly during the period immediately following a transaction. We may also require additional debt or equity financing to complete such transactions, and there can be no assurance that financing will be available on acceptable terms, or at all. Furthermore, acquisitions and other strategic transactions involve a number of risks and challenges, including:
| ● | diversion of management’s attention; |
| ● | potential loss of key employees and customers of the acquired companies; |
| ● | an increase in our expenses and working capital requirements; |
| ● | failure of the acquired entities to achieve expected results; |
| ● | our failure to successfully integrate any acquired entities into our business; and our inability to achieve expected synergies and/or economies of scale. |
These opportunities may also expose us to successor liability relating to actions involving any acquired entities, their respective management or contingent liabilities incurred prior to our involvement and will expose us to liabilities associated with ongoing operations, in particular to the extent we are unable to adequately and safely manage such acquired operations. These transactions may also be structured in such a manner that would result in our assumption of obligations or liabilities not identified during our pre- acquisition due diligence.
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Any of these and other factors could adversely affect our ability to achieve anticipated cash flows at acquired operations or realize other anticipated benefits of acquisitions, which could adversely affect our reputation and have a material adverse effect on us.
Our indebtedness could adversely affect our ability to raise additional capital to fund operations.
We currently have five outstanding secured convertible debentures in an aggregate original principal amount of $14,513,506 (excluding interest accrued thereon).
If we cannot generate sufficient cash flow from operations to service our debt, we may need to, among other things, dispose of some or all of the collateral or issue equity to obtain necessary funds. We do not know whether we will be able to do any of this on a timely basis, on terms satisfactory to us, or at all. Our indebtedness could have important consequences, including:
| ● | our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes may be limited; |
| ● | a portion of our cash flows from operations may be dedicated to the payment of principal and interest on the indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; |
| ● | our ability to adjust to changing market conditions may be limited and may place us at a competitive disadvantage compared to less-leveraged competitors, if such exist; and we may be vulnerable during a downturn in general economic conditions or in our business, or may be unable to carry on capital spending that is important to our growth. |
New lines of business or new products and services may subject us to additional risks.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, any new line of business and/or new service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new services could have a material adverse effect on our business, results of operations and financial condition.
Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted.
Our business operations depend on the continued services of our senior management, particularly the executive officers named in this annual report. While we have provided different incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management team will not join our competitors or form a competing business. If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements or we may be unable to enforce them at all.
We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our share price, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.
In 2022 and the beginning of 2023, some of the well-known crypto asset market participants, including Celsius Network, Voyager Digital Ltd., Three Arrows Capital and Genesis Global Holdco, LLC, declared bankruptcy. In November 2022, FTX, the third largest digital asset exchange by volume at the time, halted customer withdrawals and shortly thereafter, FTX and its subsidiaries filed for bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. Furthermore, it also revealed potential systemic risks and industry contagion as a significant number of other major market participants were affected by FTX’s bankruptcy — namely, among others, BlockFi Inc., as one of the largest digital assets lending companies.
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In response to these events, the digital asset markets, including the market for Bitcoin specifically, have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital assets markets and in Bitcoin. These events have also negatively impacted the liquidity of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital assets markets continues to be negatively impacted by these events, digital asset prices (including the price of Bitcoin) may continue to experience significant volatility and confidence in the digital asset markets may be further undermined. These events are continuing to develop and it is not possible to predict at this time all of the risks that they may pose to us, our service providers or on the digital asset industry as a whole.
We had no direct and material exposure to FTX or any of the above-mentioned cryptocurrency companies. We will not have material assets that may not be recovered or may otherwise be lost or misappropriated due to the bankruptcies. However, the failure or insolvency of large exchanges and key institutions in the cryptocurrency asset industry like FTX may cause the price of Bitcoin to fall and decrease confidence in the ecosystem, which could adversely affect an investment in us. Such volatility and decrease in Bitcoin price have had a material and adverse effect on our results of operations and financial condition and we expect our results of operations to continue to be affected by the Bitcoin price as all our revenue has been from Bitcoin mining production. In particular, our production in November 2022 was negatively affected by the strong volatility of the Bitcoin price. As a result, we scaled down our operations to cut down costs.
In December 2022, due to high energy price and the Georgia site’s weak condition in general, SonicHash US ceased the operation of the miners in the Georgia site and shipped 1,490 miners that were deployed in the Georgia site to the mining facility in Marion, Indiana and were deployed in January 2023. We ceased the operation of the miners in the Indiana site in September 2023 and moved all the miners to the Wyoming site. In December 2023, we ceased the operations of the miners in the Wyoming site in December 2023 due to the high operating costs in the United States. In addition, in December 2022, we reached an agreement with Your Choice 4 CA, Inc., the host of the mining facility in Marion, Indiana, that the hosting fee is adjusted to equal to the sum of (i) the electricity cost of the mining activities and (ii) 50% of SonicHash US’s profit generated from the Indiana site, i.e., the difference of the market price of the Bitcoins mined from the Indiana site and the electricity cost. The market price of the Bitcoins is the daily Bitcoin closing price available at CoinMarketCap.com as of the day immediately prior to the day that we receive the electricity bill. The new fee structure decreased our cost significantly in December 2022. We are exploring strategic opportunities to revitalize our crypto mining operations. This includes identifying suitable hosting partners and evaluating the potential for buying and selling mining hardware.
We cannot assure that the Bitcoin price will remain high enough to sustain our operation or that the Bitcoin price will not decline significantly in the future. Fluctuations in the Bitcoin price have had and are expected to continue to have an immediate impact on the trading price of our ordinary shares even before our financial performance is affected, if at all. To the extent investors view our ordinary shares as linked to the value of our Bitcoin holdings, these potential consequences of a Bitcoin trading venue’s failure could have a material adverse effect on the market value of our ordinary shares.
In addition, a perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government- mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital asset exchange’s failure could adversely affect an investment in us.
As of the date of this annual report, we are not subject to any legal proceedings or government investigations in the United States or in other jurisdictions. However, in the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation of this type may be expensive to defend and may divert our management’s attention and resources from the operation of our business.
The recent disruption in the crypto asset markets may harm our reputation.
To the extent our counterparties/suppliers view our business as linked to the value of our Bitcoin holdings, they may lose confidence in enter into business with us and may deem our business to be risky. It may be difficult for us to reach the same business terms with such counterparties/suppliers like we did before. For example, our suppliers would require more deposits or advance payments from us.
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In addition, additional regulations may subject us to investigation, administrative or regulatory proceedings, and civil or criminal litigations, all of which could harm our reputation and affect our business operation and the value of our ordinary shares. If we have difficulties to comply with such additional regulatory and registration requirements, we may have to cease certain or all of our operations. Any such actions could have a material adverse effect on our business, financial condition and results of operations.
Regulatory developments in the United States or internationally may restrict the use, transfer, custody, acquisition, or legal status of cryptocurrencies, including Dogecoin (“DOGE”), which could adversely affect our business.
The regulatory treatment of digital assets continues to evolve, and governments in various jurisdictions have taken, and may continue to take, actions that restrict or prohibit certain cryptocurrency-related activities. Some countries, such as China, India, and Russia, have imposed significant limitations on acquiring, owning, transacting in, or exchanging cryptocurrencies for local currency, and have restricted the ability of financial institutions to engage in or support digital-asset transactions. Other jurisdictions have considered or implemented rules that limit or ban specific activities, including digital-asset mining, consumer use of cryptocurrencies as a means of payment, or the provision of custodial or exchange services.
Although we no longer engage in Bitcoin mining, future regulations relating to cryptocurrency mining, digital-asset custody, treasury management, consumer usage, cross-border transfers, anti-money-laundering requirements, or the classification of digital assets could materially impact our Dogecoin treasury strategy and our access to custodial, banking, or trading services. For example, authorities in some regions have restricted proof-of-work mining due to energy-consumption concerns, and other jurisdictions have proposed legislation that could affect digital-asset service providers, require enhanced disclosures, impose licensing requirements, or limit the ability of corporations to hold or transact in digital assets.
If the United States or other major jurisdictions adopt similar restrictive measures, or impose new regulations affecting the holding, custody, transfer, sale, or accounting treatment of DOGE or other digital assets, our business, financial condition, and ability to execute our treasury strategy could be materially and adversely affected. Such developments could also reduce the liquidity, value, or utility of our DOGE holdings and harm investors.
Our cryptocurrency holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
We hold cryptocurrency in order to enjoy the potential benefits of the appreciation of the Dogecoin price. Our DOGE holdings are maintained with BitGo Trust Company, Inc., which serves as our third-party digital asset custodian. Historically, the cryptocurrency markets have been characterized by more price volatility, less liquidity, and lower trading volumes compared to sovereign currencies markets, as well as relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, and various other risks inherent in its entirely electronic, virtual form and decentralized network. As a result, our cryptocurrency holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. If the cryptocurrency price decreases when we trade the cryptocurrency for fiat currency, the amount of fiat currency we receive will decrease as well and our results of operation will be negatively impact.
Our board of management has experience in risk management and we have risk management policies in place in light of current crypto asset market conditions. However, if we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected.
Our board of management have experience in risk management and our company have risk management policies in place covering financing, liquidity management, cryptocurrency management, supplier management and counter party management. Our board of management is evaluating the risk exposure monthly and constantly adapting to the latest trend of the industry. Specifically, With respect to our Dogecoin treasury strategy, our risk management policies focus on, among other matters, DOGE price volatility, liquidity, concentration risk, custody and cybersecurity, counterparty exposure and access to capital.
However, the Dogecoin Treasury and related industries are emerging and evolving, which may lead to period-to-period variability and may make it difficult to evaluate our risk exposures. If we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected.
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We may face financing, liquidity, or other risks related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets we use as collateral or the value of our crypto assets used by others as collateral.
As of the issuance date of this annual report, we have pledged approximately 33,305,196 Dogecoin as collateral in connection with certain financing arrangements and convertible notes. The value of Dogecoin is highly volatile, and a significant decline in its market value could reduce the collateral coverage available to our lenders. In such circumstances, our lenders may exercise remedies available to them under the applicable financing agreements, including restricting further borrowings or enforcing their security interests in the pledged Dogecoin, which could result in a partial or total loss of the pledged assets.
Any such enforcement action, or the perception of increased collateral risk, could adversely affect our liquidity, financial condition, and results of operations, and may limit our ability to obtain additional financing on acceptable terms, or at all.
Our GPU infrastructure business is new, and we may not realize the anticipated benefits of our acquisition.
We recently entered the GPU infrastructure business through our acquisition of 16 NVIDIA Blackwell B300 AI servers. We have limited experience owning or commercializing advanced GPU servers and overseeing third parties engaged in deploying and operating such equipment.
The success of this business depends on timely delivery and deployment, reliable equipment performance, sufficient utilization, customer demand, operating costs and the performance of PT Mitra Manunggal Sangkara (“MMS”) and other service providers. Our assumptions regarding these matters may prove inaccurate. We may incur substantial expenses without receiving the anticipated rental income or recovering our investment. If the project does not perform as expected, we could experience operating losses, liquidity pressure and impairment of the acquired assets.
Our GPU servers have not yet been delivered or deployed, and their delivery and deployment may be delayed.
As of the date of this annual report, our GPU servers had not yet been delivered or deployed. The servers are currently expected to be delivered and deployed in Malaysia during the third quarter of 2026, but this timetable is subject to uncertainty.
Potential causes of delay include shipping disruptions, customs clearance, supplier issues, data center readiness, installation and testing difficulties, and insufficient power, cooling or network capacity. We will not become entitled to rental income until the servers are available for operation under the management agreement we entered into on June 28, 2026 (the “Management Agreement”), with PT Mitra Manunggal Sangkara. Any material delay could cause us to incur additional expenses without corresponding income and delay our realization of the anticipated benefits of the transaction.
We depend on a third-party manager to deploy, operate and commercialize our GPU servers.
We appointed MMS to deploy, manage and commercialize the GPU servers. We depend on MMS and its service providers for substantially all operational aspects of this business, including coordinating delivery, data center hosting, equipment operation, maintenance and commercial utilization.
If MMS experiences financial or operational difficulties, fails to secure sufficient commercial utilization, fails to make payments when due or otherwise fails to perform its obligations, our business and financial results could be materially adversely affected. Our contractual rights may not fully compensate us for delayed or lost income, service interruptions, equipment damage or other losses.
Our net rental income will be affected by the operating expenses associated with the GPU servers.
Under the Management Agreement, we are entitled to fixed rental income of $368,640 for each monthly settlement period beginning when the servers become available for operation. We are responsible for operating expenses relating to the servers, including hosting, electricity, network connectivity, logistics, insurance, maintenance and repair costs. These expenses are netted against the fixed rental income and will therefore affect the net amount received by us.
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The Management Agreement includes certain expense-control mechanisms. Reimbursable operating expenses must be reasonable, documented and actually incurred, and any individual operating expense exceeding $5,000 generally requires our prior written approval, except where the expense is reasonably necessary to prevent material damage to the servers or an interruption of management services. We also receive monthly settlement statements and operating reports and have certain rights to review the relevant records.
Although these mechanisms are intended to help us monitor and manage operating expenses, they may not prevent increases in electricity, hosting, maintenance or other costs. Any material increase in such expenses could reduce the net rental income and profitability generated by the GPU servers.
Rapid technological development may cause our GPU servers to become obsolete or less competitive.
GPU and AI computing technologies develop rapidly. New generations of GPUs may provide better performance, energy efficiency or operating economics. Changes in AI models, software frameworks, customer requirements or computing architecture could reduce demand for our servers before the end of their expected useful lives.
Reduced demand, utilization or market value could adversely affect our revenue and require us to recognize increased depreciation or impairment charges.
Equipment failures or data center interruptions could adversely affect our GPU operations.
GPU servers operate under intensive workloads and require reliable electricity, cooling and network connectivity. Equipment failures, overheating, power outages, cyber incidents, network disruptions or inadequate maintenance could result in downtime, lost rental income and substantial repair or replacement costs.
Because the equipment will be operated at a third-party data center, many of these risks will be outside our direct control. Insurance, warranties and contractual protections may not cover all resulting losses.
Operations in Malaysia expose us to foreign operational and regulatory risks.
Our GPU servers are expected to be deployed in Malaysia through foreign counterparties and service providers. This exposes us to risks relating to local laws, taxes, customs, import requirements, permits, electricity regulation, foreign exchange movements and the enforcement of contractual and ownership rights.
Changes in local regulation, import restrictions, data center policies or electricity availability could delay deployment, increase operating expenses or otherwise adversely affect the performance of the GPU business.
Export controls affecting advanced GPUs could adversely affect our business.
Advanced GPUs and related technology may be subject to export controls, sanctions, licensing requirements and end-use or end-user restrictions imposed by the United States and other jurisdictions.
These restrictions could delay or prevent delivery, limit permitted customers or applications, restrict access to maintenance or replacement components, or expose us to regulatory penalties. Applicable requirements may change rapidly and could materially affect our ability to deploy or commercialize the equipment.
The pre-funded warrant issued as consideration may substantially dilute our existing shareholders.
As part of the consideration of the asset purchase agreement dated June 28, 2026, we issued a pre-funded warrant exercisable for up to 6,457,863 Class A ordinary shares (or 1,291,573 after giving effect to the 1-for-5 reverse share split in August 2026), subject to customary adjustments and beneficial ownership limitations. Because the purchase price represented by the warrant was substantially pre-funded when the warrant was issued, only nominal additional consideration is required upon exercise.
Issuances of Class A ordinary shares upon exercise could substantially dilute our existing shareholders, increase the number of shares available for sale and place downward pressure on the market price of our Class A ordinary shares.
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Risks Related to Our Corporate Structure
The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.
We are a Cayman Islands exempted company with limited liability. Our corporate affairs are governed by our memorandum and articles of association (as may be amended and restated from time to time) and by the laws of the Cayman Islands. The rights of shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (i) a duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (ii) a duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (iii) directors should not improperly fetter the exercise of future discretion; (iv) a duty to exercise powers fairly as between different classes of shareholders; (v) a duty to exercise independent judgment; and (vi) a duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Our memorandum and articles of association have modified this last obligation by providing that a director shall be at liberty to vote in respect of any contact or transaction in which the director is so interested provided that the nature of the interest of any director in such transaction shall be disclosed by the director at or prior to its consideration and any vote thereon. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its shareholders (made up of two components) and the director’s duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
We are a Cayman Islands exempted company with limited liability. The rights of our shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands (other than decisions of the Privy Council in appeals from the Cayman Islands courts). The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our directors have discretion to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.
Certain judgments obtained against us by our shareholders may not be enforceable.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Some of our assets are located outside of the United States. In addition, a majority of our directors and executive officers reside outside of the United States, and most of the assets of these persons are located outside of the United States. As a result, it may be difficult, impractical or impossible for you to effect service of process within the United States upon us or these individuals, or to bring an action against us or against these individuals in the United States in the event that you believe your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets or the assets of our directors and officers outside of the United States.
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Any judgment obtained in the federal or state courts of the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands (the “Grand Court”) if (a) the judgment was given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgement has been given (c) our company either submitted to the jurisdiction of the foreign court or was resident and carrying on business in the jurisdiction and was duly served with process, (d) the judgment was final and conclusive, (e) the judgment was not in respect of taxes, a fine or a penalty or similar fiscal or revenue obligations imposed on our company, and (f) the judgment was not obtained by fraud and is not of a kind the recognition and enforcement of which would be contrary to the principles of natural justice or public policy in the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. It is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands.
The economic substance legislation of the Cayman Islands may adversely impact us or our operations.
The Cayman Islands, together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act (as amended) (the “Substance Act”) came into force in the Cayman Islands in January 2019, introducing certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain geographically mobile business activities (“relevant activities”). As we are a Cayman Islands exempted company, compliance obligations include filing annual notifications for the Company, which needs to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Substance Act. It is anticipated that the Substance Act may evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Substance Act. Failure to satisfy applicable requirements may subject us to penalties under the Substance Act.
We may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares.
We may rely on dividends to be paid by our subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends pursuant to its respective policy or make other distributions to us.
Risks Related to United States Government Regulations
We are subject to an extensive and rapidly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results and financial condition.
Our crypto mining business may be or may become subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which we operate, including those typically applied to financial services and banking, securities, commodities, the exchange, and transfer of digital assets, cross-border and domestic money and cryptocurrency transmission businesses, as well as those governing data privacy, data governance, data protection, cybersecurity, fraud detection, payment services (including payment processing and settlement services), consumer protection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, and related technologies. As a result, they often do not contemplate or address unique issues associated with digital assets, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local jurisdictions.
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These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the relative novelty and evolving nature of our business and the significant uncertainty surrounding the regulation of digital assets requires us to exercise our judgement as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, limitations on our business, reputational harm, and other regulatory consequences, as well as criminal penalties, each of which may be significant and could adversely affect our business, operating results and financial condition.
In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, as well as in other countries may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development and use of digital assets as a whole, digital asset mining operations, and our legal and regulatory status in particular by changing how we operate our business, how our operations are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements or new costs of doing business, or imposing a total ban on certain activities or transactions with respect to digital assets, as has occurred in certain jurisdictions in the past.
If laws or regulations or their respective interpretation change, we may become subject to ongoing examinations, oversight, and reviews by U.S. federal and state regulators, which would have broad discretion to audit and examine our business if we become subject to their oversight. Adverse changes to, or our failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results and financial condition.
A determination that Dogecoin is a security could adversely affect the value and liquidity of our Dogecoin holdings and subject us to additional regulatory requirements.
The status of a particular digital asset under the U.S. federal securities laws depends on the characteristics of the asset and the facts and circumstances surrounding the manner in which it is offered, sold and used. The legal and regulatory framework applicable to digital assets continues to evolve, and regulatory interpretations and judicial decisions may change over time.
In March 2026, the SEC and the CFTC issued an interpretation addressing the application of the federal securities laws and the Commodity Exchange Act to certain crypto assets and transactions. The interpretation describes Dogecoin, based on its characteristics, terms and functions as of the date of the interpretation, as an example of a “digital commodity.” Dogecoin also underlies futures products made available for trading on a CFTC-regulated designated contract market. Based on the current regulatory framework and the characteristics of Dogecoin, we do not believe that Dogecoin itself is a security under the U.S. federal securities laws.
Nevertheless, the regulatory characterization of Dogecoin is subject to uncertainty and could change. A transaction involving a digital asset that is not itself a security may nonetheless constitute an investment contract or otherwise be subject to the federal securities laws. Changes to the Dogecoin network, the manner in which Dogecoin is offered, marketed or used, applicable laws, regulatory interpretations or judicial decisions could affect the regulatory treatment of Dogecoin or transactions involving Dogecoin. Our determination regarding the status of Dogecoin is a risk-based assessment and is not binding on the SEC, any other regulatory authority or any court.
We hold Dogecoin for our own account as a treasury asset. We did not create or issue Dogecoin, and we do not currently operate a digital-asset exchange, provide brokerage, dealing, trading, transmission or custody services to customers, or offer interests in Dogecoin to third parties. However, if the SEC, a court or another regulatory authority were to determine that Dogecoin is a security, or that any of our activities involving Dogecoin constitute the offer, sale or trading of securities, we could become subject to registration, licensing, reporting, custody, compliance or other obligations under the federal or state securities laws.
A determination that Dogecoin is a security could also cause digital-asset exchanges, custodians, market makers and other service providers supporting Dogecoin to discontinue or restrict their services, seek additional registrations or modify their operations. As a result, Dogecoin could become more difficult or costly to trade, transfer, pledge or custody, and its liquidity, usability and market value could decline materially. We could be required to dispose of our Dogecoin holdings, modify our treasury-management practices or discontinue certain activities. Any such development could result in investigations, enforcement actions, injunctions, civil monetary penalties, disgorgement, reputational harm, increased compliance costs or other adverse consequences and could materially and adversely affect our business, financial condition, results of operations, liquidity and the market price of our Class A ordinary shares.
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We could be required to register as an investment company under the Investment Company Act, which could materially restrict our business and adversely affect our financial condition and results of operations.
Under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company generally may be considered an investment company if, among other things, it is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities, or if it is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities,” as defined under the Investment Company Act, having a value exceeding 40% of the value of its total assets, exclusive of U.S. government securities and cash items, on an unconsolidated basis.
We do not believe that we are an investment company under the Investment Company Act. We do not hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Our business strategy includes operating activities involving AI computing, GPU-based infrastructure and related services. In addition, based on the current regulatory framework and the characteristics of Dogecoin, we do not believe that our Dogecoin holdings constitute “investment securities” for purposes of the Investment Company Act.
Nevertheless, our status under the Investment Company Act depends on, among other things, the nature of our business activities, the composition and value of our assets, the sources of our income and the legal characterization of the assets we hold. These factors may change over time. A significant decline in the value of our operating assets relative to other assets, delays in developing our GPU infrastructure business, an increase in our holdings of assets treated as investment securities, or a determination that Dogecoin or another material asset held by us is a security could increase the risk that we may be deemed an investment company.
If we were deemed to be an investment company, we could be required to register under the Investment Company Act unless an exemption or exclusion were available. As a company organized outside the United States, we generally could not register as an investment company without an order from the SEC. Registration under the Investment Company Act would impose significant restrictions and compliance obligations relating to, among other things, our capital structure, transactions with affiliates, custody of assets, governance and reporting.
If we were required to register but were unable to do so, we could be required to restructure or dispose of certain assets, modify or discontinue portions of our business, or seek to obtain an exemption, exclusion or other relief. An unregistered investment company may also be subject to enforcement action, and its contracts may be unenforceable or subject to rescission by the other parties. Any such outcome could materially and adversely affect our business, financial condition, results of operations, liquidity, ability to raise capital and the market price of our Class A ordinary shares.
Enactment of the Infrastructure Investment and Jobs Act of 2021 (the “Infrastructure Act”) may have an adverse impact on our business and financial condition.
On November 15, 2021, President Joseph R. Biden signed the Infrastructure Act. Section 80603 of the Infrastructure Act modifies and amends the Internal Revenue Code of 1986 (the “Code”) by requiring brokers of digital asset transactions to report their customers to the Internal Revenue Service, or IRS. This provision was included to enforce the taxability of digital asset transactions. Section 80603 defines “broker” as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” That could potentially include miners, validators, and developers of decentralized applications. These functions play a critical role in our business and in the functioning of the blockchain ecosystem. Importantly, these functions have no way of identifying their anonymous users. Indeed, Bitcoin’s blockchain was designed for anonymity.
This reporting requirement took effect on January 1, 2023 and thus affects tax returns filed in 2024. The implementation of these requirements is ongoing. The Company is closely monitoring the situation and waiting for more issuance of updated guidance from government agencies. Disclosing the identity of our digital asset mining operations and associated accounts to ensure they can be taxed by the IRS could cause a significant devaluing of our business, the bitcoin currency, and the entire digital asset market. Additionally, noncompliance with this provision could lead to significant fines and or regulatory actions against our Company.
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If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, we may incur significant compliance costs, which could be substantial or cost- prohibitive. If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations.
To the extent that our activities cause us to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.
To the extent that our activities cause us to be deemed a “money transmitter” (“MT”) or equivalent designation, under state law in any state in which we operate (currently, Nebraska, Georgia and Texas), we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses, possibly affecting an investment in our securities in a materially adverse manner.
Furthermore, the Company and our service providers may not be capable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs. If we are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we may act to leave a particular state or the U.S. completely. Any such action would be expected to materially adversely affect our operations.
Ongoing regulatory developments may affect the treatment of digital assets and materially and adversely affect our business, financial condition and results of operations.
The legal and regulatory treatment of digital assets in the United States continues to evolve. Digital assets and related transactions may be subject to regulation by multiple federal and state authorities, including the SEC, the CFTC, FinCEN, OFAC, the Internal Revenue Service and state financial-services, securities and money-transmission regulators. New laws, regulations, regulatory interpretations, judicial decisions or enforcement actions could affect the classification, acquisition, custody, transfer, pledge, sale or other use of digital assets, including Dogecoin.
The CFTC administers the Commodity Exchange Act of 1936, as amended (the “CEA”), and has regulatory authority over derivatives involving commodities as well as enforcement authority with respect to fraud and manipulation in interstate spot commodity markets. In March 2026, the SEC and the CFTC issued an interpretation addressing the application of the federal securities laws and the CEA to certain crypto assets and transactions. The interpretation describes Dogecoin, based on its characteristics, terms and functions as of the date of the interpretation, as an example of a “digital commodity.” Dogecoin also underlies futures products made available for trading on a CFTC-regulated designated contract market.
Nevertheless, the regulatory characterization of a digital asset may depend on the relevant facts and circumstances and may change over time. A transaction involving a digital asset that is not itself a security may nonetheless constitute an investment contract, derivative or other regulated transaction. Changes to the Dogecoin network, the manner in which Dogecoin is offered or used, applicable laws, regulatory interpretations or judicial decisions could affect the regulatory treatment of Dogecoin or transactions involving Dogecoin.
We currently hold Dogecoin for our own account as a treasury asset. We do not currently operate a digital-asset exchange, provide digital-asset trading or custody services to customers, transmit digital assets on behalf of third parties, operate a commodity pool, provide commodity trading advice, or enter into digital-asset derivatives for customers. We also ceased our proprietary Bitcoin mining operations in December 2023. Based on the nature of our current activities, we do not believe that the CEA or CFTC regulations impose material registration requirements on us solely as a result of holding Dogecoin for our own account.
However, if we were to enter into futures, options, swaps, leveraged or margined transactions, yield-generating arrangements, hedging transactions or other structured transactions involving Dogecoin, those activities could be subject to the CEA and CFTC regulations. We currently have no plans to enter into such transactions. Any future transaction involving derivatives or structured digital-asset products would be subject to management’s evaluation of the applicable legal and regulatory requirements.
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If Dogecoin were determined to be a security or otherwise became subject to additional regulatory restrictions, the exchanges, custodians and other service providers supporting Dogecoin could become subject to additional registration, licensing or compliance obligations. Such developments could reduce the liquidity or market value of Dogecoin, restrict our ability to hold, transfer, pledge or dispose of our Dogecoin holdings, increase our compliance and operating costs, or require us to modify or discontinue certain activities.
We cannot predict the form, timing or effect of future legislative, regulatory or judicial developments relating to digital assets. Any additional requirements or restrictions applicable to us, Dogecoin, our custodian or other service providers on which we rely could materially and adversely affect our business, financial condition, results of operations, liquidity and the market price of our Class A ordinary shares.
The application of financial accounting standards to our digital-asset holdings could materially affect our reported results of operations.
On December 13, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-08, Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which establishes accounting and disclosure requirements for certain crypto assets. ASU 2023-08 requires crypto assets within its scope to be measured at fair value at the end of each reporting period, with changes in fair value recognized in net income. It also requires the separate presentation of in-scope crypto assets from other intangible assets on the balance sheet, the separate presentation of changes in their fair value in the income statement, and additional disclosures regarding significant crypto-asset holdings and related activity.
We account for our Dogecoin holdings in accordance with ASU 2023-08. As a result, changes in the market price of Dogecoin are reflected in our results of operations for each applicable reporting period, regardless of whether we sell or otherwise dispose of any Dogecoin. Because the market price of Dogecoin has historically been highly volatile, the application of fair-value accounting may cause significant fluctuations in our reported assets, net income or loss and shareholders’ equity from period to period. These accounting fluctuations may not directly correspond to the cash flows generated or used by our operations.
Although ASU 2023-08 provides guidance for crypto assets within its scope, accounting standards and regulatory interpretations relating to digital assets, digital-asset transactions, custody arrangements, collateral arrangements and related disclosures continue to evolve. Future guidance or interpretations issued by the FASB, the SEC, the Public Company Accounting Oversight Board or other authorities could require us to change our accounting policies, presentation or disclosures. Such changes could require retrospective application, result in revisions or restatements of previously issued financial statements, increase our accounting and compliance costs, or materially affect our reported financial condition and results of operations.
Errors in determining the fair value of our Dogecoin holdings or applying the relevant accounting and disclosure requirements could also result in material misstatements in our financial statements or deficiencies in our internal control over financial reporting. Any such error, change in accounting treatment, revision or restatement could adversely affect investor confidence, the market price of our Class A ordinary shares and our ability to raise capital.
Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business.
Due to the new and evolving nature of digital assets and the absence of comprehensive legal guidance with respect to digital assets and related transactions, many significant aspects of the U.S. federal income and applicable state, local and non-U.S. tax treatment of transactions involving digital assets, such as the purchase and sale of Bitcoin and the receipt of staking rewards and other digital asset incentives and rewards products, are uncertain, and it is unclear what guidance may be issued in the future with respect to the tax treatment of digital assets and related transactions.
Current IRS guidance indicates that for U.S. federal income tax purposes digital assets such as Bitcoins should be treated and taxed as property, and that transactions involving the payment of Bitcoins for goods and services should be treated in effect as barter transactions. The IRS has also released guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to taxable income and guidance with respect to the determination of the tax basis of digital currency. However, current IRS guidance does not address other significant aspects of the U.S. federal income tax treatment of digital assets and related transactions. Moreover, although current IRS guidance addresses the treatment of certain forks, there continues to be uncertainty with respect to the timing and amount of income inclusions for various crypto asset transactions, including, but not limited to, staking rewards and other crypto asset incentives and rewards products. While current IRS guidance creates a potential tax reporting requirement for any circumstance where the ownership of a Bitcoin passes from one person to another, it preserves the right to apply capital gains treatment to those transactions, which is generally favorable for investors in Bitcoin.
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There can be no assurance that the IRS will not alter its existing position with respect to digital assets in the future or that other state, local and non-U.S. taxing authorities or courts will follow the approach of the IRS with respect to the treatment of digital assets such as Bitcoins for income tax and sales tax purposes. Any such alteration of existing guidance or issuance of new or different guidance may have negative consequences including the imposition of a greater tax burden on investors in Bitcoin or imposing a greater cost on the acquisition and disposition of Bitcoin, generally; in either case potentially having a negative effect on the trading price of Bitcoin or otherwise negatively impacting our business. In addition, future technological and operational developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for U.S. federal income and applicable state, local and non-U.S. tax purposes.
Risks Related to Singaporean Government Regulations
Current and future laws and regulations approved by the Singaporean government may have an adverse impact on our operations in Singapore.
As of the date of this annual report, there are no laws or regulations in Singapore that specifically prohibit the holding of cryptocurrencies as treasury assets. However, the regulatory framework applicable to digital assets in Singapore is evolving, and future legislation, regulations or regulatory guidance may impose additional requirements, restrictions or licensing obligations on entities that hold, manage, transfer, pledge or otherwise utilize crypto assets, including cryptocurrencies held for treasury or investment purposes.
To the extent that our crypto-asset treasury activities are deemed to constitute regulated activities under Singapore law, such activities may fall within the scope of the Securities and Futures Act 2001, the Commodity Trading Act 1992, the Payment Services Act 2019, and related subsidiary legislation, as well as regulations introduced pursuant to the Financial Services and Markets Act 2022. These laws and regulations could subject us to additional compliance obligations, including licensing, reporting, anti-money laundering and counter-terrorist financing requirements, custody and safeguarding standards, capital requirements, or restrictions on the manner in which crypto assets may be held or transferred.
Although we are not currently engaged in cryptocurrency mining activities in Singapore, we may from time to time evaluate opportunities related to crypto-asset treasury management and other blockchain- related technologies in Singapore. Any such activities may be subject to additional regulatory oversight, supervisory expectations or interpretive guidance issued by the Monetary Authority of Singapore or other regulatory authorities.
In addition, gains, losses or income arising from the holding, disposition or other use of crypto assets may be subject to Singapore income tax or other applicable taxes, depending on the facts and circumstances and prevailing tax laws and guidance.
Any changes in the regulatory or tax treatment of crypto assets in Singapore could adversely affect our ability to implement or maintain our crypto-asset treasury strategy, increase compliance or operating costs, reduce the value or liquidity of our crypto-asset holdings, or otherwise have a material adverse effect on our business, financial condition, results of operations and prospects.
Risks Related to Our Class A Ordinary Shares
The dual-class structure of our Class A and Class B ordinary shares has the effect of concentrating voting power with the holders of Class B ordinary shares, which could limit the ability of holders of Class A ordinary shares to influence corporate matters.
We have two classes of ordinary shares. Each Class A ordinary share carries one (1) vote, while each Class B ordinary share carries twenty (20) votes. As of the issuance date of this report, 1,948,603 Class A ordinary shares and 21,043 Class B ordinary shares are outstanding. Such dual-class structure has the effect of concentrating voting power with the holders of Class B ordinary shares, which limits the ability of holders of Class A ordinary shares to influence the outcome of important transactions, including a change in control, a merger and future amendments to the memorandum and articles of association of the Company.
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Any future issuances of additional Class B ordinary shares or securities convertible into Class B ordinary shares will have a dilutive effect on our earnings per share, book value per share, and the voting power and interest of holders of Class A ordinary shares. In addition, the availability of additional Class B ordinary shares for issuance could, under certain circumstances, discourage or make more difficult any efforts to obtain control of the Company. Holders of Class B ordinary shares will have considerable influence over matters such as decisions regarding mergers and consolidations, election of directors, amendments to the memorandum and articles of association that are subject to a shareholder vote and other significant corporate actions and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated voting power may have the ultimate effect of delaying, preventing or deterring a change in control of our Company (including a merger or by way of future amendments to the memorandum and articles of association of the Company), could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our Company and might ultimately materially and adversely affect the market price of our Class A ordinary shares. This concentrated control may also prevent or discourage unsolicited acquisition proposals or offers for our shares that other shareholders may feel are in their best interest. As a result, such concentrated control may adversely affect the market price of our Class A ordinary shares.
Furthermore, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could result in a less active trading market for our Class A ordinary shares and also adversely affect the value of our Class A ordinary shares.
The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.
As a publicly listed company, we are required to file periodic reports with the Securities and Exchange Commission upon the occurrence of matters that are material to our company and shareholders. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.
The market price of our Class A ordinary shares has recently declined significantly, and our Class A ordinary shares could be delisted from the Nasdaq or trading could be suspended.
The listing of our Class A ordinary shares on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions for continued listing. We have received deficiency notifications from Nasdaq regarding late filing of annual report, shareholders equity and minimum bid price. See “4.B. Business overview – Legal Proceedings – Nasdaq Compliance” for additional details. We cannot assure you that we will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing price of our Class A ordinary shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If we do not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our Class A ordinary shares. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted Class A ordinary shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such Class A ordinary shares. A suspension or delisting would likely decrease the attractiveness of our Class A ordinary shares to investors and cause the trading volume of our Class A ordinary shares to decline, which could result in a further decline in the market price of our Class A ordinary shares.
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Any future reverse share split may not achieve its intended effects and could result in increased volatility, reduced liquidity and additional dilution to our shareholders.
We have effected a 1-for-30 reverse split of our ordinary shares in May 2023, a 1-for-60 reverse share split of our ordinary shares in January 2026 and a 1-for-5 reverse share split of our ordinary shares in August 2026, in order to regain compliance with Nasdaq’s minimum bid price requirement and to improve the marketability of our ordinary shares. There can be no assurance, however, that the reverse share splits or any future reverse share split will have the intended effect of increasing or maintaining the trading price of our ordinary shares, improving liquidity or preventing future delisting.
Following the reverse share split, the trading price of our ordinary shares may remain volatile or decline, and the number of outstanding shares will be reduced, which may result in lower trading volume and reduced liquidity. In addition, future issuances of ordinary shares, including shares issuable upon conversion of our outstanding convertible notes, issuances under the equity purchase facility or exercise of warrants, could result in significant dilution to existing shareholders and could offset any increase in the market price resulting from the reverse share split.
If we are unable to maintain compliance with Nasdaq’s continued listing requirements following the reverse share split, our ordinary shares could be delisted from Nasdaq, which would further adversely affect the liquidity and market price of our ordinary shares.
In the event that our Class A ordinary shares are delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in our Class A ordinary shares because they may be considered penny stocks and thus be subject to the penny stock rules.
