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What changed in TREASURE GLOBAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TREASURE GLOBAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+266 added−264 removedSource: 10-K (2024-09-30) vs 10-K (2023-09-28)

Top changes in TREASURE GLOBAL INC's 2024 10-K

266 paragraphs added · 264 removed · 163 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

95 edited+56 added−39 removed292 unchanged
Biggest changeAccording to the World Bank, Malaysia had a population of approximately 33 million people in 2022 compared to 23 million people in 2000. 5 1 https://www.statista.com/statistics/796245/gdp-of-the-asean-countries/ 2 https://www.statista.com/statistics/279447/gross-domestic-product-gdp-in-the-european-union-eu/ https://www.statista.com/statistics/263591/gross-domestic-product-gdp-of-the-united-states/ 3 https://www.imf.org/en/News/Articles/2023/05/31/pr23191-malaysia-imf-executive-board-concludes-2023-article-iv-consultation-with-malaysia 4 IMF Staff Report March 2021 5 https://www.worldometers.info/world-population/south-eastern-asia-population/ https://data.worldbank.org/indicator/SP.POP.TOTL?locations=MY 3 A high percentage of Malaysians have lived in cities for the last decade and that percentage is increasing.
Biggest changeIn fact, according to the Google Report, the SEA Internet sector GMV is forecast to grow to over US$360 billion by 2025 up from the $300 billion forecast in the Google, Temasek, Bain SEA Report 2022. 12 Malaysia’s internet economy has grown from $14 billion in 2020 to $21 billion in 2021 (47% growth) and is expected to grow to $35 billion in 2025. 13 1 https://www.statista.com/statistics/796245/gdp-of-the-asean-countries/ 2 https://www.statista.com/statistics/279447/gross-domestic-product-gdp-in-the-european-union-eu/ https://www.statista.com/statistics/263591/gross-domestic-product-gdp-of-the-united-states/ 3 https://www.imf.org/en/News/Articles/2023/05/31/pr23191-malaysia-imf-executive-board-concludes-2023-article-iv-consultation-with-malaysia 4 IMF Staff Report March 2021 5 https://www.worldometers.info/world-population/south-eastern-asia-population/ https://data.worldbank.org/indicator/SP.POP.TOTL?locations=MY 6 https://www.statista.com/statistics/455880/urbanization-in-malaysia/ 7 https://www.statista.com/ 8 https://www.worldbank.org/en/country/malaysia/overview#1 9 The World Bank Press Release dated March 16, 2021, https://www.worldbank.org/en/news/press-release/2021/03/16/aiminghighmalaysia 10 https://services.google.com/fh/files/misc/e_conomy_sea_2022_report.pdf 11 https://www.statista.com/statistics/975058/internet-penetration-rate-in-malaysia/ 12 https://www.bain.com/globalassets/noindex/2021/e_conomy_sea_2021_report.pdf https://services.google.com/fh/files/misc/e_conomy_sea_2022_report.pdf 13 https://www.digitalnewsasia.com/digital-economy/e-conomy-sea-report-2021-malaysias-internet-economy-crosses-us21-bil 6 As consumers in these markets gradually shift towards the online platform model, the total value of internet-based transactions has grown tremendously and is expected to keep doing so.
We have in place a “Disaster Recovery” (“DR”) initiative, which we rely on the “AWS” cloud facilities to ensure as described below: The architecture diagram shows how “AWS” cloud architect is powered by distributed servers and database services across multiple zones to ensure disaster recovery on deployment across multiple data centers, once the Application Load Balancer (ALB) detects the primary unavailable then it will direct all traffic to other in-service data centers. 29 29 Disaster Recovery – First-in-class automated disaster recovery mechanism with multi-AZ support https://docs.aws.amazon.com/whitepapers/latest/disaster-recovery-workloads-on-aws/disaster-recovery-options-in-the-cloud.html 19 The controls for restricting user access to our system and data, include: 1) User authorization 2) Maintaining the user access log 3) Periodic review user access 4) Revoking user access 5) Managing Privileged User access 6) Separation of Duties to reduce the risk of misuse of client code and assets 7) Change management, risk management and issue management are exercised as part of Management Reviews Litigation From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.
We have in place a “Disaster Recovery” (“DR”) initiative, which we rely on the “AWS” cloud facilities to ensure as described below: The architecture diagram shows how “AWS” cloud architect is powered by distributed servers and database services across multiple zones to ensure disaster recovery on deployment across multiple data centers, once the Application Load Balancer (ALB) detects the primary unavailable then it will direct all traffic to other in-service data centers. 29 The controls for restricting user access to our system and data, include: 1) User authorization 2) Maintaining the user access log 3) Periodic review user access 4) Revoking user access 5) Managing Privileged User access 6) Separation of Duties to reduce the risk of misuse of client code and assets 7) Change management, risk management and issue management are exercised as part of Management Reviews 29 Disaster Recovery — First-in-class automated disaster recovery mechanism with multi-AZ support https://docs.aws.amazon.com/whitepapers/latest/disaster-recovery-workloads-on-aws/disaster-recovery-options-in-the-cloud.html 19 Litigation From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.
Noncompliance with applicable regulations or requirements could subject us to: ● investigations, enforcement actions, and sanctions; ● mandatory changes to our network and products; ● disgorgement of profits, fines, and damages; ● civil and criminal penalties or injunctions; ● claims for damages by our customers or channel partners; ● termination of contracts; ● failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings necessary to conduct our operations; and ● temporary or permanent debarment from sales to public service organizations.
Noncompliance with applicable regulations or requirements could subject us to: ● investigations, enforcement actions, and sanctions; ● mandatory changes to our network and products; ● disgorgement of profits, fines, and damages; ● civil and criminal penalties or injunctions; 32 ● claims for damages by our customers or channel partners; ● termination of contracts; ● failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings necessary to conduct our operations; and ● temporary or permanent debarment from sales to public service organizations.
ZCITY users will be able to purchase vouchers for these items at reduced prices, thereby assisting low-income Malaysians and helping to address this societal challenge. 8. TAZTE Smart F&B system ZCITY App offers a “Smart F&B” system that provides a one stop solution and digitalization transformation for all registered Food and Beverage (“F&B”) outlets located in Malaysia.
ZCITY users will be able to purchase vouchers for these items at reduced prices, thereby assisting low-income Malaysians and helping to address this societal challenge. 8. TAZTE Smart F&B system ZCITY App offers a “Smart F&B” system that provides a one stop solution and digitalization transformation for all registered Food “F&B” outlets located in Malaysia.
We are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. 21 If we fail to raise capital when needed it will have a material adverse effect on our business, financial condition and results of operations.
We are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. If we fail to raise capital when needed it will have a material adverse effect on our business, financial condition and results of operations.
Many of these laws include specific disclosure requirements and prohibitions or limitations on the use of expiration dates and the imposition of certain fees. Various companies that provided deal products similar to ours around the world are currently or were defendants in purported class action lawsuits. 33 The application of various other laws and regulations to our products is uncertain.
Many of these laws include specific disclosure requirements and prohibitions or limitations on the use of expiration dates and the imposition of certain fees. Various companies that provided deal products similar to ours around the world are currently or were defendants in purported class action lawsuits. The application of various other laws and regulations to our products is uncertain.
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. The material weaknesses identified included the following: (1) Inadequate U.S. GAAP expertise.
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. 30 The material weaknesses identified included the following: (1) Inadequate U.S. GAAP expertise.
We believe that it is much easier to measure and optimize social media campaigns while they are active. If an advertisement isn’t producing the expected results, we can suspend the campaign or reallocate funds on demand. 13 Another key media vehicle that we utilize is Universal App Campaign (or “UAC”) by Google.
We believe that it is much easier to measure and optimize social media campaigns while they are active. If an advertisement isn’t producing the expected results, we can suspend the campaign or reallocate funds on demand. Another key media vehicle that we utilize is Universal App Campaign (or “UAC”) by Google.
We are currently focusing on using our intellectual property in Malaysia and plan to expand further into Southeast Asia as part of our strategy. The loss of all of these third-party payment facilitators could not be easily replaced and therefore could materially affect our business and results of operations. 17 Trademarks .
We are currently focusing on using our intellectual property in Malaysia and plan to expand further into Southeast Asia as part of our strategy. The loss of all of these third-party payment facilitators could not be easily replaced and therefore could materially affect our business and results of operations. Trademarks .
In addition, we may be required to expend significant financial or other resources to successfully enforce our rights. Breaches of our online commerce security could occur and could have an adverse effect on our reputation. A significant barrier to online commerce and communications is the secure transmission of confidential information over public networks.
In addition, we may be required to expend significant financial or other resources to successfully enforce our rights. 25 Breaches of our online commerce security could occur and could have an adverse effect on our reputation. A significant barrier to online commerce and communications is the secure transmission of confidential information over public networks.
If these or other similar restrictions are imposed by a government to influence the economy, it may lead to a slowing of economic growth, which may harm our business, financial condition and results of operations. 28 If inflation increases significantly in SEA countries, our business, results of operations, financial condition and prospects could be materially and adversely affected.
If these or other similar restrictions are imposed by a government to influence the economy, it may lead to a slowing of economic growth, which may harm our business, financial condition and results of operations. If inflation increases significantly in SEA countries, our business, results of operations, financial condition and prospects could be materially and adversely affected.
Branded e-Vouchers Users can purchase their preferred e-Vouchers with instant discounts and rewards points with each checkout. 6. User Engagement through Gamification Users can earn daily rewards by playing our ZCITY App minigame “Spin & Win” where they can earn further ZCITY RP, ZCITY e-Vouchers as well as monthly grand prizes. 5 7.
Branded e-Vouchers Users can purchase their preferred e-Vouchers with instant discounts and rewards points with each checkout. 6. User Engagement through Gamification Users can earn daily rewards by playing our ZCITY App minigame “Spin & Win” where they can earn further ZCITY RP, ZCITY e-Vouchers as well as monthly grand prizes. 7 7.
Any potential liability, business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources. 27 The economy of Malaysia in general might not grow as quickly as expected, which could adversely affect our revenues and business prospects. Our business and prospects depend on the continuing development of the economy in Malaysia.