The SEC has adopted a number of rules to regulate “penny stock” that restricts transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity of penny stocks. “Penny stocks” generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on Nasdaq if current price and volume information with respect to transactions in such securities is provided by the exchange or system). The Company’s Class A ordinary shares could be considered to be a “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in our Class A ordinary shares, which could severely limit the market liquidity of such Class A ordinary shares and impede their sale in the secondary market.
A U.S. broker-dealer selling a penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance with SEC standards relating to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the “penny stock” held in a customer’s account and information with respect to the limited market in “penny stocks”.
The market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid- ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
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We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.
We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, although our directors and executive officers will be required to report equity holdings under Section 16 of the Exchange Act, they will not be subject to the insider short-swing profit disclosure and recovery regime.
As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti- manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differs from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.
As a company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We have followed and intend to follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the New York Stock Exchange that listed companies must obtain its shareholders’ approval of all equity compensation plans and any material amendments to such plans. As a result of our reliance on the “foreign private issuer” exemptions, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
We will incur increased costs as a result of being a public company, particularly now that we no longer qualify as an “emerging growth company.”
We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. We no longer qualify as an “emerging growth company,” and as a result we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
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The requirements of being a public company may strain our resources and divert management’s attention.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes- Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly now that we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, interim, and current reports with respect to our business and operating results.
As a result of disclosure of information in this annual report and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.
We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.
The market price of our Class A ordinary shares may be volatile or may decline regardless of our operating performance.
The market price of our Class A ordinary shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our revenue and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
| ● | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; |
| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Share prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A ordinary shares for return on your investment.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A ordinary shares as a source for any future dividend income.
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Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A ordinary shares will likely depend entirely upon any future price appreciation of our Class A ordinary shares. There is no guarantee that our Class A ordinary shares will appreciate in value or even maintain the price at which you purchased the Class A ordinary shares. You may not realize a return on your investment in our Class A ordinary shares and you may even lose your entire investment in our Class A ordinary shares.
Future issuances or sales, or perceived issuances or sales, of substantial amounts of Class A ordinary shares in the public market could materially and adversely affect the prevailing market price of the Class A ordinary shares and our ability to raise capital in the future.
The market price of our Class A ordinary shares could decline as a result of future sales of substantial amounts of Class A ordinary shares or other securities relating to the Class A ordinary shares in the public market, including by the Company’s substantial shareholders, or the issuance of new Class A ordinary shares by the Company, or the perception that such sales or issuances may occur. Future sales, or perceived sales, of substantial amounts of the Class A ordinary shares could also materially and adversely affect our ability to raise capital in the future at a time and at a price favorable to us, and our shareholders will experience dilution in their holdings upon our issuance or sale of additional securities in the future.
Future financing may cause a dilution in your shareholding or place restrictions on our operations.
We may need to raise additional funds in the future to finance further expansion of our capacity and business relating to our existing operations, acquisitions or strategic partnerships. If additional funds are raised through the issuance of new equity or equity-linked securities of the Company other than on a pro rata basis to existing shareholders, the percentage ownership of such shareholders in the Company may be reduced, and such new securities may confer rights and privileges that take priority over those conferred by the Class A ordinary shares. Alternatively, if we meet such funding requirements by way of additional debt financing, we may have restrictions placed on us through such debt financing arrangements which may:
| ● | further limit our ability to pay dividends or require us to seek consents for the payment of dividends; |
| ● | increase our vulnerability to general adverse economic and industry conditions; |
| ● | require us to dedicate a substantial portion of our cash flows from operations to service our debt, thereby reducing the availability of our cash flow to fund capital expenditure, working capital requirements and other general corporate needs; and limit our flexibility in planning for, or reacting to, changes in our business and our industry. |
We have a material weakness in our internal control over financial reporting. If any material weakness persists or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately report its financial results could be adversely affected.
In connection with the preparation of the financial statement for the Company’s Annual Report on Form 20-F for the year ended June 30, 2026, our management evaluated the effectiveness of our internal control over financial reporting as of June 30, 2026 and determined they were not effective as described in Part II. Item 15. “Controls and Procedures” of this annual report. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
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Management identified one material weakness arising from two related deficiencies: (i) insufficient resources with the necessary U.S. GAAP and SEC reporting expertise, and (ii) ineffective review controls over complex and non-routine transactions and related financial reporting. These deficiencies resulted in errors in the unaudited interim financial statements for the six months ended December 31, 2025 relating to the classification of redeemable Class A ordinary shares, the presentation of interest expense associated with the convertible debentures measured under fair value option, and the measurement of deemed dividends. Management identified these matters and corrected the related accounting in preparing the consolidated financial statements for the year ended June 30, 2026. We subsequently restated the unaudited condensed consolidated financial statements as of and for the six months ended December 31, 2025 to correct the resulting material misstatements. The material weakness, if not remediated timely, may lead to material misstatements in its consolidated financial statements in the future.
To remedy the identified material weakness, we took several measure to improve our internal control over financial reporting, including, among others: (1) engaging additional accounting resources with U.S. GAAP and SEC reporting experience, strengthening the review of complex and non-routine transactions, and enhancing the period-end financial reporting and disclosure review process, (2) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for its accounting and financial reporting personnel, (3) enhancing oversight over and clarifying reporting requirements for, non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with U.S. GAAP and SEC reporting requirements, (4) recruiting more qualified internal control personnel with experience in the requirements of the Sarbanes-Oxley Act and adopting accounting and internal control guidance on U.S. GAAP and SEC reporting, and (5) preparing more detailed guidance and manuals on financial closing policies and procedures to improve the quality and accuracy of period-end financial closing process. The material weakness will not be considered remediated until the enhanced controls have operated for a sufficient period and management has concluded, through testing, that they are designed and operating effectively.
There can be no assurance that any of our efforts we are implementing, or our internal control over financial reporting generally, will remediate any material weakness or avoid future weaknesses or deficiencies. Any failure to remediate the material weakness and any future weaknesses or deficiencies or any failure to implement required new or improved controls or difficulties encountered in their implementation could cause us to fail to meet its reporting obligations or result in material misstatements in its financial statements. If we are unable to remediate its material weaknesses, our management may not be able to conclude that its disclosure controls and procedures or internal control over financial reporting are effective, which could result in investors losing confidence in its reported financial information and may lead to a decline in the share price.
There can be no assurance that we will not be passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Class A ordinary shares to significant adverse United States income tax consequences.
We will be a “passive foreign investment company,” or “PFIC,” if, in any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the average quarterly value of our assets(as determined on the basis of fair market value) during such year produce or are held for the production of passive income (the “asset test”). Based upon our income and assets, including goodwill, and the value of our Class A ordinary shares, we do not believe that we were a PFIC for the taxable years ended June 30, 2026, 2025, and 2024 and do not anticipate becoming a PFIC in the foreseeable future.
While we do not expect to become a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of our Class A ordinary shares, fluctuations in the market price of our Class A ordinary shares may cause us to become a PFIC for the current or subsequent taxable years. The determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. If we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.
If we are a PFIC in any taxable year, a U.S. holder may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the Class A ordinary shares and on the receipt of distributions on the Class A ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules and such holder may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. holder holds our Class A ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our Class A ordinary shares.
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Securities analysts may not cover our Class A ordinary shares and this may have a negative impact on the market price of our Class A ordinary shares.
The trading market for our Class A ordinary shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various on-independent analysts). We do not currently have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverage of us, the trading price for our Class A ordinary shares would be negatively impacted. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our Class A ordinary shares, changes their opinion of our Class A ordinary shares or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Class A ordinary shares could decrease and we could lose visibility in the financial markets, which could cause the price and trading volume of our Class A ordinary shares to decline.
Techniques employed by short sellers may drive down the market price of our Class A ordinary shares.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.
We may in the future be the subject of unfavorable allegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our Class A ordinary shares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would expect to strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality.
Such a situation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and the value of any investment in our Class A ordinary shares could be greatly reduced or rendered worthless.
ITEM 4. INFORMATION ON THE COMPANY
4.A. History and development of the company
Corporate History
SANGRIX was incorporated in the Cayman Islands on January 23, 2018.
SonicHash Canada was formed on December 14, 2021 under the laws of Alberta, Canada. It is a subsidiary of SANGRIX. It is not currently engaging in any active business as of the date of this annual report.
SonicHash US was formed on December 17, 2021 under the laws of Delaware. It is a subsidiary of SANGRIX. It was formed to engage in Bitcoin mining in the United States. As of December 31, 2023, SonicHash US temporarily ceased all Bitcoin mining activities.
Sonic Auspice was formed on November 30, 2023 under the laws of Delaware. SANGRIX owns 55% of the membership interest in Sonic Auspice. It does not have any material operation as of the date of this annual report.
Bit Origin Pte. Ltd. was formed on June 26, 2025 under the laws of Singapore. It is a subsidiary of SANGRIX. It is not currently engaging in any active business as of the date of this annual report.
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In addition, SonicHash Singapore was formed on December 16, 2021 under the laws of Singapore. It is a subsidiary of SANGRIX and had never engaged in any active business. On April 18, 2024, the board of directors of the Company approved to wind down SonicHash Singapore. SonicHash Singapore has been officially struck off in September 4, 2024. It did not own any assets or have any employees or business operation at the time of winding down.
On April 27, 2022, as approved by a majority of shareholders in a special meeting of shareholders, we completed a disposition in which we sold all the equity interest in its subsidiaries WVM Inc. and China Silanchi Holding Limited for a total price of US$1,000,000 pursuant to a share purchase agreement dated March 31, 2022. Such disposition includes the sale of the subsidiaries and consolidated variable interest entities of WVM Inc. and China Silanchi Holding Limited. As a result of the disposition, the Company does not operate under a VIE structure anymore. As of the date of this annual report, the Company does not have any subsidiaries or any business operation in the Mainland China, Hong Kong or Macau.
Effective February 15, 2022, we changed trading symbol of our ordinary shares from “PLIN” to “BTOG”. Effective April 29, 2022, we changed the Company’s name from “China Xiangtai Food Co., Ltd.” to “Bit Origin Ltd”.
On September 13, 2022, the Company amended its memorandum of association to reflect a change in authorized share capital from US$1,500,000 consisting of 150,000,000 shares of US$0.01 each to US$3,000,000 consisting of 300,000,000 shares of US$0.01 each, as approved by the special shareholders meeting on April 27, 2022.
On May 23, 2023, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on May 18, 2023, the board of directors of the Company approved the reverse share split at a ratio of one-for-thirty (1-for-30). Upon the opening of the market on May 30, 2023, the Company’s ordinary shares began trading on the Nasdaq Capital Market on a post- reverse share split basis.
On March 14, 2025, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on March 14, 2025, the Company adopted a dual-class share capital structure, pursuant to which (i) all of the issued and outstanding ordinary shares were re-designated as Class A Ordinary Shares, each having one (1) vote per share and the other rights attached to it as set out in the Company’s amended and restated memorandum and articles of association on a one for one basis, (ii) 25,000,000 then authorized but unissued ordinary shares re-designated as 25,000,000 Class B Ordinary Shares, each having twenty (20) votes per share and the other rights attached to it as set out in the Company’s amended and restated memorandum and articles of association on a one for one basis, and (iii) the remaining authorized but unissued ordinary shares re-designated as authorized but unissued Class A Ordinary Shares on a one for one basis. Additionally, 768,000 ordinary shares held by Mr. Jinghai Jiang as of March 14, 2025 were re-designated as 768,000 Class A Ordinary Shares and were repurchased and issued as 768,000 Class B Ordinary Shares.
At the same annual meeting of shareholders held on March 14, 2025, the shareholders approved by a special resolution, subject to the confirmation by the Grand Court of the Cayman Islands, the par value of each authorized share in the capital of the Company (including all issued shares) to reduce from US$0.30 to US$0.000001 (the “Share Capital Reduction”), such that following the Share Capital Reduction, the authorized share capital of the Company shall be US$500, divided into 500,000,000 shares of par value US$0.000001 each, comprising of 475,000,000 Class A Ordinary Shares of par value US$0.000001 each and 25,000,000 Class B Ordinary Shares of par value US$0.000001 each. On June 5, 2025, the Grand Court of the Cayman Islands granted an order confirming the reduction of the par value of each issued and authorized share of the Company from US$0.30 to US$0.000001 per issued share. The Court’s order confirming the Share Capital Reduction and the minute of reduction were registered by the Cayman Islands Registrar of Companies on July 25, 2025. Immediately following the Share Capital Reduction, an ordinary resolution adopted by the shareholders on March 14, 2025 came into effect, such that the Company’s authorized share capital was increase from (i) US$500, divided into 500,000,000 shares of par value US$0.000001 each, comprising of 475,000,000 Class A Ordinary Shares of par value US$0.000001 each and 25,000,000 Class B Ordinary Shares of par value US$0.000001 each, to (ii) US$15,000 divided into 15,000,000,000 shares of par value US$0.000001 each, comprising of 14,250,000,000 Class A Ordinary Shares of par value US$0.000001 each and 750,000,000 Class B Ordinary Shares of par value US$0.000001 each, by (1) the creation of 13,775,000,000 new Class A Ordinary Shares of par value US$0.000001 each; and (2) the creation of 725,000,000 new Class B Ordinary Shares of par value US$0.000001 each.
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On December 19, 2025, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on March 14, 2025, the board of directors of the Company approved the reverse share split at a ratio of one-for-sixty (1-for-60). Upon the opening of the market on January 20, 2026, the Company’s Class A ordinary shares began trading on the Nasdaq Capital Market on a post- reverse share split basis. The Company’s authorized share capital was changed to 250,000,000 ordinary shares of a par value of US$0.00006 each, comprising 237,500,000 Class A Ordinary Shares of a par value of US$0.00006 each and (b) 12,500,000 Class B Ordinary Shares of a par value of US$0.00006 each.
On August 11, 2026, the Company held an extraordinary general meeting of shareholders at which the shareholders approved, among others: (i) a change of the name of the Company (the “Name Change”) from “BIT ORIGIN LTD” to “SANGRIX INC.”; (ii) to increase the Company’s authorized share capital from US$15,000 divided into 237,500,000 class A ordinary shares of a par value of US$0.00006 each and 12,500,000 class B ordinary shares of a par value of US$0.00006 each, to US$60,000,000 divided into 950,000,000,000 class A ordinary shares of a par value of US$0.00006 each and 50,000,000,000 class B ordinary shares of a par value of US$0.00006 each; (iii) to amend and restate the Company’s current amended and restated memorandum of association to reflect the name change and share capital increase; (iv) a share consolidation of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares, par value US$0.00006 each, at a ratio of five (5)-for-one (1), such that every five (5) Class A ordinary shares of a par value of US$0.00006 each be consolidated into one Class A Ordinary Share of a par value of US$0.0003 each, and every five (5) Class B ordinary shares of a par value of US$0.00006 each be consolidated into one Class B Ordinary Share of a par value of US$0.0003 each, and the rounding up of any fractional shares resulting from the share consolidation to the nearest whole ordinary share, which shall take effect on August 21, 2026; (v) to amend and restate the then effective memorandum and articles of association of the Company to reflect the share consolidation; (vi) general authorization.
On August 21, 2026, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on August 11, 2026, a reverse share split at a ratio of one-for-five (1-for-5) was effective. Upon the opening of the market on August 21, 2026, the Company’s ordinary shares began trading on the Nasdaq Capital Market on a post- reverse share split basis. The new CUSIP number following the reverse share split is G21621209. The reverse share split reduced the number of outstanding shares of the Company from approximately 100.9 million to approximately 3.3 million and affected all outstanding ordinary shares.
Effective September 1, 2026, we changed the trading symbol of our ordinary shares from “BTOG” to “SGRX”. Effective September 1, 2026, we changed the Company’s name from “BIT ORIGIN LTD” to “SANGRIX INC”.
Corporate Takeover Information
As of the date of this annual report, there have been no indication of any public takeover offers by third parties in respect of the company’s shares or by the company in respect of other companies’ shares which have occurred during the last and current financial year.
Corporate Information
Our principal executive offices are located at 160 Robinson Road, 12F, SBF Center, Singapore 068914. The telephone number of our principal executive offices is 347-556-4747. Our registered office in the Cayman Islands is provided by McGrath Tonner Corporate Services Limited and located at 5th Floor, Genesis Close, George Town, PO Box 446, Grand Cayman, KYl-1106, Cayman Islands. Our corporate website is http:// sangrix.ai /. The information contained on our website is not a part of this annual report.
The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.
Material Licenses and Permits
Our operating subsidiary, SonicHash US, has obtained all material licenses and approvals required for its operations in the United States.
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4.B. Business overview
As part of our growth strategy, we evaluate opportunities involving emerging technologies and digital infrastructure. We entered the Bitcoin mining business in December 2021 but ceased our Bitcoin mining operations in the United States in December 2023 due primarily to high operating costs. We have suspended further expansion of our proprietary cryptocurrency mining operations and, as of the date of this annual report, have not committed to restarting such operations.
In July 2025, we established a dedicated Dogecoin treasury program as part of our digital-asset strategy. As of the issuance date of this annual report, we held 67,543,745 Dogecoin. We currently have no plans to make additional material purchases of Dogecoin. This balance includes 30,000,000 DOGE subject to redemption notices received from all three investors in our August 2025 private placement. Settlement of these redemptions remained outstanding as of the date of this annual report. See “Dogecoin Treasury Strategy—Current Holdings and Treasury Management” for further details.
In 2026, we began expanding our business focus toward AI computing and digital infrastructure. In connection with this strategy, we acquired 16 GPU servers and entered into a management agreement for their deployment, management and commercialization. The servers have not yet been delivered or deployed and are currently expected to be deployed in Malaysia during the third quarter of 2026, subject to equipment delivery, customer commitments, hosting arrangements and other operational factors. We intend to evaluate additional opportunities involving GPU computing, server leasing, data center infrastructure and related services.
Dogecoin Treasury Strategy
In July 2025, we established a dedicated Dogecoin treasury program as part of our digital-asset strategy. Under the program, we acquired Dogecoin for long-term treasury investment purposes. Our treasury approach has since evolved to include sales of a portion of our DOGE holdings to support working capital and our transition toward AI computing infrastructure, together with the management of our remaining holdings and settlement of investor redemptions under the August 2025 securities purchase agreements. We will continue to evaluate further sales based on market conditions, liquidity needs and capital allocation priorities, subject to applicable contractual obligations and collateral restrictions. There can be no assurance that additional sales will occur. Our Dogecoin holdings are subject to significant price volatility, liquidity, regulatory, custody, cybersecurity and other risks. See “Risk Factors” for additional information regarding the risks associated with our Dogecoin holdings.
Current Holdings and Treasury Management
On September 7, 2026, we sold an aggregate of 3,000,000 DOGE through two transactions of 1,500,000 DOGE each, generating approximately US$267,665 in gross proceeds before transaction fees. These sales reflected our assessment of market conditions, operating cash requirements and investment priorities as we reallocate resources toward our AI infrastructure business.
As of the date of this annual report, we held 67,543,745 DOGE following these sales and before settlement of the redemptions described below. This balance includes 30,000,000 DOGE covered by redemption notices received on August 20, 2026 from all three investors in our August 2025 private placement. The notices seek the return of those DOGE in exchange for the surrender and cancellation of the corresponding eligible Class A ordinary shares under the applicable securities purchase agreements. As of the date of this annual report, settlement of these redemptions remained outstanding.
We will continue to evaluate further sales of our remaining DOGE holdings from time to time based on market conditions, liquidity needs and capital allocation priorities, taking into account our redemption obligations, applicable collateral restrictions and any required consents. The timing, amount and pricing of any additional sales will depend on the circumstances at the time, and there can be no assurance that additional sales will occur. Available proceeds from any additional sales would support working capital and the continued development of our AI infrastructure business.
We currently have no plans to make additional material purchases of DOGE. Our remaining holdings continue to expose us to price volatility, liquidity, custody, cybersecurity, regulatory and other risks.
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Sources of Capital
We funded our existing Dogecoin holdings primarily through capital raised in equity and convertible-note financings and through the receipt of Dogecoin as consideration in a private placement. Our Dogecoin treasury program has not been funded by material internally generated operating cash flows.
In connection with the establishment of the Dogecoin treasury program, we entered into equity and convertible-debt financing arrangements with institutional investors providing for up to US$500 million of potential financing, subject to the terms and conditions of the applicable agreements. This amount represents the original aggregate potential financing capacity under those arrangements, rather than cash on hand or financing currently available for immediate drawdown. Our ability to access any remaining amounts under these arrangements depends on factors beyond our control, including market conditions, investor participation, trading volume, the market price of our Class A ordinary shares, regulatory developments and satisfaction of the applicable closing and funding conditions.
We have also commenced sales of a portion of our DOGE holdings to support liquidity and our transition toward AI computing infrastructure. On September 7, 2026, we sold 3,000,000 DOGE for approximately US$267,665 in gross proceeds. We intend to use the net proceeds for general working capital and planned AI infrastructure expenditures, including equipment and deployment-related costs. We will continue to evaluate additional sales based on market conditions, liquidity needs and capital allocation priorities, taking into account our redemption obligations, applicable collateral restrictions and any required consents. There can be no assurance that additional sales will occur.
Although certain amounts may remain available under these arrangements, we currently do not intend to use such availability to make additional material purchases of Dogecoin. Any capital raised in the future is currently expected to be used primarily for working capital, satisfaction of our financing obligations, deployment and commercialization of our GPU servers, development of our AI computing and digital infrastructure business, and other general corporate purposes, subject to the terms of the applicable financing arrangements and management’s assessment of the Company’s needs.
There can be no assurance that any remaining financing will be available when needed, in sufficient amounts or on terms acceptable to us. Current market conditions may reduce financing availability, increase our cost of capital or result in substantial dilution to our existing shareholders. Adverse DOGE market conditions may also limit our ability to generate additional liquidity through sales of our remaining holdings.
Treasury Management Timeline
Over the next twelve months, we currently expect our treasury-management activities to consist principally of:
| ● | maintaining institutional custody arrangements for our remaining Dogecoin holdings; |
| ● | monitoring the market value, liquidity and concentration of our Dogecoin holdings; |
| ● | administering the redemption notices received from all three investors under the August 2025 securities purchase agreements, covering the return of an aggregate of 30,000,000 DOGE, subject to satisfaction of the applicable contractual requirements, in exchange for the surrender and cancellation of eligible unsold Class A Ordinary Shares; |
| ● | evaluating the effect of our Dogecoin holdings and the pending redemptions on our liquidity, collateral requirements, financial condition and results of operations; |
| ● | monitoring regulatory, accounting, tax, custody and cybersecurity developments affecting Dogecoin; and |
| ● | following our sale of 3,000,000 DOGE on September 7, 2026, evaluating further sales of our remaining DOGE holdings from time to time based on market conditions, liquidity needs and capital allocation priorities, taking into account our redemption obligations, applicable collateral restrictions and any required consents. Available proceeds from any additional sales would support working capital and the continued development of our AI infrastructure business. There can be no assurance that additional sales will occur. |
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We currently have no timetable or plan for making additional material purchases of Dogecoin. Our treasury-management approach may change based on market volatility, liquidity requirements, financing conditions, regulatory developments, internal risk parameters and management’s assessment of our overall business needs.
Yield Generation Strategy
We have not implemented any yield-generation program involving our Dogecoin holdings and have not entered into any definitive agreement to lend, stake or otherwise deploy Dogecoin for the purpose of generating yield. We do not currently plan to use decentralized finance protocols or other unregulated platforms in connection with our Dogecoin holdings.
Our current treasury priorities are managing our remaining DOGE holdings, administering the redemption notices received and evaluating further sales to support working capital and our transition toward AI computing infrastructure, taking into account applicable contractual obligations and collateral restrictions.
Material Aspects of Treasury Strategy
Our current Dogecoin treasury strategy is focused on the prudent management, custody and evaluation selective monetization of our existing remaining Dogecoin holdings and the settlement of investor redemptions, rather than the continued accumulation of Dogecoin. The material elements of our current strategy include:
| ● | maintaining our remaining Dogecoin holdings with an institutional digital-asset custodian and applying internal authorization and security controls; |
| ● | monitoring the market value, liquidity, concentration and volatility of our Dogecoin holdings and their effect on our financial condition and results of operations; |
| ● | administering the redemption notices received from all three investors under the August 2025 securities purchase agreements, covering the return of an aggregate of 30,000,000 DOGE, subject to satisfaction of the applicable contractual requirements, in exchange for the surrender and cancellation of eligible unsold Class A Ordinary Shares; |
| ● | following our sale of 3,000,000 DOGE on September 7, 2026, evaluating further sales based on market conditions, liquidity needs and capital allocation priorities to support working capital and the continued development of our AI infrastructure business; |
| ● | monitoring legal, regulatory, accounting, tax, custody and cybersecurity developments affecting Dogecoin; |
| ● | evaluating the effect of any pledge or other use of Dogecoin as collateral under our financing arrangements and obtaining any required consents for sales or transfers of pledged DOGE; and |
| ● | periodically reviewing whether continued ownership of Dogecoin remains consistent with our broader business strategy, capital requirements and internal risk parameters. |
We currently have no plans to make additional material purchases of Dogecoin or to deploy our Dogecoin holdings through unregulated platforms. We may retain or dispose of all or a portion of our remaining Dogecoin holdings, subject to our redemption obligations, applicable collateral restrictions and any required consents. There can be no assurance that additional sales will occur. and Our strategy may change at any time based on market conditions, liquidity requirements, financing obligations, regulatory developments and management’s assessment of our overall business needs.
Custody Arrangements
We store all of our Dogecoin holdings with BitGo Trust Company, Inc., a regulated institutional digital-asset custodian and South Dakota-chartered trust company. Our Dogecoin is held in segregated custody accounts maintained separately from BitGo’s proprietary assets and the assets of other customers. BitGo provides institutional-grade custody services, including cold-storage architecture, multi-signature security controls, and SOC 2 — certified operational processes. BitGo also maintains commercial crime insurance covering certain losses relating to digital assets held in custody, subject to policy limits, conditions, and exclusions.
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Private keys associated with our Dogecoin holdings are administered through BitGo’s multi-signature infrastructure, and no individual officer or employee of the Company has unilateral control over such keys.
Transactions are initiated by authorized personnel and processed through BitGo’s controlled approval and verification workflows. Withdrawals of Dogecoin are subject to BitGo’s security review procedures and may be delayed for verification purposes, including for large or unusual transactions.
Under the custodial agreement, BitGo may suspend or restrict access to custodial services if required by applicable law or regulatory authority, or in connection with compliance or risk-management concerns.
BitGo’s liability under the custodial agreement is generally limited and applies primarily in cases of gross negligence, fraud, or willful misconduct, as defined therein.
We currently rely exclusively on BitGo for the custody of all Dogecoin holdings, although we may evaluate additional custodial arrangements in the future in response to changes in scale, regulatory requirements, or operational needs.
Dogecoin Use Cases
Dogecoin (“DOGE”) is primarily used for peer-to-peer value transfer, including small-value payments, microtransactions, online tipping, charitable contributions, and community-driven commerce. Its low transaction fees and fast block times make DOGE suitable for high-frequency, low-friction transactions.
DOGE is also increasingly used in merchant integrations, online platforms, gaming environments, and community-supported economic activities. As the ecosystem develops, additional use cases may emerge, including integration into payment applications, decentralized commerce, and digital-asset loyalty systems.
Dogecoin Network Architecture
Dogecoin operates on an open-source, proof-of-work (“PoW”) blockchain that is secured through merged mining with Litecoin, allowing miners to validate blocks for both networks simultaneously. This structure is intended to increase hash-power participation and improve network stability.
The Dogecoin blockchain includes:
| ● | miners who validate blocks and receive newly minted DOGE as block rewards; |
| ● | full nodes that maintain a copy of the ledger and verify network consensus; |
| ● | developers who maintain the protocol and propose updates; |
| ● | users who send transactions to the network. |
Transactions are validated and added to the blockchain approximately every minute, enabling fast settlement relative to other proof-of-work blockchains.
Dogecoin Tokenomics Dogecoin’s economic model includes several key characteristics:
| ● | Circulating Supply DOGE has a circulating supply exceeding 140 billion tokens, with no maximum supply cap. |
| ● | DOGE Lock-up and Unlocking Schedule As a decentralized, proof-of-work asset with no pre-mine, there is no amount of DOGE held in a locked state, and consequently, no related unlocking or vesting schedule to disclose. |
| ● | Annual Block Rewards Miners receive a fixed block reward of 10,000 DOGE per block, resulting in approximately 5 billion new DOGE issued annually. |
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| ● | Inflationary Issuance Unlike capped-supply cryptocurrencies, Dogecoin is structured as an inflationary asset, which may encourage spending and reduce hoarding but may also exert downward pressure on price if demand does not grow proportionally. |
| ● | Absence of Burn Mechanisms Dogecoin does not include a native token-burn mechanism, and its supply is expected to continue increasing indefinitely under current parameters. |
| ● | Price Volatility Dogecoin has experienced significant historical price volatility driven by global crypto-market sentiment, investor speculation, liquidity conditions, and adoption trends. |
| ● | Miner Incentives Miner profitability is driven by block rewards, transaction fees, DOGE market price, and mining difficulty. Changes in these variables may influence network participation and security. |
Lifecycle of Dogecoin The lifecycle of DOGE includes:
| ● | Creation New DOGE is created through the mining process when miners solve cryptographic puzzles and validate blocks. |
| ● | Validation Nodes verify transactions and enforce consensus rules; miners include validated transactions in new blocks. |
| ● | Settlement Transactions are broadcast, confirmed on-chain, and become immutable after inclusion in a block. |
| ● | Circulation & Integration DOGE is used for payments, held as a store of value, traded on exchanges, or integrated into third-party applications and ecosystems. |
| ● | Ecosystem Development The Dogecoin community and open-source contributors continue to support protocol updates, integrations, and ecosystem initiatives that may expand DOGE’s utility over time. |
Miners
In December 2023, we ceased all Bitcoin mining operations, and we no longer deploy or operate any mining equipment.
In addition to our historical Bitcoin mining activities, we currently hold supplier prepayments for 617 Aethir cloud-rendering miners and 134 MicroBT WhatsMiner M60S ASIC miners. These units are not intended for deployment in Company-operated mining activities and do not form part of our mining operations. Instead, they represent inventory available for sale or delivery to customers under our sales-representative arrangements. Since the commencement of our miner-sales initiative in June 2024, we have sold an aggregate of 790 Aethir units.
The Company is actively pursuing multiple commercial channels to monetize these units, including:
(i) direct sales to institutional and retail customers; (ii) strategic partnerships with hosting providers, cloud-rendering platforms, and mining-equipment distributors; and (iii) marketing campaigns intended to broaden customer demand. These efforts are ongoing and form part of our asset-light digital-infrastructure strategy.
We expect disposition of the Aethir and WhatsMiner units to occur on a rolling basis over the next 6 – 12 months, subject to customer purchase commitments and prevailing market demand for cloud-rendering and mining hardware.
Mining Facilities
As of the date of this annual report, we do not own or operate any active Bitcoin mining facilities. All mining operations in Macon, Georgia; Marion, Indiana; and Cheyenne, Wyoming have been discontinued.
Operations at the Macon, Georgia facility were suspended in December 2022 due to high energy costs and operational inefficiencies, and the related hosting agreement expired on April 30, 2023. Operations at the Marion, Indiana facility ceased in September 2023, and operations at the Cheyenne, Wyoming facility ceased in December 2023 due to elevated operating costs in the United States.
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Following the cessation of these operations, all miners previously deployed at these facilities disposed of, and we currently do not generate revenue from Bitcoin mining activities.
While we continue to evaluate strategic alternatives related to digital asset infrastructure from time to time, there can be no assurance that we will resume mining operations or acquire or operate mining facilities in the future.
Strategic Partnership
On June 7, 2024, we entered into a sales representative agreement with NGH Computer Pte. Ltd. (“NGH”), pursuant to which NGH agreed to engage us as its non-exclusive representative to market and solicit orders for Aethir Edgar miners, hardware devices for contributing rendering services to Aethir Cloud Depin network. Aethir, a leader in decentralized GPU cloud infrastructure, has successfully closed its fundraising of close to USD150mn according to cryptorank.io. Aethir is an enterprise-grade, artificial intelligence (“AI”) and Gaming-focused GPU-as-a-service provider, which offers a convenient way for users to access highperformance computing resources for machine learning, deep learning, and other data-intensive applications. Aethir’s decentralized cloud computing infrastructure enables GPU providers to connect with enterprise clients who need the raw power of NVIDIA’s H100 chips for sophisticated AI and machine learning tasks. In addition, Aethir’s infrastructure supports cloud gaming clients and has contracts with the world’s largest gaming and telecom companies, taking advantage of its flexibility and coverage across technological and operational expertise.
By becoming a sales representative for Aethir, we aim to leverage our extensive expertise and industry connections to further expand Aethir’s market reach. This partnership aligns with our strategic objectives to innovate and lead in the technology and blockchain sectors. Furthermore, we have announced our intention to acquire certain Aethir devices for strategic self-deployment in Singapore or Malaysia, and we believe this collaboration will significantly enhance our offerings while driving substantial growth and value for both companies.
AI Computing and GPU Infrastructure Business
As part of our strategy to diversify our operations and develop new sources of revenue, we have expanded into AI computing infrastructure through the acquisition of GPU-based computing equipment. Our initial focus is on owning GPU servers used for artificial intelligence, high-performance computing, rendering and other computationally intensive applications, while engaging third parties to deploy, manage and commercialize the equipment.
We believe this ownership-and-management model may allow us to participate in the demand for advanced computing capacity without independently developing all of the personnel, data center and operating infrastructure required to manage GPU servers. However, this model also causes us to depend substantially on third-party managers, data center operators, power and network providers and other service providers.
Acquisition of NVIDIA Blackwell B300 AI Servers
On June 28, 2026, we completed an asset purchase transaction with PT Mitra Manunggal Sangkara, or MMS, pursuant to which we acquired 16 NVIDIA Blackwell B300 AI servers, each configured with eight GPUs, representing a total of 128 GPUs. The acquired assets also include related components, documentation, transferable warranties and service rights, and rights relating to the purchase, delivery and logistics of the servers.
At the time of the acquisition, the GPU servers were in transit and had not yet been physically delivered. Upon closing, we acquired ownership of the servers and the related rights to receive delivery. MMS is required to cooperate with us in coordinating delivery and transferring applicable supplier, warranty, shipping and other rights.
The contractual purchase consideration consisted of $1.0 million in cash and a pre-funded warrant having an agreed aggregate value of $10.0 million and exercisable for up to 6,457,863 Class A ordinary shares (or 1,291,573 after giving effect to the 1-for-5 reverse share split in August 2026), subject to customary adjustments and beneficial ownership limitations. The accounting value of the acquired assets and warrant consideration will be determined in accordance with applicable accounting requirements and may differ from the values assigned in the transaction documents.
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Operation of the GPU Servers
In connection with the acquisition, on June 28, 2026, we entered into a Management Agreement with MMS pursuant to which MMS was appointed to deploy, manage and commercialize the GPU servers for an initial five-year term. MMS will be responsible for the day-to-day operation of the equipment, including coordinating data center hosting, power, network connectivity, maintenance and commercial utilization.
Under the Management Agreement, we are entitled to fixed rental income of $368,640 for each monthly settlement period beginning when the servers are available for operation. We are responsible for operating expenses relating to the servers, including hosting, power, network, logistics, insurance, maintenance and repair costs. These expenses will be netted against the fixed rental income and will therefore affect the net amount received by us.
Reimbursable operating expenses must be reasonable, documented and actually incurred. Any individual operating expense exceeding $5,000 generally requires our prior written approval, except where the expense is reasonably necessary to prevent material damage to the servers or an interruption of management services. We will also receive monthly settlement statements and operating reports and have certain rights to review the relevant records.
As of the date of this annual report, the GPU servers had not yet been delivered or deployed. The servers are currently expected to be delivered and deployed in Malaysia during the third quarter of 2026. We will not become entitled to rental income until the servers are available for operation under the Management Agreement. Accordingly, as of the date of this annual report, we had not generated revenue from the acquired GPU servers.
Delivery, deployment and commencement of operations remain subject to shipping, customs clearance, installation, testing, data center readiness, availability of sufficient power, cooling and network connectivity, and other operational conditions.
Growth Strategy
If the initial GPU deployment performs satisfactorily, we may evaluate additional opportunities involving GPU equipment, AI computing capacity, storage infrastructure and related data center services.
We intend to evaluate potential expansion opportunities based on equipment availability, customer demand, expected utilization, contractual revenue arrangements, operating expenses, financing costs and anticipated investment returns. We have not committed to a fixed level of expansion, and additional projects may require substantial capital obtained through cash on hand, debt financing, equipment financing, equity issuances or other financing transactions.
Disposition and Discontinued Operations
Prior to April 2021, our then subsidiaries and variable interest entities engaged in the pork processing business and had operations across key sections of the industry value chain, including slaughtering, packing, distribution, wholesale, and retail of a variety of fresh pork meat and parts. Prior to February 2020, one of our then subsidiaries operated a grocery store in Chongqing, China that sold our pork and meat products and other consumer goods. In February 2020, the grocery store operation was discontinued. In April 2021, the pork processing business was discontinued.
On April 27, 2022, we sold 100% equity interest in WVM Inc. and China Silanchi Holding Limited, including the subsidiaries and consolidated variable entities of WVM Inc. and China Silanchi Holding Limited (See “— Corporate History and Structure”), to an unrelated third party for a total of $1,000,000 pursuant to a securities purchase agreement dated March 31, 2022. Such disposition includes the sale of the grocery store and meat processing business.
Grocery Store. In July 2018, we acquired CQ Pengmei and opened two grocery stores in Chongqing in November 2017 that offered a variety of consumer goods. One of the grocery stores was closed in August 2018 due to the landlord’s failure to meet the fire safety requirements. We filed a lawsuit against the landlord for breach of the store operating lease. The lawsuit is still ongoing. In February 2020, due to the increase in inventory purchase cost and the quarantine restrictions as a result of the COVID-19 pandemic in China, we closed the other grocery store.
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Meat Processing. We used to engage in the slaughtering, packing, distribution, wholesale, and retail of a variety of fresh pork meat and parts through CQ Penglin and GA Yongpeng. We used to sell fresh pork to distributors, who then sold to pork vendors in farmers’ markets. Due to the African Swine fever affecting China in October 2018, the supply of hogs decreased. Also, starting from March 2019, the Chongqing government started requiring all local slaughtering houses to only purchase hogs from hog farms in Chongqing, which further limited the supply of hogs. The decrease in supply increased the price of hogs and increased our cost of per unit slaughtering and processing. Starting in January 2020, due to the COVID-19 pandemic and quarantine measures, our sales volume in farmers markets decreased. We were operating at losses during the fiscal year ended June 30, 2021. In addition, in March 2021, we ceased operation of the slaughtering and food processing facilities as a result of a legal dispute between CQ Penglin and Chongqing Puluosi Small Mortgage Co., Ltd. The food processing facility was sealed by the court and is subject to a lien. The court ordered the sale of this facility to enforce the court verdict against CQ Penglin. The slaughtering facility is subject to the same lien pursuant to the same court order, and pursuant to which order the facility cannot be sold, transferred or otherwise disposed without approval of the court. As a result, in April 2021, we discontinued the meat processing business.
Impact of Recent Developments Regarding Crypto Asset Market
The crypto-asset industry has experienced significant volatility, market disruptions and regulatory developments in recent years. During 2022 and early 2023, several prominent participants in the crypto-asset industry experienced liquidity problems, insolvencies, regulatory investigations or bankruptcy proceedings, including Celsius Network, Voyager Digital, Three Arrows Capital, FTX, BlockFi and Genesis. These events contributed to substantial declines in crypto-asset prices, reduced market liquidity, increased regulatory scrutiny and a loss of confidence in certain crypto-asset market participants.
We had no direct and material exposure to FTX or the other above-mentioned crypto-asset companies and did not experience any material loss of assets as a result of their bankruptcies. Nevertheless, failures or financial difficulties involving major digital-asset exchanges, custodians, lenders, market makers or other industry participants may adversely affect the broader crypto-asset market. Such events could reduce the price and liquidity of Dogecoin, disrupt our access to trading or custody services, increase our compliance and operating costs, and adversely affect investor perceptions of companies that hold digital assets.
Crypto-asset markets continued to experience significant price fluctuations during 2024, 2025 and 2026. Although the industry experienced periods of increased institutional participation, the introduction and expansion of exchange-traded products involving certain digital assets, and greater corporate interest in holding digital assets, these developments did not eliminate the volatility, liquidity constraints or operational risks associated with crypto assets. Changes in macroeconomic conditions, interest rates, regulation, investor sentiment, cybersecurity events, market concentration and the financial condition of major industry participants may cause material and rapid changes in crypto-asset prices.
We entered the Bitcoin mining business in December 2021. The volatility of Bitcoin prices, together with high energy and hosting costs, adversely affected the economic performance of our former mining operations. We ceased our proprietary Bitcoin mining operations in the United States in December 2023 due primarily to high operating costs. We no longer own or operate an active cryptocurrency mining facility and have not committed to restarting proprietary cryptocurrency mining operations. Accordingly, our current operating results are no longer directly dependent on Bitcoin mining production or mining rewards.
In July 2025, we established a dedicated Dogecoin treasury program. As of the issuance date of this annual report, we currently have no plans to make additional material purchases of Dogecoin. This balance includes 30,000,000 DOGE subject to redemption notices received from all three investors in our August 2025 private placement. Settlement of these redemptions remained outstanding as of the date of this annual report. See “Dogecoin Treasury Strategy—Current Holdings and Treasury Management” for further details. We currently have no plans to make additional material purchases of Dogecoin. However, our financial condition and results of operations remain exposed to changes in the market value of our existing Dogecoin holdings. A material decline in the price of Dogecoin could result in losses from changes in fair value, reduce the value of our assets and collateral, adversely affect our liquidity and borrowing capacity, and negatively affect investor perceptions of our business and the market price of our Class A ordinary shares.
Dogecoin markets may be less liquid and more susceptible to volatility and market dislocation than markets for larger digital assets such as Bitcoin and Ethereum. The execution of a significant sale of Dogecoin could affect prevailing market prices, particularly during periods of reduced trading volume or market stress. Exchange outages, withdrawal restrictions, cybersecurity incidents, regulatory actions or disruptions affecting custodians or trading venues could also limit our ability to access, transfer or dispose of our Dogecoin holdings when desired.
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We hold our Dogecoin with BitGo Trust Company, Inc., a regulated institutional digital-asset custodian. Although the use of a third-party institutional custodian is intended to reduce certain custody and operational risks, it does not eliminate the possibility of loss, delayed access, cybersecurity incidents, operational failures, regulatory restrictions or insolvency-related risks. Any material disruption affecting BitGo or another service provider on which we rely could restrict access to our Dogecoin holdings or otherwise adversely affect our business, financial condition and results of operations.
We intend to continue evaluating our Dogecoin holdings in light of market conditions, liquidity requirements, regulatory developments, internal risk parameters and our broader business strategy. We may retain or dispose of all or a portion of our Dogecoin holdings. Any future decision to acquire additional Dogecoin would be subject to management’s assessment of these and other relevant considerations.
Our current growth strategy is increasingly focused on AI computing and digital infrastructure, including our acquisition and proposed deployment of NVIDIA Blackwell B300 AI servers. Although this strategy may reduce our dependence on crypto-asset-related activities over time, our GPU infrastructure business is new, and the servers have not yet been delivered or deployed. There can be no assurance that our GPU infrastructure business will be successfully implemented or generate the anticipated revenue or other benefits. As a result, adverse developments in the crypto-asset market, combined with delays or underperformance in our GPU infrastructure business, could materially and adversely affect our business, financial condition, results of operations, liquidity and ability to execute our business strategy.
Legal Proceedings
Except as discussed below, there are no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, other than disclosed above, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company that are outside the ordinary course of business or in which an adverse decision could have a material adverse effect.
However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise.
Litigation
In March 2023, the Company and SonicHash LLC, a subsidiary of the Company, along with other named entities, were named as defendants in a state court civil lawsuit filed in Cheyenne, Wyoming by BCB Cheyenne LLC (“BCB”) who had contractual relationship with two of the named defendants, MineOne Wyoming Data Center LLC, the other with Terra Crypto, Inc. Defendant alleges these parties breached their respective contracts. For its part, SANGRIX and Sonichash, who had no relationship with BCB, were nevertheless alleged to have intentionally interfered with BCB’s contractual relationships with these other parties. Both the Company and Sonichash were also named as what is known as an “alter ego” defendant pursuant to which a party may be found liable if its later discovered it was acting, in essence, as the alter ego of the primary wrongdoer. Prior to the Company discovering it had been named in this Wyoming lawsuit, the case had been dismissed but simultaneously recommenced in the U.S. District Court in Wyoming against the same parties, with substantively the same causes of action. The Company and Sonichash were made aware of and appeared in this new federal court litigation denying all material allegations alleged against each of them.
In September 2023, BCB filed an amended complaint to add parties and substitute parties in place of others but leaving the Company and Sonichash LLC as named defendants accused of intentionally interfering with BCB’s contractual relations. Once again, both companies were also alleged to be alter egos of the primary wrongdoers. In its lawsuit, BCB seeks “no less than $38 million” in compensatory damages. The Company denies any liability to BCB arising out of this lawsuit and is defending this matter vigorously.
The parties mediated this dispute from August 6 to August 8, 2024 and entered into a Settlement Agreement and Mutual Release on October 14, 2024, pursuant to which the Company agreed to pay $13,050 to cover certain litigation cost. On October 14, 2024, the court dismissed the lawsuit, granting full releases to all defendants and officially concluding the matter.
Share Capital Reduction
In May 2025, the Company petitioned the Grand Court of the Cayman Islands (Financial Services Division) under Cause No. FSD 115 of 2025 (DDJ) for a reduction of its authorized share capital. The application sought to reduce the par value of each of the Company’s issued and authorized but unissued ordinary shares from US$0.30 to US$0.000001, thereby reducing the Company’s total authorized share capital from US$15,000 to US$500, with the surplus being credited to the Company’s additional paid-in capital.
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Following due process and consideration, the Court issued its final order on June 5, 2025, approving the share capital reduction as petitioned. The order confirmed that the reduction was properly effected in accordance with the Companies Act (as amended) of the Cayman Islands.
The court order was registered by the Cayman Islands General Registry on July 25, 2025.
Nasdaq Compliance
Minimum Bid Price
On June 14, 2022, the Company received a written notification from Nasdaq, notifying the Company that it is not in compliance with the Minimum Bid Price Requirement, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of our ordinary shares for the 30 consecutive business days from May 2, 2022, to June 13, 2022, the Company no longer meets the Minimum Bid Price Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until December 12, 2022, to regain compliance with the Minimum Bid Price Requirement.
On December 13, 2022, the Company received a written notice from Nasdaq stating that, although the Company had not regained compliance with the Minimum Bid Price Requirement by December 12, 2022, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company is eligible for an additional 180 calendar day period, or until June 12, 2023, to regain compliance with the Minimum Bid Price Requirement.
On May 23, 2023, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on May 18, 2023, the board of directors of the Company approved the reverse share split at a ratio of one-for-thirty (1-for-30). Upon the opening of the market on May 30, 2023, the Company’s ordinary shares began trading on the Nasdaq Capital Market on a post- reverse share split basis.
On June 14, 2023, the Company received a letter from Nasdaq stating that because the Company’s ordinary shares had a closing bid price at or above $1.00 per share for 11 consecutive business days from May 30 to June 13, 2023, the Company had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2), and that the matter is now closed.
Late Filing of Annual Report
On November 20, 2024, the Company received a written notice from Nasdaq notifying the Company that, since the Company has not yet filed its Form 20-F for the year ended June 30, 2024, it no longer complies with Nasdaq Listing Rules for continued listing under Listing Rule 5250(c)(1). Under Nasdaq Listing Rules, the Company has 60 calendar days to submit a plan to regain compliance and if Nasdaq accepts the Company’s plan, Nasdaq can grant the Company an exception of up to 180 calendar days from the Form 20-F’s due date, or until May 12, 2025, to regain compliance. The Company regained compliance upon filing of its Form 20-F for the year ended June 30, 2024.
Stockholders’ Equity
On January 3, 2025, the Company received a written notification from the Listing Qualifications staff of The Nasdaq Stock Market LLC indicating that the Company was no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing on the Nasdaq Capital Market. As reported in its Form 20-F filed on December 26, 2024, the Company had stockholders’ equity of $909,583 as of June 30, 2024. In accordance with Nasdaq rules, the Company had 45 calendar days to submit a plan to regain compliance. Upon reviewing the Company’s submission dated February 17, 2025, Nasdaq granted the Company an extension through June 30, 2025, to execute its compliance plan and demonstrate compliance with the stockholders’ equity requirement. The Company may be subject to delisting if it fails to evidence compliance by that date or in its next Form 20-F for the fiscal year ending June 30, 2025. To address the deficiency, the Company converted secured convertible debentures into equity and completed revenue-generating transactions. As a result, the Company reported stockholders’ equity of approximately $3.6 million as of May 31, 2025. On July 1, 2025, Nasdaq confirmed that the Company had regained compliance with the equity requirement under Listing Rule 5550(b)(1).
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Minimum Bid Price
On February 21, 2025, the Company received a written notice from Nasdaq stating that, based on the closing bid price of its ordinary shares for the prior 30 consecutive business days, the Company was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial 180 calendar day period, or until August 20, 2025, to regain compliance with the minimum bid price requirement.
On August 28, 2025, the Company received a written notice from Nasdaq (the “August 2025 Notice”) stating that, although the Company had not regained compliance with the minimum bid price requirement by August 20, 2025, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company is eligible for an additional 180 calendar day period, or until February 16, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2).
On December 19, 2025, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on March 14, 2025, the board of directors of the Company approved the reverse share split at a ratio of one-for-sixty (1-for-60). Upon the opening of the market on January 20, 2026, the Company’s Class A ordinary shares began trading on the Nasdaq Capital Market on a post- reverse share split basis.
On February 9, 2026, the Company received a letter from Nasdaq confirming that the Company regained compliance with the minimum bid price requirement set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules. For 14 consecutive business days, beginning from January 20, 2026 to February 6, 2026, the closing bid price of the Company’s Class A ordinary shares has been at $1.00 per share or greater, and therefore the Company has regained compliance with the Nasdaq Capital Market’s listing requirements, effective February 9, 2026.
U.S. Regulations and Policies Relating to Digital Assets
The legal and regulatory framework applicable to digital assets in the United States continues to evolve. Digital assets and related activities may be subject to regulation by multiple federal and state authorities, including the Securities and Exchange Commission (the “SEC”), the Commodity Futures Trading Commission (the “CFTC”), the Financial Crimes Enforcement Network (“FinCEN”), the Office of Foreign Assets Control (“OFAC”), the Internal Revenue Service and state financial-services, securities and money-transmission regulators. The application of these laws and regulations may depend on the characteristics of the relevant digital asset and the nature of the activities conducted.
We currently hold Dogecoin for our own account as a treasury asset. We do not currently operate a digital-asset exchange, provide digital-asset trading or custody services to customers, transmit digital assets on behalf of third parties, or issue Dogecoin or any other digital asset. We also ceased our proprietary Bitcoin mining operations in December 2023. Accordingly, many laws applicable to digital-asset exchanges, custodians, money transmitters and mining operators may not currently apply directly to our activities. However, changes in our business, the manner in which we acquire, hold, pledge or dispose of digital assets, or the adoption or interpretation of applicable laws and regulations could subject us to additional licensing, registration, compliance or reporting requirements.
Classification of Dogecoin and Other Digital Assets
The regulatory classification of a digital asset may affect the manner in which it may be acquired, held, traded, pledged, custodied or disposed of. In March 2026, the SEC and the CFTC issued an interpretation addressing the application of the federal securities laws and the Commodity Exchange Act to certain crypto assets and transactions. The interpretation describes Dogecoin, based on its characteristics, terms and functions as of the date of the interpretation, as an example of a “digital commodity.” Dogecoin also underlies futures products made available for trading on a CFTC-regulated designated contract market.
Nevertheless, the characterization of a digital asset may depend on the relevant facts and circumstances, and a transaction involving a digital asset that is not itself a security may nonetheless constitute an investment contract or otherwise be subject to federal or state securities laws. The regulatory treatment of Dogecoin could also change as a result of changes to the Dogecoin network, applicable law, regulatory interpretations or judicial decisions.
If Dogecoin were determined to be a security or otherwise became subject to additional regulatory restrictions, the exchanges, custodians and other service providers supporting Dogecoin could become subject to additional registration or compliance obligations. Such developments could reduce the liquidity or market value of Dogecoin, restrict our ability to hold, transfer, pledge or dispose of our Dogecoin holdings, increase our compliance costs, or otherwise materially and adversely affect our business, financial condition and results of operations.
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Commodity Regulation
The CFTC has regulatory authority over derivatives involving commodities and enforcement authority with respect to fraud and manipulation in interstate spot commodity markets. Because Dogecoin has been identified by the CFTC as an example of a digital commodity, transactions involving Dogecoin may be subject to the CFTC’s antifraud and anti-manipulation authority, and derivatives involving Dogecoin may be subject to the broader requirements of the Commodity Exchange Act and CFTC regulations.
We do not currently operate a derivatives exchange, execute derivatives transactions for customers, provide commodity trading advice or operate a commodity pool. However, if we were to enter into derivatives, hedging, yield-generating or other structured transactions involving Dogecoin, those activities could implicate additional CFTC requirements. We currently have no plans to enter into such transactions. Any future transaction involving derivatives or structured digital-asset products would be subject to management’s evaluation of the applicable legal and regulatory requirements.
FinCEN, Anti-Money Laundering and Money-Transmission Regulation
FinCEN administers the Bank Secrecy Act and its implementing regulations, including regulations applicable to money services businesses. FinCEN guidance generally distinguishes persons that acquire or use convertible virtual currency for their own account from administrators or exchangers that accept and transmit convertible virtual currency or buy or sell it as a business for others.
Because we hold Dogecoin for our own account and do not currently transmit, exchange or provide custody of digital assets for customers, we do not believe our existing treasury activities cause us to be a money services business under current FinCEN guidance. However, this determination depends on the nature of our activities. If we were to provide digital-asset exchange, transmission, payment, custody or other services to third parties, we could be required to register as a money services business and implement an anti-money laundering program, customer-identification procedures, transaction monitoring, recordkeeping and regulatory reporting controls.
State laws may separately require licensing or registration for entities engaged in virtual-currency business activity or money transmission. Although we do not believe that our current holding of Dogecoin for our own account requires us to obtain a state money-transmission or virtual-currency license, changes in our activities or changes in applicable law could result in additional state licensing and compliance obligations.
Sanctions Compliance
OFAC administers and enforces economic and trade sanctions based on U.S. foreign-policy and national-security objectives. Digital-asset transactions are subject to the same OFAC requirements as transactions involving traditional assets. The pseudonymous nature of blockchain transactions may make it difficult to identify the persons or jurisdictions associated with a particular digital-asset address.
We rely on institutional custodians and other service providers to conduct sanctions screening and other compliance procedures in connection with transactions involving our Dogecoin holdings. However, such screening procedures may not identify every prohibited person, address or transaction. If we or one of our service providers were to process a transaction involving a sanctioned person, jurisdiction or digital-asset address, we could be subject to investigation, penalties, asset blocking, reputational harm or restrictions on our ability to conduct future transactions.
Custody Regulation
We hold our Dogecoin through BitGo Trust Company, Inc., a South Dakota-chartered trust company that provides institutional digital-asset custody services. Regulation of digital-asset custodians continues to develop at both the federal and state levels. Changes in custody, capital, cybersecurity, segregation, reporting or other regulatory requirements applicable to BitGo or other digital-asset custodians could increase our custody costs, restrict access to certain services, delay transactions or require us to establish alternative custody arrangements.
Our use of a regulated third-party custodian does not eliminate the risks associated with holding digital assets. We remain exposed to operational failures, cybersecurity incidents, loss or compromise of private keys, legal or regulatory restrictions, insolvency-related risks and limitations under applicable insurance arrangements.
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Investment Company Act
Under the Investment Company Act of 1940, as amended, a company may be required to register as an investment company if it is engaged primarily in the business of investing, reinvesting, owning, holding or trading securities, or if it owns investment securities exceeding certain statutory thresholds.
We do not believe that Dogecoin constitutes an investment security for purposes of the Investment Company Act under the current regulatory framework, and our business strategy includes operating activities involving AI computing and digital infrastructure. Nevertheless, the determination of our status under the Investment Company Act depends on, among other things, the composition and value of our assets, the nature of our income and business activities, and the legal characterization of the assets we hold. If Dogecoin or any other material asset held by us were classified as a security, or if the composition of our assets or business activities changed, we could be required to modify our activities or asset holdings to avoid registration under the Investment Company Act. Registration as an investment company would impose significant compliance obligations and restrictions that could materially and adversely affect our business, financial condition and results of operations.
Regulation of Historical Mining Activities and Mining Equipment
We ceased our proprietary Bitcoin mining operations in December 2023 and no longer own or operate an active cryptocurrency mining facility. Accordingly, laws and regulations specifically applicable to active cryptocurrency mining, including energy-consumption, environmental, permitting and mining-pool requirements, do not currently apply to us in the same manner as they would to an active mining operator.
We continue to hold contractual rights associated with supplier prepayments for certain Aethir Cloud rendering miners and MicroBT WhatsMiner M60S ASIC miners. We intend to market these machines for sale and arrange for their delivery to customers through sales representative arrangements rather than deploy them in Company-operated mining activities. The purchase, sale, import, export and delivery of such equipment may be subject to commercial, customs, sanctions, export-control and other applicable laws. If we were to restart proprietary cryptocurrency mining in the future, we could again become subject to laws and regulations governing energy use, environmental impacts, facility operation, mining pools and other mining-related activities. We have not committed to restarting such operations.
Singapore Regulations Relating to Digital Assets
Our principal executive offices are located in Singapore. The Monetary Authority of Singapore (“MAS”) regulates certain digital-payment-token services under the Payment Services Act 2019 and certain digital-token services under the Financial Services and Markets Act 2022. Regulated activities may include dealing in, facilitating the exchange of, transmitting, safeguarding or providing other specified services involving digital payment tokens or digital tokens for customers.
We currently hold Dogecoin for our own account and do not provide digital-payment-token or digital-token services to customers in or from Singapore. Based on the nature of our current activities, we do not believe that we are required to obtain a payment-services or digital-token-service-provider license in Singapore solely as a result of holding Dogecoin as a treasury asset. However, if we expand our activities to provide digital-asset services to third parties or conduct other regulated digital-token activities in or from Singapore, we may become subject to licensing, anti-money laundering, technology-risk, consumer-protection and other requirements administered by MAS.
The regulatory framework for digital assets in Singapore continues to evolve. MAS may adopt new rules, expand the scope of existing requirements or change its interpretation of applicable laws. Any such development could restrict our ability to conduct digital-asset activities from Singapore, increase our compliance and operating costs, require us to modify our business practices or otherwise materially and adversely affect our business, financial condition and results of operations.
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Human Capital Resources
General
As of June 30, 2026, we had 1 full-time equivalent employee located in the United States and 4 full-time equivalent employees located in Singapore. None of our employees are either represented by a labor union or subject to a collective bargaining agreement.
Facilities
Our corporate headquarters are located in Singapore, where we hold a lease that has a monthly fee of S$23,174.49 (GST included).
4.C. Organizational structure
SANGRIX was incorporated in the Cayman Islands on January 23, 2018. The following diagram illustrates our corporate structure:
Direct and indirect subsidiaries
SonicHash Canada was formed on December 14, 2021 under the laws of Alberta, Canada. It is a subsidiary of SANGRIX. It is not currently engaging in any active business.
SonicHash US was formed on December 17, 2021 under the laws of Delaware. It is a wholly-owned subsidiary of SANGRIX. It was formed to engage in Bitcoin mining in the United States. As of December 31, 2023, the Company temporarily ceased all Bitcoin mining activities.
Sonic Auspice was formed on November 30, 2023 under the laws of Delaware. SANGRIX owns 55% of the membership interest in Sonic Auspice. It does not have any material operation as of the date of this annual report.
In addition, SonicHash Singapore was formed on December 16, 2021 under the laws of Singapore. It was a wholly-owned subsidiary of SANGRIX and had never engaged in any active business. On April 18, 2024, the board of directors of the Company approved to wind down SonicHash Singapore. SonicHash Singapore has been officially struck off in September 4, 2024. It did not own any assets or have any employees or business operation at the time of winding down.
SANGRIX Pte. Ltd. was formed on June 26, 2025 under the laws of Singapore. It is a subsidiary of SANGRIX. It is not currently engaging in any active business as of the date of this annual report.
4.D. Property, plants and equipment
As of June 30, 2026 and the date of this annual report, our principal executive offices are located at 160 Robinson Road, 12F, SBF Center, Singapore 068914.
For detailed description of the miners we own, see “Item 4. Information of the Company - 4.B Business Overview - Miners.”
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ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this annual report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this annual report, particularly in “Risk Factors.” All amounts included in the fiscal years ended June 30, 2026, 2025 and 2024 (“Annual Financial Statements”) are derived from our audited consolidated financial statements included elsewhere in this annual report. These Annual Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.
Overview
As part of our growth strategy, we have been actively seeking opportunities to own GPU servers used for artificial intelligence, high-performance computing, rendering and other computationally intensive applications, while engaging third parties to deploy, manage and commercialize the equipment. We have been also seeking opportunities to deploy other emerging technologies such as building and managing a Dogecoin (“DOGE”) treasury and developing related digital-asset initiatives.
In December 2023, we ceased all Bitcoin mining operations in the United States due to high operating costs. As of the date of this report, we do not operate any mining facilities, do not deploy miners, and do not generate revenue from Bitcoin mining. We are not currently engaged in any crypto mining operations, and we have suspended all exploration of new mining sites or capacity increases. While we may evaluate strategic opportunities in the digital asset ecosystem—including potential hosting partnerships and the sale of mining hardware—we have no present plans to resume our own Bitcoin mining operations unless market conditions materially change.
Beginning in July 2025, we launched a dedicated DOGE Treasury program to advance our digital-asset strategy. As of the issuance date of this report, we hold 67,543,745 DOGE, which are custodied with BitGo Trust Company, Inc. This balance includes 30,000,000 DOGE subject to redemption notices received from all three investors in our August 2025 private placement. Settlement of these redemptions remained outstanding as of the date of this annual report. See “Dogecoin Treasury Strategy—Current Holdings and Treasury Management” for further details.
New Business
In April 2026, we began our strategic expansion beyond digital asset mining into AI computing infrastructure, GPU computing services and related digital infrastructure opportunities. On June 28, 2026, we entered into an asset purchase agreement with a third party, pursuant to which we purchased approximately $11 million of NVIDIA Blackwell B300 AI servers. Following the expected delivery during the third quarter of 2026, we expect the infrastructure to commence commercial operations in Malaysia and begin generating recurring infrastructure-related revenue. Management believes demand for high-performance GPU infrastructure continues to be driven by the rapid adoption of artificial intelligence technologies, large language models, enterprise AI applications and next-generation computing workloads. As enterprises increasingly deploy AI-powered products and services, access to reliable, scalable computing infrastructure has become an increasingly critical component of the global digital economy. We believe this acquisition strengthens our position within the evolving AI computing ecosystem while establishing a foundation for continued expansion into high-performance computing infrastructure.
Key factors that Affect Operating Results
Our business, financial condition and results of operations have been and are expected to continue to be, affected by a number of factors, which primarily include the following:
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Our results of operations are expected to be impacted by significant fluctuation of Bitcoin price and Dogecoin price.
The prices of DOGE and, to a lesser extent, Bitcoin have experienced significant volatility, and fluctuations in the price of DOGE may materially and adversely affect our results of operations, financial condition, and liquidity.
Because our treasury strategy is concentrated in DOGE, we are particularly exposed to DOGE-specific volatility, liquidity constraints, and market dislocation risks.
If DOGE prices decline, we may be required to record significant losses from changes in fair value, which could materially reduce our assets and results of operations. In addition, our ability to liquidate DOGE to meet operational needs could be constrained during periods of heightened volatility, thin order-book depth, exchange outages, or adverse market sentiment. There is no assurance that DOGE can be sold at prevailing market prices, or at all, when liquidity is required.
DOGE trading markets may be less developed, less liquid, and more susceptible to volatility than markets for other cryptocurrencies. Dogecoin market depth is materially lower than that of larger digital assets such as Bitcoin and Ethereum. As a result, large transactions may have a greater market impact, preventing us from executing sales at desired prices and increasing our vulnerability to adverse market movements. In addition, DOGE markets may be more susceptible to market manipulation, rapid shifts in sentiment, and liquidity fragmentation across exchanges.
The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate.
The use of cryptocurrencies to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs cryptocurrency assets based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale acceptance of cryptocurrencies as a means of payment has not occurred, and may never occur. The growth of this industry in general, and the use of Bitcoin and DOGE, in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably. The factors include, but are not limited to:
| ● | continued worldwide growth in the adoption and use of cryptocurrencies as a medium to exchange; |
| ● | governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar cryptocurrency systems; |
| ● | changes in consumer demographics and public tastes and preferences; |
| ● | the maintenance and development of the open-source software protocol of the network; |
| ● | the increased consolidation of contributors to the cryptocurrency blockchain through mining pools; |
| ● | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; |
| ● | the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; |
| ● | general economic conditions and the regulatory environment relating to cryptocurrencies; and negative consumer sentiment and perception of Bitcoin specifically and cryptocurrencies generally. |
The outcome of these factors could have negative effects on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations as well as potentially negative effect on the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, which would harm investors in our securities.
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Our GPU infrastructure business is new, and we may not realize the anticipated benefits of our acquisition.
We recently entered the GPU infrastructure business through our acquisition of 16 NVIDIA Blackwell B300 AI servers. We have limited experience owning or commercializing advanced GPU servers and overseeing third parties engaged in deploying and operating such equipment.
The success of this business depends on timely delivery and deployment, reliable equipment performance, sufficient utilization, customer demand, operating costs and the performance of PT Mitra Manunggal Sangkara (“PTMMS”) and other service providers. Our assumptions regarding these matters may prove inaccurate. We may incur substantial expenses without receiving the anticipated rental income or recovering our investment. If the project does not perform as expected, we could experience operating losses, liquidity pressure and impairment of the acquired assets. As of the issuance date of this annual report, our GPU servers had not yet been delivered or deployed. The servers are currently expected to be delivered and deployed in Malaysia during the third quarter of 2026, but this timetable is subject to uncertainty.
We believe this ownership-and-management model may allow us to participate in the demand for advanced computing capacity without independently developing all of the personnel, data center and operating infrastructure required to manage GPU servers. However, this model also causes us to depend substantially on third-party managers, data center operators, power and network providers and other service providers. If PTMMS experiences financial or operational difficulties, fails to secure sufficient commercial utilization, fails to make payments when due or otherwise fails to perform its obligations, our business and financial results could be materially adversely affected. Our contractual rights may not fully compensate us for delayed or lost income, service interruptions, equipment damage or other losses.
New lines of business or new products and services may subject us to additional risks.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, any new line of business and/or new service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new services could have a material adverse effect on our business, results of operations and financial condition.
Results of Operations
The tables in the following discussion summarize our consolidated statements of operations for the periods indicated. This information should be read together with our consolidated financial statements included elsewhere in this annual report. The operating results in any period are not necessarily of the results that may be expected for any future period.
Revenues
Total cryptocurrency mining revenue for the years ended June 30, 2026, 2025 and 2024 was approximately nil, nil and $2.9 million, respectively. Total cryptocurrency miner sales net revenue for the years ended June 30, 2026, 2025 and 2024 was approximately nil, $39,000 and nil, respectively.
We started Bitcoin mining in May 2022 and were awarded a total of 95.62 coins during the year ended June 30, 2024 at an average Bitcoin value of $30,208. In December 2023, we ceased all Bitcoin mining operations in the United States due to high operating costs. We started cryptocurrency miner sales in June 2024 and sold 295 units of Aethir Edge Miners and recognized agency income of approximately $39,000 for the sales during the year ended June 30, 2025. For the year ended June 30, 2026, we did not generate any revenue from cryptocurrency mining or miner sales, as we had ceased all mining operations and completed prior period miner sales.
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Cost of revenues and expenses
Cost of revenues for cryptocurrency mining for the years ended June 30, 2026, 2025 and 2024 was approximately nil, nil, and $3.8 million, respectively. Cost of revenues consists primarily of all-in-one production costs of mining operations, and depreciation expense of our own mining equipment recorded during the years ended June 30, 2026, 2025 and 2024. We signed hosting agreement with hosting partners, and the hosting partners will install the mining equipment and provide electric power, internet services and other necessary services to maintain the operation of the mining equipment. All the related operating fees are included in the all-in-one monthly fees charged by the hosting partners.
Gross Profit (Loss)
The gross profit (loss) for the years ended June 30, 2026, 2025 and 2024 was approximately nil, $39,000 and ($0.9) million, respectively.
General and Administrative Expenses
General and administrative expenses decreased by approximately $0.3 million, or 10.7%, from approximately $3.1 million for the year ended June 30, 2025 to approximately $2.8 million for the year ended June 30, 2026. The decrease in general and administrative expenses was primarily due to a decrease in professional fees of approximately $1.3 million in the year of 2026. The decrease was mainly offset by an increase in salary expenses of approximately $0.1 million, an impairment loss on prepayments of approximately $0.5 million, an increase in insurance expense of approximately $0.1 million, and an increase in rental fees of approximately $0.2 million.
General and administrative expenses decreased by approximately $0.7 million, or 19.2%, from approximately $3.8 million for the year ended June 30, 2024 to approximately $3.1 million for the year ended June 30, 2025. The decrease in general and administrative expenses was primarily due to a decrease in salary expenses of approximately $0.9 million and audit fees of approximately $0.2 million in the year of 2025. The decrease was mainly offset by an increase in legal professional fees of approximately $0.4 million.
Provision for (Recovery of) Credit Losses
During the year ended June 30, 2026, we made approximately $0.6 million provision for credit losses for loans receivable.
During the year ended June 30, 2025, we made approximately $66,000 recovery of credit losses for loans receivable and approximately $14,000 provision for credit losses for other receivables.
During the year ended June 30, 2024, we made approximately $1.1 million provision for credit losses and doubtful accounts for other receivables, prepayments, loans receivables and the GST tax receivable.
Change in Fair Value of Crypto assets
For the year ended June 30, 2026, following adoption of ASU 2023-08, we recognized a $10.9 million loss from changes in the fair value of crypto assets. No such fair value change was recognized for the year ended June 30, 2025. Prior to adoption of ASU 2023-08, crypto assets were accounted for under the previous cost-less-impairment model, and approximately $7,000 of impairment loss was recognized for the year ended June 30, 2024.
Impairment Loss of Long-lived assets
We recorded approximately nil, nil and $6.5 million of impairment loss during the years ended June 30, 2026, 2025 and 2024 for our cryptocurrency mining equipment.
Impairment Loss of Long-term investment
We recorded approximately nil, nil and $2.4 million of impairment loss during the years ended June 30, 2026, 2025 and 2024 for our long-term investment.
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Share Based Compensation Expenses
We incurred nil share compensation expense during the years ended June 30, 2026 and 2025.
We incurred approximately $73,000 to pay for CEO, president, and head of HR share based compensation expenses during the year ended June 30, 2024.
Loss from Operations
The loss from operations for the year ended June 30, 2026 was approximately $14.3 million, an increase of approximately $11.3 million, or 377.3%, from approximately $3.0 million for the year ended June 30, 2025. The increase was primarily due to the increase of provision for credit losses and change in fair value of crypto assets as the reasons that we mentioned above, partially offset bt lower general and administrative expenses.
The loss from operations for the year ended June 30, 2025 was approximately $3.0 million, a decrease of approximately $11.8 million, or 79.8%, from approximately $14.8 million for the year ended June 30, 2024. The decrease was primarily due to the decrease of gross loss, provision for credit losses and impairment losses as the reasons that we mentioned above.
Other Expenses, Net
Our other expenses, net, consists of realized gain on sale/exchange of crypto assets, interest income and expense, other financing expenses, loss on warrants settlement, and change in fair value of convertible debentures.
Our other expenses, net was approximately $14,000 during the year ended June 30, 2026, a decrease of approximately $1.4 million, or 99.0%, as compared to our other expenses, net of approximately $1.4 million during the year ended June 30, 2025. The decrease was mainly due to a gain of approximately $0.9 million from the change in fair value of convertible debentures recognized during the fiscal year of 2026 and a decrease of approximately $0.7 million of interest expenses incurred from convertible debentures as we elect the fair value option to measure the convertible debentures entirely at fair value without presenting those contractual interest expense separately.
Our other expenses, net was approximately $1.4 million during the year ended June 30, 2025, a decrease of approximately $2.1 million, or 60.0%, as compared to our other expenses, net of approximately $3.4 million during the year ended June 30, 2024. The decrease was mainly due to a decrease of the loss on warrants settlement of approximately $1.9 million and an increase of realized gain on sale/exchange of crypto assets of approximately $0.2 million for the year ended June 30, 2025.
Provision for Income Taxes
We did not have any taxable income during the years ended June 30, 2026, 2025 and 2024.
Net Loss
Our net loss was approximately $14.3 million for the year ended June 30, 2026, increased by approximately $9.9 million, or 227.1%, from a net loss of approximately $4.4 million for the year ended June 30, 2025. Our net loss for the fiscal year 2025 decreased by approximately $13.9 million, or 76.1%, from a net loss of approximately $18.3 million for the year ended June 30, 2024. Such change was the result of the combination of the changes as discussed above.
Liquidity and Capital Resources
For the fiscal years ended June 30, 2026, 2025 and 2024
As of June 30, 2026, we had working capital of approximately $8.7 million and an accumulated deficit of approximately $112.2 million. Although working capital was positive, the Group had a limited cash balance and continued to incur operating cash outflows. We have been constantly evaluating partnerships to expand into AI computing infrastructure and to diversify into other blockchain-related activities or products. Our initial focus is on owning GPU servers used for artificial intelligence, high-performance computing, rendering and other computationally intensive applications, while engaging third parties to deploy, manage and commercialize the equipment. We will use equity and debt financing to finance our working capital requirements and capital expenditures when necessary. Based on the above considerations, management is of the opinion that the substantial doubt about our ability to continue as a going concern was alleviated and we have sufficient funds to meet our working capital requirements for the next twelve months from the date of this report.
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The following summarizes the key components of our cash flows for the years ended June 30, 2026, 2025 and 2024.
| | For the Year Ended June 30, | |||||||
| | 2026 | | 2025 | | 2024 | |||
Net cash used in operating activities | | $ | (2,923,118) | | $ | (2,290,607) | | $ | (7,929,234) |
Net cash (used in) provided by investing activities |
| | (200,000) |
| | 1,545,888 |
| | 1,023,256 |
Net cash provided by (used in) financing activities |
| | 4,636,932 |
| | (608,712) |
| | 8,298,774 |
Change in cash and cash equivalents | | $ | 1,513,814 | | $ | (1,353,431) | | $ | 1,392,796 |
Operating activities
Cash used in operating activities was approximately $2.9 million for the year ended June 30, 2026, which was mainly due to the net loss of approximately $14.3 million and a gain of approximately $0.9 million from the change in fair value of convertible debentures. The net cash used in operating activities was mainly offset by non-cash items, including the change in fair value of crypto assets of approximately $10.9 million, issuance costs and discounts on convertible debentures of approximately $1.1 million and the provision for credit losses of approximately $0.6 million.