Any potential liability, business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources. The economy of Malaysia in general might not grow as quickly as expected, which could adversely affect our revenues and business prospects. Our business and prospects depend on the continuing development of the economy in Malaysia.
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 harm our business and operating results. 34 Failure to comply with the U.S.
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 harm our business and operating results. Failure to comply with the U.S.
For a description of these material contracts See “ Business—About ZCITY App .” We rely on email, internet search engines and application marketplaces to drive traffic to our ZCITY App, certain providers of which offer products and services that compete directly with our products.
For a description of these material contracts See “ Business — About ZCITY App .” 21 We rely on email, internet search engines and application marketplaces to drive traffic to our ZCITY App, certain providers of which offer products and services that compete directly with our products.
We have forecast potential merchants by category, which will enable us to create a marketing plan that will attract them by aligning our promotional content with their business interests and ideals. We will initiate advertisements that connect with their preferences and generate brand loyalty.
We have forecast potential merchants by category, which will enable us to create a marketing plan that will attract them by aligning our promotional content with their business interests and ideals. We will initiate advertisements that connect with their preferences and generate brand loyalty. Convenience .
We would lose the revenues associated with these accounts and could be subject to material penalties and fines, both of which would seriously harm our business. We are subject to certain risks by virtue of our international operations. We operate and expand internationally.
We would lose the revenues associated with these accounts and could be subject to material penalties and fines, both of which would seriously harm our business. 26 We are subject to certain risks by virtue of our international operations. We operate and expand internationally.
Our “Green Oil” program will allow our merchants to contribute to zero pollution by recycling used cooking oil with one of our strategic partners. Credibility . We expect to prove our credibility by presenting our expertise to potential merchants who are seeking alternative business strategies in the ever-expanding technological age.
For example, our “Green Oil” program will allow our merchants to contribute to zero pollution by recycling used cooking oil with one of our strategic partners. Credibility . We expect to prove our credibility by presenting our expertise to potential merchants who are seeking alternative business strategies in the ever-expanding technological age.
In preparing our consolidated financial statements as of and for the year ended June 30, 2023, we and our independent registered public accounting firms identified 2 material weaknesses and other control deficiencies including significant deficiencies in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board.
In preparing our consolidated financial statements as of and for the year ended June 30, 2024, we and our independent registered public accounting firms identified 2 material weaknesses and other control deficiencies including significant deficiencies in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board.
We have limited revenue-producing operations and will require the proceeds from our recently concluded offering to execute our full business plan. We believe the proceeds from our previous offering will be sufficient to cover our funding needs until part way through the first calendar quarter of 2024.
We have limited revenue-producing operations and will require the proceeds from our recently concluded offering to execute our full business plan. We believe the proceeds from our previous offering will be sufficient to cover our funding needs until part way through the first calendar quarter of 2025.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors (“Board”), particularly to serve on our audit committee and renumeration committee, and qualified executive officers.
These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee and renumeration committee, and qualified executive officers.
We feel TAZTE has the potential for our ZCITY App to pioneer a generation of technologically astute “Smart Merchants,” effectively encouraging more merchants to join the technological trend. Apart from the technological advantages, merchants would be able to gain access to a significant consumer database of nearly one million registered users currently for their own brand marketing. Partner Growth .
We feel our ZCITY App has the potential to pioneer a generation of technologically astute “Smart Merchants,” effectively encouraging more merchants to join the technological trend. Apart from the technological advantages, merchants would be able to gain access to a significant consumer database of nearly 2.7 million registered users currently for their own brand marketing. Partner Growth .
Any potential disruption in and other risks relating to the offline or online merchants’ supply chain as a result of the COVID-19 pandemic or Russia’s invasion of Ukraine, could increase the costs of their products or services to consumers, potentially causing consumers to limit their spending or seek products or services from alternative businesses that may not be registered as a merchant with us, which may ultimately affect the total number of users using our platform and harm our business, financial condition and results of operations.
Any potential disruption in and other risks relating to the offline or online merchants’ supply chain as a result of the COVID-19 pandemic or Russia’s invasion of Ukraine, could increase the costs of their products or services to consumers, potentially causing consumers to limit their spending or seek products or services from alternative businesses that may not be registered as a merchant with us, which may ultimately affect the total number of users using our platform and harm our business, financial condition and results of operations. 28 Our business will be exposed to foreign exchange risk.
The agreements we enter into with these local strategic partners provide us with payment gateways (i.e, online “checkout” portals) used to enter credit card information for payment of goods and services.
We have local strategic partner agreements with iPay88. The agreements we enter into with these local strategic partners provide us with payment gateways (i.e, online “checkout” portals) used to enter credit card information for payment of goods and services.
Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business. 32 Regulation of the internet generally could have adverse consequences on our business.
Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business.
Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of September 25, 2023, we had 2,642,404 registered users and 2,025 registered merchants. Corporate Structure Treasure Global Inc is a Delaware corporation that was incorporated on March 20, 2020.
Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of September 25, 2024, we had 2,704,306 registered users and 2,027 registered merchants. 1 Corporate Structure Treasure Global Inc is a Delaware corporation that was incorporated on March 20, 2020.
Human Capital Resources As of June 30, 2023, we had a total of 103 full-time employees and a total of [*] independent contractors and consultants. We engage consultants on an as-needed basis to supplement existing staff.
Human Capital Resources As of June 30, 2024, we had a total of 25 full-time employees and a total of 3 independent contractors and consultants. We engage consultants on an as-needed basis to supplement existing staff.
A change in policies by the Malaysian government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies or the expropriation or nationalization of private enterprises.
Policies of the Malaysian government can have significant effects on the economic conditions of Malaysia. A change in policies by the Malaysian government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies or the expropriation or nationalization of private enterprises.
We have chosen to take advantage of the extended transition period for complying with new or revised accounting standards. 31 We will remain an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.
We will remain an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.
Without prejudice to the generality of foregoing, ZCITY is, inter alia, the direct owner of the registered trademark “ZCITY” in connection with artificial intelligence software, electronic payment services, loyalty programs, SaaS platforms, and other subsets of our business. Information Technology Protection .
While we have not delineated each of our trademarks, the foregoing constitutes our material trademarks. Without prejudice to the generality of foregoing, ZCITY is, inter alia, the direct owner of the registered trademark “ZCITY” in connection with artificial intelligence software, electronic payment services, loyalty programs, SaaS platforms, and other subsets of our business. Information Technology Protection .
Our business could suffer if customers use the ZCITY App for illegal or improper purposes. 26 If merchants on our ZCITY App are operating illegally, we could be subject to civil and criminal lawsuits, administrative action and prosecution for, among other things, money laundering or for aiding and abetting violations of law.
If merchants on our ZCITY App are operating illegally, we could be subject to civil and criminal lawsuits, administrative action and prosecution for, among other things, money laundering or for aiding and abetting violations of law.
We are also subject to regulations and laws in Malaysia specifically governing the internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services.
Regulation of the internet generally could have adverse consequences on our business. We are also subject to regulations and laws in Malaysia specifically governing the internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services.
D/B/A Pay’s Gift and MOL Access Portal Sdn. Bhd. D/B/A Razer Gold in which Pay’s Gift and Razer Gold provide us with e-vouchers for use on the ZCITY App that provide users with discounts on goods and services of many top multinational and lifestyle brands, including gas, clothing, fast food, movie theaters and others.
D/B/A Razer Gold in which Pay’s Gift and Razer Gold provide us with e-vouchers for use on the ZCITY App that provide users with discounts on goods and services of many top multinational and lifestyle brands, including gas, clothing, fast food, movie theaters and others. We pay the service partner for the cost of the e-voucher plus a service fee.
Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties or any other legal obligations or regulatory requirements relating to privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise have an adverse effect on our reputation and business.
We also expect that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions. 33 Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties or any other legal obligations or regulatory requirements relating to privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise have an adverse effect on our reputation and business.
The data can be utilized and turned into actionable insights (to run campaigns and promotions which users are more favorable to) that will share our strategic and tactical business decisions, while boosting the ZCITY App brand presence.
Through AppsFlyer SDK, we can monitor digital media activities to optimize our marketing budget. The data can be utilized and turned into actionable insights (to run campaigns and promotions which users are more favorable to) that will share our strategic and tactical business decisions, while boosting the ZCITY App brand presence.
Also, we will seek to obtain additional capital through the sale of debt or equity financing or other arrangements to fund operations; however, there can be no assurance that we will be able to raise needed capital under acceptable terms, if at all.
We anticipate incurring additional losses until such time, if ever, that we will be able to effectively market our products. 20 Also, we will seek to obtain additional capital through the sale of debt or equity financing or other arrangements to fund operations; however, there can be no assurance that we will be able to raise needed capital under acceptable terms, if at all.
ZCITY has filed one trademark application stylized as “ ” with the trademark offices of Malaysia. The name and mark, ZCITY App and other trade names and service marks of ZCITY in this prospectus are our property. Patents . ZCITY has filed one patent application entitled “A Revenue Allocation System” with the Patents Registration Office of Malaysia.
ZCITY has filed one trademark application stylized as “” with the trademark offices of Malaysia. The name and mark, ZCITY App and other trade names and service marks of ZCITY in this prospectus are our property. Patents .
For the year ended June 30, 2023, we had approximately $4.6 million cash on hand, an accumulated deficit of approximately $31.4 million at June 30, 2023, a net loss of approximately $11.7 million for the year ended June 30, 2023, and approximately $9.6 million net cash used by operating activities for the year ended June 30, 2023.
For the year ended June 30, 2024, we had approximately $200,013 cash on hand, an accumulated deficit of approximately $38.0 million at June 30, 2024, a net loss of approximately $6.59 million for the year ended June 30, 2024, and approximately $4.7 million net cash used by operating activities for the year ended June 30, 2024.
Revenue Model ZCITY’s revenues are generated from a diversified mix of: ● e-commerce activities for users; ● services to merchants to help them grow their businesses; and ● membership subscription fees. The revenue streams consist of “Consumer Facing” revenues and “Merchant Facing” revenues.