Cash used in operating activities was approximately $2.3 million for the year ended June 30, 2025, which was mainly due to the net loss of approximately $4.4 million, the increase of prepayments of approximately $0.5 million for miner advances. The net cash used in operating activities was mainly offset by the change of crypto assets of approximately $0.4 million, the non-cash items of issuance costs and discounts on convertible debenture of approximately $1.2 million and the interest expense of convertible debenture of approximately $0.7 million, and the decrease of other receivables of approximately $0.7 million.
Cash used in operating was approximately $7.9 million for the year ended June 30, 2024, which was mainly due to the net loss of approximately $18.3 million, the change of crypto assets of approximately $2.7 million, the increase of other receivables of approximately $3.0 million, and the decrease of accounts payable of approximately $0.7 million for miner setup fees. The net cash used in operating activities was mainly offset by the non-cash items of impairment losses of approximately $8.9 million, loss on warrants settlement of approximately $1.9 million, and the increase of other payables and accrued liabilities of approximately $1.3 million.
Investing activities
Cash used in investing activities was approximately $0.2 million for the year ended June 30, 2026, which was $0.2 million advance for long-term investment.
Cash provided by investing activities was approximately $1.5 million for the year ended June 30, 2025, which was due to the increase of approximately $1.5 million repayments from loans to third parties.
Cash provided by investing activities was approximately $1.0 million for the year ended June 30, 2024, which was due to approximately $4.7 million proceeds received from sale of crypto assets and offset by approximately $3.6 million loans to third parties.
Financing activities
Cash provided by financing activities was approximately $4.6 million for the year ended June 30, 2026, primarily attributable to proceeds from convertible debentures, net of issuance costs, of approximately $6.4 million, and offset by approximately $0.6 million in purchases of crypto assets and payment of equity issuance costs of approximately $1.2 million.
Cash used in financing activities was approximately $0.6 million for the year ended June 30, 2025, which was due to the payments of convertible debenture interest expense.
Cash provided by financing activities was approximately $8.3 million for the year ended June 30, 2024, which was mainly due to the proceeds from issuance of ordinary shares of approximately $4.0 million, the proceeds from convertible debenture, net of issuance costs of approximately $6.1 million, and the proceeds from exercises of warrants of approximately $1.2 million. Cash provided by financing activities was mainly offset by the repayments to the convertible debenture of $1.6 million.
Research and Development
We currently do not have any research and development expenses.
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Trend Information
Other than as disclosed elsewhere in this annual report and below, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Contingencies
In March 2023, SANGRIX and SonicHash US, together with other defendants, were named in litigation brought by BCB Cheyenne LLC in connection with alleged contractual interference and related claims. BCB sought compensatory damages of no less than $38 million. We denied liability and defended the matter.
In October 2024, the parties entered into a Settlement Agreement and Mutual Release pursuant to which we agreed to pay $13,050 in settlement of the matter. The amount had been accrued within other payables and accrued liabilities as of June 30, 2024 and was paid in November 2024. The litigation was dismissed in October 2024 and the matter was fully resolved.
As of June 30, 2026, this matter had been fully resolved, and we were not subject to any other material legal proceedings, claims or contingencies requiring disclosure.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. While our significant accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, 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:
Allowance for credit losses
Allowance for credit losses represents management’s best estimate of probable losses inherent in the portfolio. On July 1, 2023, we adopted ASC 326, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.
Under ASU 2016-13, we have exposure to credit losses for financial assets, which are other receivables and loans receivable. We considered various factors, including nature, historical collection experience, the age of the accounts receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. We have adopted loss rate method to calculate the credit loss and considered the reverent factors of the historical and future conditions of us to make reasonable estimation of the risk rate. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment.
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Fair value of measurements
We elect to apply the fair value option (“FVO”) pursuant to ASC 825-10-25-4 after we consider the overall value of the embedded features to the following convertible debentures, whether the bifurcation provides a more faithful presentation of the instrument’s overall economics, and the applicability of selecting the FVO if such election is more appropriate. Under this election, the convertible debentures and derivatives are measured in their entirety at fair value, with changes in fair value recognized in earnings, except for the portion attributable to instrument-specific credit risk, which is recognized in other comprehensive income (“OCI”) in accordance with ASC 825-10-45-5. Changes in fair value attributable to factors other than instrument-specific credit risk are recognized in earnings; and the related cumulative amount previously recognized in accumulated other comprehensive income for instrument-specific credit risk is reclassified to earnings upon settlement. The estimated fair value of the financial instruments classified within the Level 3 category was determined using both observable inputs and unobservable inputs. We estimated the fair value of the convertible debentures based upon using the Binomial Model.
The following table summarizes the significant inputs used in measuring the fair value of the Debentures on issuance date:
| | 2025 Debentures | | April 2026 Debenture | | June 2026 Debenture | | |||
Class A Ordinary Share price | | $ | 99.55~117.3 | | $ | 13.0 | | $ | 6.15 | |
Credit-adjusted discount rate | | | 16.33~16.61 | % | | 17.53 | % | | 23.43 | % |
Remaining term (years) | | | 4.0 | | | 4.0 | | | 4.0 | |
Expected volatility | |
| 145.75~150.16 | % | | 158.05 | % | | 155.70 | % |
Dividend yield | | | — | | | — | | | — | |
Risk-free interest rate | |
| 3.93 | % | | 3.86 | % | | 4.12 | % |
The following table summarizes the significant inputs used in measuring the fair value of the Debentures on June 30, 2026:
| | 2025 Debentures | | April 2026 Debenture | | June 2026 Debenture | | |||
Class A Ordinary Share price | | $ | 6.25 | | $ | 6.25 | | $ | 6.25 | |
Credit-adjusted discount rate | | | 24.13~24.16 | % | | 23.62 | % | | 23.43 | % |
Remaining term (years) | | | 3.04~3.09 | | | 3.8 | | | 4.0 | |
Expected volatility | |
| 164.77~164.94 | % | | 159.03 | % | | 155.70 | % |
Dividend yield | | | — | | | — | | | — | |
Risk-free interest rate | |
| 4.15 | % | | 4.17 | % | | 4.12 | % |
Fair value of crypto assets
We adopted Accounting Standard Update (“ASU”) 2023-08 on July 1, 2025, which requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The amendments also require that an entity provide disclosures about significant holdings, contractual sale restrictions, and changes during the reporting period.
At each date of measurement, we review internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the crypto assets. Our holdings of Dogecoin meet the scope criteria in ASC 350-60 to be accounted for as crypto assets. Fair value is determined using the closing price from the principal market for Dogecoin, which we have identified, in accordance with ASC 820, as the active market it has access to and normally uses to transact in Dogecoin. Because this is a quoted price in an active market for an identical asset, our Dogecoin is classified within Level 1 of the ASC 820 fair value hierarchy. The classification of crypto assets as current or non-current is determined under ASC 210 based on whether the assets are reasonably expected to be realized in cash, sold or otherwise realized during the normal operating cycle or within twelve months after the reporting date. In making this assessment, we consider all relevant facts and circumstances, including any collateral arrangements and related contractual release provisions applicable to pledged crypto assets.
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Valuation of deferred tax and uncertain tax position
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. 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.
Valuation allowance is provided against deferred tax assets when we determine that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. We consider positive and negative evidence to determine whether some portion or all of the deferred tax assets will more-likely-than-not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates we are using to manage the underlying businesses.
We believe that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates. To the extent that there are material differences between these estimates and the actual results, future financial statements will be affected.
Quantitative and Qualitative Disclosures about Market Risks
Cryptocurrency Risk
The price of DOGE has experienced significant fluctuations over its relatively short existence and may continue to fluctuate significantly in the future. DOGE prices ranged from approximately $0.065 per coin as of June 30, 2022; $0.067 per coin as of June 30, 2023; $0.123 per coin as of June 30, 2024; $0.170 per coin as of June 30, 2025; to $0.073 per coin as of June 30, 2026, according to Coin Market Cap.
We expect our results of operations will be affected by the DOGE price as DOGE has become our core asset as of the issuance date of this report. Any future significant reduction in the price of DOGE will likely have a material and adverse effect on our results of operations and financial condition. We cannot assure you that the DOGE price will remain high enough to sustain our operation or that the DOGE price will not decline significantly in the future. Furthermore, fluctuations in the DOGE price can have an immediate impact on the trading price of our ordinary shares even before our financial performance is affected, if at all.
Various factors, mostly beyond our control, could impact the DOGE price. DOGE was born from an internet meme, and its value is intrinsically linked to its viral nature. A trending hashtag, a viral TikTok video, or a coordinated push on Reddit can generate massive, but often short-lived, price spikes. Unlike a stock, which can be valued on revenue and profits, or even Bitcoin which is often framed as “digital gold,” DOGE lacks a clear, fundamental investment thesis. This makes its price almost purely a function of sentiment and speculation, which are inherently unstable. Unlike Bitcoin which has a fixed cap, DOGE does not have a fixed cap for supply in the whole market which suppress long-term price growth and contribute to downward pressure during bear markets. Additionally, DOGE’s price heavily correlates with Bitcoin and the overall crypto market. When Bitcoin and Ethereum rise, DOGE tends to rise even more in percentage terms. When the broader market falls, DOGE often falls harder.
Liquidity Risk
We are also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions and third parties to obtain short-term funding to meet the liquidity shortage.
Inflation Risk
We are also exposed to inflation risk factors which could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of revenue if the market prices of our crypto assets do not increase with such increased costs.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A. Directors and Management
The following table provides information regarding our executive officers and directors as of the date of this annual report.
Name | | Age | | Position(s) |
Jinghai Jiang |
| 47 |
| Chairman of the Board, Chief Executive Officer, Chief Operating Officer |
Xiaping Cao |
| 50 |
| Independent Director, Chair of the Nominating Committee and the Compensation Committee |
Mei Ting Yeung |
| 39 |
| Independent Director, Chair of the Audit Committee, and a member of the Compensation Committee and the Nominating Committee |
Wei Li |
| 42 |
| Independent Director, member of the Audit Committee, the Compensation Committee and the Nominating Committee |
The business address of the officers and directors is 160 Robinson Road, 12F, SBF Center, Singapore 068914.
The following paragraphs set forth information regarding the current ages, positions, and business experience of the nominees.
Jinghai Jiang, Chairman of the Board, Chief Executive Officer, Chief Operating Officer, age 47
Mr. Jinghai Jiang has been our Chief Operating Officer since December 13, 2021. Mr. Jiang has been involved in blockchain technology since 2016, when he founded Haiyuan Culture Development Limited and Qisuan Technology Limited to research and apply blockchain technology. Mr. Jiang also created the online community “Big Cabbage Blockchain” and has published multiple white papers to teach blockchain technology and the cryptocurrency business. Furthermore, Mr. Jiang has invested in over ten data centers whose combined capacity totals 1030MW. Mr. Jinghai Jiang graduated with a degree in Industrial Automation from Wuxi Radio and Television University in 2000. On April 10, 2024, Jinghai Jiang, was appointed as the Chief Executive Officer and Chairman of the Board.
Xiaping Cao, Director, age 50
Dr. Xiaping Cao has years of experience in domestic and overseas teaching, research and management, and has gained a high international reputation in finance and fintech industry. Dr. Cao is a professor of Finance at Hang Seng University of Hong Kong. Previously, Dr. Cao served as Dean of Asia Private Equity College at Singapore Management University, Visiting Professor of Innovation and Entrepreneurship Center at Nanyang Technological University, Director of Massachusetts Institute of Technology REAP Guangzhou Center, President of Southern Institute of Financial Technology, committee member of Major Administrative Decision-making Advisory Committee at People’s Government of Guangdong Province, and committee member of Guangzhou Equity Exchange.
Dr. Xiaping Cao currently also serves as the associate editor of international renowned economic journal Economic Modelling and Frontier in Artificial Intelligence. Dr. Cao has been invited to serve as the featured chief editor of Pacific Basin Finance Journal, a well-known international financial Journal. Dr. Cao has published many papers as the first author in top international financial and management journals, including Journal of Financial Economics, Journal of Corporate Finance, Journal of Banking and Finance, Journal of Quantitative and Financial Analysis, and Management Science. In addition, he is working as an adviser to the Securities Investor Association, initiated by Singapore Exchange (SGX).
Dr. Cao received his PhD Degree in Finance from Boston College in 2008, under the supervision of Professor Josh Lerner from Harvard Business School, a well-known scholar in venture capital and private equity.
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Mei Ting Yeung, Director, age 39
Ms. Mei Ting Yeung has served as our independent director and the Chair of our Audit Committee since July 10, 2026. She has more than 10 years of accounting, financial reporting and corporate finance experience. Since 2021, Ms. Yeung has served as Senior Accounting Manager at Audio Video Invasion, where she oversees accounting operations for multiple business entities, including financial reporting, month-end and year-end close, payroll administration, cash flow management, budgeting, internal controls and audit support. Prior to joining SANGRIX, Ms. Yeung held progressively responsible accounting and finance positions with private companies, where she developed broad experience in financial reporting, accounting operations, regulatory compliance and corporate finance. In addition to her corporate accounting experience, Ms. Yeung previously served as an elected Treasurer and member of the board of directors of a residential community association, where she was responsible for fiduciary oversight of budgets, reserve funding, financial governance and long-term capital planning. Ms. Yeung received a Bachelor’s degree of Finance from Florida International University.
Wei Li, Director, age 42
Mr. Wei Li has served as our independent director and a member of our Audit Committee, Compensation Committee and Nominating Committee since July 10, 2026. Mr. Li has over 17 years of experience in investment banking, wealth management and capital markets. Prior to founding Crestwave Capital, Mr. Li served as Chief Executive Officer and Director of Mainnet Capital, where he was responsible for fundraising, investor relations, investment strategy, risk management and fund operations. Earlier in his career, Mr. Li held senior positions at Standard Chartered, Schroders, Barclays Capital, Credit Suisse and Bank of America Merrill Lynch. Throughout his career, he led investment banking operations, regulatory compliance initiatives, trading infrastructure development and regional transformation projects across global financial institutions. Mr. Li holds a Master’s degree of Information Technology from the University of Technology Sydney, a Master’s degree of Business Information Systems from the University of Sydney, and a Bachelor’s degree in Computer Science from Nanjing University of Posts and Telecommunications.
Ms. Mei Yeung and Mr. Siyuan Zhuang resigned as directors and from all committees of our board of directors effective July 10, 2026. Their resignations were not the result of any disagreement with the Company or its management on any matter relating to the Company’s operations, policies or practices.
Ms. Mei Ting Yeung is the sister of Ms. Mei Yeung, who resigned as a director of the Company effective July 10, 2026. Except as disclosed above, neither Ms. Mei Ting Yeung nor Mr. Wei Li has a family relationship with any director or executive officer of the Company. Neither of them has been involved in any transaction with the Company during the past two years that would require disclosure under Item 404(a) of Regulation S-K.
Family Relationships
As of the date of this report, there are no family relationships among our current directors, executive officers, or persons nominated or chosen to become directors or executive officers. Ms. Mei Ting Yeung is the sister of Ms. Mei Yeung, who resigned as a director effective July 10, 2026.
6.B. Compensation
Employment Agreements with Executive Officers
Our employment agreements with our officers generally provide for employment for a specific term and pay annual salary, health insurance, pension insurance, and paid vacation and family leave time. The agreement may be terminated by either party as permitted by law. In the event of a breach or termination of the agreement by our company, we may be obligated to pay the employee twice the ordinary statutory rate. In the event of a breach or termination causing loss to our company by the employee, the employee may be required to indemnify us against loss. We have executed employment agreement with Jinghai Jiang. We have executed Director Offers with Xiaping Cao, Mei Ting Yeung, and Wei Li.
Jinghai Jiang
We entered into an employment agreement with Jinghai Jiang for the position of Chief Operating Officer. The employment agreement is effective until April 9, 2027, with an annual compensation of $50,000.
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Xiaping Cao
We entered into a Director Offer Letter, effective on March 22, 2022, with Mr. Cao pursuant to which Mr. Cao shall receive an annual compensation of $10,000.
Mei Ting Yeung
We entered into a Director Offer Letter, effective on July 10, 2026, with Ms. Mei Ting Yeung pursuant to which Ms. Yeung shall receive an annual compensation of $24,000.
Wei Li
We entered into a Director Offer Letter, effective on July 10, 2026, with Mr. Wei Li pursuant to which Mr. Li shall receive an annual compensation of $10,000.
Mei Yeung
We entered into a Director Offer Letter, effective on March 21, 2024, with Ms. Mei Yeung pursuant to which Ms. Mei Yeung shall receive an annual compensation of $24,000. On July 10, 2026, Ms. Yeung resigned as a director of the Company, and the Director Offer Letter terminated in accordance with its terms.
Siyuan Zhuang
We entered into a Director Offer Letter, effective on March 21, 2024, with Mr. Zhuang pursuant to which Mr. Zhuang shall receive an annual compensation of $10,000. On July 10, 2026, Mr. Zhuang resigned as a director of the Company, and the Director Offer Letter terminated in accordance with its terms.
Compensation of Directors and Executive Officers
For the year ended June 30, 2026, 2025 and 2024, we paid an aggregate of $50,000, $50,000 and $643,982 to our executive officers and employee directors, respectively, which is the total amount of base salary plus bonus, in cash to our executive officers and employee directors. In June 2026, we also settled $100,000 of accrued compensation relating to services rendered in fiscal years 2026 and 2025 through the issuance of Class B ordinary shares. See “Item 7.B. Related Party Transactions”. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation Recovery Policy
On December 1, 2023, our board of directors adopted an executive compensation recovery policy (the “Compensation Recovery Policy”), providing for the recovery of certain incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate any of its financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Adoption of the Compensation Recovery Policy was mandated by new Nasdaq listing standards introduced pursuant to Exchange Act Rule 10D-1. The Compensation Recovery Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002 which permits the SEC to order the disgorgement of bonuses and incentive-based compensation earned by a registrant issuer’s chief executive officer and chief financial officer in the year following the filing of any financial statement that the issuer is required to restate because of misconduct, and the reimbursement of those funds to the issuer. A copy of the Compensation Recovery Policy has been incorporated by reference herewith as Exhibit 97.1.
6.C. Board Practices
Board of Directors and Board Committees
Our board of directors currently consists of four directors, three of whom are independent as such term is defined by the Nasdaq Capital Market.
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The directors will be re-elected at our annual general meeting of shareholders on an annual basis.
A director may vote in respect of any contract or transaction in which he is interested, provided, however that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in which he is so interested and may vote on such motion.
Board Committees
We established three committees under the board of directors: an audit committee, a compensation committee and a nominating committee. We have adopted a charter for each of the three committees.
Each committee’s members and functions are described below.
Audit Committee. Our audit committee consisted of Ms. Mei Ting Yeung, Mr. Wei Li and Mr. Xiaping Cao. Ms. Mei Ting Yeung is the chairman of our audit committee. The Company believes that each of the members of the audit committee is “independent” and that Mei Ting Yeung qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market listing standards. The primary responsibility of the audit committee is to make such examinations as are necessary to monitor the corporate financial reporting and external audits of the Company and its subsidiaries; to provide to the board of directors the results of its examinations and recommendations derived therefrom; to outline to the board of directors improvements made, or to be made, in internal accounting controls; to nominate an independent auditor; and to provide to the board of directors such additional information and materials as it may deem necessary to make the board of directors aware of significant financial matters requiring the board of directors attention. In carrying out its responsibility, the audit committee will be responsible for, among other things:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Compensation Committee. Our compensation committee consists of Mr. Xiaping Cao, Mr. Wei Li and Ms. Mei Ting Yeung. Mr. Xiaping Cao is the chairman of our compensation committee. The compensation committee will assist the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our CEO may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:
| ● | reviewing and approving, or recommending to the board of directors for its approval, the compensation for our CEO and other executive officers; |
| ● | reviewing and recommending to the shareholders for determination with respect to the compensation of our directors; |
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| ● | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
| ● | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
Nominating Committee. Our nominating committee consists of Ms. Mei Ting Yeung, Mr. Wei Li and Mr. Xiaping Cao. Mr. Xiaping Cao is the chairperson of our nominating committee. All members of the nominating committee are independent, as such term is defined by the Nasdaq Capital Market listing standards. The nominating committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board of directors and its committees. The nominating committee will be responsible for, among other things:
| ● | selecting and recommending to the board nominees for election by the shareholders or appointment by the board of directors; |
| ● | reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
| ● | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board of directors; and |
| ● | advising the board of directors periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board of directors on all matters of corporate governance and on any remedial action to be taken. |
Copies of our committee charters are also available on the Company’s website at http:// sangrix.ai/ and in print upon request.
Duties of Directors
Under Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our company may have the right to seek damages if a duty owed by our directors is breached.
Interested Transactions
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board of directors or otherwise contained in the minutes of a meeting or a written resolution of the board of directors or any committee of the board of directors that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.
Remuneration and Borrowing
All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified. The directors may receive such remuneration as determined by a general meeting of the Company from time to time. Each director is entitled to be repaid or prepaid all traveling, hotel and incidental expenses properly incurred in going to attending and returning from meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the business of the Company. The compensation committee will assist the directors in reviewing the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.
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Terms of Directors and Officers
Our officers are elected by and serve at the discretion of the board of directors. Each director is not subject to a term of office and holds office until such time as his successor takes office or until the earlier of his death, resignation or removal from office by ordinary resolution or the affirmative vote of a simple majority of the other directors present and voting at a board meeting. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be of unsound mind; (iii) resigns by notice in writing to our company; (iv) is prohibited by law from being a director; or (v) is removed from office pursuant to any other provisions of the Memorandum and Articles of Association.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
6.D. Employees
We have five employees as of the date of this annual report. The following table sets forth a breakdown of our employees by function as of the date of this annual report:
| | Number of |
Department | | Employees |
Management |
| 1 |
Marketing |
| 1 |
Administrative |
| 3 |
Total |
| 5 |
Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes.
6.E. Share Ownership
The following table sets forth information with respect to beneficial ownership of our ordinary shares as of the date of this annual report by:
| ● | Each person who is known by us to beneficially own more than 5% of our outstanding ordinary shares; |
| ● | Each of our director, director nominees and named executive officers; and |
| ● | All directors and named executive officers as a group. |
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Our company is authorized to issue 190,000,000,000 Class A Ordinary Shares of $0.0003 par value per share, and 10,000,000,000 Class B Ordinary of $0.0003 par value per share. The number and percentage of Class A Ordinary Shares and Class B Ordinary Shares beneficially owned are based on 1,948,603 Class A Ordinary Shares and 21,043 Class B ordinary shares issued and outstanding as of the issuance date of this annual report. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our Class A Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person has voting or investment power with respect to securities. In computing the number of Class A Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Class A Ordinary Shares shown as beneficially owned by them.
| | Amount of | | Percentage of |
| Amount of | | Percentage of | | | |
| | Class A | | Class A | | Class B | | Class B | | | |
| | Ordinary | | Ordinary | | Ordinary | | Ordinary | | Percentage of | |
| | Shares | | Shares | | Shares | | Shares | | Total | |
| | Beneficially | | Beneficially |
| Beneficially | | Beneficially | | voting | |
Principal Shareholders | | Owned | | Owned | | Owned | | Owned | | power | |
Directors and Named Executive Officers: |
| |
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Jinghai Jiang, Chairman of the Board and Chief Executive Officer |
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| 21,043 |
| 100 | % | 31.07 | % |
Xiaping Cao, Director |
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| — |
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Wei Li, Director |
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Mei Ting Yeung, Director |
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All directors and executive officers as a group (4 persons) |
| — |
| — |
| 21,043 |
| 100 | % | 31.07 | % |
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5% Beneficial Owner |
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- |
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
Please refer to “Item 6. Directors, Senior Management and Employees - 6.E. Share Ownership.” The company’s major shareholders do have different voting rights than the other shareholders.
7.B. Related Party Transactions
Terms of Directors and Officers
See “Item 6. Directors, Senior Management and Employees-6.C. Board Practices-Terms of Directors and Officers.”
Employment Agreements and Indemnification Agreements
See “Item 6. Directors, Senior Management and Employees-6.B. Compensation-Employment Agreements with Executive Officers.”
Other Related Party Transactions
During the years ended June 30, 2026, 2025 and 2024, other than disclosed below, we did not have any other related party transactions.
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For the years ended June 30, 2026, 2025 and 2024, we had the following related party transactions with Intellectual International Capital LLC (“IIC”). IIC was considered a related party of the Company by virtue of the involvement of the Company’s former president, Dr. Jiaming Li, who concurrently served as a senior manager of IIC and was therefore able to exercise significant influence over both entities. Following Dr. Jianming Li’s resignation in November 2023, transactions and balances between the Group and IIC up to November 2023 were regarded as related-party transactions.
| | | | For the year ended | | For the year ended | | For the year ended | ||
| | | | June 30, | | June 30, | | June 30, | ||
Name of related party | | Related party | | 2026 | | 2025 | | 2024 | ||
Receipt on behalf of Group |
| Intellectual International Capital LLC | | $ | — | | $ | — |
| 3,393,027 |
Payment on behalf of Group |
| Intellectual International Capital LLC | |
| — | |
| — |
| (2,812,692) |
On June 11, 2026, we entered into a debt settlement and mutual release agreement with Mr. Jinghai Jiang, our Chief Executive Officer, Chief Operating Officer and Chairman of the Board, pursuant to which we agreed to issue 56,180 Class B Ordinary Shares to Mr. Jiang in full settlement of $100,000 in accrued and unpaid compensation owed to him for the fiscal years 2025 and 2026 under his employment agreement. The shares were valued at $1.78 per share, the closing price of our Class A Ordinary Shares on the trading day immediately preceding the date of the agreement. Upon the issuance of the shares, the debt was deemed cancelled and paid in full, and the parties agreed to a mutual release of all claims related thereto.
7.C. Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8.A. Consolidated Statements and Other Financial Information
Please refer to “Item 18. Financial Statements.”
Legal and Administrative Proceedings
Please refer to “Item 4. Information on the Company - Legal Proceedings.”
Dividend Policy
We have never declared or paid any cash dividends on our Class A Ordinary Shares. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the board of directors may deem relevant.
Under our memorandum and articles of association and the Cayman Islands Companies Act, we may only pay dividends (A) out of profits, (B) out of our share premium account, provided that we are able to pay our debts as they fall due in the ordinary course of business immediately after the dividend payment. The Company may by ordinary resolution or by resolution of the directors declare dividends, but no dividend shall exceed the amount recommended by the directors.
8.B. Significant Changes
Since June 30, 2026, the date of our audited consolidated financial statements, the following significant changes have occurred:
On July 10, 2026, Ms. Mei Yeung and Mr. Siyuan Zhuang resigned as directors and from all committees of our board of directors. Ms. Mei Ting Yeung and Mr. Wei Li were appointed as directors and members of the board committees effective the same date.
On August 21, 2026, we effected a 1-for-5 reverse split of our Class A and Class B ordinary shares.
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We changed our name from Bit Origin Ltd to SANGRIX INC. Our Class A ordinary shares began trading on Nasdaq under the symbol “SGRX” on September 4, 2026.
On September 7, 2026, we sold 3,000,000 Dogecoin for approximately US$267,665 in gross proceeds.
ITEM 9. THE OFFER AND LISTING
9.A. Offer and listing details
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “SGRX.”
9.B. Plan of distribution
Not applicable for annual reports on Form 20-F.
9.C. Markets
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “SGRX.”
9.D. Selling shareholders
Not applicable for annual reports on Form 20-F.
9.E. Dilution
Not applicable for annual reports on Form 20-F.
9.F. Expenses of the issue
Not applicable for annual reports on Form 20-F.
ITEM 10. ADDITIONAL INFORMATION
10.A. Share capital
As of the issuance date of this annual report, the Company is authorized to issue 190,000,000,000 Class A Ordinary Shares of $0.0003 par value per share, and 10,000,000,000 Class B Ordinary of $0.0003 par value per share, and has 1,948,603 Class A Ordinary Shares and 21,043 Class B ordinary shares issued and outstanding, excluding such number of Class A Ordinary Shares issuable upon the exercise or conversion of the securities described below:
July 2025 Convertible Notes Offering
On July 13, 2025, the Company entered into a securities purchase agreement with the buyers mentioned in the schedule thereto, pursuant to which the Company agreed to sell up to (i) an aggregate principal amount of $100,000,000 in Senior Secured Convertible Notes, convertible into Class A Ordinary Shares of the Company. The securities purchase agreement contains representations and warranties of the Company and the buyers which are typical for transactions of this type. In addition, the securities purchase agreement contains customary covenants on the Company’s part that are typical for transactions of this type, as well as the following additional covenants.
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The securities purchase agreement also obligates the Company to indemnify the buyers for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by the Company or any subsidiary in any of the Transaction Documents (as defined in the securities purchase agreement), (ii) any breach of any covenant, agreement or obligation of the Company or any subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any subsidiary) or which otherwise involves such indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the securities, (C) any disclosure properly made by such buyer, or (D) the status of such buyer or holder of the securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to securities purchase agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief).
In connection with this offering, the Company also entered into the following agreements: (i) registration rights agreement, (ii) guaranty, and (iii) security and pledge agreement. The securities purchase agreement contains customary representations, warranties, and covenants of the Company and the buyers.
Pursuant to the securities purchase agreement, the Company has issued (i) a Series A-1 Senior Secured Convertible Note (the “Series A-1 Senior Secured Convertible Note”) in the principal amount of Ten Million Dollars ($10,000,000) maturing on July 16, 2029, with a current conversion price of $1.63, subject to adjustment as provided therein; and (ii) a Series B-1 Senior Secured Convertible Note (the “Series B-1 Senior Secured Convertible Note”, collectively with the Series A-1 Senior Secured Convertible Note, the “July 2025 Notes”) in the principal amount of Five Million Dollars ($5,000,000) maturing on July 16, 2029, with a current conversion price of $1.63, subject to adjustment as provided therein.
The Series A-1 Senior Secured Convertible Note and the Series B-1 Senior Secured Convertible Note were issued on July 16, 2025, subject to the satisfaction of customary closing conditions.
Pursuant to the securities purchase agreement, on July 31, 2025 at the first Additional Closing, the Company issued a Series C-1 Senior Secured Convertible Note (the “Series C-1 Senior Secured Convertible Note”, and together with the Series A-1 Senior Secured Convertible Note and Series B-1 Senior Secured Convertible Note, the “July 2025 Notes ”) in the principal amount of One Million Three Hundred Thirty Eight Thousand Five Hundred and Six Dollars ($1,338,506) maturing on July 31, 2029, with a current conversion price of $1.63, subject to adjustment as provided therein.
The July 2025 Notes are senior secured obligations of the Company and are secured by all personal property and assets of the Company, pursuant to a security agreement.
The July 2025 Notes also contain certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, restrictions on redemption and cash dividends, restrictions on the transfer of assets and changes in the nature of business. The July 2025 Notes also contain standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the July 2025 Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the July 2025 Notes), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company.
Additionally, on July 16, 2025, pursuant to the July 2025 Notes, the Company entered into a security and pledge agreement by and between the Company and the lead buyer, in its capacity as collateral agent, pursuant to which the Company granted to the lead buyer, for the ratable benefit of the lead buyer and the other buyers, a valid, perfected and enforceable security interest in all personal property and assets of the Company and its subsidiaries, which assets include substantially all of the assets of the Company’s in certain of the Company’s subsidiaries.
On July 16, 2025, the Company also entered into a registration rights agreement with the buyers, which provides, subject to certain limitations, the buyer with certain registration rights for the ordinary shares issuable upon conversion of the July 2025 Notes. The registration rights agreement requires the Company to prepare and file a registration statement with the SEC within 45 days after the issuance of the July 2025 Notes to register the resale of the shares underlying the July 2025 Notes and cause such registration statement to be effective within 150 days after the issuance of the July 2025 Notes. In the event that the Company fails to file the registration statement by the prescribed deadline or such registration statement is not declared effective by the prescribed deadline or the Company fails to maintain the effectiveness of such registration statement, then the Company shall pay to each holder of registrable securities relating to such registration statement an amount in cash equal to two percent (2%) of such investor’s original principal amount stated in such investor’s July 2025 Note on July 16, 2025.
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On July 16, 2025, all of the Company’s subsidiaries entered into a subsidiary guaranty, pursuant to which the Company’s subsidiaries agreed to guaranty the Company’s obligations under the securities purchase agreement, the July 2025 Notes, and other transaction documents.
Entry into this offering, and the related agreements and documents, was approved by the Company’s board of directors on July 13, 2025.
The Convertible Notes and Class A Ordinary Shares issuable upon conversion and exercise of the July 2025 Notes have not been registered under the Securities Act and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. Each Buyer acquired the securities for investment and acknowledged that it is an accredited investor as defined by Rule 501 under the Securities Act. The Convertible Notes and Common Shares may not be offered or sold in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act.
July 2025 Equity Purchase Facility Agreement
On July 13, 2025, the Company also entered into the equity purchase facility agreement (the “EPFA”) with an unrelated third-party accredited investor (the “Investor”), pursuant to which the Investor committed to purchase, subject to certain conditions and limitations, up to $400,000,000 (the “Commitment Amount”) in newly issued ordinary shares (collectively, the “Advance Shares”). The EPFA will terminate automatically on the earlier of August 1, 2028 or the date on which the Investor has paid the full Commitment Amount for Advance Shares under the EPFA, and may be terminated by the Company upon five Trading Days’ (as defined in the EPFA) prior written notice to the Investor.
Upon the terms and subject to the conditions of the EPFA, at any time until the EPFA is terminated, the Company, in its sole discretion, has the right, but not the obligation, to issue and sell to the Investor, and the Investor must subscribe for and purchase from the Company, Advance Shares by the delivery to the Investor of Advance Notices (as defined below), on the following terms:
“Maximum Advance Amount” means the Accelerated Purchase Maximum Advance Amount, Regular Purchase Maximum Advance Amount or Extended Purchase Maximum Advance Amount, as applicable, provided, however, the Maximum Advance Amount shall not exceed the limitations set forth in the EPFA:
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The price per Advance Share will be obtained as follows:
Pursuant to the terms of the EPFA, if required by the applicable rules of the Principal Market, the Company is required to hold a special meeting of shareholders (the “Shareholder Meeting”), no later than sixty (60) calendar days following the date such approval is required by the applicable rules of the Principal Market, to seek approval of the issuance of Advance Shares under the EPFA equal to and in excess of 20% of the total outstanding Common Shares (such approval, the “Shareholder Approval”). Until Shareholder Approval is obtained, the total cumulative number of Common Shares that may be issued to the Investor will be limited to 19.99% of the number of Common Shares issued and outstanding as of July 13, 2025 (the “Exchange Cap”) pursuant to the requirements of the Nasdaq Stock Market LLC or other applicable rules of the Principal Market. The Exchange Cap will be calculated based on the number of Common Shares issued and outstanding as of July 13, 2025, which number shall be reduced, on a share-for-share basis, by the number of Common Shares issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by such agreement under the applicable rules of the Principal Market.
The EPFA contains customary representations, warranties, agreements and conditions, indemnification rights and obligations of the parties. Among other things, the Investor represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act).
The offers and sales of the Shares issuable under the EPFA will be made in a private placement in reliance on an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and applicable state securities laws. The Company plans to file with the SEC a registration statement relating to the resale of the Advance Shares issuable under the EPFA. The Company cannot draw on the EPFA, and the Advance Shares may not be sold nor may offers to buy be accepted, prior to the time that the registration statement covering the resale of the Advance Shares is declared effective by the SEC.
On July 13, 2025, the Company also entered into a registration rights agreement with the Investor with respect to the resale of the Advance Shares issuable pursuant to the EPFA (the “EPFA Registration Rights Agreement”).
If the registration statement covering the Registrable Securities (as defined in the EPFA Registration Rights Agreement) is not filed or declared effective by certain days set forth in the EPFA Registration Rights Agreement (among other things, the “Event Date”), on each such Event Date and on each monthly anniversary of such Event Date thereafter (if not cured by such date) or any pro rata portion thereof, until the applicable Event Date is cured or sixty (60) calendar days after the applicable Event Date, whichever comes first, the Company shall pay to the Investor an amount in cash, as partial liquidated damages, equal to the product of one percent (1.0%) multiplied by the total purchase price of each outstanding Advance Notice (other than the purchase price for any Advance Shares purchased by the Investor prior to the occurrence of the Event); provided, that the maximum aggregate amount payable thereunder shall not exceed 3% of such amount.
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Commencing on the 30th calendar day following July 13, 2025, if at any time there is not an effective registration statement covering the Registrable Securities, and the Company proposes to register the offer and sale of any Common Shares under the Securities Act(other than a registration (i) pursuant to a registration statement on Form S-8 ((or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a registration statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one or more shareholders of the Company and the form of registration statement to be used may be used for any registration of Registrable Securities, the Company shall give prompt written notice (in any event no later than five days prior to the filing of such registration statement) to the holders of Registrable Securities of its intention to effect such a registration and, shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities; provided that, the Company shall not be required to register any Registrable Securities that have been sold or may be sold without any restrictions pursuant to Rule 144 under the Securities Act, as determined by the counsel to the Company.
August 2025 Securities Purchase Agreements
On August 6, 2025, the Company entered into the securities purchase agreements with certain investors relating to the issuance and sale of 20,000,000 Class A Ordinary Shares (or 66,668 Class A Ordinary Shares after giving effect to the 1-for-60 reverse share split in January 2026 and the 1-for-5 reverse share split in August 2026) (the “Purchased Shares) for a total purchase price of $6,000,000. The purchasers had elected to pay the purchase price in Dogecoin (“DOGE”), and the amount of DOGE to be paid shall equal (a) the purchase price, divided by (b) the spot exchange rate for DOGE as published by Coinbase.com at 5:56 a.m. (New York City time) on August 6, 2025 (the “DOGE Amount”).
The Company received 30 million DOGE and issued the Purchased Shares on August 11, 2025. The Purchased Shares were issued in a private placement exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, Regulation D promulgated thereunder and/or Regulation S promulgated thereunder.
If during the three (3) month period following the Closing Date, the Company effects any share split, share dividend, share combination, recapitalization, or similar transaction involving the Company’s Class A Ordinary Shares (each, a “Share Combination Event”), and the average Volume-Weighted Average Price (the “VWAP”) of the Class A Ordinary Shares for the five (5) lowest trading days during the fifteen (15) consecutive trading days following the Share Combination Event Date (the “Event Market Price”) is less than the product of (i) $0.30 multiplied by (ii) a fraction of which the numerator shall be the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and of which the denominator shall be the total number of Class A Ordinary Shares outstanding immediately after such event (the “Adjusted Purchase Price”), the Company shall issue to the Purchasers warrants (the “Warrants”), to purchase a number of Class A Ordinary Shares equal to (a) the number of Purchased Shares, multiplied by (b) a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately after the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately before such event. The exercise price of the Warrants shall be equal to the greater of (i) the Event Market Price or (ii) the product of (x) $0.24, multiplied by (y) a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately after such event. The Company shall not be obligated to issue any Warrants if the Event Market Price is equal to or greater than the Adjusted Purchase Price. The Warrants can only be exercised for cash and are non-transferable. The Purchasers shall not sell, assign, transfer, pledge, encumber or otherwise dispose of the Warrants or any rights hereunder to any third party without the prior written consent of the Company, which may be granted or withheld in the sole discretion of the Company.
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If any Purchaser does not sell or exercise, as applicable, all of the Purchased Shares and Warrants within twelve (12) months following the Closing Date, such Purchaser may elect to redeem a portion of the original DOGE Amount (the “Redemption Option”) by providing written notice to the Company within fifteen (15) Business Days after such anniversary. The redeemable amount of DOGE shall be calculated based on the ratio of unsold Class A Ordinary Shares and unexercised Warrants to the total Purchased Shares and Warrants, using the formula: Redeemable DOGE = DOGE Amount × (the unsold Purchased Shares + unexercised Warrants) / (Purchased Shares + Total Warrants). However, the Redemption Option is not available if, on the 12-month anniversary (or if such a day is not a trading day, the trading day immediately following such day), the Company’s closing bid price equals or exceeds 175% of the higher of (i) the Event Market Price or (ii) the product of $0.24 multiplied by a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately after such event. The Purchasers must also provide brokerage or custodial account statements verifying its holdings and dispositions of the originally issued Purchased Shares (excluding any market purchases) within fifteen (15) business days after the 12-month anniversary. The Purchasers shall surrender for cancellation, and the Company shall cause the cancellation of, the unsold Purchased Shares and the unexercised Warrants to be canceled upon exercise of the Redemption Option.
In connection with the Offering, certain shareholders of the Company provided a waiver to the Company with respect to (i) entering into the securities purchase agreement and (ii) registration of the Purchased Shares and shares underlying the Warrants.
On August 20, 2026, all of the investors delivered written notices to the Company exercising this right to redeem an aggregate of 66,668 Class A Ordinary Shares, representing all of such investors’ respective unsold Class A Ordinary Shares, in exchange for the return from the Company of an aggregate of 30 million DOGE to the investors, representing 100% of the DOGE originally paid by such investors. The Shares will be cancelled and returned to the Company’s authorized but unissued share capital.
April 2026 Securities Purchase Agreement
On April 16, 2026, we entered into a securities purchase agreement with an institutional investor, pursuant to which we agreed to sell up to an aggregate principal amount of $5,000,000 in senior convertible notes, convertible into Class A Ordinary Shares. At the initial closing on April 16, 2026, we issued a senior convertible note in the principal amount of $500,000, maturing on April 16, 2030, with a current conversion price of $1.63 per share. The note contains certain negative covenants, including prohibitions on the incurrence of indebtedness and liens, restrictions on redemptions and cash dividends, restrictions on the transfer of assets and changes in the nature of our business, as well as standard and customary events of default. The note and the Class A Ordinary Shares issuable upon conversion thereof were issued in a private placement in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. We intend to use the net proceeds for working capital and general corporate purposes.
June 2026 Securities Purchase Agreements
On June 28, 2026, we entered into a securities purchase agreement with an institutional investor, pursuant to which we agreed to sell up to an aggregate principal amount of $10,000,000 in senior convertible notes, convertible into Class A Ordinary Shares. At the initial closing on June 29, 2026, we issued a senior convertible note in the principal amount of $2,000,000, maturing on June 29, 2030, with a current conversion price of $1.63 per share. The note contains negative covenants and events of default including prohibitions on the incurrence of indebtedness, liens, restrictions on redemption and cash dividends, restrictions on the transfer of assets and changes in the nature of business. The note also contains standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the note, existence of a default or event of default under any of the transaction documents, the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company. The note and the Class A Ordinary Shares issuable upon conversion thereof were issued in a private placement in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder, and no registration rights were granted in connection with the offering. We intend to use the net proceeds for working capital and general corporate purposes.
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June 2026 Asset Purchase Agreement
On June 28, 2026, we entered into an asset purchase agreement with PT Mitra Manunggal Sangkara, pursuant to which we agreed to acquire certain AI computing assets and related contractual rights, including (i) sixteen NVIDIA Blackwell B300 AI servers, including servers in transit and rights to receive delivery thereof, (ii) related customer service agreements, (iii) hosting and colocation agreements, and (iv) related rights and interests, subject to the terms and conditions set forth in the asset purchase agreement, for consideration consisting of (i) $1,000,000 in cash and (ii) a pre-funded warrant to purchase 6,457,863 (or 1,291,573 after giving effect to the 1-for-5 reverse share split in August 2026) Class A Ordinary Shares with an aggregate value of $10,000,000. The pre-funded warrant is exercisable at an exercise price of US$0.0003 per share, provides for cashless exercise and includes a beneficial ownership limitation of 4.99%, which the holder may increase or decrease upon 61 days’ prior written notice, provided that the limitation may not exceed 9.99%. The pre-funded warrant and the Class A Ordinary Shares issuable upon exercise thereof were issued in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act. See “Item 4. Information on the Company—4.B. Business Overview —Acquisition of NVIDIA Blackwell B300 AI Servers” for additional information regarding this transaction.
10.B. Memorandum and articles of association
The following are summaries of the material provisions of our eighth amended and restated memorandum and articles of association (adopted by special resolution passed on August 11, 2026) and the Cayman Islands Companies Act, insofar as they relate to the material terms of our Class A Ordinary Shares. Copies of our memorandum and articles of association are filed as exhibits to this annual report. As a convenience to potential investors, we provide the below description of Cayman Islands law and our Articles of Association.
General
Each Class A Ordinary Share in the Company confers upon the shareholder:
| ● | the right to one (1) vote at a meeting of shareholders or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
Each Class B Ordinary Share in the Company confers upon the shareholder:
| ● | the right to twenty (20) votes at a meeting of shareholders or on any resolution of shareholders; |
| ● | no rights to receive dividends, unless otherwise determined by the board of directors; and |
| ● | the same right as the holders of Class A Ordinary Shares to share equally in the distribution of the surplus assets of the Company upon liquidation. |
All of our issued Class A and Class B Ordinary Shares are fully paid and non-assessable. Certificates representing the shares are issued in registered form.
Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one-for-one basis at the option of the holder. The conversion ratio is subject to adjustment to reflect any share split, subdivision, consolidation, capitalization, reclassification, recapitalization, or similar event that affects either class of shares. Class A Ordinary Shares are not convertible into Class B Ordinary Shares.
Voting Together as a Single Class. Except as otherwise provided by law or our Articles, holders of Class A and Class B Ordinary Shares vote together as a single class on all matters submitted to a shareholder vote.
Except as described above, the Class A Ordinary Shares and Class B Ordinary Shares rank pari passu and have the same rights, preferences, privileges and restrictions.
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Listing
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “SGRX.” The Class B Ordinary Shares are not listed or traded on any exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares and Class A Ordinary Shares is Securities Transfer Corporation.
Dividends and Distributions
The holders of our Class A Ordinary Shares are entitled to such dividends or other distributions as may be recommended by the board and authorized by shareholders subject to the Cayman Islands Companies Act and our memorandum and articles of association. Holders of Class B Ordinary Shares do not have dividend rights. Holders of Class A Ordinary Shares and Class B Ordinary Shares are entitled to the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
Shareholders’ voting rights
Any action required or permitted to be taken by shareholders must be taken at a duly called annual or special meeting of shareholders entitled to vote on such action and may be effected by a resolution of shareholders consented to in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a corporation, by its duly authorized representative) will have one vote per Class A Ordinary Share and twenty votes per Class B Ordinary Share held.
Ordinary resolution requires to be passed by a simple majority of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting, or a written resolution signed by all shareholders entitled to vote at a general meeting.
Special resolution requires to be passed by a majority of at least two-thirds of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given, or a written resolution signed by all shareholders entitled to vote at a general meeting and otherwise in accordance with our memorandum and articles of association and the Cayman Islands Companies Act.
Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of Cayman Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in Cayman Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.
The Company may by ordinary resolution or by resolution of the directors at any time, and from time to time, appoint a person as an additional director or persons as additional directors. The Company may by ordinary resolution or by resolution of the directors remove a director before the expiration of his period of office, and may by ordinary resolution or by resolution of the directors appoint another person in his stead.
Our memorandum and articles of association provides that the remuneration of the directors shall from time to time be determined by the Company in general meeting or by resolution of the directors or any committee of the directors. The directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the directors, or any committee of the directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the directors from time to time, or a combination partly of one such method and partly the other.
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Meetings of shareholders
Any of our directors may convene a meeting of shareholders whenever they think fit. We must provide at least seven days’ written notice (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) of all meetings of shareholders, stating the time, place of the general meeting and, in the case of special business, the general nature of that business to shareholders whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors must convene a general meeting upon the written request of one or more shareholders holding at least 10% of our shares.
No business may be transacted at any general meeting unless a quorum is present at the time the meeting proceeds to business. One or more shareholders holding in the aggregate not less than one-third of the total voting rights of all of the issued shares of the Company entitled to vote present in person or by proxy and entitled to vote shall be a quorum. If, within half an hour from the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may transact the business for which the meeting was called. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.
A corporation that is a shareholder shall be deemed for the purpose of our articles of association to be present at a general meeting in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting, by a resolution of the directors or by one or more shareholders present in person or by a proxy who together hold not less than fifteen per cent of the paid up capital of the Company entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
Meeting of directors
The management of our company is entrusted to our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside Cayman Islands as the directors determine to be necessary or desirable. A director must be given not less than 5 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if at least two directors are present. If there is a sole director, that director shall be a quorum. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
Protection of minority shareholders
We would normally expect Cayman Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of minority shareholders (such as the right to vote and pre-emptive rights), and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new shares under either Cayman Islands law or our memorandum and articles of association.
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Transfer of Class A Ordinary Shares and Class B Ordinary Shares
Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Ordinary Shares and Class B Ordinary Shares by written instrument of transfer signed by the transferor and containing the name of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Class A Ordinary Shares and Class B Ordinary Shares without giving any reason.
Winding Up
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the paid up capital at the commencement of the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid up capital, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Cayman Islands Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not), and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
The liquidator may also vest the whole or any part of these assets in trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.
Calls on and forfeiture of Class A Ordinary Shares and Class B Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A Ordinary Shares and Class B Ordinary Shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The Class A Ordinary Shares and Class B Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture.
Repurchase of Class A Ordinary Shares and Class B Ordinary Shares
We are empowered by the Cayman Islands Companies Act to purchase our own shares, subject to certain restrictions and requirements. Our directors may only exercise this power on our behalf, subject to the Cayman Islands Companies Act, our memorandum and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the SEC, or by any other recognized stock exchange on which our securities are listed. Under the Cayman Islands Companies Act, the repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital (including share premium account and capital redemption reserve). If the repurchase proceeds are paid out of our company’s capital, our company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Islands Companies Act no such share may be repurchased (1) unless it is fully paid up, (2) if such repurchase would result in there being no shares outstanding, or (3) if the company is being wound up and: (a) the terms of the repurchase provided for it to take place after the commencement of the winding up; or (b) during the period beginning on the date when the repurchase was to have taken place and ending with the commencement of the shares were to have been repurchased. In addition, under the Cayman Islands Companies Act, our company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares).
Subject to the provisions of the Cayman Islands Companies Act and our memorandum and articles of association, the Company may purchase its own Shares, including any redeemable shares, provided that the manner of purchase has first been authorized by ordinary resolution or by resolution of the directors and may make payment therefor or for any redemption of shares in any manner authorized by the Cayman Islands Companies Act, including out of capital.
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Modifications of rights
All or any of the special rights attached to any class of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by not less than three-fourths of such shareholders of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of shareholders in the requisite majorities:
| ● | amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue; |
| ● | Divide our authorized and issued shares into a larger number of shares; and |
| ● | combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Holders of our Class A Ordinary Shares and Class B Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Issuance of additional Class A Ordinary Shares and Class B Ordinary Shares
Our memorandum and articles of association authorizes our board of directors to issue additional Class A Ordinary Shares and Class B Ordinary Shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
10.C. Material contracts
We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company,” “10.A. Share capital” above or elsewhere in this annual report.
10.D. Exchange controls
The Cayman Islands and the United States currently have no exchange control regulations or currency restrictions.
10.E. Taxation
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
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Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax.
No stamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share.
United States Federal Income Tax Considerations
The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition of our Class A Ordinary Shares by a U.S. holder (as defined below) that holds our Class A Ordinary Shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the “Code”). This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations and may be changed, possibly with retroactive effect. No ruling has been sought from the IRS with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (for example, banks or other financial institutions, insurance companies, broker-dealers, pension plans, cooperatives, traders in securities that have elected the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment companies, real estate investment trusts, and tax-exempt organizations (including private foundations)), holders who are not U.S. holders, holders who own (directly, indirectly, or constructively) 10% or more of our voting shares, holders who will hold their Class A Ordinary Shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, or investors that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not discuss any non-United States, alternative minimum tax, state, or local tax considerations, or the Medicare tax on net investment income. Each U.S. holder is urged to consult its tax advisors regarding the United States federal, state, local, and non-United States income and other tax considerations with respect to the ownership and disposition of our Class A Ordinary Shares.
General
For purposes of this discussion, a “U.S. holder” is a beneficial owner of our Class A Ordinary Shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under applicable United States Treasury regulations.
If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our Class A Ordinary Shares and partners in such partnerships are urged to consult their tax advisors as to the particular United States federal income tax consequences of an investment in our Class A Ordinary Shares.
Passive Foreign Investment Company Considerations
A non-United States corporation, such as our company, will be a “passive foreign investment company,” or “PFIC,” for United States federal income tax purposes, if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the average quarterly value of its assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and the company’s unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.
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Although we do not believe that we were a PFIC for the taxable year ended June 30, 2026, 2025 and 2024 and do not anticipate becoming a PFIC in the foreseeable future, the determination of whether we are or will become a PFIC will depend in part upon the value of our goodwill and other unbooked intangibles (which will depend upon the market value of our Class A Ordinary Shares from time-to-time, which may be volatile). In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization. Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may be or become a PFIC for the current or future taxable years. It is also possible that the IRS may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or one or more future taxable years.
The determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. Because our PFIC status for any taxable year is a factual determination that can be made only after the close of a taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year. If we are a PFIC for any year during which a U.S. holder held our Class A Ordinary Shares, we generally would continue to be treated as a PFIC for all succeeding years during which such U.S. holder held our Class A Ordinary Shares.
The discussion below under “Dividends” and “Sale or Other Disposition of Class A Ordinary Shares” is written on the basis that we will not be or become a PFIC for United States federal income tax purposes. The United States federal income tax rules that apply if we are a PFIC for the current taxable year or any subsequent taxable year are generally discussed below under “Passive Foreign Investment Company Rules.”
Dividends
Subject to the PFIC rules discussed below, any cash distributions (including the amount of any tax withheld) paid on our Class A Ordinary Shares out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. holder as dividend income on the day actually or constructively received by the U.S. holder. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be reported as a “dividend” for United States federal income tax purposes. A non-corporate recipient of dividend income will generally be subject to tax on dividend income from a “qualified foreign corporation” at a reduced United States federal tax rate rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met.
A non-United States corporation (other than a corporation that is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (b) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the United States. In the event we are deemed to be a resident enterprise under the PRC Enterprise Income Tax Law, we may be eligible for the benefits of the United States-PRC income tax treaty (which the U.S. Treasury Department has determined is satisfactory for this purpose) and in that case we would be treated as a qualified foreign corporation with respect to dividends paid on our Class A Ordinary Shares. Each non-corporate U.S. holder is advised to consult its tax advisors regarding the availability of the reduced tax rate applicable to qualified dividend income for any dividends we pay with respect to our Class A Ordinary Shares. Dividends received on the Class A Ordinary Shares will not be eligible for the dividends received deduction allowed to corporations.
Dividends will generally be treated as income from foreign sources for United States foreign tax credit purposes and will generally constitute passive category income. In the event that we are deemed to be a PRC “resident enterprise” under the Enterprise Income Tax Law, a U.S. holder may be subject to PRC withholding taxes on dividends paid on our Class A Ordinary Shares. In that case, a U.S. holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on Class A Ordinary Shares. A U.S. holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which such U.S. holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. U.S. holders are advised to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
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Sale or Other Disposition of Class A Ordinary Shares
Subject to the PFIC rules discussed below, a U.S. holder will generally recognize capital gain or loss upon the sale or other disposition of Class A Ordinary Shares in an amount equal to the difference between the amount realized upon the disposition and the U.S. holder’s adjusted tax basis in such Class A Ordinary Shares. Any capital gain or loss will be long-term if the Class A Ordinary Shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. Long-term capital gain of non-corporate U.S. holders is generally eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations. In the event that we are treated as a PRC “resident enterprise” under the Enterprise Income Tax Law and gain from the disposition of the Class A Ordinary Shares is subject to tax in the PRC, a U.S. holder that is eligible for the benefits of the income tax treaty between the United States and the PRC may elect to treat the gain as PRC source income. U.S. holders are advised to consult its tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of our Class A Ordinary Shares including the availability of the foreign tax credit under their particular circumstances and the election to treat any gain as PRC source.
Passive Foreign Investment Company Rules
If we are a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares, and unless the U.S. holder makes a mark-to-market election (as described below), the U.S. holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, for subsequent taxable years, on (i) any excess distribution that we make to the U.S. holder (which generally means any distribution paid during a taxable year to a U.S. holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. holder’s holding period for the Class A Ordinary Shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, of Class A Ordinary Shares. Under the PFIC rules:
| ● | such excess distribution and/or gain will be allocated ratably over the U.S. holder’s holding period for the Class A Ordinary Shares; |
| ● | such amount allocated to the current taxable year and any taxable years in the U.S. holder’s holding period prior to the first taxable year in which we are a PFIC, or pre-PFIC year, will be taxable as ordinary income; |
| ● | such amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for that year; and |
| ● | an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
If we are a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares and any of our non-United States subsidiaries is also a PFIC, such U.S. holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. holders are advised to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.
As an alternative to the foregoing rules, a U.S. holder of “marketable stock” in a PFIC may make a mark-to-market election. Since our Class A Ordinary Shares are listed on the Nasdaq, a U.S. holder holds Class A Ordinary Shares will be eligible to make a mark-to-market election if we are or were to become a PFIC. If a mark-to-market election is made, the U.S. holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of Class A Ordinary Shares held at the end of the taxable year over the adjusted tax basis of such Class A Ordinary Shares and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the Class A Ordinary Shares over the fair market value of such Class A Ordinary Shares held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. holder’s adjusted tax basis in the Class A Ordinary Shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. holder makes an effective mark-to-market election, in each year that we are a PFIC any gain recognized upon the sale or other disposition of the Class A Ordinary Shares will be treated as ordinary income and loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If a U.S. holder makes a mark-to-market election it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the Class A Ordinary Shares are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the election.
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If a U.S. holder makes a mark-to-market election in respect of a PFIC and such corporation ceases to be a PFIC, the U.S. holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not a PFIC.
Because a mark-to-market election cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. holder who makes a mark-to-market election with respect to our Class A Ordinary Shares may continue to be subject to the general PFIC rules with respect to such U.S. holder’s indirect interest in any of our non-United States subsidiaries if any of them is a PFIC.
We do not intend to provide information necessary for U.S. holders to make qualified electing fund elections, which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.
As discussed above under “Dividends,” dividends that we pay on our Class A Ordinary Shares will not be eligible for the reduced tax rate that applies to qualified dividend income if we are a PFIC for the taxable year in which the dividend is paid or the preceding taxable year. In addition, if a U.S. holder owns our Class A Ordinary Shares during any taxable year that we are a PFIC, such holder would generally be required to file an annual IRS Form 8621. Each U.S. holder is advised to consult its tax advisors regarding the potential tax consequences to such holder if we are or become a PFIC, including the possibility of making a mark-to-market election.
Information Reporting
Certain U.S. holders may be required to report information to the IRS relating to an interest in “specified foreign financial assets,” including shares issued by a non-United States corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds US$50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a United States financial institution). These rules also impose penalties if a U.S. holder is required to submit such information to the IRS and fails to do so.
In addition, U.S. holders may be subject to information reporting to the IRS with respect to dividends on and proceeds from the sale or other disposition of our Class A Ordinary Shares. Each U.S. holder is advised to consult with its tax advisor regarding the application of the United States information reporting rules to their particular circumstances.
10.F. Dividends and paying agents
Not applicable for annual reports on Form 20-F.
10.G. Statement by experts
Not applicable for annual reports on Form 20-F.
10.H. Documents on display
We are subject to the information requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.
10.I. Subsidiary Information
Not applicable.
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See “Item 5. Operating and Financial Review and Prospects - Quantitative and Qualitative Disclosures about Market Risk”
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A. Debt Securities
Not applicable.
12.B. Warrants and Rights
Not applicable.
12.C. Other Securities
Not applicable.
12.D. American Depositary Shares
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
We do not have any material defaults in the payment of principal, interest, or any installments under a sinking or purchase fund.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF PROCEEDS
14.A. - 14.D. Material Modifications to the Rights of Security Holders
On March 14, 2025, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on March 14, 2025, the Company adopted a dual-class share capital structure, pursuant to which (i) all of the issued and outstanding ordinary shares were re-designated as Class A Ordinary Shares, each having one (1) vote per share and the other rights attached to it as set out in the Company’s amended and restated memorandum and articles of association on a one for one basis, (ii) 25,000,000 then authorized but unissued ordinary shares re-designated as 25,000,000 Class B Ordinary Shares, each having twenty (20) votes per share and the other rights attached to it as set out in the Company’s amended and restated memorandum and articles of association on a one for one basis, and (iii) the remaining authorized but unissued ordinary shares re-designated as authorized but unissued Class A Ordinary Shares on a one for one basis. Additionally, 768,000 ordinary shares held by Mr. Jinghai Jiang as of March 14, 2025 were re-designated as 768,000 Class A Ordinary Shares and were repurchased and issued as 768,000 Class B Ordinary Shares.
14.E. Use of Proceeds
Securities Purchase Agreement dated April 16, 2026
On April 16, 2026, we issued a senior convertible note in the principal amount of $500,000, convertible into Class A Ordinary Shares at a current conversion price of $1.63 per share, pursuant to a securities purchase agreement dated April 16, 2026 with an institutional investor providing for the sale of up to $5,000,000 in aggregate principal amount of senior convertible notes. We used the net proceeds for working capital and general corporate purposes.
Securities Purchase Agreement dated June 28, 2026
On June 29, 2026, we completed the initial closing under a securities purchase agreement dated June 28, 2026 with an institutional investor providing for the sale of up to $10,000,000 in aggregate principal amount of senior convertible notes, and issued a senior convertible note in the principal amount of $2,000,000, convertible into Class A Ordinary Shares at a current conversion price of $1.63 per share. We used the net proceeds for working capital and general corporate purposes.
ITEM 15. CONTROLS AND PROCEDURES
| (a) | Evaluation of Disclosure Controls and Procedures. |
As of June 30, 2026, the end of the fiscal year covered by this report, our management, under the supervision and with the participation of our Chief Executive Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective.
| (b) | Management’s annual report on internal control over financial reporting. |
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Management evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2026 using the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
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In connection with the preparation of the financial statement for the Company’s Annual Report on Form 20-F for the year ended June 30, 2026, our management evaluated the effectiveness of our internal control over financial reporting as of June 30, 2026 and as a result of the material weakness described below, management concluded they were not effective. Management identified one material weakness arising from two related deficiencies: (i) insufficient resources with the necessary U.S. GAAP and SEC reporting expertise, and (ii) ineffective review controls over complex and non-routine transactions and related financial reporting. These deficiencies resulted in errors in the unaudited interim financial statements for the six months ended December 31, 2025 relating to the classification of redeemable Class A Ordinary Shares, the presentation of interest expense associated with convertible debentures measured under the fair value option, and the measurement of deemed dividends. The Company subsequently restated the affected interim financial statements to correct the resulting material misstatements. The material weakness, if not remediated timely, may lead to material misstatements in its consolidated financial statements in the future.
To remediate the identified material weakness, we took several measure to improve our internal control over financial reporting, including, among others: (1) engaging additional accounting resources with U.S. GAAP and SEC reporting experience, strengthening the review of complex and non-routine transactions, and enhancing the period-end financial reporting and disclosure review process, (2) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for its accounting and financial reporting personnel, (3) enhancing oversight over and clarifying reporting requirements for, non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with U.S. GAAP and SEC reporting requirements, (4) recruiting more qualified internal control personnel with experience in the requirements of the Sarbanes-Oxley Act and adopting accounting and internal control guidance on U.S. GAAP and SEC reporting, and (5) preparing more detailed guidance and manuals on financial closing policies and procedures to improve the quality and accuracy of period-end financial closing process. The material weakness will not be considered remediated until the enhanced controls have operated for a sufficient period and management has concluded, through testing, that they are designed and operating effectively.
(c)Attestation report of the registered public accounting firm.
Not applicable.
(d)Changes in internal control over financial reporting.
Except for the remediation activities described above, there were no changes in our internal controls over financial reporting occurred during the twelve months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Company’s board of directors has determined that Ms. Mei Ting Yeung qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market standards. The Company’s board of directors has also determined that members of the Audit Committee are all “independent” in accordance with the applicable Nasdaq Capital Market standards.
ITEM 16B. CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, officers, employees and advisors. The Code of Business Conduct and Ethics is attached as an exhibit to this annual report. Copy of the Code of Business Conduct and Ethics is also available on our website at http://sangrix.ai/.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Effective on March 4, 2025, the Company dismissed its independent registered auditor, WWC, P.C., which action was approved and ratified by the Company’s Board of Directors on March 4, 2025.
On March 4, 2025, the Board of Directors of the Company and the Audit Committee of the Company approved and ratified the appointment of HTL International, LLC as its new independent registered public accounting firm to audit the Company’s financial statements, effective March 4, 2025.
84
Fees Paid To Independent Registered Public Accounting Firm
Audit Fees
HTL International, LLC’s fees for the fiscal years ended June 30, 2026 and 2025 were $220,000 and $180,000, respectively.
WWC, P.C.’s fee for the fiscal years ended June 30, 2024 was $208,000.
Audit-Related Fees
There was no audit-related service fees incurred from HTL International, LLC for the fiscal year ended June 30, 2026 and 2025.
There was no audit-related service fees incurred from WWC, P.C. for the fiscal years ended June 30, 2024.
Tax Fees
There was no tax service fees incurred from HTL International, LLC for the fiscal year ended June 30, 2026 and 2025.
There was no tax service fees incurred from WWC, P.C. for the fiscal years ended June 30, 2024.
All Other Fees
There were no other services fees incurred from HTL International, LLC in fiscal year ended June 30, 2026 and 2025.
There were no other services fees incurred from WWC, P.C. in fiscal years ended June 30, 2024.
Audit Committee Pre-Approval Policies
HTL International, LLC’s engagement by the Company to render audit or non-audit services was approved and ratified by the Company’s audit committee. All services rendered by HTL International, LLC have been so approved and ratified.
WWC, P.C.’s engagement by the Company to render audit or non-audit services was approved and ratified by the Company’s audit committee. All services rendered by WWC, P.C. have been so approved and ratified.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended June 30, 2026.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
| (1) | Previous Independent Registered Public Accounting Firm |
(i) | Effective on March 4, 2025, the Company dismissed its independent registered auditor, WWC, P.C., which action was approved and ratified by the Company’s Board of Directors on March 4, 2025. |
(ii) | The report of WWC, P.C. on the consolidated of operations and comprehensive loss of the Company, and the consolidated statements of changes in shareholders’ equity, and cash flows for the year ended June 30, 2024, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. |
85
(iii) | The decision to change the independent registered public accounting firm was approved by the Board of Directors of the Company. |
(iv) | During the Company’s most recent fiscal year ended June 30, 2024 and through March 4, 2025, the date of dismissal, (a) there were no disagreements with WWC, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of WWC, P.C., would have caused it to make reference thereto in its reports on the financial statements for such years and (b) there were no “reportable events” as described in Item 16F of Form 20-F, except for the material weakness related to the Company’s internal control over financing reporting, including insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP, which has been disclosed in the Company’s annual report on Form 20-F. |
(v) | The Company provided WWC, P.C. with a copy of this Current Report and has requested that it furnish the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether it agrees with the above statements. A copy of such letter is attached as Exhibit 16.1 to this Report of Foreign Private Issuer on Form 6-K. |
| (2) | New Independent Registered Public Accounting Firm |
On March 4, 2025, the Board of Directors of the Company and the Audit Committee of the Company approved and ratified the appointment of HTL International, LLC as its new independent registered public accounting firm to audit the Company’s financial statements, effective March 4, 2025. During the two most recent fiscal years ended June 30, 2024 and 2023 and any subsequent interim periods through the date hereof prior to the engagement of HTL International, LLC, neither the Company, nor someone on its behalf, has consulted HTL International, LLC regarding:
(i) | either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or |
(ii) | any matter that was either the subject of a disagreement as defined in Item 16F (a)(1)(iv) of Form 20-F or a reportable event as described in Item 16F (a)(1)(v) of Form 20-F. |
ITEM 16G. CORPORATE GOVERNANCE
As a company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We endeavor to comply with the Nasdaq corporate governance practices. Pursuant to the home country rule exemption set forth under Nasdaq Listing Rule 5615(a)(3)(A), which provides (with certain exceptions not relevant to the conclusions expressed herein) that a foreign private issuer may follow its home country practice in lieu of the requirements of the Nasdaq Marketplace Rule 5600 Series, 5250 (b) (3) and 5250(d). The Company also elects to be exempt from Nasdaq Listing Rule 5620(a), 5635(c) and 5635(d).
Nasdaq Stock Market Rule 5620(a) requires a company to hold an annual meeting of shareholders within one year after the end of each fiscal year. In lieu of following Rule 5620(a), the Company has elected to follow the home country practice in the Cayman Islands, which does not require shareholder approval for such issuance, establishment of the plan and any amendment thereto.
Nasdaq Stock Market Rule 5635(c) requires shareholder approval prior to the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants, with a few limited exceptions. In lieu of following Rule 5635(c), the Company has elected to follow the home country practice in the Cayman Islands, which does not require shareholder approval for such issuance, establishment of the plan and any amendment thereto.
86
Nasdaq Stock Market Rule 5635(d) requires shareholder approval prior to a transaction involving the sale or issuance of a company’s common stock (or securities convertible into or exercisable for its common stock): (i) at a price below the greater of book value or market value; and (ii) which together with sales by officers, directors, or substantial stockholders, is equal to 20% or more of the company’s outstanding shares of common stock or 20% or more of the voting power prior to issuance. In lieu of following Rule 5635(d), the Company has elected to follow the home country practice in the Cayman Islands, which does not require shareholder approval for such transaction.
Our shareholders may be afforded less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. See “Item 3. Key Information-D. Risk Factors-Risks Related to Our Class A Ordinary Shares -As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.”
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
ITEM 16K. CYBERSECURITY
We recognize the importance of
Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards. We monitor and test our safeguards and regularly conduct training for our employees on these safeguards in collaboration with the administrative department and management. We are committed to promoting a company-wide culture of cybersecurity risk management.
87
PART III
ITEM 17. FINANCIAL STATEMENTS
See Item 18.
ITEM 18. FINANCIAL STATEMENTS
Our consolidated financial statements are included at the end of this annual report, beginning with page F-1.
ITEM 19. EXHIBITS
Exhibit No. | | Description of Exhibit |
| | |
1.1* | | Eighth Amended and Restated Memorandum and Articles of Association |
2.1 | | |
2.2 | | |
2.3 | | |
2.4 | | |
2.5 | | |
2.6 | | |
2.7 | | |
2.8 | | |
2.9 | | |
2.10 | | |
2.11 | | |
2.12 | | |
2.13 | | |
2.14 | | |
2.15* | | |
2.16 | | |
2.17 | | |
2.18 | |
88
4.1 | | |
4.2 | | |
4.3 | | |
4.4 | | |
4.5 | | |
4.6 | | |
4.7 | | |
4.8 | | |
4.9 | | |
4.10 | | |
4.11 | | |
4.12 | | |
4.13 | | |
4.14 | | |
4.15 | | |
4.16 | | |
4.17 | | |
4.18 | | |
4.19 | | |
4.20 | | |
4.21 | | |
4.22 | |
89
4.23 | | |
4.24 | | |
4.25 | | |
4.26 | | |
4.27 | | |
4.28 | | |
4.29 | | |
4.30 | | |
4.31 | | |
4.32 | | |
4.33 | | |
8.1* | | |
11.1 | | |
12.1* | | Certification of Chief Principal Executive Officer Required by Rule 13a-14(a) |
12.2* | | Certification of Principal Chief Financial Officer Required by Rule 13a-14(a) |
13.1* | | |
13.2* | | |
15.1* | | |
15.2* | | |
97.1 | | |
101.INS* | | XBRL Instance Document. |
101.SCH* | | XBRL Taxonomy Extension Schema Document. |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* | | XBRL Taxonomy Extension Labels Linkbase Document. |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* | Filed with this annual report on Form 20-F |
** | Furnished with this annual report on Form 20-F |
90
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
SANGRIX INC. | ||
| | |
By: | /s/ Jinghai Jiang | |
| Name: | Jinghai Jiang |
| Title: | Chief Executive Officer and Chairman of the Board |
Date: September 18, 2026
SANGRIX INC.
91
SANGRIX INC.
(FORMERLY KNOWN AS BIT ORIGIN LTD)
TABLE OF CONTENTS
Consolidated Financial Statements | |
| |
Reports of Independent Registered Public Accounting Firm (PCAOB ID: | F-2 |
| |
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1171) | F-4 |
| |
F-5 | |
| |
F-6 | |
| |
F-7 | |
| |
Consolidated Statements of Cash Flows for the years ended June 30, 2026, 2025 and 2024 | F-8 |
| |
F-9 – F-34 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
SANGRIX INC.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SANGRIX INC. (formerly known as Bit Origin Ltd) and its subsidiaries (the “Company”) as of June 30, 2026 and 2025, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we do not provide a separate opinion on this matter or on the accounts or disclosures to which they relate.
Accounting for the PTMMS Financing Arrangement
As described in Notes 5 and 11 to the consolidated financial statements, on June 28, 2026, the Company entered into an integrated transaction with PT Mitra Manunggal Sangkara (“PTMMS”) that included an Asset Purchase Agreement for AI servers, pre-funded warrants issued as consideration, and a five-year non-cancellable Management Agreement. The agreements were accounted for together as a failed sale-leaseback and financing arrangement. The Company recognized a financial asset of $11,525,929 comprising the $1,000,000 cash consideration and the $10,525,929 issuance-date fair value of the pre-funded warrants.
The principal considerations for our determination that the accounting for the PTMMS transaction is a critical audit matter were the auditor judgment and effort required to evaluate the concurrently executed, cross-conditioned agreements as an integrated arrangement and to determine whether the leaseback and PTMMS’s operational rights precluded the Company from obtaining control of the servers for accounting purposes, despite the transfer of legal title. The initial measurement of the financial asset, including the noncash consideration represented by the pre-funded warrants, also required significant audit effort.
Our audit procedures related to accounting for the PTMMS financing arrangement included the following:
F-2
| ● | We obtained and read the Asset Purchase Agreement, Bill of Sale, Management Agreement, and pre-funded warrant documentation, and evaluated the significant terms and interrelationships of the concurrently executed agreements, including PTMMS’s operational rights and the contractual settlement mechanics. |
| ● | We evaluated management’s accounting analysis of the integrated arrangement, including whether the Company obtained control of the servers for accounting purposes, whether the transfer qualified as a sale under ASC 842, and whether the arrangement should instead be accounted for as a financing. |
| ● | We tested the consideration transferred and the initial measurement of the financial asset, including the cash consideration, the issuance and classification of the pre-funded warrants, and the issuance-date fair value of the pre-funded warrants, and agreed the underlying information to supporting records. |
| ● | We evaluated the contractual net cash flows and tested the effective-yield calculation prepared at initial recognition, including the mathematical accuracy of the calculation and the reasonableness of significant estimated inputs. |
| ● | We assessed the adequacy of the related disclosures in the consolidated financial statements. |
Fair Value Measurement of Convertible Debentures
As described in Notes 9 and 10 to the consolidated financial statements, during the year ended June 30, 2026, the Company issued five convertible debentures and elected the fair value option under ASC 825. The convertible debentures were measured in their entirety at fair value using a binomial model and classified within Level 3 of the fair value hierarchy. As of June 30, 2026, the outstanding principal amount was $14,513,506 and the aggregate carrying amount, including accrued and unpaid contractual interest, was $10,624,818.