We believe that promoting a credible and reliable system for merchants will increase referrals and positive reviews. Revenue Model ZCITY’s revenues are generated from a diversified mix of: ● e-commerce activities for users; ● services to merchants to help them grow their businesses; and ● membership subscription fees. The revenue streams consist of “Consumer Facing” revenues and “Merchant Facing” revenues.
The information with respect to Fave was obtained from Fave’s website at https://help.myfave.com/hc/en-us/articles/115000181194-How-do-I-pay-with-FavePay-. The information with respect to Shop Back was obtained from Shop Back’s website at https://support.shopback.my/hc/en-us/articles/360037382453-Is-there-a-payment-method-not-eligible-for-Cashback-.
The information with respect to Shop Back was obtained from Shop Back’s website at https://support.shopback.my/hc/en-us/articles/360037382453-Is-there-a-payment-method-not-eligible-for-Cashback- .
As a result of Kok Pin “Darren” Tan’s 100% ownership of our common stock and the Beneficial Shareholding Agreements, TGL and ZCITY were both under the sole control of Kok Pin “Darren” Tan. 1 TGL and ZCITY were reorganized into a parent subsidiary structure pursuant to a Share Swap Agreement, dated March 11, 2021, as amended on March 11, 2021 among TGL, the Initial ZCITY Shareholders and Chong Chan “Sam” Teo (the “Share Swap Agreement”), in which TGL exchanged 321,585 shares of its common stock (the “Swap Shares”) for all equity of ZCITY.
TGL and ZCITY were reorganized into a parent subsidiary structure pursuant to a Share Swap Agreement, dated March 11, 2021, as amended on March 11, 2021 among TGL, the Initial ZCITY Shareholders and Chong Chan “Sam” Teo (the “Share Swap Agreement”), in which TGL exchanged 321,585 shares of its common stock (the “Swap Shares”) for all equity of ZCITY.
Market Opportunity We expect that continued strong economic expansion, robust population growth, rising level of urbanization, the emergence of the middle class and the increasing rate of adoption of mobile technology provide market opportunities for our Company in Southeast Asia (“SEA”).
Accordingly, the Company has regained compliance with the Bid Price Rule and this matter is closed. 5 Market Opportunity We expect that continued strong economic expansion, robust population growth, rising level of urbanization, the emergence of the middle class and the increasing rate of adoption of mobile technology provide market opportunities for our Company in Southeast Asia (“SEA”).
UAC then uses machine learning technology to make decisions for each ad by analyzing potential data signal combinations in real-time, including the platform where users are most likely to engage with our ad (such as YouTube or Gmail), the right ad format (whether video, text, or combination of the two) and keywords that will perform best for our marketing goals.
UAC then uses machine learning technology to make decisions for each ad by analyzing potential data signal combinations in real-time, including the platform where users are most likely to engage with our ad (such as YouTube or Gmail), the right ad format (whether video, text, or combination of the two) and keywords that will perform best for our marketing goals. 13 In addition, in order to obtain more accurate data for analysis, AppsFlyer SDK is installed in our ZCITY App, where it provides conversion data of user acquisition and retention campaigns.
Additionally, through the Company’s agreement with ATX Distribution, it is able to gain access to bill payment services provided by Malaysia’s telco service provider such as, among others, CelcomDigi, U Mobile, Astro and Air Selangor. 7 Download ZCITY App ZCITY App is free to download from the Google Play Store, Apple iOS Store, and Huawei AppGallery.
Additionally, through the Company’s agreement with ATX Distribution, it is able to gain access to bill payment services provided by Malaysia’s telco service provider such as, among others, CelcomDigi, U Mobile, Astro and Air Selangor.
On August 17, 2023, we received a letter from Nasdaq notifying us that we were no longer in compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2).
On August 17, 2023, we received a letter from Nasdaq notifying us that we were no longer in compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2). Although Nasdaq has granted us 180 calendar days, or until February 13, 2024, to regain compliance with the Bid Price Rule.
ZCITY Apps’s Reward Points Program Operating under the hashtag #RewardsOnRewards, we believe the ZCITY App reward points program encourages users to sign up the app, as well as increasing user engagement and spending on purchases/repeat purchases and engenders user loyalty.
Download ZCITY App ZCITY App is free to download from the Google Play Store, Apple iOS Store, and Huawei AppGallery. 9 ZCITY Apps’s Reward Points Program Operating under the hashtag #RewardsOnRewards, we believe the ZCITY App reward points program encourages users to sign up the app, as well as increasing user engagement and spending on purchases/repeat purchases and engenders user loyalty.
Our business will be exposed to foreign exchange risk. We derive most of our revenue from the operations of our ZCITY App in Malaysia and expect to derive our revenue from Malaysia, other SEA countries and Japan in the future. Our functional currencies will by necessity be the currencies of the countries of SEA and Japan.
We derive most of our revenue from the operations of our ZCITY App in Malaysia and expect to derive our revenue from Malaysia, other SEA countries and Japan in the future. Our functional currencies will by necessity be the currencies of the countries of SEA and Japan. Our reporting currency is the U.S. dollar.
If the protection of proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished.
If the protection of proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished. Any of these events could have an adverse effect on our business and financial results.
Furthermore, we would expect to finance such acquisitions through internal and potential financings from the stock market. 14 IMF: https://www.imf.org/en/News/Articles/2023/05/31/pr23191-malaysia-imf-executive-board-concludes-2023-article-iv-consultation-with-malaysia 16 Strategic Partnerships We have entered into agreements with various Malaysian companies i.e.: Touch’nGo e-wallet marketing, iPay88, Boost eWallet, Digi and Grabpay eWallet to provide essential services to our ZCITY App platform.
Furthermore, we would expect to finance such acquisitions through internal and potential financings from the stock market. Strategic Partnerships We have entered into agreements with various Malaysian companies i.e.: Touch’nGo e-wallet marketing, iPay88, Boost eWallet, Digi and Grabpay eWallet to provide essential services to our ZCITY App platform.
The lack of market acceptance of such services or our inability to generate satisfactory revenues from such expanded services to offset their cost could have a material adverse effect on our business, results of operations and financial condition. 24 In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example, by providing the appropriate training to out account managers, sales technology specialists, engineers and consultants to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations or financial condition could be adversely affected.
In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example, by providing the appropriate training to out account managers, sales technology specialists, engineers and consultants to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations or financial condition could be adversely affected. 24 A decline in the demand for goods and services of the merchants included in the ZCITY App could result in adverse financial consequences.
Any of these events could have an adverse effect on our business and financial results. 35 Effective trade secret, copyright, trademark and domain name protection is expensive to develop and maintain, both in terms of initial and ongoing registration requirements and expenses and the costs of defending our rights.
Effective trade secret, copyright, trademark and domain name protection is expensive to develop and maintain, both in terms of initial and ongoing registration requirements and expenses and the costs of defending our rights.
We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.
We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names may require litigation, which could result in substantial costs and diversion of management’s attention.
Our future revenues will depend upon continued demand for the types of goods and services that are offered by the merchants that are included on such platforms.
We expect to derive most of our revenues from fees from successfully completed transactions on our consumer facing platforms. Our future revenues will depend upon continued demand for the types of goods and services that are offered by the merchants that are included on such platforms.
“Business—Market Opportunity. ” 15 As we scale our operations, we intend to expand to other countries in Southeast Asia, which possesses solid economic fundamentals, fast growing middle classes, favorable demographic trends and accelerating adoption of mobile technology. Experienced Management Team .
“Business — Market Opportunity. ” As we scale our operations, we intend to expand to other countries in Southeast Asia, which possesses solid economic fundamentals, fast growing middle classes, favorable demographic trends and accelerating adoption of mobile technology. 14 IMF: https://www.imf.org/en/News/Articles/2023/05/31/pr23191-malaysia-imf-executive-board-concludes-2023-article-iv-consultation-with-malaysia 15 Experienced Management Team .
ZCITY owns all intellectual property rights to copyrightable, patentable, and other protectable intangible assets relating to our business, including trademarks. Corporate Information Our principal executive offices are located at 276 5 th Avenue, Suite 704 #739, New York, New York 10001 and No.29, Jalan PPU 2A, Taman Perindustrian Pusat Bandar Puchong, 47100 Puchong, Selangor, Malaysia.
Corporate Information Our principal executive offices are located at 276 5 th Avenue, Suite 704 #739, New York, New York 10001 and No.29, Jalan PPU 2A, Taman Perindustrian Pusat Bandar Puchong, 47100 Puchong, Selangor, Malaysia.
Furthermore, we believe the simplicity of the steps to obtaining Reward Points (or “RP”) is an attractive incentive to user participation in that participants receive: ● 200 RP for registration as a new user; ● 100 RP for referral of a new user; ● Conversion of Malaysian ringgit spent into RP; ● 50% RP of every user paid amount; and ● 25% RP of every referred user paid amount as a result of the referral. 8 The key objectives of our RP are: ● Social Engagement; ○ RP are offered to users for increased social engagement. ● Spending; ○ RP incentivizes users with every MYR spent in order to increase the spending potential and to build users loyalty. ● Sign-up ; and ○ Drives loyalty and greater customer engagement.
Furthermore, we believe the simplicity of the steps to obtaining Reward Points (or “RP”) is an attractive incentive to user participation in that participants receive: ● 200 RP for registration as a new user; ● 100 RP for referral of a new user; ● Conversion of Malaysian ringgit spent into RP; ● 50% RP of every user paid amount; and ● 25% RP of every referred user paid amount as a result of the referral.
In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed.
If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed. 36 Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
In addition, the depreciation of significant U.S. dollar denominated assets could result in a change to our operations and a reduction in the value of these assets. 29 We may not be able to maintain the listing of our common stock on Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our common stock and decrease or eliminate your investment.
We may not be able to maintain the listing of our common stock on Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our common stock and decrease or eliminate your investment.
The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects.
The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock. We operate solely through our subsidiaries: (i) ZCITY; (ii) AY Food Ventures Sdn Bhd; (iii) Morgan Global Sdn. Bhd; and (iv) Foodlink.
Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock. We have no substantive operations other than holding all of the outstanding shares of ZCity Sdn. Bhd.