The principal considerations for our determination that the fair value measurement of the convertible debentures is a critical audit matter were the complexity of the instruments and the auditor judgment and effort required to evaluate the binomial valuation methodology and significant assumptions used in the Level 3 measurements, including expected volatility and assumptions related to the Company’s credit risk. The audit also required professionals with specialized valuation knowledge to assist in evaluating the methodology and assumptions.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | We obtained and read the executed securities purchase agreements, convertible debentures, and conversion documentation, and evaluated the significant contractual terms and management’s accounting under the fair value option. |
| ● | We tested the conversion activity and evaluated management’s accounting for partial conversions, including the fair value remeasurement immediately before conversion, derecognition of the converted portion, the shares issued upon conversion, and the related reclassification from accumulated other comprehensive income to earnings. |
| ● | Our valuation specialists assisted us in evaluating the binomial valuation methodology and significant assumptions, including expected volatility and credit risk and credit-adjusted discount rates, by comparing the methodology and assumptions with relevant market data and independently developed ranges. |
| ● | We tested the source data and mathematical accuracy of the valuation calculations and reconciled the components of the whole-FVO liability rollforward and the ending carrying amount to the Company’s accounting records and supporting documentation. |
| ● | We assessed the adequacy of the related disclosures included in Notes 9 and 10 to the consolidated financial statements. |
/s/ | |
| |
We have served as the Company’s auditor since 2025. | |
| |
| |
| |
September 18, 2026 | |
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: | The Board of Directors and Shareholders of |
| SANGRIX INC. (formerly known as Bit Origin Ltd) |
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of operations and comprehensive loss of SANGRIX INC. and its subsidiaries (the “Company”), and the consolidated statements of changes in shareholders’ equity, and cash flows for the year ended June 30, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred substantial losses and generated significant net cash outflows from operating activities during the year ended June 30, 2024, as well as had temporarily ceased its business operations during the current year. These circumstances give rise to substantial doubt that the Company will continue as a going concern. Management’s plan regarding these matters are described in Note 2. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of our management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WWC, P.C.
WWC, P.C.
Certified Public Accountants
PCAOB ID:1171
We have served as the Company’s auditor from May 8, 2021 through March 4, 2025
San Mateo, California
December 26, 2024
F-4
SANGRIX INC. (FORMERLY KNOWN AS BIT ORIGIN LTD) AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars, except for share and per share data)
| | As of | | As of | ||
|
| June 30, | | June 30, | ||
| | 2026 | | 2025 | ||
ASSETS | | | | | | |
CURRENT ASSETS | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Crypto assets | |
| | |
| — |
Other receivables, net | |
| | |
| |
Prepayments, net | |
| | |
| |
Loans receivable, net | | | | | | |
Total current assets | |
| | |
| |
| | | | | | |
NONCURRENT ASSETS | |
| | |
| |
Loans receivable, net | |
| | |
| — |
Deposit for long-term investment | |
| | |
| — |
Total noncurrent assets | |
| | |
| — |
| | | | | | |
Total assets | | $ | | | $ | |
| | | | | | |
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY | | | | | | |
CURRENT LIABILITIES | | | | | | |
Other payables and accrued liabilities | | $ | | | $ | |
Total current liabilities | | | | | | |
| | | | | | |
NONCURRENT LIABILITIES | | | | | | |
Convertible debentures | | | | | | — |
Total noncurrent liabilities | | | | | | — |
| | | | | | |
Total liabilities | | | | | | |
| | | | | | |
COMMITMENTS AND CONTINGENCIES (Note 13) | | | | | | |
| | | | | | |
MEZZANINE EQUITY | | | | | | |
Class A Ordinary Shares subject to potential redemption, | | | | | | — |
| | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | |
Class A Ordinary Share (par value $ | | | | | | |
Class B Ordinary Share (par value $ | | | | | | |
Additional paid-in capital | | | | | | |
Accumulated deficit | | | ( | | | ( |
Other comprehensive income | | | | | | — |
Total SANGRIX INC. shareholders’ equity | | | | | | |
| | | | | | |
NONCONTROLLING INTERESTS | | | ( | | | ( |
| | | | | | |
Total shareholders’ equity | | | | | | |
| | | | | | |
Total liabilities, mezzanine equity and shareholders’ equity | | $ | | | $ | |
*
The accompanying notes are an integral part of these consolidated financial statements.
F-5
SANGRIX INC. (FORMERLY KNOWN AS BIT ORIGIN LTD) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars, except for share and per share data)
| | For the Year Ended June 30, | |||||||
| | 2026 | | 2025 | | 2024 | |||
REVENUES | | | | | | | | | |
Crypto asset mining revenue | | $ | — | | $ | — | | $ | |
Crypto asset miner sales net revenue | | | — | | | | | | — |
Total revenues | |
| — | |
| | |
| |
| | | | | | | | | |
COST OF REVENUES | |
| | |
| | |
| |
Cost of crypto asset mining revenue | | | — | | | — | | | |
Total cost of revenues | |
| — | |
| — | |
| |
| | | | | | | | | |
GROSS PROFIT / (LOSS) | |
| — | |
| | |
| ( |
| | | | | | | | | |
OPERATING EXPENSES: | |
| | |
| | |
| |
General and administrative | |
| | |
| | |
| |
Provision for / (recovery of) credit losses | | | | | | ( | | | |
Change in fair value of crypto assets | | | | | | — | | | — |
Impairment loss of crypto assets | | | — | | | — | | | |
Impairment loss of miners | | | — | | | — | | | |
Impairment loss of long-term investment | | | — | | | — | | | |
Share based compensation expense | | | — | | | — | | | |
Total operating expenses | |
| | |
| | |
| |
| | | | | | | | | |
LOSS FROM OPERATIONS | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
OTHER INCOME / (EXPENSE): | |
| | |
| | |
| |
Realized gain on sale/exchange of crypto assets | |
| — | |
| | |
| |
Interest income | |
| | |
| | |
| |
Interest expense | |
| — | |
| ( | |
| ( |
Other financing expenses | | | ( | | | ( | | | ( |
Loss on warrants settlement | | | — | | | — | | | ( |
Change in fair value of convertible debentures | | | | | | — | | | — |
Total other expenses, net | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
LOSS BEFORE INCOME TAXES | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
PROVISION FOR INCOME TAXES | | | — | | | — | | | — |
| | | | | | | | | |
NET LOSS | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
LESS: Net (loss) / income attributable to noncontrolling interests | | | ( | | | | | | ( |
Deemed dividend attributable to down round feature of warrants | | | | | | | | | — |
| | | | | | | | | |
NET LOSS ATTRIBUTABLE TO SANGRIX INC. | | | ( | | | ( | | | ( |
| | | | | | | | | |
NET LOSS | | | ( | | | ( | | | ( |
| | | | | | | | | |
OTHER COMPREHENSIVE INCOME / (LOSS): | | | | | | | | | |
Effects of credit risk change from liabilities measured at fair value | | | | | | — | | | — |
Reclassification of change in instrument-specific credit risk | | | | | | — | | | — |
| | | | | | | | | |
LESS: Total comprehensive (loss) / income attributable to noncontrolling interests | | | ( | | | | | | ( |
| | | | | | | | | |
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO SANGRIX INC. | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES* | |
| | |
| | |
| |
Basic and diluted | |
| | |
| | | | |
| | | | | | | | | |
LOSS PER SHARE - BASIC AND DILUTED* | | $ | ( | | $ | ( | | $ | ( |
*
The accompanying notes are an integral part of these consolidated financial statements.
F-6
SANGRIX INC. (FORMERLY KNOWN AS BIT ORIGIN LTD) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Stated in U.S. Dollars, except for share and per share data)
| | | | | |
| | | | |
| | | | | | Additional |
| | | Other | | | | | | | |||
|
| Ordinary shares |
| Class A Ordinary Shares |
| Class B Ordinary Shares | | paid-in |
| Accumulated | | comprehensive | | Noncontrolling | | | | |||||||||||||
| | Share | | Amount | | Share | | Amount | | Share | | Amount | | capital | | deficit | | income | | interests | | Total | ||||||||
BALANCE, June 30, 2023* |
| | | $ | | | — | | $ | — | | — | | $ | — | | $ | | | $ | ( | | $ | — | | $ | — | | $ | |
Sales of ordinary shares |
| | |
| | | — | |
| — | | — | |
| — | | | | |
| — | | | — | |
| — | |
| |
Issuance of ordinary shares for compensation | | | | | — | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | |
Conversion of convertible debenture into ordinary shares | | | | | | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | |
Warrants issued with convertible debenture | | — | | | — | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | |
Exercise of warrants | | | | | | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | |
Exchange of warrants for convertible debenture | | — | | | — | | — | | | — | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Noncontrolling interests acquired | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | — | | | | | | |
Net loss | | — | | | — | | — | | | — | | — | | | — | | | — | | | ( | | | — | | | ( | | | ( |
BALANCE, June 30, 2024* |
| | |
| | | — | |
| — | | — | |
| — | | | | |
| ( | | | — | |
| ( | |
| |
Re-designation of authorized ordinary shares | | ( | | | ( | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — |
Exercise of warrants |
| — | |
| — | | | |
| | | — | |
| — | | | ( | |
| — | | | — | |
| — | |
| — |
Conversion of convertible debentures into ordinary shares | | — | | | — | | | | | | | — | | | — | | | | | | — | | | — | | | — | | | |
Deemed dividend attributable to down round feature of warrants | | — | | | — | | — | | | — | | — | | | — | | | | | | ( | | | — | | | — | | | — |
Net (loss) income | | — | | | — | | — | | | — | | — | | | — | | | — | | | ( | | | — | | | | | | ( |
BALANCE, June 30, 2025* |
| — | | | — | | | | | | | | | | | | | | | | ( | | | — | | | ( | | | |
Exercise of warrants | | — | | | — | | | | | | | — | | | — | | | ( | | | — | | | — | | | — | | | — |
Conversion of convertible debentures into Class A Ordinary Shares | | — | | | — | | | | | | | — | | | — | | | | | | — | | | — | | | — | | | |
Issuance of Class A Ordinary Shares for debt settlement |
| — | |
| — | | — | |
| — | | | |
| | | | | |
| — | | | — | |
| — | |
| |
Additional Class A Ordinary Shares issued in lieu of fractional share entitlements arising from the reverse share split |
| — | |
| — | | | |
| — | | — | |
| — | | | — | |
| — | | | — | |
| — | |
| — |
Deemed dividend attributable to down round feature of warrants |
| — | |
| — | | — | |
| — | | — | |
| — | | | | |
| ( | | | — | |
| — | |
| — |
Issuance of pre-funded warrants for asset purchase | | — | | | — | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | |
Effects of credit risk change from liabilities measured at fair value | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | | | | — | | | |
Reclassification of change in instrument-specific credit risk | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | | | | — | | | |
Net loss |
| — | |
| — | | — | |
| — | | — | |
| — | | | — | |
| ( | | | — | |
| ( | |
| ( |
BALANCE, June 30, 2026* |
| — | | $ | — | | | | $ | | | | | $ | | | $ | | | $ | ( | | $ | | | $ | ( | | $ | |
* Giving retroactive effect to the -for-60 reverse share split effected on January 20, 2026 and the -for-5 reverse share split effected on August 21, 2026.
The accompanying notes are an integral part of these consolidated financial statements.
F-7
SANGRIX INC. (FORMERLY KNOWN AS BIT ORIGIN LTD) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars, except for share and per share data)
|
| For the Year ended June 30, | |||||||
| | 2026 | | 2025 | | 2024 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
| | |
| | |
| | |
Net loss | | $ | ( | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | |
| | |
| |
Depreciation | |
| — | |
| — | |
| |
Provision for (recovery of) credit losses | | | | | | ( | | | |
Realized gain on sale/exchange of crypto assets | | | — | | | ( | | | ( |
Change in fair value of crypto assets | | | | | | — | | | — |
Impairment loss of crypto assets | | | — | | | — | | | |
Impairment loss of prepayments | | | | | | — | | | — |
Impairment loss of long-lived assets | | | — | | | — | | | |
Impairment loss of long-term investment | | | — | | | — | | | |
Share compensation expense | | | — | | | — | | | |
Issuance costs and amortization of discounts on convertible debentures | | | | | | | | | |
Change in fair value of convertible debentures | | | ( | | | — | | | — |
Interest paid on convertible debentures recorded at fair value | | | ( | | | — | | | — |
Interest expense of convertible debenture | | | — | | | | | | |
Interest expense of third party loans | | | — | | | — | | | |
Loss on warrants settlement | | | — | | | — | | | |
Changes in operating assets and liabilities | | | | | | | | | |
Crypto assets | | | — | | | | | | ( |
Other receivables | |
| ( | |
| | |
| ( |
Prepayments | |
| ( | |
| ( | |
| |
Security deposits | |
| — | |
| — | |
| |
Accounts payable | | | — | | | — | | | ( |
Other payables and accrued liabilities | | | | | | ( | | | |
Net cash used in operating activities | | | ( | | | ( | | | ( |
| | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
Proceeds from sale of crypto assets | | | — | | | — | | | |
Advance for a long-term investment | |
| ( | |
| — | |
| — |
Loan to a third party | |
| — | |
| — | |
| ( |
Repayments from loans to third parties | | | — | | | | | | — |
Proceeds from investment of subsidiaries’ noncontrolling interests | | | — | | | — | | | |
Net cash (used in) provided by investing activities | |
| ( | |
| | |
| |
| | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
| | |
| |
Proceeds from issuance of ordinary shares through private offerings | |
| — | |
| — | |
| |
Purchase of crypto assets to pay offering expenses | |
| ( | |
| — | |
| — |
Repayments to third party loans | | | — | | | — | | | ( |
Payments of convertible debenture interest expense | | | — | | | ( | | | ( |
Payments of third party loans interest expense | | | — | | | — | | | ( |
Proceeds from convertible debentures, net of issuance costs | | | | | | — | | | |
Repayments of convertible debenture | |
| — | |
| — | |
| ( |
Proceeds from exercise of warrants | | | — | | | — | | | |
Payment of equity issuance costs | | | ( | | | — | | | — |
Net cash provided by (used in) financing activities | |
| | |
| ( | |
| |
| | | | | | | | | |
CHANGES IN CASH AND CASH EQUIVALENTS | |
| | |
| ( | |
| |
| | | | | | | | | |
CASH AND CASH EQUIVALENTS, beginning of year | |
| | |
| | |
| |
| | | | | | | | | |
CASH AND CASH EQUIVALENTS, end of year | | $ | | | $ | | | $ | |
| | | | | | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | |
| | |
| |
Cash paid for income tax | | $ | — | | $ | — | | $ | — |
Cash paid for interest | | $ | | | $ | | | $ | |
| | | | | | | | | |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |
| | |
| | |
| |
Conversion of convertible debenture into Class A Ordinary Shares | | $ | | | $ | | | $ | — |
Conversion of convertible debenture interest payable into Class A Ordinary Shares | | $ | | | $ | | | $ | — |
Exchange of warrants for convertible debenture | | $ | — | | $ | — | | $ | |
Exchange of pre-funded warrants for loans receivable | | $ | | | $ | — | | $ | — |
Issuance of convertible debenture in exchange for crypto assets | | $ | | | $ | — | | $ | — |
Issuance of Class A Ordinary Shares with redemption rights in exchange for crypto assets | | $ | | | $ | — | | $ | — |
Deemed dividend attributable to down round feature of warrants | | $ | | | $ | | | $ | — |
The accompanying notes are an integral part of these consolidated financial statements.
F-8
SANGRIX INC. (FORMERLY KNOWN AS BIT ORIGIN LTD) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Nature of business and organization
Organization
SANGRIX INC. (formerly known as Bit Origin Ltd., “SANGRIX” or the “Company”) is a company incorporated on January 23, 2018 under the laws of the Cayman Islands. SANGRIX holds all of the outstanding share capital of the following entities: SonicHash Inc, (“SonicHash Canada”), SonicHash LLC (“SonicHash US”) and Bit Origin Pte. Ltd. (“Bit Origin SG”), and holds
Subsequent to June 30, 2026, the Company’s shareholders approved the change of the Company’s name from “BIT ORIGIN LTD” to “SANGRIX INC.” at an extraordinary general meeting held on August 11, 2026.
On December 14, 2021, the Company formed SonicHash Canada, a company incorporated under the laws of Alberta, Canada. On December 16, 2021, the Company formed SonicHash Singapore, a company incorporated under the laws of Singapore, which was struck off on September 4, 2024. On December 17, 2021, the Company formed SonicHash US under the laws of the State of Delaware. Sonic Auspice was formed by a third party under the laws of the State of Delaware on November 30, 2023. The Company purchased
Business overview
The Company and its subsidiaries (collectively, the “Group”) historically engaged in Bitcoin mining and related digital-asset activities and have subsequently shifted their strategic focus toward digital-asset treasury management and AI computing infrastructure. The Group commenced Bitcoin mining business in May 2022 and temporarily suspended the operations in the United States (“U.S.”) in December 2023. Beginning in June 2024, the Group began facilitating the purchase and sale of mining computers under a sales representative arrangement. In July 2025, the Group introduced a dedicated Dogecoin treasury program to advance its strategic development. The Group did not generate operating revenue during the year ended June 30, 2026.
During the year ended June 30, 2026, the Group began evaluating opportunities in AI computing and digital infrastructure. On June 28, 2026, the Company entered into an integrated arrangement related to AI servers and a related five-year management agreement. The arrangement is accounted for as a financing arrangement in accordance with the applicable accounting guidance. As of June 30, 2026, the related operating activities had not commenced. Subsequent to year end, the Company changed its corporate name to SANGRIX INC. to reflect its evolving strategic focus on AI computing infrastructure and related digital infrastructure services.
F-9
Consolidation scope
The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities as of June 30, 2026:
Name | | Background | | Ownership |
SonicHash Canada | | · A Canada company. | | |
SonicHash US | | · A U.S. company of the State of Delaware | | |
| | . It operates the Bitcoin mining business | | |
Sonic Auspice | | · A U.S. company of the State of Delaware | | |
| | . It was established to explore potential mining site operation opportunities but has not commenced any business operations but has undertaken limited financing and investment activities to third parties as of the date of this report | | |
Bit Origin SG | | · A Singapore company | | |
| | · It was established to engage in venture capital investment activities in the crypto asset industry but has not commenced any business operations as of the date of this report | |
Liquidity and going concern
In assessing the Group’s liquidity, management monitors and analyzes the cash on-hand, contractual obligations and the expected operating expenditures for the period of twelve-month after the date of these consolidated financial statements are issued.
For the years ended June 30, 2026, 2025 and 2024, the Group incurred net losses of $
Based on the Group’s recent operating cash requirements and limited cash on hand on June 30, 2026, existing cash resources alone would not be sufficient to fund the Group’s expected obligations and operating expenditures for the twelve-month assessment period. Accordingly, the Group’s recurring losses, continued operating cash outflows and limited readily available cash resources initially raised substantial doubt about its ability to continue as a going concern.
F-10
Management evaluated the following plans and sources of liquidity in determining whether such substantial doubt was alleviated.
| ● | Equity purchase facility agreement (“EPFA”). On July 13, 2025, the Company entered into an equity purchase facility agreement under which the investor committed to purchase up to $ |
| ● | Convertible-note financing arrangements. The Company entered into securities purchase agreements providing for aggregate potential note issuances of up to $ |
| ● | Financing arrangement. Under the |
| ● | Crypto assets and subsequent liquidity actions. The Group also holds liquid crypto assets that may be converted into cash subject to prevailing market conditions, custody arrangements and applicable collateral arrangement and any required consents. Subsequent to June 30, 2026, the Company disposed of |
Management evaluated the Group’s expected liquidity needs over the twelve-month period following the issuance of these consolidated financial statements, taking into account its cash on hand, expected operating expenditures, contractual obligations and available sources of liquidity. While the Group had $
Based on management’s evaluation of the contractual terms of these arrangements, the Group’s prior ability to raise capital under such arrangements, subsequent financing and liquidity activity, and its expected liquidity requirements during the assessment period, management concluded that its plans are probable of being effectively implemented and, when implemented, are probable of providing sufficient liquidity for the Group to meet its obligations as they become due for at least one year after the date these consolidated financial statements are issued. Accordingly, management concluded that the substantial doubt about the Group’s ability to continue as a going concern has been alleviated.
Note 2 – Summary of significant accounting policies
Basis of presentation
The accompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation.
F-11
Use of estimates and assumptions
In presenting the consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Group to revise its estimates. The Group bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates are used when accounting for items and matters including allowances for credit losses and doubtful accounts, determination of fair value of financial instruments, and realization of deferred tax assets and uncertain tax position. Significant judgment is also involved in the calculation of deemed dividends and the determination of the fair value of financial instruments, particularly the Group’s convertible debentures measured under the fair value option, which requires the use of valuation models and significant assumptions, including expected volatility, credit risk, discount rates, and other unobservable inputs. These assumptions are inherently subjective and may result in significant variability in the reported fair value.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in transit and time deposits placed with banks or other financial institutions and have original maturities of less than three months.
Crypto assets
The Group adopted Accounting Standards Update (“ASU”) 2023-08 on July 1, 2025 using the cumulative-effect transition method. The Group did not hold crypto assets within the scope of the guidance as of July 1, 2025, adoption did not result in a cumulative-effect adjustment to opening retained earnings. The Group measures crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. To qualify for Accounting Standards Codification (“ASC”) 350-60, an asset must meet the criteria outlined in ASC 350-60-15-1.
| 1. | Meet the definition of intangible assets as defined in the FASB Accounting Standards Codification. |
| 2. | Do not provide the asset holder with enforceable rights to, or claims on, underlying goods, services, or other assets |
| 3. | Are created or reside on a distributed ledger based on blockchain or similar technology |
| 4. | Are secured through cryptography |
| 5. | Are fungible |
| 6. | Are not created or issued by the reporting entity or its related parties |
Additionally, ASC 350-60 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and present changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The amendments also require that an entity provide disclosures about significant holdings, contractual sale restrictions, and changes during the reporting period.
F-12
Digital assets within the scope of ASC 350-60
The Group’s holdings of Dogecoin meet the scope criteria in ASC 350-60 to be accounted for as crypto assets (fungible intangible assets that reside on a distributed ledger, are secured through cryptography, convey no enforceable rights to underlying goods or services, and were not issued by the Group or a related party). They are initially recognized at fair value on the date of acquisition and subsequently remeasured at fair value at each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. Fair value is determined using the closing price from the principal market for Dogecoin, which the Group has identified, in accordance with ASC 820, as the active market it has access to and normally uses to transact in Dogecoin. Because this is a quoted price in an active market for an identical asset, the Group’s Dogecoin is classified within Level 1 of the ASC 820 fair value hierarchy. The Group’s Dogecoin are held in custody by BitGo Trust Company, Inc. (“BitGo”), a regulated institutional digital asset custodian. Certain Dogecoin is pledged as collateral under contractual collateral arrangements. Such collateral arrangements do not affect the fair value measurement of the Dogecoin under ASC 820. The fair value of any pledged Dogecoin and the nature and remaining term of such collateral arrangement are disclosed in Note 3. For dispositions, the Group accounts for realized gains or losses using the first-in-first-out (“FIFO”) method. The classification of crypto assets as current or non-current is determined under ASC 210 based on whether the assets are reasonably expected to be realized in cash, sold or otherwise realized during the normal operating cycle or within twelve months after the reporting date. In making this assessment, the Group considers all relevant facts and circumstances, including any collateral arrangements and related contractual release provisions applicable to pledged crypto assets.
Stablecoins
The Group may hold stablecoins, including Tether USD (“USDT”), in connection with certain financing transactions. Stablecoins are evaluated individually to determine whether they meet the scope criteria of ASC 350-60. Based on the contractual rights associated with USDT, the Group determined that its USDT holdings are outside the scope of ASC 350-60 because the instrument provides rights or claims that are inconsistent with the scope criterion in ASC 350-60-15-1(b). Accordingly, USDT is accounted for under other applicable U.S. GAAP based on the contractual rights and economic characteristics of the instrument. During the year ended June 30, 2026, USDT was acquired and used in connection with financing transactions, and the Group had no USDT balance outstanding as of June 30, 2026.
Other receivables
Other receivables include advances to third parties or employees, interest receivable and receivable due from buyer of convertible debentures. Management regularly reviews the adequacy of the allowance for credit losses on an ongoing basis and considers factors such as the aging of receivables and changes in payment trends, creditworthiness, current economic trends as well as other supportable forward-looking factors. Accounts considered uncollectible are written off against allowances after exhaustive efforts at collection are made. During the years ended June 30, 2026, 2025 and 2024, $
Loans receivable
Loans receivable are recognized initially at fair value, typically the principal amount advanced, plus directly attributable transaction costs, with any financing element discounted to present value and accreted as interest income over the loan term. Subsequently, they are measured at amortized cost using the effective interest method, which allocates each contractual net settlement received between principal recovery and interest income based on the effective yield applied to the gross carrying amount. A loss allowance is recognized for expected credit losses, with changes in the allowance recognized in profit or loss; loans or portions thereof are written off against the allowance when no realistic recovery prospect exists. For presentation purposes, loan receivables are classified as current where principal and interest are contractually due within twelve months from the reporting date, and as non-current for amounts due beyond twelve months.
Expected credit losses are estimated on a regular basis based on an assessment of historical collection experience, adjusted for loan balance aging, credit quality and specific risk characteristics of the borrowers and prevailing economic conditions. The Group continues to evaluate the reasonableness of the allowance policy and update it as necessary. During the years ended June 30, 2026, 2025 and 2024,
F-13
Allowance for credit losses
Allowance for credit losses represents management’s current estimate of expected credit losses over the contractual life of the financial assets, based on historical experience, current conditions, and reasonable and supportable forecast. The Group adopted Accounting Standard Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.
Under ASU 2016-13, the Group has exposure to credit losses for financial assets, which are other receivables and loans receivable. The Group considered various factors, including nature, historical collection experience, the age of the receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. The Group has adopted a loss-rate method to calculate the credit loss and considered the relevant factors of the historical and future conditions of the Group to make reasonable estimate of the loss rate.
Financial assets are presented net of the allowance for credit losses in the consolidated balance sheets. The measurement of the allowance for credit losses is recognized through current expected credit loss expense. Current expected credit loss expense is included as a component of general and administrative expenses in the consolidated statements of operations. Write-offs are recorded in the period in which the asset is deemed to be uncollectible.
Prepayments
Prepayments primarily represent amounts advanced to suppliers for equipment and cash advanced to service providers for future services. The Group evaluates the recoverability of prepayments at each reporting date based on the contractual terms, expected delivery, market conditions affecting the underlying goods and other relevant facts and circumstances. When the carrying amount of a prepayment is determined to exceed the amount expected to be recovered through delivery, sale or refund, an impairment loss is recognized in earnings. During the years ended June 30, 2026, 2025 and 2024, $
Long-term investment
The Group’s long-term investment represented an equity investment without a readily determinable fair value and was accounted for using the measurement alternative under ASC Topic 321, Investments — Equity Securities. Under this approach, the investment was carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments, if any. As of June 30, 2026, the Group had advanced consideration toward this investment but had not yet legally obtained the equity interest; accordingly, the amount is presented as an advance toward the investment and will be reclassified and measured as described above upon completion of the transaction.
At each reporting date, the Group assesses whether events or changes in circumstances indicate that the investment is impaired. If qualitative factors indicate that the fair value of the investment is less than its carrying amount, the Group estimates the fair value of the investment. When the fair value is determined to be less than the carrying amount, an impairment loss is recognized in earnings equal to the difference between the two amounts.
Impairment for long-lived assets
Long-lived assets, including plant and equipment and intangible assets 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. The Group assesses 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, the Group 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. During the years ended June 30, 2026, 2025 and 2024,
F-14
Mezzanine equity
Ordinary shares that are redeemable at the holder’s option, or upon the occurrence of an event not solely within the Company’s control, are classified outside permanent shareholders’ equity as mezzanine equity in accordance with ASC 480-10-S99-3A. Such shares are initially measured at their issuance-date fair value, which generally equals the proceeds allocated to the shares in an arm’s-length transaction, net of incremental and directly attributable issuance costs.
At each reporting date, the Company assesses whether the shares are currently redeemable or whether it is probable that they will become redeemable. If the shares are currently redeemable, they are measured at their current redemption value, subject to a floor equal to the initial carrying amount. If the shares are not currently redeemable but it is probable that they will become redeemable, the Company has elected to recognize changes in redemption value as they occur and adjust the carrying amount to the current redemption value at each reporting date, rather than accreting to the redemption value over the period to the earliest redemption date. This policy is applied consistently to similar redeemable equity instruments.
Any adjustment to the carrying amount is recognized as an adjustment to retained earnings, or additional paid-in capital in the absence of retained earnings, and is reflected in income available to ordinary shareholders for purposes of earnings per share. The carrying amount of the redeemable shares is not reduced below the amount initially recorded in mezzanine equity.
Fair value measurement
The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Group.
ASC 820-10-20 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The accounting standards establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable inputs that are significant to the fair value measurement. |
The following table presents the Group’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and 2025:
| | | | | | | | | | | Total | ||||
| | | | | | | | | | | June 30, | | June 30, | ||
| | Level 1 | | Level 2 | | Level 3 | | 2026 | | 2025 | |||||
Assets |
| | |
| | |
| | |
| | |
| | |
Crypto assets | | $ | | | $ | — | | $ | — | | $ | | | $ | — |
| | | | | | | | | | | | | | | |
Liabilities | |
| | |
| | |
| | |
| | |
| |
Convertible debentures | | $ | — | | $ | — | | $ | ( | | $ | ( | | $ | — |
For financial instruments that are not measured at fair value on a recurring basis, the carrying amounts of cash and cash equivalents, other receivables, and other payables and accrued liabilities approximate their fair values due to their short-term maturities. The Group noted
F-15
Convertible debentures not measured under the fair value option
For convertible debentures issued in periods prior to July 1, 2025 for which the fair value option was not elected, the Group evaluated embedded conversion and other features under ASC 815 to determine whether such features required bifurcation and separate accounting as derivative liabilities. The host debt instrument was accounted for under the applicable debt guidance, including the recognition and amortization of debt discounts, premiums and issuance costs using the effective interest method, as applicable. Derivative liabilities, when separately recognized, were measured at fair value with changes in fair value recognized in earnings.
Upon conversion pursuant to the original contractual terms, the carrying amount of the debt and related components was reclassified to shareholders’ equity in accordance with the applicable conversion guidance. The convertible debentures accounted for under this historical model were fully settled as of June 30, 2025, and no such instruments remained outstanding since then.
Convertible debentures measured under the fair value option
Beginning with convertible debentures issued from July 1, 2025, the Group elected the fair value option (“FVO”) under ASC 825, where eligible, at the applicable election date. Under the FVO, each convertible debenture is accounted for as a single hybrid financial liability measured in its entirety at fair value rather than separately accounting for embedded conversion and other derivative features. Under the FVO, each convertible debenture is accounted for as a single hybrid financial liability measured in its entirety at fair value, rather than separately accounting for embedded features that would otherwise require evaluation under ASC 815.
The convertible debentures are initially and subsequently measured at fair value. Changes in fair value are recognized in earnings, except for the portion attributable to changes in instrument-specific credit risk, which is recognized separately in other comprehensive income in accordance with ASC 825. Upon derecognition of a financial liability for which the FVO has been elected, the cumulative amount previously recognized in accumulated other comprehensive income attributable to instrument-specific credit risk is reclassified to earnings.
Upfront costs and fees incurred in connection with convertible debentures for which the FVO has been elected are recognized in earnings as incurred and are not deferred or included in the initial fair value measurement.
Fair value is determined using valuation techniques that incorporate the contractual terms of the instruments and relevant observable and unobservable inputs, including the Group’s ordinary share price, expected volatility, discount rates, risk-free interest rates, remaining contractual terms, conversion features and instrument-specific credit risk, as applicable. The fair value measurement includes contractual interest incurred but unpaid as of the reporting date. The Group does not present contractual interest expense separately for the convertible debentures; the economic effect of contractual interest is included within the change in fair value of convertible debentures recognized in earnings.
At initial recognition, any difference between the transaction price and the fair value of a debenture is recognized in earnings when the transaction price is determined not to represent fair value in accordance with ASC 820.
Upon a conversion pursuant to the original contractual terms, the portion of the convertible debenture being converted is remeasured to fair value immediately before conversion. The resulting fair value change is recognized in earnings and other comprehensive income, as applicable, and the fair value carrying amount of the converted obligation is subsequently derecognized and recognized in shareholders’ equity.
Warrants
The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815-40”).
The assessment considers whether the warrants are freestanding financial instruments, whether they meet the definition of a liability under ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815-40. This includes determining whether the warrants are indexed to the Group’s own ordinary shares and whether the warrant holders could potentially require net cash settlement in a circumstance outside of the Group’s control. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and is reassessed when changes in contractual terms or other relevant facts and circumstances could affect the classification of the warrants
F-16
Warrants that meet all of the criteria for equity classification are recorded as a component of equity based on the amount attributable to the warrants under the applicable accounting for the transaction in which they are issued and are not subsequently remeasured. Warrants that do not meet the criteria for equity classification are recorded as liabilities, measured at fair value at issuance and subsequently remeasured to fair value at each reporting period, with changes in fair value recognized in earnings.
Pre-funded warrants
The Group may also issue pre-funded warrants with a nominal exercise price that are exercisable for Class A Ordinary Shares. Such pre-funded warrants are evaluated under the same guidance in ASC 480 and ASC 815-40. When the pre-funded warrants qualify for equity classification, they are recorded in shareholders’ equity and are not subsequently remeasured. The fair value of pre-funded warrants is determined at issuance using valuation techniques appropriate to the specific terms and economic characteristics of the instrument, with maximum use of relevant observable market inputs where available.
For pre-funded warrants with a nominal exercise price and contractual terms that make them economically similar to the underlying ordinary shares, the Group measures their issuance-date fair value by reference to the quoted market price of the underlying ordinary shares, adjusted for the nominal exercise price and other instrument-specific terms, as applicable.
Down-round features
For equity-classified warrants containing a down-round feature, the Group recognizes the value of the effect of a down-round feature in equity-classified warrants when the feature is triggered (i.e., when the exercise price is adjusted downward) in accordance with ASC 260. This value is measured as the difference between (1) the financial instrument’s fair value (without the down-round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down-round feature) using the reduced exercise price. Both measurements use the same market conditions as of the trigger date and reflect the applicable contractual terms, including changes in the exercise price and, where applicable, the number of warrant shares. The value of the effect of the down-round feature is treated as a deemed dividend and a reduction to income available to ordinary shareholders in the basic earnings per share (“EPS”) calculation.
Revenue recognition
The Group recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: (i) identifies the contract with the customer, (ii) identifies the performance obligations in the contract, (iii) determines the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the contract, and (v) recognizes revenue when (or as) the Group satisfies the performance obligation.
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
| ● | Variable consideration |
| ● | Constraining estimates of variable consideration |
| ● | The existence of a significant financing component in the contract |
| ● | Noncash consideration |
| ● | Consideration payable to a customer |
F-17
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Crypto asset mining:
The Group entered into crypto asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Group’s enforceable right to compensation only begins when the Group provides computing power to the mining pool operator. In exchange for providing computing power, the Group is entitled to a fractional share of the fixed crypto asset award the mining pool operator receives (less crypto asset transaction fees to the mining pool operator which are recorded net with revenues), for successfully adding a block to the blockchain. The Group’s fractional share is based on the proportion of computing power the Group contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.
Providing computing power in crypto asset transaction verification services is an output of the Group’s ordinary activities. The provision of computing power is the only performance obligation in the Group’s contracts with third party pool operators. The transaction consideration the Group receives, if any, is noncash consideration, which the Group measures at fair value on the date received, which is not materially different than the fair value at contract inception. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the Group successfully places a block (by being the first to solve an algorithm) and the Group receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.
Fair value of the crypto asset award received is determined using the intraday low quoted price of the related crypto asset at the time of receipt. All of the Group’s crypto asset are populated crypto assets which are actively traded on the major trading platforms such as coinmarketcap.com. In December 2023, the Group temporarily suspended the crypto asset mining operations due to the high operating costs in the United States.
Crypto asset miner sales:
The Group earns revenue by facilitating a third party supplier to sell crypto asset mining equipment. The transaction price is fixed, agreed upon with the customer at contract inception, and payable in full prior to delivery, with no significant financing components. The Group recognizes revenue at a point in time when control of the equipment transfers to the customer from the supplier, which occurs upon delivery to the customer’s designated pick-up location and acceptance per the sales contract terms.
The Group acts as an agent in these transactions, as it does not control the equipment before transfer. This determination reflects that: (1) the Group is not primarily responsible for fulfilling the promise to provide the equipment (a third-party supplier bears this obligation), and (2) the Group does not bear inventory risk before or after the sale. As an agent, the Group’s performance obligation is to arrange for the equipment’s provision to the customer. Revenue is thus recognized on a net basis, representing the fee or commission earned, calculated as the difference between amounts charged to the customer and amounts remitted to the supplier. No significant variable consideration (e.g., discounts or returns) or capitalized contract costs are present as the consideration is received in full prior to delivery.
Cost of revenues
Cost of revenues consists primarily of the direct costs associated with running the crypto asset mining business, such as utilities, maintenance labor costs, shipping fees, plant remodeling fees and other service charges. The Group signed hosting agreements with hosting partners, and the hosting partners will install the mining equipment and provide electricity, internet services and other necessary services to maintain the operation of the mining equipment. All the related operating fees are included in the bundled monthly fees charged by the hosting partner to the Group. Depreciation of crypto asset mining equipment is calculated separately and also recorded as a component of cost of revenues for crypto asset mining. In December 2023, the Group temporarily suspended the Bitcoin mining operations due to the high operating costs in the United States.
F-18
Share-based compensation
Share-based compensation expense consists of the Group’s restricted stock units (“RSUs”) expense. RSUs granted to employees are measured based on the grant-date fair value. In general, a portion of the Group’s RSUs vests at the time of signing the employment agreement and the remaining vests over a service period of
Income taxes
The Group accounts for income taxes in accordance with ASC 740, Income Taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items that are not taxable or deductible for tax purposes. It is calculated using tax rates that have been enacted by the balance sheet date.