The results of litigation and claims to which we may be subject cannot be predicted with certainty. Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, results or operations and reputation.
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, results or operations and reputation. 35 We face potential liability and expense for legal claims based on the content on our ZCITY App.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to take advantage of the extended transition period for complying with new or revised accounting standards.
From time to time, other companies may copy information from our ZCITY App, through website scraping, robots or other means, and publish or aggregate it with other information for their own benefit. We have no assurance other companies will not copy, publish or aggregate content from our ZCITY App in the future.
We may be required to expend resources to protect ZCITY App information or we may be unable to launch our services. From time to time, other companies may copy information from our ZCITY App, through website scraping, robots or other means, and publish or aggregate it with other information for their own benefit.
In addition, Section 10 7 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the “Securities Act”) for complying with new or revised accounting standards.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 31 In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the “Securities Act”) for complying with new or revised accounting standards.
Consumers have the choice of shopping with any online or offline retailer, large marketplaces or restaurant chain. We compete for consumers and merchants based on our ability to deliver a personalized e-commerce experience with an easy-to-use mobile app, unique cross-business reward system, instant rebate & cashback, and a trusted payment gateway which is both secure and convenient.
We compete for consumers and merchants based on our ability to deliver a personalized e-commerce experience with an easy-to-use mobile app, unique cross-business reward system, instant rebate & cashback, and a trusted payment gateway which is both secure and convenient. 16 Within the Malaysian market, we believe the principal competitors to the ZCITY App to include, but not limited to Fave and Shopback.
These claims could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merits of the claims. In some instances, we may elect or be compelled to remove content or may be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims.
In some instances, we may elect or be compelled to remove content or may be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims.
Despite measures we will take to detect and lessen the risk of this kind of conduct, we cannot assure that these measures will succeed.
Despite measures we will take to detect and lessen the risk of this kind of conduct, we cannot assure that these measures will succeed. Our business could suffer if customers use the ZCITY App for illegal or improper purposes.
Our executives and directors combine decades of on-the-ground local e-commerce operations and social media marketing experience, as well as professional expertise in the global finance field.
Our executives and directors combine decades of on-the-ground local e-commerce operations and social media marketing experience, as well as professional expertise in the global finance field. Our Growth Strategy Our main goal is focused on the recruitment of new consumers and the registration of as many merchants as possible in the most efficient way in the shortest amount of time.
As a result, Google’s promotion of its own competing products, or similar actions by Google in the future that have the effect of reducing our prominence or ranking on its search results, could have a substantial negative effect on our business and results of operations.
As a result, Google’s promotion of its own competing products, or similar actions by Google in the future that have the effect of reducing our prominence or ranking on its search results, could have a substantial negative effect on our business and results of operations. 22 The ecommerce market is highly competitive and if we do not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis our business could be adversely affected.
We face potential liability and expense for legal claims based on the content on our ZCITY App. We face potential liability and expense for legal claims relating to the information that we publish on our website and our ZCITY App, including claims for copyright or trademark infringement, among others.
We face potential liability and expense for legal claims relating to the information that we publish on our website and our ZCITY App, including claims for copyright or trademark infringement, among others. These claims could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merits of the claims.
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.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. 34 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.
Our marketing efforts will focus on attracting consumers by awarding RP upon the execution of successful transactions (where they can redeem instant rebates). Merchant Growth .
We strive to provide consumers with a smarter shopping experience from ordering to receiving goods and services as one seamless process. Our marketing efforts will focus on attracting consumers by awarding RP upon the execution of successful transactions (where they can redeem instant rebates). Merchant Growth .
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We anticipate incurring additional losses until such time, if ever, that we will be able to effectively market our products.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
TAZTE Smart F&B System shall be adopted in Morgan Global and AY Food Venture licensee holder. Marketing Strategy - Consumer With the number of available apps for download from the world’s leading app stores totaling over four million, we believe that structured and innovative user marketing strategy is the only way to stand out in today’s app market.
In order to increase the spending power of the user, our ZCITY App RP program will credit RP to the user for all MYR paid. 10 Marketing Strategy — Consumer With the number of available apps for download from the world’s leading app stores totaling over four million, we believe that structured and innovative user marketing strategy is the only way to stand out in today’s app market.
External partnerships play an important part in our business, as we will continue sourcing more delivery partners to offer our merchants greater flexibility. Consumer Growth . We strive to provide consumers with a smarter shopping experience from ordering to receiving goods and services as one seamless process.
We believe that this approach establishes a cycle where more consumers lead to more merchants and more merchants lead to more consumers. External partnerships play an important part in our business, as we will continue sourcing more delivery partners to offer our merchants greater flexibility. Consumer Growth .
We face the risk that changes in the policies of the Malaysian government could have a significant impact upon the business we may be able to conduct in Malaysia and the profitability of such business. Policies of the Malaysian government can have significant effects on the economic conditions of Malaysia.
This could in turn result in a substantial need for restructuring of our business objectives and could result in a partial or entire loss of an investment in our Company. 27 We face the risk that changes in the policies of the Malaysian government could have a significant impact upon the business we may be able to conduct in Malaysia and the profitability of such business.
According to the Google Report, total the GMV of South Asia’s Internet economy is expected to skyrocket from US$174 billion in 2021 to US$363 billion in 2025.
According to the Google Report, total the GMV of South Asia’s Internet economy is expected to skyrocket from US$174 billion in 2021 to US$363 billion in 2025. We believe that these ongoing positive economic and demographic trends in SEA and South Asia propel demand for our e-commerce platform.
The ZCITY App targets consumers through the provision of personalized deals based on consumers’ purchase history, location and preferences. Our technology platform allows us to identify the spending trends of our customers (the when, where, why, and how much).
Our technology platform allows us to identify the spending trends of our customers (the when, where, why, and how much).
Any delisting determination by Nasdaq could seriously decrease or eliminate the value of an investment in our common stock and other securities linked to our common stock.
However, there can be no assurance that we will continue to be in compliance and Nasdaq could make a determination to issue another notice regarding such incompliance. 29 Any delisting determination by Nasdaq could seriously decrease or eliminate the value of an investment in our common stock and other securities linked to our common stock.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive offices are located at 276 5th Avenue, Suite 704 #739, New York, New York 10001 and No.29, Jalan PPU 2A, Taman Perindustrian Pusat Bandar Puchong, 47100 Puchong, Selangor, Malaysia. We lease and maintain our offices, and we currently do not own any real estate.
Biggest changeItem 2. Properties. Our principal executive offices are located at 276 5 th Avenue, Suite 704 #739, New York, New York 10001 and No.29, Jalan PPU 2A, Taman Perindustrian Pusat Bandar Puchong, 47100 Puchong, Selangor, Malaysia. We lease and maintain our offices, and we currently do not own any real estate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 36 PART II
Biggest changeMine Safety Disclosures Not applicable. 37 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe recipients of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Transfer Agent The transfer agent for the common stock is Vstock Transfer, LLC, 18 Lafayette Place, Woodmere, New York, telephone (212) 828-8436.
Biggest change(b) Warrants . None. (c) Option Grants . None. (d) Issuance of Notes . None. Transfer Agent The transfer agent for the common stock is Vstock Transfer, LLC, 18 Lafayette Place, Woodmere, New York, telephone (212) 828-8436. 38 Item 6. [Reserved] Not applicable.
We intend to retain any future earnings to finance the operation and expansion of our business and fund our share repurchase program, and we do not expect to pay cash dividends in the foreseeable future. Securities Authorized for Issuance under Equity Compensation Plans We have not adopted any equity compensation plans as of June 30, 2023.
We intend to retain any future earnings to finance the operation and expansion of our business and fund our share repurchase program, and we do not expect to pay cash dividends in the foreseeable future. Securities Authorized for Issuance under Equity Compensation Plans We have not adopted any equity compensation plans as of June 30, 2024.
Recent Sales of Unregistered Securities During the fiscal year ended June 30, 2023, the registrant has granted or issued the following securities of the registrant that were not registered under the Securities Act, as amended. (a) Issuance of Capital Stock .
Recent Sales of Unregistered Securities During the fiscal year ended June 30, 2024, the registrant has granted or issued the following securities of the registrant that were not registered under the Securities Act, as amended. (a) Issuance of Capital Stock .
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “TGL.” Holders As of June 30, 2023, there were 28 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “TGL.” Holders As of June 30, 2024, there were 18 stockholders of record of our common stock.
Removed
In March 2023, we issued 285,714 shares of common stock to Voon Him “Victor” Hoo upon his resignation from Board. 37 The issuance of the capital stock listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering.
Added
On October 12, 2023, the Company issued 42,044 shares of its common stock to a licensor pursuant to a License and Service Agreement.
Removed
The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. (b) Warrants . None. (c) Option Grants . None. (d) Issuance of Notes .
Added
On October 30, 2023, we issued a total of 25,954 shares of our common stock to our former Chief Executive Officer, Chong Chan “Sam” Teo, and to Kok Pin “Darren” Tan in exchange for the cancellation of $321,562.08 in aggregate indebtedness.
Removed
On February 28, 2023, we entered into the Securities Purchase Agreement with YA II PN, Ltd.
Added
From May 2023 through November 8, 2023, we have issued 72,739 shares of our common stock to YA II PN, Ltd pursuant to the terms of Convertible Debentures purchased from the Company by YA II PN, Ltd.
Removed
(the “Selling Stockholder”), pursuant to which the Selling Stockholder agreed to purchase the Convertible Debentures, in the aggregate principal amount of up to $5,500,000 in a private placement for a purchase price with respect to each Convertible Debenture of 92% of the initial principal amount of such Convertible Debenture.
Added
On December 19, 2023, the Company issued 142,858 shares of common stock to VT Smart Venture Sdn Bhd pursuant to a Software Development Agreement. On March 12, 2024, the Company issued 198,412 shares of common stock to Myviko Holding Sdn Bhd. pursuant to a Software Development Agreement.
Removed
The purchase by the Selling Stockholder of the First Convertible Debenture which has an initial issuance principal amount of $2,000,000 occurred on February 28, 2023 for a purchase price of $1,840,000 and the closing of the purchase of the Second Convertible Debenture which has an initial issuance a principal amount of $3,500,000 occurred shortly after the registration statement related to the prospectus for the shares of common stock issuable upon the conversion of the Convertible Debentures (the “Selling Stockholder Registration Statement”) was declared effective by the SEC for a purchase price of $3,220,000.
Added
On April 8, 2024, the Company issued 126,082 shares of common stock to MYUP Solution Sdn Bhd pursuant to a Software Development Agreement. On May 5, 2024, the Company issued 20,000 shares to a consultant. On May 27, 2024, the Company issued 125,955 shares of common stock to Falcon Gateway Sdn Bhd pursuant to a Software Development Agreement.
Removed
The total purchase price paid to us by the Selling Stockholder for the Convertible Debentures in the Private Placement was $5,060,000. Each Convertible Debenture accrues or will accrue interest on its full outstanding principal amount at 4% per annum and has a 12-month term.
Removed
Assuming no conversions, prepayments or events of default have been made on or occurred with respect to the First and Second Convertible Debenture, on the maturity date thereof, interest of $220,000 shall have accrued and be payable on the First and Second Convertible Debenture.
Removed
Upon the occurrence and continuance of an Event of Default (as defined below) with respect to any Convertible Debenture, its per annum interest rate will increase to 15%. As of September 25, 2023, no Event of Default has occurred under the First Convertible Debenture.
Removed
Upon the occurrence and continuance of an Event of Default under the Second Convertible Debenture, its per annum interest rate will increase to 15%. 38 “Event of Default” means with respect to any Convertible Debenture: (i) the Company’s failure to pay to amounts due under such Convertible Debenture; (ii) the Company or any subsidiaries of the Company is subject to bankruptcy or insolvency proceeding or similar proceeding and such proceedings remain undismissed for a period of sixty one (61) days; (iii) the Company or any subsidiaries of the Company shall default in any of its payment obligations under any debenture, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company in an amount exceeding $100,000 and such default shall result in the full amount of such indebtedness becoming or being declared due and payable and such default is not thereafter cured within five (5) Business Days; (iv) the Company’s common stock shall cease to be quoted or listed for trading, as applicable, on any national exchange for a period of ten (10) consecutive trading days; (v) the Company shall be a party to certain change of control transactions (unless in connection with such change of control transaction such Convertible Debenture is retired; (vi) the Company’s (A) failure to deliver required number of shares of common stock as required under such Convertible Debenture or (B) notice, written or oral, to any holder of such Convertible Debenture of the Company’s intention not to comply with a request for conversion of such Convertible Debenture; (vii) the Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined in the Convertible Debenture) within five (5) Business Days after such payment is due; (viii) the Company’s failure to timely file with the SEC any of its periodic reports and such default is not thereafter cured within five (5) business days; (ix) any representation or warranty made or deemed to be made by or on behalf of the Company in or in connection with such Convertible Debenture or any of the other documents related to the Private Placement, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made; (x) any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder, ceases to be in full force and effect; or the Company or any other person or entity contests in writing the validity or enforceability of any provision of any Convertible Debenture or any of the other documents related to the Private Placement; or the Company denies in writing that it has any or further liability or obligation under any Convertible Debenture or any of the other documents related to the Private Placement, or purports in writing to revoke, terminate (other than in line with the relevant termination provisions) or rescind any Convertible Debenture or any of the other documents related to the Private Placement; (xi) the Company uses the proceeds of the issuance of such Convertible Debenture, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose; or (xii) any Event of Default (as defined in the other Convertible Denture or in any other documents related to the Private Placement) occurs with respect to any other Convertible Debenture, or any breach of any material term of any other debenture, note, or instrument held by the holder of such Convertible Debenture in the Company or any agreement between or among the Company and such holder; or (xiii) the Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision of such Convertible Debenture (except as may be covered by another Event of Default) or any other any other document related to the Private Placement) which is not cured or remedied within the time prescribed or if no time is prescribed within ten (10) business days of notification thereof.
Removed
If any Event of Default occurs under a Convertible Debenture (other than an event with respect to a bankruptcy or insolvency), at the Selling Stockholder election, all amounts owing in respect thereof, to the date of acceleration shall become immediately due and payable in cash; provided that, in the case of a bankruptcy or insolvency of the Company, all amounts owing in respect thereof, to the date of acceleration shall automatically become immediately due and payable in cash, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company.
Removed
The Selling Stockholder will also have the right to convert such Convertible Debenture at the applicable conversion price.
Removed
The Convertible Debentures provide a conversion right, in which any portion of the principal amount of the Convertible Debentures, together with any accrued but unpaid interest, may be converted into our common stock at a conversion price equal to the lower of (i) $1.6204 (the “Fixed Price”) or (ii) 93% of the lowest daily volume weighted average price (the “VWAP”) of the common stock during the ten (10) trading days immediately preceding the date of conversion (but not lower than a floor price of $0.25). 39 If a Trigger Event occurs, then the Company shall make monthly payments beginning on the 10 th calendar day after the date on which a Trigger Event occurs and then on the same day of each successive calendar month.
Removed
Each monthly payment shall be in an amount equal to the sum of (i) the lesser of (x) $1,000,000 and (y) the outstanding principal of the Convertible Debentures (the “Triggered Principal Amount”), plus (ii) a redemption premium of 7% of such Triggered Principal Amount, plus (iii) accrued and unpaid interest hereunder as of each payment date.
Removed
The obligation of the Company to make monthly payments shall cease if any time after the Trigger Date the daily VWAP is greater than the Floor Price for a period of 5 of 7 consecutive Trading Days in the event of a Floor Price Trigger unless a new Trigger Event occurs.
Removed
“Trigger Event” means the daily VWAP is less than the $0.25 for five Trading Days during a period of any 5 of 7 consecutive trading days.
Removed
Under the Convertible Debentures, the Company has the right, but not the obligation, to redeem (“Optional Redemption”) early a portion or all amounts outstanding under the Convertible Debentures; provided that (i) the closing price of the Company’s common stock on the date of such Optional Redemption is less than $1.6204 and (ii) the Company provides the Holder with at least 5 business days’ prior written notice (each, a “Redemption Notice”) of its desire to exercise an Optional Redemption.
Removed
The “Redemption Amount” shall be equal to the outstanding Principal balance being redeemed by the Company, plus a 10% premium on the principal amount being redeemed, plus all accrued and unpaid interest. If we elect to redeem the full $5,500,0000 principal amount of the Convertible Debentures, such premium payable will equal to $550,000.
Removed
The Selling Stockholder Registration Statement registers the resale by the Selling Stockholder of up to 22,880,000 shares of common stock that can be issuable upon the conversion of the Convertible Debentures.
Removed
The number of shares that were registered was calculated by dividing (x) the sum of the aggregate principal amount of Convertible Debentures ($5,500,000) plus one year of accrued interest on the Convertible Debentures ($220,000) by (y) the conversion floor price ($0.25), which is the lowest possible conversion price pursuant to the terms of the Convertible Debentures.
Removed
We sold an aggregate of $5,500,000 of the Convertible Debentures and received a purchase price of $5,060,000 from the Selling Stockholder. As of September 25, 2023, a total of $3,835,954 is due under the Convertible Notes, net of unamortized discounts of $114,046.
Removed
The notes and loan described above was deemed exempt from registration in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+42 added−41 removed42 unchanged
Biggest changeHowever, there is no guarantee that the substantial doubt about our ability to continue as a going concern will be alleviated. 49 The following summarizes the key components of our cash flows for the years ended June 30, 2023 and 2022: For the Years Ended June 30, 2023 June 30, 2022 Net cash used in operating activities $ (9,560,285 ) $ (8,663,901 ) Net cash used in investing activities (61,244 ) (311,739 ) Net cash provided by financing activities 12,659,188 8,163,893 Effect of exchange rate on cash and cash equivalents (289,257 ) (186,419 ) Net change in cash and cash equivalents $ 2,748,402 $ (998,166 ) Operating Activities Net cash used in operating activities for the years ended June 30, 2023 was approximately $9.6 million and were mainly comprised of the net loss of approximately $11.7 million, increase of prepayments of approximately $0.1 million as our vendors required us to make deposit to secure the purchase, increase of accounts receivable of approximately $0.2 million as a result of offering credit terms to our corporate customers engaged in the sales of nutrition products, and food and beverage products, increase in inventory of approximately $0.2 million as we increase our inventory level on June 30, 2023 to meet with the demand of our product, and increase of approximately $0.4 million in other receivables and other current assets as we prepaid IT maintenance fee to a third party service provider, offset by amortization of debt discount of approximately $1.3 million, stock-based compensation of approximately $0.8 million, increase of approximately $0.1 million in customer deposits as we incurred deferred revenue related to member subscription revenue for the remaining subscribed period as of June 30, 2023, increase of approximately $0.1 million in contract liability as we deferred more revenue due to increase of our customer’s redemption rate in spending related reward point, and increase of approximately $0.5 million in other payables and accrued liabilities mainly related to the accrued professional expenses.
Biggest changeNet cash used in operating activities for the years ended June 30, 2023 was approximately $9.6 million and were mainly comprised of the net loss of approximately $11.7 million, increase of prepayments of approximately $0.1 million as our vendors required us to make deposit to secure the purchase, increase of accounts receivable of approximately $0.2 million as a result of offering credit terms to our corporate customers engaged in the sales of nutrition products, and food and beverage products, increase in inventory of approximately $0.2 million as we increase our inventory level on June 30, 2023 to meet with the demand of our product, and increase of approximately $0.4 million in other receivables and other current assets as we prepaid IT maintenance fee to a third party service provider, offset by amortization of debt discount of approximately $1.3 million, stock-based compensation of approximately $0.8 million, increase of approximately $0.1 million in customer deposits as we incurred deferred revenue related to member subscription revenue for the remaining subscribed period as of June 30, 2023, increase of approximately $0.1 million in contract liability as we deferred more revenue due to increase of our customer’s redemption rate in spending related reward point, and increase of approximately $0.5 million in other payables and accrued liabilities mainly related to the accrued professional expenses. 48 Investing Activities Net cash used in investing activities for the year ended June 30, 2024 was approximately $0.3 million, which was mainly due to purchase of equipment and intangible assets of approximately $17,000, and $0.2 million, respectively, for our operations used, and approximately $45,000 of cash released, net of cash received from disposal of Foodlink and its subsidiaries.