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 bases used in the computation of taxable income. Subject to applicable exceptions, deferred tax liabilities are recognized for taxable temporary differences, and deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which the assets are realized or the liabilities are settled. Deferred tax expense or benefit is generally recognized in the consolidated statements of operations, except for the tax effects of items recognized outside of earnings, which are recognized in the same manner as the underlying items, as applicable. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, 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 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, based on the technical merits, 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 of being realized on examination. The Group recognizes penalties and interest related to uncertain tax positions, if any, as a component of income tax expense.
Reverse share splits
The Company retroactively adjusts all applicable share and per-share information presented in the consolidated financial statements for reverse share splits occurring during the reporting period or after the reporting date but before the consolidated financial statements are issued. Accordingly, all share and per-share amounts, including ordinary shares outstanding, weighted-average shares, earnings or loss per share, and other equity-linked share data affected by such reverse share splits, have been retroactively adjusted for all periods presented, as applicable.
Loss per share
Basic loss per share is computed using the two-class method pursuant to ASC 260, as the Company has two classes of ordinary shares with different contractual rights. Class A Ordinary Shares are entitled to receive dividends, while Class B Ordinary Shares do not have rights to receive dividends.
Under the two-class method, distributed earnings, if any, are allocated to each class based on dividends declared during the period, and undistributed earnings are allocated based on the contractual rights of each class to participate in such earnings as if all earnings for the period had been distributed. Undistributed losses are allocated between the classes based on their respective contractual rights and obligations, including their rights to residual net assets upon liquidation. Basic earnings or loss per share for each class of ordinary shares is calculated by dividing the earnings or loss allocated to that class by the weighted-average number of shares of that class outstanding during the period.
Class B Ordinary Shares are convertible, at the holder’s option, into Class A Ordinary Shares on a one-for-one basis. For purposes of diluted earnings or loss per share attributable to Class A Ordinary Shares, the potential effect of the conversion of Class B Ordinary Shares is evaluated using the if-converted method and is included only when dilutive. Diluted earnings or loss per share for Class B Ordinary Shares is calculated separately in accordance with the two-class method. Other potential ordinary shares, including warrants and other convertible instruments, are reflected in diluted earnings or loss per share using the applicable method when their effect is dilutive.
F-19
Potential ordinary shares are excluded from diluted loss per share when their inclusion would be anti-dilutive. For the years ended June 30, 2026, 2025 and 2024, the Company incurred net losses and, accordingly, potential ordinary shares that would have had an anti-dilutive effect were excluded from the calculation of diluted loss per share.
The following table presents the EPS of the Group for the years ended June 30, 2026, 2025 and 2024, respectively:
| | For the year | | For the year | | For the year | |||
| | ended | | ended | | ended | |||
| | June 30, 2026 | | June 30, 2025 | | June 30, 2024 | |||
Net loss attributable to the Company | | $ | ( | | $ | ( | | $ | ( |
Basic and diluted loss per Class A Ordinary Share | |
| ( | |
| ( | |
| ( |
Weighted average number of Class A Ordinary Shares outstanding - basic and diluted | |
| | |
| | |
| |
Segment reporting
ASC 280, Segment Reporting, (“ASC 280”), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, the chief operating decision maker (“CODM”) has been identified as the Group’s Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group operates as
Recent accounting pronouncements
New accounting pronouncements adopted
In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires certain crypto assets to be measured at fair value with changes in fair value recognized in net income and introduces related presentation and disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The Group adopted ASU 2023-08 on July 1, 2025. The adoption resulted in the Group measuring its qualifying crypto assets, including Dogecoin, at fair value with changes in fair value recognized in earnings.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. The Group adopted ASU 2023-09 on July 1, 2025, and the adoption of this ASU did not have a material effect on the Group’s consolidated financial statements and related disclosures.
New accounting pronouncements yet to be adopted
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim periods within those annual reporting periods, with early adoption permitted. The Group will adopt ASU 2024-04 for its fiscal year beginning July 1, 2026 and is currently evaluating the impact of the guidance on its consolidated financial statements and related disclosures.
F-20
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In January 2025, the FASB issued ASU 2025-01 to clarify its effective date for entities with non-calendar year ends. The amendments require public business entities to provide additional disaggregated information about certain expense categories and are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Group is currently evaluating the impact of the guidance on its consolidated financial statement disclosures.
In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 (disaggregation of income statement expenses) for non-calendar year-end entities. The clarification ensures that initial adoption is required in an annual reporting period (rather than unintentionally in an interim period) for entities with non-calendar year ends. The amendments align with the effective dates stated in ASU 2024-03 (annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027) and early adoption is permitted. The Company is currently evaluating the potential impact of ASU 2024-03 (as clarified by ASU 2025-01) on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on certain current accounts receivable and contract assets arising from transactions accounted for under ASC 606. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim periods within those annual reporting periods, with early adoption permitted. The Group will adopt the guidance for its fiscal year beginning July 1, 2026 and does not currently expect the adoption to have a material effect on its consolidated financial statements and related disclosures.
Except as mentioned above, the Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Group’s consolidated financial statements and related disclosures.
Note 3 – Crypto assets
Crypto assets consisted of the following:
| | June 30, | | June 30, | ||||||
| | 2026 | | 2025 | ||||||
| | Quantity | | Amount | | Quantity | | Amount | ||
Crypto assets, current |
| |
| | |
| |
| | |
| | | $ | |
| — | | $ | — | |
Crypto assets, non-current |
| | |
| |
| | |
| |
| — | | $ | — |
| — | | $ | — | |
As of June 30, 2026, the Group held
The following table presents additional information about Dogecoin for the year ended June 30, 2026:
| | June 30, 2026 | |||
| | Quantity | | Value | |
Opening balance |
| — | | $ | — |
Issuance of convertible debentures in exchange for Dogecoins (see Note 9 for details) |
| | |
| |
Issuance of Class A Ordinary Shares in exchange for Dogecoins (see Note 11 for details) |
| | |
| |
Change in fair value |
| — | |
| ( |
Ending balance |
| | | $ | |
A portion of the Group’s , amounting to
F-21
The agreement provides contractual mechanisms under which the pledged Dogecoin may be released from the Blocked Custodial Accounts from time to time. In particular, the Group may request the release of collateral in connection with certain optional redemptions, subject to the applicable conditions and the absence of an event of default. The agreement also provides for release upon satisfaction of specified outstanding note obligations. Accordingly, the pledged Dogecoin is subject to collateral control while the pledge remains in effect, but the agreement provides mechanisms for release during the term of the related notes.
The classification of crypto assets as current or non-current is determined under ASC 210 based on whether the assets are reasonably expected to be realized in cash, sold or otherwise realized during the normal operating cycle or within twelve months after the reporting date. In making this assessment, the Group considers all relevant facts and circumstances, including the contractual release provisions applicable to pledged crypto assets. Based on management’s expected realization of the Dogecoin holdings within the current period, the contractual release mechanisms and subsequent release activity, the Group classified the Dogecoin as current as of June 30, 2026.
The following table presents additional information about BTC for the years ended June 30, 2025 and 2024:
| | Quantity | | Amount | |
Balance on June 30, 2023 |
| | | $ | |
Revenue recognized from BTC mined |
| | |
| |
Hosting fees settled in BTC |
| ( | |
| ( |
Proceeds from sale of BTC | | ( | | | ( |
Realized gain on sale/exchange of BTC | | — | | | |
Impairment loss of BTC | | — | | | ( |
Balance on June 30, 2024 | | | | $ | |
Service fees settled in BTC | | ( | | | ( |
Realized gain on sale/exchange of BTC | | — | | | |
Balance on June 30, 2025 |
| — | | $ | — |
Subsequent to June 30, 2026, approximately
Note 4 – Other receivables, net
Other receivables, net consist of the following:
| | June 30, | | June 30, | ||
| | 2026 | | 2025 | ||
Advances to a third party | | $ | | | $ | |
Interest receivables | | | | | | |
Total other receivables | | | | | | |
Less: allowance for credit losses | | | ( | | | ( |
Total other receivables, net | | $ | | | $ | |
Movements of allowance for credit losses are as follows:
| | For the year ended | | For the year ended | | For the year ended | |||
| | June 30, | | June 30, | | June 30, | |||
| | 2026 | | 2025 | | 2024 | |||
Beginning balance | | $ | | | $ | | | $ | |
Addition | |
| | |
| | |
| |
Write-off | |
| ( | |
| ( | |
| — |
Ending balance | | $ | | | $ | | | $ | |
F-22
Note 5 – Loans receivable, net
Outstanding balances on loans receivable consist of the following as of June 30, 2026 and 2025:
| | | | Interest rate / Effective | | | | June 30, | | June 30, | ||
Third party | | Maturity | | yield | | Collateral/Guarantee | | 2026 | | 2025 | ||
A | | January 5, 2026 (Extended to January 5, 2027 on January 5, 2026) (1) | | % | None | | $ | |
| $ | | |
A | | April 30, 2026 (Extended to April 30, 2027 on April 30, 2026)(1) | | % | None | |
| |
|
| | |
PTMMS | | Monthly net settlement amounts through the fifth anniversary of billing commencement date(2) | | % | Company retains legal title to AI servers; no third-party guarantee | | | | | | — | |
Loans receivable from third parties | | | | | | | | | |
| | |
Allowance for credit losses | | | | | | | | | ( | | | ( |
Loans receivable, net | | | | | | | | $ | | | $ | |
Less: non-current | | | | | | | | | ( | | | — |
Total current | | | | | | | | $ | | | $ | |
Movements of allowance for credit losses are as follows:
| | For the year ended | | For the year ended | | For the year ended | |||
| | June 30, | | June 30, | | June 30, | |||
| | 2026 | | 2025 | | 2024 | |||
Beginning balance | | $ | | | $ | | | $ | — |
(Recovery) addition | |
| | |
| ( | |
| |
Ending balance | | $ | | | $ | | | $ | |
Interest income of the above loans receivable for the years ended June 30, 2026, 2025 and 2024 amounted to $
| (1) | These loans were advanced to a third party in connection with the Company’s contemplated business cooperation with the counterparty. During the year ended June 30, 2026, the maturity dates of the loans were further extended based on mutual agreement, primarily to align with the revised implementation timeline of the contemplated cooperation and related operational arrangements. As of June 30, 2026, the loans remained unsecured and uncollateralized. Management continues to monitor the status of the counterparty and the contemplated cooperation, and has considered the relevant facts and circumstances in assessing the recoverability of the outstanding balances and the related allowance for credit losses. |
| (2) | On June 28, 2026, the Company entered into an integrated transaction with PTMMS comprising |
F-23
The Asset Purchase Agreement and Management Agreement were evaluated together as an integrated arrangement. Although legal title to the servers transferred to the Company, the leaseback arrangement precluded the Company from obtaining control of the servers for accounting purposes. Accordingly, the transfer did not qualify as a sale and the Company accounted for the transaction as a financing arrangement. The Company did not recognize the servers as property and equipment and instead recognized a financial asset for the fair value of the consideration transferred.
The financial asset was initially recognized at $
Under the Management Agreement, amounts payable by PTMMS to the Company and amounts payable by the Company to PTMMS are contractually set off and net settled for each settlement period. Based on management’s current estimate of the resulting net settlement cash flows, the financial asset has an estimated effective annual yield of approximately
Note 6 – Deposit for long-term investment
On September 5, 2025, the Group entered into an agreement to acquire a
Note 7 – Taxes
Income tax
Cayman Islands
Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gains. Additionally, upon payment of dividends to the shareholders,
Canada
SonicHash Canada is incorporated in Canada and is subject to both federal and provincial income taxes for its business operations in Canada. The applicable tax rate is
United States
SonicHash US and Sonic Auspice are incorporated in the U.S. and are only subject to federal income taxes but no state income taxes as they did not conduct any business operations in Delaware. The applicable tax rate is
Singapore
SonicHash Singapore and Bit Origin SG are incorporated in Singapore and are subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. SonicHash Singapore was struck off on September 4, 2024 and had
F-24
Loss before provision for income taxes consisted of:
| | For the year | | For the year | | For the year | |||
| | ended | | ended | | ended | |||
| | June 30, 2026 | | June 30, 2025 | | June 30, 2024 | |||
Cayman | | $ | ( | | $ | ( | | $ | ( |
United States | |
| ( | |
| ( | |
| ( |
Canada | | | — | | | ( | | | ( |
Singapore | | | — | | | — | | | ( |
| | $ | ( | | $ | ( | | $ | ( |
The following table reconciles to the Group’s effective tax rate for the years ended June 30, 2026, 2025 and 2024:
| | For the year | | For the year | | | For the year | | ||||||||
| | ended | | ended | | | ended | | ||||||||
| | June 30, | | June 30, | | | June 30, | | ||||||||
| | 2026 | | 2025 | | | 2024 |
| ||||||||
| | Amount | | Effective tax rate | | Amount | | Effective tax rate | | Amount | | Effective tax rate | | |||
Income tax expense at Cayman statutory rate | | $ | — | | — | % | $ | — | | — | % | $ | — | | — | % |
Effect of foreign tax rates | | | |
| | | | | | | | | | | | |
United States | | | ( |
| | % | | ( | | | % | | ( | | | % |
Other foreign jurisdictions | | | — | | — | % | | | | ( | % | | ( | | | % |
Effect of changes in valuation allowance | | | |
| ( | % | | | | ( | % | | | | ( | % |
Total income tax expenses | | $ | — |
| — | % | $ | — | | — | % | $ | — | | — | % |
During the years ended June 30, 2026, 2025 and 2024, the Company did not make any income tax payments.
Significant components of deferred tax assets were as follows:
| | June 30, | | June 30, | ||
| | 2026 | | 2025 | ||
Deferred tax assets | | | | | | |
Net operating loss carryforward in the U.S. | |
| | |
| |
Net operating loss carryforward in Canada | | | | | | |
Net operating loss carryforward in Singapore | | | — | | | — |
Valuation allowance | | | ( | | | ( |
Total net deferred tax assets | | $ | — | | $ | — |
As of June 30, 2026, the Group’s net operating loss carry forward was approximately $
Uncertain tax positions
The Group evaluates uncertain tax positions based on the technical merits, that the position will be sustained upon examination by the relevant tax authority. As of June 30, 2026 and 2025, the Group had
F-25
Note 8 – Concentration of risks
Credit risk
Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash. The Group maintains its cash balances in various financial institutions located in different jurisdictions, including the United States and Singapore. In the U.S., the insurance coverage of each bank is $
There is a risk that some or all of the Group’s Dogecoin could be lost, stolen, or otherwise become inaccessible. The Group stores its Dogecoins in both hot and cold wallets with BitGo. Hot wallets, which are connected to the Internet, facilitate transactions but are more vulnerable to hacking and other cyber incidents. Cold wallets, which are kept offline, provide greater protection from external attacks but may result in delayed access to assets during market volatility and carry risks of internal error or misappropriation. The Group may maintain limited amounts of Dogecoin in internal operational wallets for transaction-processing purposes; however, the substantial majority of our digital-asset holdings are maintained in BitGo cold storage. BitGo also maintains commercial crime insurance covering certain losses relating to digital assets custodied with BitGo, subject to policy limits, conditions, and exclusions, which may not cover all potential losses.
The Group is also exposed to credit risk from its other receivables and loans receivable. These assets are subjected to credit evaluations. An allowance has been made for expected credit losses based on the historical experience, current conditions, and reasonable and supportable forecast.
Note 9 – Convertible debentures
Previously settled convertible debentures
The following convertible debentures were fully settled before June 30, 2025. The disclosures below summarize the material contractual terms and settlement activity relevant to the comparative periods presented.
2022 Debenture
In October 2022, the Company issued a convertible debenture with an original principal amount of $
During the year ended June 30, 2024, the Company repaid $
2023 Debenture
In December 2023, the Company issued a convertible debenture with an original principal amount of $
During the year ended June 30, 2024, the Company repaid $
F-26
Exchange Note
In May 2024, the Company issued a $
The Exchange Note bore interest at
| | June 30, | |
| | 2025 | |
Principal balance | | $ | |
Less: conversions into ordinary shares | | | ( |
Less: repayments in cash | | | ( |
Remaining balance | | | — |
Less: non-current | |
| — |
Total current | | $ | — |
Convertible debentures outstanding as of June 30, 2026
The Company’s convertible debentures outstanding as of June 30, 2026 consist of senior convertible debentures issued in July 2025, April 2026 and June 2026 (collectively, the “Debentures”). The Debentures bear interest at
2025 Debentures
In July 2025, pursuant to a securities purchase agreement authorizing the issuance of up to $
The 2025 Debentures bear interest at
April 2026 Debenture
In April 2026, pursuant to a securities purchase agreement authorizing the issuance of up to $
F-27
June 2026 Debenture
In June 2026, pursuant to a securities purchase agreement authorizing the issuance of up to $
The Company received aggregate net cash proceeds of approximately $
Fair value option
The Debentures contain conversion, anti-dilution, alternate-conversion, redemption and default provisions. At initial recognition, the Company elected the fair value option under ASC 825-10 for each Debenture and accounts for each instrument as a single hybrid financial liability rather than separately accounting for its embedded features. The FVO election is irrevocable for each Debenture.
The Debentures are initially and subsequently measured at fair value. Changes in fair value are recognized in earnings, except for the portion attributable to changes in instrument-specific credit risk, which is recognized in other comprehensive income in accordance with ASC 825. Transaction and issuance costs associated with the Debentures are recognized in earnings as incurred.
The fair value of the Debentures is estimated using a binomial valuation model and is classified within Level 3 of the fair value hierarchy because the valuation incorporates significant unobservable inputs, including expected volatility and assumptions related to the Company’s credit risk. Upon derecognition of all or a portion of a Debenture, the related cumulative amount previously recognized in accumulated other comprehensive income for instrument-specific credit risk is reclassified to earnings.
Upon issuance, the aggregate fair value of the Debentures exceeded the purchase price allocated to the Debentures by approximately $
Transaction and issuance costs associated with the Debentures are recognized in earnings as incurred and are not included in the fair value measurement. During the year ended June 30, 2026, the Company incurred approximately $
As of June 30, 2026, the aggregate fair value of the Debentures was $
| | 2026 | |
Day 1 loss on issuance | | $ | ( |
Subsequent change in fair value attributable to factors other than instrument-specific credit risk | |
| |
Reclassification of change in instrument-specific credit risk upon settlement | | | ( |
Net gain recognized in earnings | | $ | |
The Company does not present contractual interest expense separately for the Debentures; the economic effect of contractual interest is included within the change in fair value of the Debentures recognized in earnings. During the year ended June 30, 2026, the Company paid $
Initial measurement and Day 1 loss
The Debentures are recorded at their issuance-date fair value rather than contractual principal or net cash proceeds. In evaluating initial recognition, the Company separately considers the contractual principal amount, the purchase price allocated to each Debenture and its issuance-date fair value.
F-28
The following table summarizes the initial measurement of the Debentures issued during the year ended June 30, 2026:
| | | | | Issuance date fair | | | | |
| | Purchase price |
| | value | | Day 1 loss | ||
2025 Debentures | | $ | | | $ | | | $ | |
April 2026 Debenture | |
| | |
| | |
| |
June 2026 Debenture | |
| | |
| | |
| |
Total | |
| | | $ | | | $ | |
The aggregate issuance-date fair value of the Debentures exceeded the purchase price allocated to the Debentures by $
The contractual difference between principal and purchase price represents an original issue discount. Because the Debentures are measured in their entirety under the FVO and the Company does not separately present contractual interest expense, the contractual original issue discount is not separately accreted using the effective-interest method.
Fair value and unpaid principal balance
As of June 30, 2026, the aggregate unpaid principal balance and carrying amount of the Debentures were as follows:
| | June 30, | |
| | 2026 | |
Aggregate unpaid principal balance | | $ | |
Aggregate fair value carrying amount | |
| |
Excess of unpaid principal over fair value | | $ | |
The fair value carrying amount includes contractual interest accrued but unpaid as of June 30, 2026.
Conversions
During the year ended June 30, 2026, holders converted an aggregate principal amount of $
Immediately prior to each conversion, the portion of the related Debenture being converted was remeasured to fair value. The aggregate fair value carrying amount of the obligations derecognized upon conversion was $
In August and September 2026, holders converted an aggregate principal amount of $
The Company made
F-29
Note 10 – Fair value measurements
The Group measures certain financial instruments at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement. The following table presents the Group’s financial liabilities measured at fair value on a recurring basis as of June 30, 2026:
| | Fair Value Measurement on a Recurring Basis at Reporting Date Using | ||||||||||
| | Level-1 Inputs | | Level-2 Inputs | | Level-3 Inputs | | Total | ||||
June 30, 2026 |
| | |
| | |
| | |
| | |
2025 Debentures | | $ | — | | $ | — | | $ | | | $ | |
April 2026 Debenture | |
| — | |
| — | |
| | |
| |
June 2026 Note | |
| — | |
| — | |
| | |
| |
Total | | $ | — | | $ | — | | $ | | | $ | |
The Debentures are measured in their entirety at fair value under the fair value option described in Note 9. The Debentures are classified within Level 3 of the fair value hierarchy because their valuation incorporates significant unobservable inputs, including expected volatility and assumptions related to the Company’s instrument-specific credit risk.
The Company uses a binomial valuation model that incorporates the contractual terms of each Debenture, including the contractual cash flows, conversion features, price-adjustment provisions and redemption features, together with market-based and unobservable inputs such as the Company’s Class A Ordinary Share price, expected volatility, risk-free interest rates, remaining contractual term and assumptions related to the Company’s credit risk. There were
As of June 30, 2026, the aggregate clean fair value of the Debentures was $
The following table presents a reconciliation of the beginning and ending balances of the Debentures, which are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs, for the year ended June 30, 2026:
| | Amount | |
Opening balance on June 30, 2025 | | $ | — |
Add: issuance at initial fair value | |
| |
Less: cash interest payments | |
| ( |
Less: accrued interest settled upon conversion | |
| ( |
Less: fair value of principal settled through conversion | |
| ( |
Subsequent change in fair value attributable to factors other than instrument-specific credit risk | |
| ( |
|
| ( | |
Closing balance on June 30, 2026 | | $ | |
The following table summarizes the significant inputs used in measuring the fair value of the Debentures on issuance date:
| | 2025 Debentures | | April 2026 Debenture | | June 2026 Debenture |
| |||
Class A Ordinary Share price |
| $ | |
| $ | |
| $ | | |
Credit-adjusted discount rate |
| | % | | | % | | | % | |
Remaining term (years) |
| | |
| | |
| | | |
Expected volatility |
| | % | | | % | | | % | |
Dividend yield |
| | — |
| | — |
| | — | |
Risk-free interest rate |
| | | % | | | % | | | % |
F-30
The following table summarizes the significant inputs used in measuring the fair value of the Debentures on June 30, 2026:
| | 2025 Debentures | | April 2026 Debenture | | June 2026 Debenture |
| |||
Class A Ordinary Share price |
| $ | |
| $ | |
| $ | | |
Credit-adjusted discount rate |
| | % | | | % | | | % | |
Remaining term (years) |
| | 3.04~3.09 |
| | |
| | | |
Expected volatility |
| | % | | | % | | | % | |
Dividend yield |
| | — |
| | — |
| | — | |
Risk-free interest rate |
| | | % | | | % | | | % |
Note 11 – Equity
Share capital and changes in authorized shares
The Company’s authorized share capital and issued and outstanding shares have been affected by a series of share capital restructurings, including a
On July 25, 2025, the Company completed a reduction in the par value of its ordinary shares from $
On January 20, 2026, the Company effected a -for-60 reverse share split of its Class A and Class B Ordinary Shares to maintain compliance with Nasdaq listing requirements.
On August 11, 2026, the Company completed an increase in authorized share capital from
On August 21, 2026, the Company effected a -for-5 reverse share split of its Class A and Class B Ordinary Shares to maintain compliance with Nasdaq listing requirements.
As of June 30, 2026, after giving effect to the reverse share splits in January 2026 and August 2026, the Company had
Direct offering and private placement
On November 7, 2023 and November 9, 2023, the Company entered into securities purchase agreements with investors for the sale of
Mezzanine equity
In August 2025, the Company completed a private placement with multiple investors pursuant to securities purchase agreements under which the Company issued Class A Ordinary Shares for aggregate consideration of $
F-31
The securities purchase agreements provide each investor with a conditional right to require the Company to redeem a portion of the Dogecoin originally transferred to the Company in exchange for the investor’s unsold purchased shares. The redemption right generally becomes exercisable around the 12-month anniversary of the closing date, provided the investor has continued to hold the applicable purchased shares, and is subject to a share-price-based knockout provision. Upon exercise, the applicable shares are surrendered to and cancelled by the Company, and the Company is required to return the corresponding quantity of Dogecoin determined under the contractual redemption formula.
The Class A Ordinary Shares subject to the redemption feature are classified outside permanent shareholders’ equity as temporary equity in accordance with ASC 480-10-S99-3A because redemption is at the holder’s option and is subject to conditions that are not solely within the Company’s control.
The Company adjusts the carrying amount of the redeemable shares to their redemption value when redemption becomes probable. As of June 30, 2026, redemption was assessed as probable; however, the aggregate redemption value of approximately $
| | Amount | |
Balance, June 30, 2025 | | $ | — |
Issuance of potential redeemable Class A Ordinary Shares | |
| |
Accretion to redemption value | |
| — |
Balance, June 30, 2026 | | $ | |
Subsequent to June 30, 2026, the 12-month anniversary of the offering occurred and the Company received redemption notices from investors with respect to shares that remained eligible for redemption. Under the terms of the securities purchase agreements, the applicable shares are required to be surrendered and cancelled upon settlement of the corresponding Dogecoin redemption. As of the date these consolidated financial statements were issued, settlement of the related redemptions, including the return of Dogecoin and cancellation of the applicable shares, had not yet been completed.
Restricted shares issued for compensation
The Company granted RSUs to several management team members during the fiscal years of 2024 and 2023.
Shares issued for settlement of accrued compensation
On June 11, 2026, the Company entered into a debt settlement and mutual release agreement with Mr. Jinghai Jiang, the Company’s Chief Executive Officer, Chief Operating Officer, Chairman of the Board and a director, to settle $
Warrants
The Company issued warrants in connection with prior financing arrangements. Certain outstanding warrants are subject to contractual anti-dilution and down-round provisions that may adjust the exercise price and, in certain circumstances, the number of shares issuable upon exercise. All warrant-related share and per-share information has been retrospectively adjusted for the reverse share splits. Certain warrants contain down-round protection features that provide for adjustments to the exercise price and the number of shares issuable upon exercise if the Company issues equity instruments at a price lower than the then-current exercise price. During the years ended June 30, 2026 and 2025, such down-round provisions were triggered, resulting in a reduction in the exercise price (as retrospectively adjusted for the reverse share splits) and a corresponding increase in the number of warrants outstanding. The fair value effect of the down-round adjustment was recognized in equity as a reclassification between retained earnings and additional paid-in capital in accordance with ASC 260-10-55-97 and was treated as a deemed dividend for purposes of earnings per share.
F-32
Pre-funded warrants
On June 28, 2026, in connection with the PTMMS transaction described in Note 5, the Company issued pre-funded warrants with an aggregate issuance-date fair value of approximately $
The pre-funded warrants have different terms from the Company’s warrants, including a nominal exercise price and no expiration date, and are accordingly presented separately below. The summary of pre-funded warrant activity is as follows:
| | | | | | | Weighted | | Average |
| | | | | | | Average | | Remaining |
| | Warrants | | Exercisable | | Exercise | | Contractual | |
| | Outstanding | | Shares | | Price | | Life | |
June 30, 2025 |
| |
| | | $ | |
| |
Issuance |
| |
| | | $ | |
| |
Exercised |
| |
| | | $ | |
| |
June 30, 2026 |
| |
| | | $ | |
| |
Warrants
During the years ended June 30, 2025 and 2026, a significant portion of the warrants were exercised on a cashless basis. As a result, the Company issued Class A Ordinary Shares with no corresponding cash proceeds, and the carrying amount of the related warrants was reclassified within shareholders’ equity. The impact of such exercises has been reflected in the Company’s equity balances as of June 30, 2025 and 2026.
The summary of warrant activities is as follows:
| | | | | | Weighted | | Average | |
| | | | | | Average | | Remaining | |
| | Warrants | | Exercisable | | Exercise | | Contractual | |
| | Outstanding | | Shares |
| Price |
| Life | |
June 30, 2023 |
| |
| | | $ | |
| |
Granted/Acquired | | | | | | $ | | | |
Cancellation (see Note 9) | | ( | | ( | | $ | | | |
Exercised | | ( | | ( | | $ | | | |
June 30, 2024 | | | | | | $ | | | |
Granted/Acquired | | | | | | $ | | | |
Adjustment on down-round feature* | | | | | | $ | | | |
Forfeited | | ( | | ( | | $ | | | |
Exercised | | ( | | ( | | $ | | | |
June 30, 2025 | | | | | | $ | | | |
Granted/Acquired | | | | | | $ | | | |
Adjustment on down-round feature* | | | | | | $ | | | |
Exercised | | ( | | ( | | $ | | | |
June 30, 2026 |
| | | | | $ | | | |
* Certain warrants issued in prior financing arrangements contain anti-dilution and down-round provisions that adjust the exercise price, in certain circumstances, the number of shares issuable upon exercise. During the years ended June 30, 2025 and 2026, this down-round feature was triggered. The fair value effect of the down-round adjustment was recognized within equity as a reclassification between retained earnings and additional paid-in capital in accordance with ASC 260-10-55-97, and was treated as a deemed dividend excluded from the numerator of basic earnings per share.
F-33
Note 12 – Segment reporting
The Group operates as a reportable segment. The Group’s CODM, who is the Chief Executive Officer, reviews financial information prepared on a consolidated basis for purposes of allocating resources and assessing financial performance.
The measure of segment profit or loss reviewed by the CODM is consolidated net loss, which is consistent with the corresponding amount presented in the consolidated statements of operations and comprehensive loss. The CODM uses this measure, together with information regarding significant operating expenses, liquidity and capital deployment, to assess performance and make resource allocation decisions.
Significant segment expenses regularly provided to the CODM include general and administrative expenses, professional and consulting fees, fair value changes on convertible debentures, and other material expense categories regularly reviewed by the CODM. Other segment items represent the difference between segment revenues less significant segment expenses and the reported measure of segment profit or loss.
The Group’s segment assets are substantially represented by the consolidated assets reported in the consolidated balance sheets. Because the Group operates as a single reportable segment, the segment information is presented on the same basis as the consolidated financial statements.
Note 13 – Commitments and contingencies
Commitments
As of June 30, 2026, the Group had no material commitments requiring disclosure.
Contingencies
In March 2023, the Company and SonicHash US, together with other defendants, were named in litigation brought by BCB Cheyenne LLC in connection with alleged contractual interference and related claims. BCB sought compensatory damages of no less than $
In October 2024, the parties entered into a Settlement Agreement and Mutual Release pursuant to which the Company agreed to pay $
As of June 30, 2026, this matter had been fully resolved, and the Group was not subject to any other material legal proceedings, claims or contingencies requiring disclosure.
Note 14 – Subsequent events
The Group has evaluated all events and transactions that occurred after June 30, 2026 up through September 18, 2026, except for those disclosed in the respective notes to these consolidated financial statements and those describe below, no other subsequent events occurred that would require recognition or disclosure in the consolidated financial statements.
In July 2026, the Board of the Group approved a bonus of $
F-34
Exhibit 1.1
The Companies Act
(As Revised)
Company Limited by Shares
Eighth Amended and Restated
Memorandum of Association
of
Sangrix Inc.
(Adopted by Special Resolution passed on August 11, 2026)
1. | The name of the Company is Sangrix Inc.. |
2. | The registered office will be situate at the offices of McGrath Tonner Corporate Services Limited, Genesis Building, 5th Floor, Genesis Close, PO Box 446, Grand Cayman, Cayman Islands, KY1-1106 or at such other place in the Cayman Islands as the Directors may from time to time decide. |
3. | The objects for which the Company is established are unrestricted and the Company shall have full power to carry out any object not prohibited by any law as provided by Section 7 (4) of the Companies Act (Revised). |
4. | Except as prohibited or limited by the laws of the Cayman Islands, the Company shall have full power and authority to carry out any object and shall have and be capable of from time to time and at all times exercising any and all of the powers at any time or from time to time exercisable by a natural person or body corporate in any part of the world whether as principal, agent, contractor or otherwise. |
5. | The Company shall not be permitted to carry on any business where a licence is required under the laws of the Cayman Islands to carry on such a business until such time as the relevant licence has been obtained. |
6. | If the Company is an exempted company, its operations will be carried on subject to the provisions of Section 174 of the Companies Act (Revised). |
7. | The liability of each Member is limited to the amount from time to time unpaid on such member’s share. |
8. | The authorised share capital of the Company is US$60,000,000 divided into 200,000,000,000 shares of par value US$0.0003 each, comprising of 190,000,000,000 Class A ordinary shares of par value US$0.0003 each and 10,000,000,000 Class B ordinary shares of par value US$0.0003 each, with the power for the Company to increase or reduce the said capital and to issue any part of its capital, original or increased, with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions; and so that, unless the condition of issue shall otherwise expressly declare, every issue of shares, whether declared to be preference or otherwise, shall be subject to the power hereinbefore contained. |
The Companies Act
(As Revised)
Company Limited by Shares
Eighth Amended and Restated
Articles of Association
of
Sangrix Inc.
(Adopted by Special Resolution passed on August 11, 2026)
1. | The Regulations contained or incorporated in Table A of the First Schedule of the Act (as defined below) shall not apply to this Company. |
INTERPRETATION
2.(a)In these Articles the following terms shall have the meanings set opposite unless the context otherwise requires:-
Articles | these Articles of Association as from time to time amended by Special Resolution |
| |
Auditors | the Auditors for the time being of the Company, if any |
| |
Class A Ordinary Share | a Class A ordinary share in the capital of the Company, having the rights provided for in these Articles |
| |
Class B Ordinary Share | a Class B ordinary share in the capital of the Company, having the rights provided for in these Articles |
| |
Company | Sangrix Inc. |
| |
Directors | the directors of the Company for the time being or, as the case may be, the directors assembled as a board |
| |
the Act | the Companies Act (Revised) of the Cayman Islands and any amendment or other statutory modification thereof and where in these Articles any provision of the Act is referred to, the reference is to that provision as modified by law for the time being in force |
| |
Member | a person who is registered in the Register of Members as the holder of any Share in the Company |
| |
Month | a calendar month |
| |
Ordinary Resolution | a resolution passed by a simple majority of the votes of such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting, or a written resolution signed by all Members entitled to vote at a general meeting |
| |
Registered Office | the registered office of the Company as provided in Section 50 of the Act |
Register of Members | the register of Members to be kept pursuant to section 40 of the Act |
| |
Secretary | any person appointed by the Directors to perform any of the duties of the secretary of the Company and including any assistant secretary |
| |
Seal | the common seal of the Company or any facsimile for official seal for use outside of the Cayman Islands |
| |
Share | a share of any class in the capital of the Company |
| |
Special Resolution | a resolution passed by a majority of at least two-thirds of the votes of such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given, or a written resolution signed by all Members entitled to vote at a general meeting and otherwise in accordance with Section 60 of the Act |
(b) | Unless the context otherwise requires, expressions defined in the Act and used herein shall have the meanings so defined. |
(c) | In these Articles unless the context otherwise requires:- |
(i) | words importing the singular number shall include the plural number and vice-versa; |
(ii) | words importing the masculine gender only shall include the feminine gender; and |
(iii) | words importing persons only shall include companies or associations or bodies of persons whether incorporated or not. |
(d) | The headings herein are for convenience only and shall not affect the construction of these Articles. |
3.(a)Subject to the provisions, if any, in that behalf in the Memorandum of Association, and without prejudice to any special rights previously conferred on the holders of existing Shares, any Share may be issued with such preferred, deferred, or other special rights, or such restrictions, whether in regard to dividend, voting, return of Share capital or otherwise, as the Company may from time to time by Special Resolution determine, and subject to the provisions of section 3 7 of the Act, any Share may, with the sanction of a Special Resolution, be issued on the terms that it is, or at the option of the Company or the holder is liable, to be redeemed.
(b) | If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied with the consent in writing of the holders of three-fourths of the issued Shares of that class or with the sanction of a resolution passed by not less than three-fourths of such holders of the Shares of that class as may be present in person or by proxy at a separate general meeting of the holders of the Shares of that class. To every such separate general meeting, the provisions of these Articles relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be any one or more persons holding or representing by proxy not less than one-third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll. |
4.(a)Every person whose name is entered as a Member in the Register of Members shall, without payment, be entitled to a certificate under the seal of the Company specifying the Share or Shares held by him and the amount paid up thereon, provided that in respect of a Share or Shares held jointly by several persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all.