On August 15, 2022, we had closed our initial underwritten public offering of 2,300,000 shares of common stock, par value $0.00001 per share, at $4.00 per share. We had received aggregate net proceeds from the closing of approximately $8.2 million, after deducting underwriting discounts and commissions and fees, and other estimated offering expenses which amounted to approximately $1.0 million.
On August 15, 2022, we had closed our initial underwritten public offering of 2,300,000 shares of common stock, par value $0.00001 per share, at $4.00 per share. We received aggregate net proceeds from the closing of approximately $8.2 million, after deducting underwriting discounts and commissions and fees, and other estimated offering expenses which amounted to approximately $1.0 million.
Investing Activities Net cash used in investing activities for the year ended June 30, 2023 was approximately $61,000, which mainly due to purchase of equipment of approximately $87,000 for our operations used, and offset with proceeds of approximately $26,000 received from disposal of our office equipment.
Net cash used in investing activities for the year ended June 30, 2023 was approximately $61,000, which mainly due to purchase of equipment of approximately $87,000 for our operations used, and offset with proceeds of approximately $26,000 received from disposal of our office equipment.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Stock-based compensation We recognize compensation costs resulting from the issuance of stock-based awards to third party consultant and former director as an expense in the statements of operations over the requisite service period based on a measurement of fair value for each stock-based award.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. 51 Stock-based compensation We recognize compensation costs resulting from the issuance of stock-based awards to third party consultant and former director as an expense in the statements of operations over the requisite service period based on a measurement of fair value for each stock-based award.
Actual results could differ from these estimates. Accounts receivable, net Accounts receivable are recorded at the invoiced amount, net of an allowance for uncollectible accounts, and do not accrue interest. We offer various payments terms to customers from cash due on delivery to 90 days based on their credit history.
Actual results could differ from these estimates. 49 Accounts receivable, net Accounts receivable are recorded at the invoiced amount, net of an allowance for uncollectible accounts and do not accrue interest. We offer various payments terms to customers from cash due on delivery to 90 days based on their credit history.
The portion allocated to the reward points is initially recorded as contract liability and subsequently recognized as revenue upon redemption or expiration. 52 The two primary estimates utilized to record the contract liability for reward points earned by members are the estimated retail price per point and estimated breakage.
The portion allocated to the reward points is initially recorded as contract liability and subsequently recognized as revenue upon redemption or expiration. The two primary estimates utilized to record the contract liability for reward points earned by members are the estimated retail price per point and estimated breakage.
GAAP. The preparation of these consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
The preparation of these consolidated financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”).
If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature.
If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment for long-lived assets were recorded as of June 30, 2023 and 2022.
If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment for long-lived assets were recorded as of June 30, 2024 and 2023.
If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended June 30, 2023 and 2022, our foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.
If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended June 30, 2024 and 2023, our foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.
The decrease was mainly attributable to decrease in product and loyalty program revenue. 45 Product and loyalty program revenue Product revenue was generated through sales of our e-voucher, health care products, and other products through our ZCITY platform while loyalty program revenue was recognized when our customers redeem their previously earned reward points from our loyalty program or upon expiration of the reward point.
The decrease was mainly attributable to the decrease in product and loyalty program revenue. 43 Product and loyalty program revenue Product revenue was generated through sales of our e-voucher, health care products and other products through our ZCITY platform while loyalty program revenue was recognized when our customers redeem their previously earned reward points from our loyalty program or upon expiration of the reward point.
Our management reviews historical accounts receivable collection rates across all aging brackets and has made 100% provision for customer balances aged above 120 days for sales of healthcare products on our ZCITY platform and 100% provision for customer balances aged above 60 days for sublicensing revenue and sales of food and beverage products.
Our management reviews historical accounts receivable collection rates across all aging brackets and has made 100% provision of credit loss for customer balances aged above 120 days for sales of healthcare products on our ZCITY platform and 100% provision for customer balances aged above 60 days for sublicensing revenue and sales of food and beverage products.
Inflation Although Malaysia is experiencing a high inflation rate, we do not believe that inflation has had a material adverse effect on our business as June 30, 2023, but we will continue to monitor the effects of inflation on our business in future periods.
Inflation Although Malaysia is experiencing a high inflation rate, we do not believe that inflation has had a material adverse effect on our business as June 30, 2024, but we will continue to monitor the effects of inflation on our business in future periods.
Financing Activities Net cash provided by financing activities for the year ended June 30, 2023 was approximately $12.7 million, which mainly comprised of proceeds received from the issuance of convertible notes to third parties of approximately $7.7 million, proceeds received from our initial public offering of approximately $8.2 million, and proceeds received from third parties loans of approximately $0.6 million, offset by repayment to related parties, third parties loans, and insurance loan of approximately $3.8 million, repayment of senior note of $65,000, and $15,000 payment of deferred offering costs. 50 Net cash provided by financing activities for the year ended June 30, 2022 was approximately $8.2 million, which were mainly comprised of proceeds received from the issuance of convertible note from third parties and related parties of approximately $8.6 million, and proceeds received from third parties loans of approximately $1.5 million, offset by repayment to related parties loan of approximately $1.8 million, and approximately $0.1 million payment of deferred offering costs.
Net cash provided by financing activities for the year ended June 30, 2023 was approximately $12.7 million, which mainly comprised of proceeds received from the issuance of convertible notes to third parties of approximately $7.7 million, proceeds received from our initial public offering of approximately $8.2 million, and proceeds received from third parties loans of approximately $0.6 million, offset by repayment to related parties, third parties loans, and insurance loan of approximately $3.8 million, repayment of senior note of $65,000, and $15,000 payment of deferred offering costs.
As a result of the Share Swap Agreement, (i) GEM became the 100% subsidiary of TGL and Kok Pin “Darren” no longer had any control over the GEM ordinary shares and (ii) Kok Pin “Darren,” the Initial GEM Stockholders and Chong Chan “Sam” Teo owned 100% of the shares of TGL common stock (Kok Pin “Darren” owning approximately 97%).
As a result of the Share Swap Agreement, (i) ZCITY became the 100% subsidiary of TGL and Kok Pin “Darren” Tan no longer had any control over the ZCITY ordinary shares and (ii) Kok Pin “Darren” Tan the Initial ZCITY Stockholders and Chong Chan “Sam” Teo owned 100% of the shares of TGL common stock (Kok Pin “Darren” Tan owning approximately 97%).
Significant accounting estimates reflected in our consolidated financial statements include the estimated retail price per point and estimated breakage to calculate the revenue recognized in our loyalty program revenue, the useful lives of property and equipment, impairment of long-lived assets, allowance for doubtful accounts, write-down for estimated obsolescence or unmarketable inventories, realization of deferred tax assets and uncertain tax position, fair value of our stock price to determine the beneficial conversion feature (“BCF”) within the convertible note, fair value of the stock-based compensation, and fair value of the warrants issued.
Significant accounting estimates reflected in our consolidated financial statements include the estimated retail price per point and estimated breakage to calculate the revenue recognized in our loyalty program revenue, the useful lives of property and equipment, impairment of long-lived assets, provision for estimated credit losses, write-down for estimated obsolescence or unmarketable inventories, realization of deferred tax assets and uncertain tax position, fair value of our stock price to determine the beneficial conversion feature (“BCF”) within the convertible note, fair value of the stock-based compensation, fair value of the marketable securities and fair value of the warrants issued.
Net losses Our net losses decreased by approximately $18,000 predominately due to the reasons as discussed above. Liquidity and Capital Resources In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our liquidity needs are to meet working capital requirements and operating expense obligations.
Net losses Our net losses decreased by approximately $5.1 million predominately due to the reasons as discussed above. Liquidity and Capital Resources In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our liquidity needs are to meet working capital requirements and operating expense obligations.
The fair value of the stock-based compensation which included warrants and common stock issued were estimated to be $819,332 and $1,283,994 for the years ended June 30, 2023 and 2022, respectively. Convertible notes We evaluate our convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives.
The fair value of the stock-based compensation which included warrants and common stock issued were estimated to be $11,111 and $819,332 for the years ended June 30, 2024 and 2023, respectively. Convertible notes We evaluate our convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives.
For the years end June 30, 2023 and 2022, we incurred approximately $1.8 million and $2.8 million, respectively, in marketing and promotion expense, and recognized the same amount of product revenue at the time of redemption of the non-spending related activities reward points by our customers.
For the years ended June 30, 2024 and 2023, we incurred approximately $0.4 million and $1.8 million, respectively, in marketing and promotion expense, and recognized the same amount of product revenue at the time of redemption of the non-spending related activities reward points by our customers.
From February to June 2023, we issued two convertible notes to a third party in an aggregate principal amount of $5,500,000. We received $5,060,000 in proceeds from the third-party net of discount. The convertible notes accrue or will accrue interest at 4% per annum and has a 12-months term.
From February to June 2023, we issued two convertible notes to a third party in an aggregate principal amount of $5,500,000. We received $5,060,000 in proceeds from the third-party net of discount. The convertible notes accrued interest at 4% per annum and had a 12-month term.
Impairment for long-lived assets Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable.
No allowance of prepayments was recorded as of June 30, 2024 and June 30, 2023. 50 Impairment for long-lived assets Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable.
As of June 30, 2023 and 2022, we had approximately $4.6 million and $1.8 million, respectively, in cash and cash equivalent which primarily consists of bank deposits, which are unrestricted as to withdrawal and use.
As of June 30, 2024 and 2023, we had approximately $0.2 million and $4.6 million, respectively, in cash and cash equivalent which primarily consists of bank deposits, which are unrestricted as to withdrawal and use.
Sublicense revenue As we acquired exclusive worldwide license for right of use in Morganfield’s Trademark on May 1, 2023 for a period of five years, we have generated sublicense revenue consist of fee charged to the customers who sublicensed the right of use of the Trademark from us.