(b) | If a Share certificate is defaced, lost or destroyed it may be renewed on payment of such fee, if any, and on such terms, if any, as to evidence and indemnity, as the Directors think fit. |
5. | Except as required by law, no person shall be recognised by the Company as holding any Share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or actual interest in any Share (except only as by these Articles or by law otherwise provided or under an order of a court of competent jurisdiction) or any other rights in respect of any Share except an absolute right to the entirety thereof in the registered holder, but the Company may in accordance with the Act issue fractions of Shares. |
6. | The Shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Act) allot, grant options over, or otherwise dispose of them to such persons, on such terms and conditions, and at such times as they think fit, but so that no Share shall be issued at a discount, except in accordance with the provisions of the Act. |
LIEN
7. | The Company shall have a first and paramount lien on every Share (not being a fully paid Share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that Share, and the Company shall also have a lien on all Shares (other than fully paid-up Shares) standing registered in the name of a single person for all moneys presently payable by him or his estate to the Company; but the Directors may at any time declare any Share to be wholly or in part exempt from the provision of this Article. The Company’s lien, if any, on a Share shall extend to all dividends payable thereon. |
8. | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the persons entitled thereto by reason of his death or bankruptcy. |
9. | For giving effect to any such sale, the Directors may authorise some person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. |
10. | The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the person entitled to the Shares at the date of the sale. |
CALLS ON SHARES
11. | The Directors may from time to time make calls upon the Members in respect of any moneys unpaid on their Shares provided that no call shall be payable earlier than one month from the last call; and each Member shall (subject to receiving at least fourteen days, notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on his Shares. |
12. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
13. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at the rate of six per cent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
14. | The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
15. | The Directors may make arrangements on the issue of Shares for a difference between the holders in the amount of calls to be paid and in the times of payment. |
16. | The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the moneys uncalled and unpaid upon any Shares held by him; and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction at the Company in general meeting six per cent per annum) as may be agreed upon between the Member paying the sum in advance and the Directors. |
FORFEITURE OF SHARES
17. | If a Member fails to pay any call or installment of a call on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of such call or installment remains unpaid, serve a notice on him requiring payment of so much of the call or installment as is unpaid, together with any interest which may have accrued. |
18. | The notice shall name a further day (not earlier than the expiration of fourteen days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited. |
19. | If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. |
20. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the Directors think fit. |
21. | A person whose Shares have been forfeited shall cease to be a Member in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares, but his liability shall cease if and when the Company receives payment in full of the amount due on the Shares. |
22. | A statutory declaration in writing that the declarant is a Director of the Company, and that a Share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the Share. The Company may receive the consideration, if any, given for the Share on any sale or disposition thereof and may execute a transfer of the Share in favour of the person to whom the Share is sold or disposed of and he shall thereupon be registered as the holder of the Share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share. |
23. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had been made payable by virtue of a call duly made and notified. |
TRANSFER AND TRANSMISSION OF SHARES
24. | The instrument of transfer of any Share shall be executed by or on behalf of the transferor (but need not be executed by or on behalf of the transferee unless the Share has been issued nil paid), and the transferor shall be deemed to remain a holder of the Share until the name of the transferee is entered in the Register of Members in respect thereof. |
25. | Shares shall be transferred in the following form, or in any usual or common form approved by the Directors: |
I, _____________ of ____________ in consideration of the sum of $____ paid to me by _____________ of ______________ (hereinafter called “the Transferee”) do hereby transfer to the Transferee the __ Share (or Shares) numbered __ in the Company called [ ], to hold the same unto the Transferee, subject to the several conditions on which I hold the same.
As witness our hands on the ______ day of __________ 20____.
______________________________________
Transferor
26. | The Directors may, in their absolute discretion and without assigning any reason therefore decline to register any transfer of Shares to a person of whom they do not approve. The Directors may also suspend the registration of transfers at such times and for such periods (not exceeding thirty days in aggregate in each year) as the Directors may from time to time determine. The Directors may decline to recognise any instrument of transfer unless (a) a fee not exceeding one dollar is paid to the Company in respect thereof, and (b) the instrument of transfer is accompanied by the certificate of the Shares to which it relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. |
If the Directors refuse to register a transfer of Shares, they shall within one month after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal.
27. | The legal personal representative of a deceased sole holder of a Share shall be the only person recognised by the Company as having any title to the Share. In case of a Share registered in the names of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only persons recognised by the Company as having any title to the Share. |
28. | Any person becoming entitled to a Share in consequence of the death or bankruptcy of a Member shall upon such evidence being produced as may from time to time be properly required by the Directors, have the right either to be registered as a Member in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt person before the death or bankruptcy. |
29. | A person becoming entitled to a Share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the Share, except that he shall not, before being registered as a Member in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company. |
CONVERSION OF SHARES INTO STOCK
30. | The Company may by ordinary Resolution convert any paid-up Shares into stock, and reconvert any stock into paid-up Shares of any denomination. |
31. | The holders of stock may transfer the same, or any part thereof in the same manner and subject to the same regulations as and subject to which the Shares from which the stock arose might prior to conversion have been transferred, or as near thereto as circumstances admit; but the Directors may from time to time fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of that minimum, but the minimum shall not exceed the nominal amount of the Shares from which the stock arose. |
32. | The holders of stock shall, according to the amount of the stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company and other matters as if they held the Shares from which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of the Company) shall be conferred by any such aliquot part of stock as would not, if existing as Shares, have conferred that privilege or advantage. |
33. | Such of the Articles of the Company as are applicable to paid-up Shares shall apply to stock, and the words “Share” and “Member” herein shall include “stock” and “stock-holder”. |
ALTERATION OF CAPITAL
34. | The Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such amount, as the resolution shall prescribe. |
35. | Subject to any direction to the contrary that may be given by the Company in general meeting, all new Shares shall be at the disposal of the Directors in accordance with Article 6. |
36. | The new Shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. |
37. | The Company may by Ordinary Resolution: |
(a) | consolidate and divide all or any of its Share capital into Shares of larger amount than its existing Shares; |
(b) | sub-divide its existing Shares, or any of them, into Shares of smaller amount than is fixed by the Memorandum of Association, subject nevertheless to the provisions of section 13 of the Act; and |
(c) | cancel any Shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person. |
37A.Subject to the Companies Act, the Company may by Special Resolution from time to time reduce its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may:
(a) | cancel any paid-up share capital which is lost, or which is not represented by available assets; or |
(b) | pay off any paid-up share capital which is in excess of the requirements of the Company, |
and may, if and so far as is necessary, alter the Memorandum of Association by reducing the amounts of its share capital and of its Shares accordingly.
38. | Subject to the provisions of the Act and the Memorandum of Association, the Company may purchase its own Shares, including any redeemable Shares, provided that the manner of purchase has first been authorised by Ordinary Resolution or by resolution of the Directors and may make payment therefor or for any redemption of Shares in any manner authorised by the Act, including out of capital. |
RIGHTS OF CLASS A ORDINARY SHARES AND CLASS B ORDINARY SHARES
39. | Except as otherwise provided in these Articles, holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Shareholders. At any general meeting, each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall entitle the holder thereof to twenty (20) votes on all such matters. |
40. | Each Class A Ordinary Share confers upon the holder thereof the right to receive dividends as provided for in these Articles. Class B Ordinary Shares do not confer upon the holders thereof any rights to receive dividends. |
41. | Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one for one basis at the option of the holder of such Class B Ordinary Shares, provided that the applicable conversion ratio for Class B Ordinary Shares shall be adjusted to account for (i) any subdivision (by share split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class A Ordinary Shares in issue into a greater or lesser number of shares occurring after the adoption of these Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Ordinary Shares in issue, and (ii) any subdivision (by share split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class B Ordinary Shares in issue into a greater or lesser number of shares occurring after the adoption of these Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class A Ordinary Shares in issue. References in this Article 41 to “convert” (or similar terms) shall mean the compulsory redemption without notice of Class B Ordinary Shares of any shareholder and, on behalf of such shareholder, automatic application of such redemption proceeds in paying for such new Class A Ordinary Shares into which the Class B Ordinary Shares have been converted at a price per Class B Ordinary Share necessary to give effect to a conversion calculated on the basis that the Class A Ordinary Shares to be issued as part of the conversion will be issued at par. |
42. | Except as set out in the preceding Articles 39, 40 and 41, the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions. |
STATUTORY MEETINGS
43.If required by the Act the Directors shall hold at least one Directors’ meeting in the Cayman Islands in each calendar year.
GENERAL MEETINGS
44. | The Directors may whenever they think fit, convene a general meeting. If at any time there are not sufficient Directors capable of acting to form a quorum, any Director, or any one or more Members holding Shares representing in the aggregate not less than one-third of the total voting rights of all of the issued Shares entitled to vote, may convene a general meeting in the same manner as nearly as possible as that in which meetings may be convened by the Directors. The Directors shall, upon the requisition in writing of one or more Members holding Shares representing in the aggregate not less than one-tenth of the total voting rights of all of the issued Shares as at the date of the requisition carries the right of voting at general meetings, convene a general meeting. Any such requisition shall express the object of the meeting proposed to be called, and shall be left at the Registered Office of the Company. If the Directors do not proceed to convene a general meeting within twenty-one days from the date of such requisition being left as aforesaid, the requisitionists or any or either of them or any other Member or Members holding Shares representing in the aggregate not less than one-tenth of the total voting rights of all of the issued Shares as at the date of the requisition carries the right of voting at general meetings, may convene a general meeting to be held at the Registered Office of the Company or at some convenient place within the Cayman Islands at such time, subject to the Company’s Articles as to notice, as the persons convening the meeting fix. |
45. | Not less than seven days notice (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) specifying the place, the day and the hour of meeting and, in the case of special business, the general nature of that business shall be given in manner hereinafter provided, or in such other manner (if any) as may be prescribed by the Company in general meeting, to such persons as are entitled to vote or may otherwise be entitled under the Articles of the Company to receive such notices from the Company; but with the consent of all the Members entitled to receive notice of some particular meeting, that meeting may be convened by such shorter notice or without notice and in such manner as those Members may think fit. |
46. | The accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by, any Member entitled to receive notice shall not invalidate the proceedings at any meeting. |
47.(a)No business shall be transacted at any general meeting unless a quorum of Members is present at the time that the meeting proceeds to business; save as herein otherwise provided, one or more Members holding Shares representing in the aggregate not less than one-third of the total voting rights of all of the issued Shares entitled to vote present in person or by proxy and entitled to vote shall be a quorum.
(b) | An Ordinary Resolution or a Special Resolution (subject to the provisions of the Act) in writing signed by all the Members for the time being entitled to receive notice of and to attend and vote at general meetings, (or being corporations by their duly authorised representatives) including a resolution signed in counterpart by or on behalf of such Members or by way of signed telefax transmission, shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
48. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the Members present shall be a quorum. |
49. | The chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company. |
50. | If there is no such chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Members present shall choose one of their number to be chairman. |
51. | The chairman may with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
52. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting, by a resolution of the Directors or by one or more Members present in person or by a proxy who together hold Shares representing not less than fifteen per cent of the total voting rights of all of the issued Shares entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution. |
53. | If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
54. | In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote. |
55. | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
VOTES OF MEMBERS
56. | On a show of hands every Member present in person or by proxy and entitled to vote shall have one vote and on a poll every Member entitled to vote shall have one (1) vote for each Class A Ordinary Share of which he is the holder and twenty (20) votes for each Class B Ordinary Share of which he is the holder. |
57. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members. |
58. | A Member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee or other person in the nature of a committee appointed by that court, and any such committee or other person may vote by proxy. |
59. | No Member shall be entitled to vote at any general meeting, unless all calls or other sums presently payable by him in respect of Shares in the Company have been paid. |
60. | On a poll votes may be given either personally or by proxy. |
61. | The instrument appointing a proxy shall be in writing under the hand of the Member or, if the Member is a corporation, either under seal or under the hand of a director or officer or attorney duly authorised. A proxy need not be a Member of the Company. |
62. | The instrument appointing a proxy shall be deposited at the Registered Office of the Company or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid PROVIDED THAT the chairman of the meeting may in his discretion accept an instrument of proxy sent by telex or telefax upon receipt of telex or telefax confirmation that the signed original thereof has been sent. |
63. | An instrument appointing a proxy may be in the following form or any other form approved by the Directors: |
[ ]
I, __________________________, of _______________________, hereby appoint __________________________ of _______________________ as my proxy, to vote for me and on my behalf at the general meeting of the Company to be held on the ______ day of ________________, 20___.
Signed this ______ day of ________________________, 20___.
64.The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETING
65. | Any corporation which is a Member of the Company may by resolution of its Directors or any committee of the Directors authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Member of the Company. |
DIRECTORS AND OFFICERS
66.(a)The names of the first Directors shall be determined in writing by the subscribers of the Memorandum of Association.
(b) | Notwithstanding any provision in these Articles to the contrary, a sole Director shall be entitled to exercise all of the powers and functions of the Directors which may be conferred on them by the Act or by these Articles. |
67. | The remuneration of the Directors shall from time to time be determined by the Company in general meeting or by resolution of the Directors or any committee of the Directors. The Directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. |
68. | No shareholding qualification shall be required for Directors unless otherwise required by the Company by Ordinary Resolution. |
69. | Any Director may in writing appoint another person who is approved by the majority of the Directors to be his alternate to act in his place at any meeting of the Directors at which he is unable to be present. Every such alternate shall be entitled to notice of meetings of the Directors and to attend and vote there at as a Director when the person appointing him is not personally present, and where he is a Director, to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time, in writing, revoke the appointment of an alternate appointed by him and such appointment shall be revoked automatically if the appointor of the alternate ceases to be a Director at any time. Every such alternate shall be an officer of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. |
70. | The Directors may by resolution, appoint one of their number to be President upon such terms as to duration of office, remuneration and otherwise as they may think fit. |
71. | The Directors may also by resolution appoint a Secretary and such other officers as may from time to time be required upon such terms as to duration of office, remuneration and otherwise as they may think fit. Such Secretary or other officers need not be Directors and in the case of the other officers may be ascribed such titles as the Directors may decide. |
POWERS AND DUTIES OF DIRECTORS
72. | The business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all such powers of the Company as are not, by the Act or these Articles, required to be exercised by the Company in general meeting, subject, nevertheless, to any clause of these Articles, to the provisions of the Act, and to such regulations, being not inconsistent with the aforesaid clauses or provisions, as may be prescribed by the Company in general meeting but no regulation made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made. |
73. | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. |
74.(a)The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him.
(b) | The Directors may delegate any of the powers exercisable by them to a Managing Director or any other person or persons acting individually or jointly as they may from time to time by resolution appoint upon such terms and conditions (including without limitation as to duration of office and remuneration) and with such restrictions as they may think fit, and may from time to time by resolution revoke, withdraw, alter or vary all or any such powers. |
(c) | All cheques promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine. |
75. | The Directors shall cause minutes to be prepared:- |
(a) | of all appointments of officers made by the Directors; |
(b) | of the names of the Directors present at each meeting of the Directors and of any committee of the Directors; |
(c) | of all resolutions and proceedings at all meetings of the Members of the Company and of the Directors and of committees of Directors; and the chairman of all such meetings or of any meeting confirming the minutes thereof shall sign the same. |
DISQUALIFICATION AND CHANGES OF DIRECTORS
76. | The office of Director shall be vacated if the Director:- |
(a) | becomes bankrupt or makes any arrangement or composition with his creditors generally; or |
(b)is found to be or becomes of unsound mind; or
(c)resigns his office by notice in writing to the Company.
77. | The number of Directors shall be not less than one, nor unless the Company in general meeting may otherwise determine, more than ten. |
78. | Any casual vacancy occurring in the Board of Directors may be filled by the Directors. |
79. | The Company may by Ordinary Resolution or by resolution of the Directors at any time, and from time to time, appoint a person as an additional Director or persons as additional Directors. |
80. | The Company may by Ordinary Resolution or by resolution of the Directors remove a Director before the expiration of his period of office, and may by Ordinary Resolution or by resolution of the Directors appoint another person in his stead. |
PROCEEDINGS OF DIRECTORS
81. | The Directors may meet together (either within or without the Cayman Islands) for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings, as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. |
82. | A Director or alternate Director may, and the Secretary on the requisition of a Director or alternate Director shall, at any time, summon a meeting of Directors by at least five days notice in writing to every Director and alternate Director which notice shall set forth the general nature of the business to be considered PROVIDED HOWEVER that notice may be waived by all the Directors (or their alternates) either at, before or after the meeting is held PROVIDED FURTHER that notice or waiver thereof may be given by telex or telefax. |
83. | The quorum necessary for the transaction of the business of the Directors, may be fixed by the Directors and unless so fixed by the Directors, shall be two Directors save where the subscriber of the Memorandum of Association or the Members in general meeting have appointed a sole Director when such Director acting alone shall constitute a quorum. For the purpose of this Article, an alternate appointed by a Director shall be counted in a quorum at a meeting at which the Director appointing him is not present. |
84. | The continuing Directors may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below the number fixed by or pursuant to the Articles of the Company as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose. |
85. | Any Director or officer may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or officer PROVIDED THAT nothing herein contained shall authorise a Director or officer or his firm to act as Auditor of the Company. |
86. | No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director or alternate Director holding office or of the fiduciary relation thereby established. A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is so interested as aforesaid PROVIDED HOWEVER that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him or the alternate Director appointed by him at or prior to its consideration and any vote thereon and a general notice that a Director or alternate Director is a shareholder of any specified firm or company and/or is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure hereunder and after such general notice it shall not be necessary to give special notice relating to any particular transaction. |
87. | The Directors may elect a chairman of their meetings and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting. |
88. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Directors. |
89. | A committee may elect a chairman of its meetings; if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting. |
90. | A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present and in case of an equality of votes the chairman shall not have a second or casting vote. |
91. | All acts done by any meeting of the Directors or of a committee of Directors, or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. |
92. | Upon the Directors (being in number at least a quorum) signing the minutes of a meeting of the Directors the same shall be deemed to have been duly held notwithstanding that the Directors have not actually come together or that there may have been a technical defect in the proceedings. A resolution signed by all such Directors, including a resolution signed in counterpart by the Directors or by way of signed telefax transmission, shall be as valid and effectual as if it had been passed at a meeting of the Directors duly called and constituted. To the extent permitted by law, the Directors may also meet by telephone conference call where all Directors are capable of speaking to and hearing the other Directors at the same time. |
SEALS AND DEEDS
93.(a)If the Directors determine that the Company shall have a common Seal, the Directors shall provide for the safe custody of the common Seal and the common Seal of the Company shall not be affixed to any instrument except by the authority of a resolution of the Directors, and in the presence of a Director and of the Secretary or, in place of the Secretary, by such other person as the Directors may appoint for the purpose; and that Director and the Secretary or other person as aforesaid shall sign every instrument to which the common Seal of the Company is so affixed in their presence. Notwithstanding the provisions hereof, annual returns and notices filed under the Act may be executed either as a deed in accordance with the Act or by the common Seal being affixed thereto in either case without the authority of a resolution of the Directors by one Director or the Secretary.
(b) | The Company may maintain a facsimile of any common Seal in such countries or places as the Directors shall appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of the Directors and in the presence of such person or persons as the Directors shall for this purpose appoint and such person or persons as aforesaid shall sign every instrument to which the facsimile Seal of the Company is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the common Seal had been affixed in the presence of and the instrument signed by a Director and the Secretary or such other person as the Directors may appoint for the purpose. |
(c) | In accordance with the Act, the Company may execute any deed or other instrument which would otherwise be required to be executed under Seal by the signature of such deed or instrument as a deed by two Directors of the Company or where there is a Sole Director of the Company, by such Sole Director, or by a Director and the Secretary of the Company or, in place of the Secretary, by such other person as the Directors may appoint or by any other person or attorney on behalf of the Company appointed by a deed or other instrument executed as a deed by two Directors of the Company, or a Sole Director or by a Director and the Secretary or such other person as aforesaid. |
DIVIDENDS AND RESERVE
94. | The Company may by Ordinary Resolution or by resolution of the Directors declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
95. | The Directors may from time to time pay to the Members interim dividends. |
96. | No dividend shall be paid otherwise than out of profits or out of monies otherwise available for dividend in accordance with the Act. |
97. | Subject to the rights of persons, if any, entitled to Shares with special rights as to dividends, all dividends on any class of Shares not fully paid shall be declared and paid according to the amounts paid on the Shares of that class, but if and so long as nothing is paid up on any of the Shares in the Company, dividends may be declared and paid according to the number of Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this article as paid on the Share. |
98. | The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for meeting contingencies, or for equalising dividends, or for any other purpose to which the profits of the Company may be properly applied, and pending such application may, at their like discretion, either be employed in the business of the Company or be invested in such investments as the Directors may from time to time think fit. |
99. | If several persons are registered as joint holders of any Share, any of them may give effectual receipts for any dividend or other monies payable on or in respect of the Share. |
100. | Any dividend may be paid by cheque or warrant sent through the post to the registered address of the Member or person entitled thereto or in the case of joint holders to any one of such joint holders at his registered address or to such person at such address as the Member or person entitled or such joint holders, as the case may be, may direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to the order of such other person as the Member or person entitled or such joint holders, as the case may be, may direct. |
101. | The Directors may declare that any dividend is paid wholly or partly by the distribution of specific assets and in particular of paid-up shares, debentures or debenture stock of any other company or in any one or more of such ways, and the Directors shall give effect to such resolution, and where any difficulty arises with regard to such distribution, the Directors may settle the same as they, think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Directors. |
102. | No dividend shall bear interest against the Company. |
CAPITALISATION OF PROFITS
103. | The Company may upon the recommendation of the Directors by Ordinary Resolution authorise the Directors to capitalise any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution and to appropriate such sums to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all action and things required to give effect to such capitalisation, with full power to the Directors to make such provision as they think fit for the case of Shares becoming distributable in fractions (including provision whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned. |
ACCOUNTS
104. | The books of account relating to the Company’s affairs shall be kept in such manner as may be determined from time to time by the Company by Ordinary Resolution or failing such determination by the Directors of the Company. |
105. | The Company may by Ordinary Resolution from time to time determine or, failing such determination, the Directors may from time to time determine that Auditors shall be appointed and that the accounts relating to the Company’s affairs shall be audited in such manner as the Company by Ordinary Resolution or the Directors (as the case may be) shall determine PROVIDED THAT nothing contained in this Article shall require Auditors to be appointed or the accounts relating to the Company’s affairs to be audited. |
WINDING UP
106. | If the Company shall be wound up, the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Act, divide amongst the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributors as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any Shares or other securities upon which there is any liability. This Article is to be without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
107. | If the Company shall be wound up and the assets available for distribution amongst the Members as such shall be insufficient to repay the whole of the paid up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the Shares held by them respectively. And if in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the Members in proportion to the capital paid up at the commencement of the winding up on the Shares held by them respectively. This Article is to be without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
NOTICES
108.(a)A notice may be given by the Company to any Member either personally or by sending it by post, telex or telefax to him to his registered address, or (if he has no registered address) to the address, if any, supplied by him to the Company for the giving of notices to him.
(b) | Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice ( by airmail if the address is outside the Cayman Islands) and to have been effected, in the case of a notice of a meeting at the expiration of three days after the time at which the letter would be delivered in the ordinary course of post. |
(c) | Where a notice is sent by telex or telefax, service of the notice shall be deemed to be effected by properly addressing and sending such notice through the appropriate transmitting medium and to have been effected on the day the same is sent. |
109. | If a Member has no registered address and has not supplied to the Company an address for the giving of notice to him, a notice addressed to him and advertised in a newspaper circulating in the Cayman Islands shall be deemed to be duly given to him at noon on the day following the day on which the newspaper is circulated and the advertisement appeared therein. |
110. | A notice may be given by the Company to the joint holders of a Share by giving the notice to the joint holder named first in the Register of Members in respect of the Share. |
111. | A notice may be given by the Company to the person entitled to a Share in consequence of the death or bankruptcy of a Member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any supplied for the purpose by the persons claiming to be so entitled or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. |
112. | Notice of every general meeting shall be given in the same manner hereinbefore authorised to: |
(a) | every Member entitled to vote, except those Members entitled to vote who (having no registered address) have not supplied to the Company an address for the giving of notices to them; and |
(b) | every person entitled to a Share in consequence of the death or bankruptcy of a Member, who, but for his death or bankruptcy would be entitled to receive notice of the meeting. |
No other persons shall be entitled to receive notices of general meetings.
RECORD DATE
113. | The Directors may fix in advance a date as the record date for any determination of Members entitled to notice of or to vote at a meeting of the Members and, for the purpose of determining the Members entitled to receive payment of any dividend, the Directors may, at or within 9 0 days prior to the date of the declaration of such dividend, fix a subsequent date as the record date for such determination. |
AMENDMENT OF MEMORANDUM AND ARTICLES
114. | Subject to and insofar as permitted by the provisions of the Act, the Company may from time to time by Special Resolution alter or amend its Memorandum of Association or these Articles in whole or in part provided however that no such amendment shall effect the rights attaching to any class of shares without the consent or sanction provided for in Article 3 (b). |
ORGANISATION EXPENSES
115. | The preliminary and organisation expenses incurred in forming the Company shall be paid by the Company and may be amortised in such manner and over such period of time and at such rate as the Directors shall determine and the amount so paid shall in the accounts of the Company, be charged against income and/or capital. |
OFFICES OF THE COMPANY
116. | Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company, in addition to its Registered Office, may establish and maintain an office in the Cayman Islands or elsewhere as the Directors may from time to time determine. |
INDEMNITY
117. | Every Director and officer for the time being of the Company or any trustee for the time being acting in relation to the affairs of the Company and their respective heirs, executors, administrators, personal representatives or successors or assigns shall, in the absence of wilful neglect or default, be indemnified by the Company against, and it shall be the duty of the Directors out of the funds and other assets of the Company to pay, all costs, losses, damages and expenses, including travelling expenses, which any such Director, officer or trustee may incur or become liable in respect of by reason of any contract entered into, or act or thing done by him as such Director, officer or trustee or in any way in or about the execution of his duties and the amount for which such indemnity is provided shall immediately attach as a lien on the property of the Company and have priority as between the Members over all other claims. No such Director, officer or trustee shall be liable or answerable for the acts, receipts, neglects or defaults of any other Director, officer or trustee or for joining in any receipt or other act for conformity or for any loss or expense happening to the Company through the insufficiency or deficiency of any security in or upon which any of the monies of the Company shall be invested or for any loss of the monies of the Company which shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any monies, securities or effects shall be deposited, or for any other loss, damage or misfortune whatsoever which shall happen in or about the execution of the duties of his respective office or trust or in relation thereto unless the same happens through his own wilful neglect or default. |
FINANCIAL YEAR
118. | Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation, shall begin on 1st January in each year. |
TRANSFER BY WAY OF CONTINUATION
119. | The Company shall, subject to the provisions of the Statute and, with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and the Directors may cause an application to be made to the Registrar of Companies to deregister the Company. |
Exhibit 2.15
DESCRIPTION OF SECURITIES
A summary of the material provisions governing our securities registered pursuant to Section 12(b) of the Exchange Act of 1934, as amended (the “Exchange Act”) is provided below. This summary is not complete and should be read together with our eighth amended and restated memorandum and articles of association (the “Articles”), a copy of which is filed with the U.S. Securities Exchange and Commission (the “SEC”). References herein to “we,” “us,” “our,” “SGRX” and the “Company” are to SANGRIX INC.
We are a Cayman Islands exempted company and our affairs are governed by our Articles and the Companies Act of the Cayman Islands, which we refer to as the Companies Act below (each as amended or modified from time to time). As of the date of the annual report of which this Description of Securities forms a part, we have the following series of securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class | | Trading | | Name of Each Exchange On Which |
Class A Ordinary shares, par value $0.0003 per share | SGRX | The Nasdaq Stock Market LLC |
As provided in the Articles, our authorized share capital consists of 200,000,000,000 ordinary shares, par value $0.0003 per share, comprising of 190,000,000,000 Class A Ordinary Shares, par value US$0.0003 per share (the “Class A Ordinary Shares”) and 10,000,000,000 Class B Ordinary Shares, par value US$0.0003 per share (the “Class B Ordinary Shares”).
Ordinary Shares
General
Each Class A Ordinary Share in the Company confers upon the shareholder:
| ● | the right to one (1) vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
Each Class B Ordinary Share in the Company confers upon the shareholder:
| ● | the right to twenty (20) votes at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | no rights to receive dividends, unless otherwise determined by the board of directors; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
All of our issued Class A and Class B Ordinary Shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form.
Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one-for-one basis at the option of the holder. The conversion ratio is subject to adjustment to reflect any share split, subdivision, consolidation, capitalization, reclassification, recapitalization, or similar event that affects either class of shares. Class A Ordinary Shares are not convertible into Class B Ordinary Shares.
Voting Together as a Single Class. Except as otherwise provided by law or our Articles, holders of Class A and Class B Ordinary Shares vote together as a single class on all matters submitted to a shareholder vote.
Except as described above, the Class A Ordinary Shares and Class B Ordinary Shares rank pari passu and have the same rights, preferences, privileges and restrictions.
Listing
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “SGRX.” The Class B Ordinary Shares are not listed or traded on any exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares and Class B Ordinary Shares is Securities Transfer Corporation.
Dividends and Distributions
The holders of our Class A Ordinary Shares are entitled to such dividends or other distributions as may be recommended by the board and authorized by shareholders subject to the Cayman Islands Companies Act and our memorandum and articles of association. Holders of Class B Ordinary Shares do not have dividend rights. Holders of Class A Ordinary Shares and Class B Ordinary Shares are entitled to the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
Shareholders’ voting rights
Any action required or permitted to be taken by the shareholders must be taken at a duly called annual or special meeting of the shareholders entitled to vote on such action and may be effected by a resolution of shareholders consented to in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a corporation, by its duly authorized representative) will have one vote per Class A Ordinary Share and twenty votes per Class B Ordinary Share held.
Ordinary resolution requires to be passed by a simple majority of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting, or a written resolution signed by all shareholders entitled to vote at a general meeting.
Special resolution requires to be passed by a majority of at least two-thirds of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given, or a written resolution signed by all shareholders entitled to vote at a general meeting and otherwise in accordance with our memorandum and articles of association and the Cayman Islands Companies Act.
Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of Cayman Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in Cayman Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.
The Company may by ordinary resolution or by resolution of the directors at any time, and from time to time, appoint a person as an additional director or persons as additional directors. The Company may by ordinary resolution or by resolution of the directors remove a director before the expiration of his period of office, and may by ordinary resolution or by resolution of the directors appoint another person in his stead.
Our memorandum and articles of association provides that the remuneration of the directors shall from time to time be determined by the Company in general meeting or by resolution of the directors or any committee of the directors. The directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the directors, or any committee of the directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the directors from time to time, or a combination partly of one such method and partly the other.
Meetings of shareholders
Any of our directors may convene a meeting of shareholders whenever they think fit. We must provide at least seven days’ written notice (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) of all meetings of shareholders, stating the time, place of the general
meeting and, in the case of special business, the general nature of that business to shareholders whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors must convene a general meeting upon the written request of one or more shareholders holding at least 10% of our shares.
No business may be transacted at any general meeting unless a quorum is present at the time the meeting proceeds to business. One or more shareholders holding in the aggregate not less than one-third of the total voting rights of all the issued shares entitled to vote in person or by proxy and entitled to vote shall be a quorum. If, within half an hour from the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may transact the business for which the meeting was called. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.
A corporation that is a shareholder shall be deemed for the purpose of our articles of association to be present at a general meeting in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting, by a resolution of the directors or by one or more shareholders present in person or by a proxy who together hold not less than fifteen per cent of the paid up capital of the Company entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
Meeting of directors
The management of our company is entrusted to our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside Cayman Islands as the directors determine to be necessary or desirable. A director must be given not less than 5 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if at least two directors are present. If there is a sole director, that director shall be a quorum. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by all of the directors.
Protection of minority shareholders
We would normally expect Cayman Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of minority shareholders (such as the right to vote and pre-emptive rights), and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new shares under either Cayman Islands law or our memorandum and articles of association.
Transfer of Class A Ordinary Shares and Class B Ordinary Shares
Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Ordinary Shares and Class B Ordinary Shares by written instrument of transfer signed by the transferor and containing the name of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Class A Ordinary Shares and Class B Ordinary Shares without giving any reason.
Winding Up
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the paid up capital at the commencement of the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid up capital, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Cayman Islands Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not), and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
The liquidator may also vest the whole or any part of these assets in trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.
Calls on and forfeiture of Class A Ordinary Shares and Class B Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A Ordinary Shares and Class B Ordinary Shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The Class A Ordinary Shares and Class B Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture.
Repurchase of Class A Ordinary Shares and Class B Ordinary Shares
We are empowered by the Cayman Islands Companies Act to purchase our own shares, subject to certain restrictions and requirements. Our directors may only exercise this power on our behalf, subject to the Cayman Islands Companies Act, our memorandum and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the SEC, or by any other recognized stock exchange on which our securities are listed. Under the Cayman Islands Companies Act, the repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital (including share premium account and capital redemption reserve). If the repurchase proceeds are paid out of our company’s capital, our company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Islands Companies Act no such share may be repurchased (1) unless it is fully paid up, (2) if such repurchase would result in there being no shares outstanding, or (3) if the company is being wound up and: (a) the terms of the repurchase provided for it to take place after the commencement of the winding up; or (b) during the period beginning on the date when the repurchase was to have taken place and ending with the commencement of the shares were to have been repurchased. In addition, under the Cayman Islands Companies Act, our company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares).
Subject to the provisions of the Cayman Islands Companies Act and our memorandum and articles of association, the Company may purchase its own Shares, including any redeemable shares, provided that the manner of purchase has first been authorized by ordinary resolution or by resolution of the directors and may make payment therefor or for any redemption of shares in any manner authorized by the Cayman Islands Companies Act, including out of capital.
Modifications of rights
All or any of the special rights attached to any class of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by not less than three-fourths of such shareholders of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of shareholders in the requisite majorities:
| ● | amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue; |
| ● | Divide our authorized and issued shares into a larger number of shares; and |
| ● | combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Holders of our Class A Ordinary Shares and Class B Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Issuance of additional Class A Ordinary Shares and Class B Ordinary Shares
Our memorandum and articles of association authorizes our board of directors to issue additional Class A Ordinary Shares and Class B Ordinary Shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
Comparison of Cayman Islands Corporate Law and U.S. Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements
In certain circumstances the Cayman Islands Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of 66 2/3 % in value) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association.
A shareholder has the right to vote on a merger or consolidation regardless of whether the shares that he holds otherwise give him voting rights. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company.
The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the director of the Cayman Islands company is required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and
by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands company, the director of the Cayman Islands company is further required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides for a right of dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree on the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; (e) if the company and the shareholder fail to agree on a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not be available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedure of which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of
the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
| ● | we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with; |
| ● | the shareholders have been fairly represented at the meeting in question; |
| ● | the arrangement is such that a business person would reasonably approve; and |
| ● | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.” |
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Squeeze-out Provisions
When a takeover offer is made and accepted by holders of 90% of the shares to whom the offer is made within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits
Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
| ● | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
| ● | the act complained of, although not beyond the scope of the authority, could be affected if duly authorized by more than the number of votes which have actually been obtained; or |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Indemnification of Directors and Executive Officers and Limitation of Liability
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.
Our Articles permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise through their own wilful neglect or default.
This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, our offer letters to our independent directors and our employment agreements with our executive officers provide such persons with additional indemnification beyond that provided in our Articles.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties
Under Delaware General Corporation Law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he or she owes the following duties to the company: a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so), and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
Shareholder Action by Written Consent
Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent in its certificate of incorporation. Our amended and restated articles of association provide that shareholders may not approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
Shareholder Proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual general meeting, provided it complies with the notice provisions in the governing documents. An extraordinary general meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
Cayman Islands law does not provide shareholders any right to put proposals before a general meeting or requisition a general meeting. However, these rights may be provided in articles of association. Our amended and restated articles of association allow our shareholders holding not less than 10% of all voting power of our share capital in issue to requisition a general meeting. Other than this right to requisition a general meeting, our current articles of association do not provide our shareholders other rights to put a proposal before a meeting. As an exempted Cayman Islands company, we are not obliged by law to call annual general meetings.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our amended and restated articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any fewer protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our amended and restated articles of association, directors may be removed with or without cause, by an ordinary resolution as a matter of Cayman Islands law (which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company).
Transactions with Interested Shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute in its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Act and our amended and restated articles of association, our company may be wound up, liquidated or dissolved by a special resolution of our shareholders.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our amended and restated articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our Articles may only be amended with a special resolution of our shareholders.
Anti-Money Laundering-Cayman Islands
If any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Exhibit 8.1
SANGRIX INC.
Subsidiaries of the Registrant
Subsidiary | | Jurisdiction of Incorporation |
SonicHash, Inc. | | Alberta, Canada |
Sonic Auspice DC LLC | | Delaware, United States |
SonicHash, LLC. | | Delaware, United States |
Bit Origin Pte. Ltd | | Singapore |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of SANGRIX INC. (the “Company”), certify that:
1. | I have reviewed this annual report on Form 20-F for the fiscal year ended June 30, 2026 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Dated: September 18, 2026
By: | /s/ Jinghai Jiang | |
Name: | Jinghai Jiang | |
Title: | Chief Executive Officer | |
Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of SANGRIX INC. (the “Company”), certify that:
1. | I have reviewed this annual report on Form 20-F for the fiscal year ended June 30, 2026 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Dated: September 18, 2026
By: | /s/ Jinghai Jiang | |
Name: Jinghai Jiang | ||
Title: Chief Executive Officer | ||
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of SANGRIX INC. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
a. | the Company’s annual report on Form 20-F for the fiscal year ended June 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
b. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Dated: September 18, 2026
By: | /s/ Jinghai Jiang | |
| Name: Jinghai Jiang | |
| Title: Chief Executive Officer | |
Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive of SANGRIX INC. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
a. | the Company’s annual report on Form 20-F for the fiscal year ended June 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
b. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Dated: September 18, 2026
By: | /s/ Jinghai Jiang | |
Name: Jinghai Jiang | ||
Title: Chief Executive Officer | ||
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-275602, and 333-281518) of our report dated September 18, 2026, relating to the consolidated financial statements of SANGRIX INC. (formerly known as Bit Origin Ltd) and its subsidiaries (the “Company”), as of June 30, 2026 and 2025, and for each of the two years in the period ended June 30, 2026, appearing in this Annual Report on Form 20-F of the Company.
/s/ HTL International, LLC |
Houston, Texas |
September 18, 2026 |
Exhibit 15.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (File Numbers 333-281518 and 333-275602), under the Securities Act of 1933 of our report dated December 26, 2024 with respect to the consolidated statements of operations and comprehensive loss of SANGRIX INC. (formerly known as Bit Origin Ltd) and its subsidiaries, and the consolidated statements of changes in shareholders’ equity, and cash flows for the year ended June 30, 2024, and the related notes included in the Annual Report on Form 20-F, filed with the Securities and Exchange Commission.
| /s/ WWC, P.C. |
San Mateo, California | WWC, P.C. |
September 18, 2026 | Certified Public Accountants |
| PCAOB ID: 1171 |