Sublicense revenue As we acquired exclusive worldwide license for right of use in Morganfield’s Trademark, and Abe Yus’s Trademark on May 1, 2023, and June 6, 2023, respectively, for a period of five years, we have generated sublicense revenue consisting of fee charged to the customers who sublicensed the right of use of the Trademark from us.
The amount was attributable to tax imposed on Treasure Global Inc from the State of Delaware, as we are required to remit franchise tax to the State of Delaware on an annual basis.
The amount was mainly attributable to tax imposed on us from the State of Delaware, as we are required to remit franchise tax to the State of Delaware on an annual basis.
Cost of revenue also consists of monthly license payment made to our licensor to maintain our good standing for the right of use in Trademark which is attributable to our sublicense revenue. Total cost of revenue decreased by approximately $10.3 million or 13.0% for the year ended June 30, 2023 compared with the same period in 2022.
Cost of revenue also consists of monthly license payment made to our licensor to maintain our good standing for the right of use the Trademark which is attributable to our sublicense revenue. Total cost of revenue decreased by approximately $47.6 million or 69.2% for the year ended June 30, 2024 compared with the same period in 2023.
The decrease was in line with our decreased of revenue.
The decrease was in line with our decrease in revenue.
Management reviews our prepayments on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Our management continues to evaluate the reasonableness of the valuation allowance policy and updates it if necessary.
Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Our management continues to evaluate the reasonableness of the valuation allowance policy and updates it if necessary.
“Business – Corporate Structure.” On March 11, 2021, TGL and GEM were reorganized into a parent subsidiary structure pursuant to the Share Swap Agreement in which TGL exchanged the swap shares for all of the issued and outstanding equity of GEM.
Tan’s common control over TGL and ZCITY see Part I, Item 1. “Business – Corporate Structure.” On March 11, 2021, TGL and ZCITY were reorganized into a parent subsidiary structure pursuant to the Share Swap Agreement in which TGL exchanged the swap shares for all of the issued and outstanding equity of ZCITY.
Users can use our secure platform and enjoy cashless shopping experiences with rebates when they shop with e-commerce and retail merchants through trusted and leading e-wallet providers such as Touch’n Go eWallet, Boost eWallet, GrabPay eWallet and credit card/online banking like the “FPX” (the Malaysian Financial Process Exchange) as well as more traditional providers such as Visa and Mastercard.
Users can use our secure platform and enjoy cashless shopping experiences with rebates when they shop with e-commerce and retail merchants through trusted and leading e-wallet providers such as Touch’n Go eWallet, Boost eWallet, GrabPay eWallet and credit card/online banking like the “FPX” (the Malaysian Financial Process Exchange) as well as more traditional providers such as Visa and Mastercard. -Food Distribution Operation On April 12, 2023, we have acquired 100% equity interest in Foodlink Global Sdn.
The ZCITY App was successfully launched in Malaysia on June 2020. GEM is equipped with the know-how and expertise to develop additional/add-on technology-based products and services to complement the ZCITY App, thereby growing its reach and user base.
Our proprietary product is an application branded “ZCITY App,” which was developed through ZCITY. The ZCITY App was successfully launched in Malaysia on June 2020. ZCITY is equipped with the know-how and expertise to develop additional/add-on technology-based products and services to complement the ZCITY App, thereby growing its reach and user base.
Our ability to engage our member consumers and empower our merchants and their brands is affected by the breadth and depth of our data insights, such as the accuracy of our members’ shopping preferences, and our technology capabilities and infrastructure, and our continued ability to develop scalable services and upgrade our platform user experience to adapt to the quickly evolving industry trends and consumer preferences. 42 Our Investment in User Base, Technology, People and Infrastructure We have made, and will continue to make, significant investments in our platform to attract consumers and merchants, enhance user experience and expand the capabilities and scope of our platform.
Our ability to engage our member consumers and empower our merchants and their brands is affected by the breadth and depth of our data insights, such as the accuracy of our members’ shopping preferences, and our technology capabilities and infrastructure, and our continued ability to develop scalable services and upgrade our platform user experience to adapt to the quickly evolving industry trends and consumer preferences.
Our management continuously assesses the reasonableness of the valuation allowance policy and updates it as needed. As of June 30, 2023, and 2022, our allowance for accounts receivable was $214 and $227, respectively. 51 Inventories Our inventories are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out (FIFO) method.
Our management continuously assesses the reasonableness of the credit loss allowance policy and updates it as needed. As of June 30, 2024 and 2023, we recorded $1,100 and $214 of provision for estimated credit losses, respectively. Inventories Our inventories are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out (FIFO) method.
Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan. As of September 13, 2023, we had 2,642,404 registered users and 2,025 registered merchants.
Our longer-term goal is for the ZCITY App and its ever-developing technology to become one of the most well-known commercialized applications more broadly in Southeast Asia and Japan.
Other expenses, net Other expenses, net amounted to approximately $1.4 million and $1.6 million for the years ended June 30, 2023 and 2022, respectively. Representing a decrease of approximately $0.2 million or 10.4%.
General and administrative expenses General and administrative expenses amounted to approximately $4.5 million and $4.7 million for the years ended June 30, 2024 and 2023, respectively, representing a decrease of approximately $0.2 million or 3.4%.
We continuously monitor the development and participation of active users as a proportion of its total registered user base to ensure the effectiveness of our marketing and feature implantation strategies.
Consequently, this has led to a decrease in new user registrations and lower retention rates among active users on our ZCITY platform. We continuously monitor the development and participation of active users as a proportion of its total registered user base to ensure the effectiveness of our marketing and feature implantation strategies.
Results of Operation For the Years ended June 30, 2023 and 2022 Revenue Our breakdown of revenues by categories for the years ended June 30, 2023 and 2022, respectively, is summarized below: For the Years Ended June 30, Change 2023 % 2022 % % Product and loyalty program revenue $ 68,899,687 99.3 % $ 79,409,756 99.7 % (13.2 )% Transaction revenue 75,274 0.1 % 53,667 0.1 % 40.3 % Agent subscription revenue - 0.0 % 15 0.0 % (100.0 )% Member subscription revenue 383,538 0.6 % 211,441 0.2 % 81.4 % Sublicence revenue 49,820 0.1 % - 0.0 % 100.0 % Total revenues $ 69,408,319 100.0 % $ 79,674,879 100.0 % (12.9 )% Total revenues decreased by approximately $10.3 million or 12.9% to approximately $69.4 million for the year ended June 30, 2023 from approximately $79.7 million for the year ended June 30, 2022.
Results of Operation For the Years ended June 30, 2024 and 2023 Revenue Our breakdown of revenues by categories for the years ended June 30, 2024 and 2023, respectively, is summarized below: For the Years Ended June 30, Change 2024 % 2023 % % Product and loyalty program revenue $ 21,455,862 97.2 % $ 68,899,687 99.3 % (68.9 )% Transaction revenue 61,241 0.3 % 75,274 0.1 % (18.6 )% Member subscription revenue 375,949 1.7 % 383,538 0.6 % (2.0 )% Sublicence revenue 173,777 0.8 % 49,820 0.1 % 248.2 % Total revenues $ 22,066,829 100.0 % $ 69,408,319 100.0 % (68.2 )% Total revenues decreased by approximately $47.3 million or 68.2% to approximately $22.1 million for the year ended June 30, 2024 from approximately $69.4 million for the year ended June 30, 2023.
Transaction revenue The transaction revenue primarily consists of fees charged to merchants for participating in our ZCITY platform upon successful sales transaction and payment service taken place between the merchants and their customers online. Our transaction revenue increased by 40.3% to approximately $75,000 for the year ended June 30, 2023 from approximately $54,000 for the same period in 2022.
Transaction revenue The transaction revenue primarily consists of fees charged to merchants for participating in our ZCITY platform upon successful sales transaction and payment service taken place between the merchants and their customers online.
Supply Chain Disruptions Although there have been global supply chain disruptions as a result of the COVID-19 pandemic and Russia’s February 2022 invasion of Ukraine that may have affected the operations of some of our online and offline merchants, these disruptions have not had a material adverse effect on our business as of June 30, 2023, but we will continue to monitor the effects of supply chain disruptions on our business in future periods.
Supply Chain Disruptions Although there have been Russia’s February 2022 invasion of Ukraine and the 2023 Middle East conflicts that may have affected the operations of some of our online and offline merchants, these disruptions have not had a material adverse effect on our business as of June 30, 2024, but we will continue to monitor the effects of above mentioned disruptions on our business in future periods. 41 Key Operating Metrics Our management regularly reviews a number of metrics to evaluate our business, measures our performance, identifies trends, formulates financial projections and makes strategic decisions.
In addition, our financial statements and the financial information included in this Report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.
In addition, our financial statements and the financial information included in this Report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods. Overview Treasure Global Inc is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware.
Based on the above assumption, the fair value of the warrants issued were estimated to be $175,349 for the year ended June 30, 2023. Recent Accounting Pronouncements See Note 2 of the notes to the consolidated financial statements included elsewhere in this report for a discussion of recently issued accounting standards.
Recent Accounting Pronouncements See Note 2 of the notes to the consolidated financial statements included elsewhere in this report for a discussion of recently issued accounting standards.
Additionally, management periodically evaluates individual customer financial conditions, credit histories, and current economic conditions to make necessary adjustments to the allowance. Account balances are charged off against the allowance when all collection efforts have been exhausted, and recovery potential is deemed remote.
Account balances are charged off against the allowance when all collection efforts have been exhausted, and recovery potential is deemed remote.
Despite receiving the proceeds from our initial underwritten public offering and issuance of two convertible notes, management is of the opinion that we will not have sufficient funds to meet the working capital requirements and debt obligations as they become due starting from one year from the date of this report due to our recurring loss.
From July to September 2024, the Company received net proceed of $2,457,456, net of broker fee from issuance of 1,583,418 shares of common stock which sell through or to the Manager related to the Marketing Offering Agreement. 47 Despite receiving the proceeds from offerings, and issuance of convertible notes, management is of the opinion that we will not have sufficient funds to meet the working capital requirements and debt obligations as they become due starting from one year from the date of this report due to our recurring loss.
Our technology platform allows us to identify the spending trends of our customers (the when, where, why, and how much).
The ZCITY App targets consumer through the provision of personalized deals based on consumers’ purchase history, location and preferences. Our technology platform allows us to identify the spending trends of our customers (the when, where, why, and how much).
Southeast Asia (“SEA”) consumers have access to a plethora of smart ordering, delivery and “loyalty” websites and apps, but in our experience, SEA consumers very rarely receive personalized deals based on their purchases and behavior. 41 The ZCITY App targets consumer through the provision of personalized deals based on consumers’ purchase history, location and preferences.
As of September 25, 2024, we had 2,704,306 registered users and 2,027 registered merchants. 39 Southeast Asia (“SEA”) consumers have access to a plethora of smart ordering, delivery and “loyalty” websites and apps, but in our experience, SEA consumers very rarely receive personalized deals based on their purchases and behavior.
Management is trying to alleviate the going concern risk through the following sources: ● Equity financing to support our working capital; ● Other available sources of financing (including debt) from Malaysian banks and other financial institutions; and ● Financial support and credit guarantee commitments from our related parties.
Management is trying to alleviate the going concern risk through the following sources: ● Equity financing to support our working capital; ● Financial support and credit guarantee commitments from our related parties. However, there is no guarantee that the substantial doubt about our ability to continue as a going concern will be alleviated.
Tan’s prior 100% ownership of TGL and his prior 100% voting and investment control over GEM pursuant to the Beneficial Shareholding Agreements. For a more detailed description of the Beneficial Shareholding Agreements and Mr. Tan’s common control over TGL and GEM see Part I, Item 1.
Prior to March 11, 2021, TGL and ZCITY were separate companies under the common control of Kok Pin “Darren,” Tan which resulted from Mr. Tan’s prior 100% ownership of TGL and his prior 100% voting and investment control over ZCITY pursuant to the Beneficial Shareholding Agreements. For a more detailed description of the Beneficial Shareholding Agreements and Mr.
Gross profit Our gross profit from our major revenue categories is summarized as follows: For the year Ended June 30, 2023 For the year Ended June 30, 2022 Change Percentage Change Product and loyalty program revenue Gross profit $ 41,771 $ 211,065 $ (169,294 ) (80.2 )% Gross margin 0.1 % 0.3 % (0.2 )% Transaction revenue Gross profit $ 75,274 $ 53,667 $ 21,607 40.3 % Gross margin 100.0 % 100.0 % — % Agent subscription revenue Gross profit $ — $ 15 $ (15 ) (100.0 )% Gross margin — % 100.0 % (100.0 )% Member subscription revenue Gross profit $ 383,538 $ 211,441 $ 172,097 81.4 % Gross margin 100.0 % 100.0 % — % Sublicense revenue Gross profit $ 22,701 $ — $ 22,701 100.0 % Gross margin 45.6 % — % 45.6 % Total Gross profit $ 523,284 $ 476,188 $ 47,096 9.9 % Gross margin 0.8 % 0.6 % 0.2 % Our gross profit for the year ended June 30, 2023 amounted to approximately $523,000 as compared to approximately $476,000 for the year ended June 30, 2022 which represents an increase of approximately $47,000 or 9.9%.
Gross profit Our gross profit from our major revenue categories is summarized as follows: For the Year Ended June 30, 2024 For the Year Ended June 30, 2023 Change Percentage Change Product and loyalty program revenue Gross profit $ 398,476 $ 41,771 $ 356,705 854.7 % Gross margin 1.9 % 0.1 % 1.8 % Transaction revenue Gross profit $ 61,241 $ 75,274 $ (14,033 ) (18.6 )% Gross margin 100 % 100.0 % — % Member subscription revenue Gross profit $ 375,949 $ 383,538 $ (7,589 ) (2.0 )% Gross margin 100 % 100 % — % Sublicense revenue Gross (loss) profit $ (19,604 ) $ 22,701 $ (42,305 ) (186.4 )% Gross margin (11.5 )% 45.6 % (57.0 )% Total Gross profit $ 816,062 $ 523,284 $ 292,778 56.0 % Gross margin 3.7 % 0.8 % 2.9 % 45 Our gross profit for the year ended June 30, 2024, amounted to approximately $0.8 million as compared to approximately $0.5 million for the same period in 2023, reflecting an increase of approximately $0.3 million or 56.0%.
Selling expenses Selling expenses amounted to approximately $4.7 million and $6.3 million for the years ended June 30, 2023 and 2022, respectively. Representing a decrease of approximately $1.6 million or 24.8%. The decrease was mainly attributable to decrease in marketing and promotion expense of approximately $1.4 million related to promoting our ZCITY platform.
The decrease was mainly attributable to a decrease in marketing and promotion expense of approximately $2.8 million related to promoting our ZCITY platform.
On August 15, 2022, we had closed our initial underwritten public offering of 2,300,000 shares of common stock, par value $0.00001 per share, at $4.00 per share. Meanwhile we received net proceeds of approximately $8.2 million, net of underwriting discounts and commissions and fees, and other estimated offering expenses amounted to approximately $1.0 million.
Recent Development -Financing Development On August 15, 2022, we had closed our initial underwritten public offering of 32,858 (2,300,000 pre reverse split) shares of common stock, par value $0.00001 per share, at $280 ($4.00 pre reverse split) per share.
Prepayments Prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any prepayments determined by management that such advances will not be in receipt of inventories, services, or refundable, we will recognize an allowance account to reserve such balances.
For any prepayments determined by management that such advances will not be in receipt of inventories, services or refundable, we will recognize an allowance account to reserve such balances. Management reviews our prepayments on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary.
As of June 30, 2023, we had 22,861 customers who subscribed to our Zmember program.
The decrease was primarily due to we experienced slowdown in acquiring new customers to participate in our Zmember program . As of June 30, 2024 and 2023, we had 28,927 and 22,861 customers who subscribed to our Zmember program, respectively.
Stock-based compensation expenses Stock-based compensation expenses amounted to approximately $0.8 million and $1.3 million for the years ended June 30, 2023 and 2022 respectively, representing decrease of approximately $0.5 million. The stock-based compensation incurred for the year ended June 30, 2022 are from Exchange Listing LLC (the “Consultant”).
Operating expenses Our operating expenses consist of selling expenses, general and administrative expenses, research and development expenses and stock-based compensation expenses. Selling expenses Selling expenses amounted to approximately $1.8 million and $4.7 million for the years ended June 30, 2024 and 2023, respectively, representing a decrease of approximately $3.0 million or 62.7%.
For the year ended June 30, 2023, sublicense revenue was amounted to approximately $50,000 while as of June 30, 2023 we engaged 7 customers as sublicensees who operated their restaurant under Morganfield’s Trademark in Singapore, Malaysia, and China. 46 Cost of revenue Our breakdown of cost of revenue by categories for the years ended June 30, 2023 and 2022, respectively, is summarized below: For the Years Ended June 30, Change 2023 2022 % Product and loyalty program revenue $ 68,857,916 $ 79,198,691 (13.1 )% Sublicense revenue 27,119 - 100.0 % Total cost of revenue $ 68,885,035 $ 79,198,691 (13.0 )% Cost of revenue mainly consists of the purchases of the gift card or “E-voucher” pin code, health care product, and food and beverage products which is directly attributable to our product revenue.
As we had disposed Foodlink and its subsidiaries along with the food distribution and sublicensing operation in May 2024, we would no longer generate revenue from sublicense going forward. 44 Cost of revenue Our breakdown of cost of revenue by categories for the years ended June 30, 2024, and 2023, respectively, is summarized below: For the Years Ended June 30, Change 2024 2023 % Product and loyalty program revenue $ 21,057,386 $ 68,857,916 (69.4 )% Sublicense revenue 193,381 27,119 613.1 % Total cost of revenue $ 21,250,767 $ 68,885,035 (69.2 )% Cost of revenue mainly consists of the purchases of the gift card or “E-voucher” pin code, health care product and food and beverage products which is directly attributable to our product revenue.
Research and development expenses Research and development expense amounted to approximately $0.5 million and $0.3 million for the years ended June 30, 2023 and 2022, respectively, representing 105.9% increase as we increase spending to maintain and enhance our mobile application or website to ensure our customers to have exceptional user experience while navigating within the ZCITY platform.
Research and development expenses Research and development expense amounted to approximately $0.5 million for the years ended June 30, 2024 and 2023, representing 6.5% decrease as we incurred less spending in mobile application or website development. Stock-based compensation expenses Stock-based compensation expenses amounted to approximately $0.1 million and $0.8 million for the years ended June 30, 2024, and 2023, respectively.
Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock.
Subsequent to the date of the Share Swap Agreement, Kok Pin “Darren” Tan transferred 9,529,002 of his 10,000,000 shares of TGL common stock to 16 individuals and entities and currently owns less than 5% of our common stock. -ZCITY Operation We have created an innovative online-to-offline e-commerce platform business model offering consumers and merchants instant rebates and affiliate cashback programs, while providing a seamless e-payment solution with rebates in both e-commerce (i.e., online) and physical retailers/merchant (i.e., offline) settings.
Accordingly, our churn and retention rates of the active user base at the end of each quarter is as follows: Starting Ending Total active users New active users (registered within the quarter) Existing active users Active users churn rate Active users retention rate July 1, 2020 September 30, 2020 2,945 2,879 66 N/A N/A October 1, 2020 December 31, 2020 42,225 41,142 1,083 63.3 % 36.7 % January 1, 2021 March 31, 2021 300,270 281,432 18,838 55.4 % 44.6 % April 1, 2021 June 30, 2021 347,596 262,780 84,816 71.8 % 28.2 % July 1, 2021 September 30, 2021 362,805 245,580 117,225 66.3 % 33.7 % October 1, 2021 December 31, 2021 421,287 288,536 132,751 63.4 % 36.6 % January 1, 2022 March 31, 2022 448,247 361,143 87,104 78.5 % 21.5 % April 1, 2022 June 30, 2022 443,430 368,390 75,040 83.3 % 16.7 % July 1,2022 September 30, 2022 448,358 146,036 342,322 22.8 % 77.2 % October 1, 2022 December 31, 2022 458,177 104,191 353,986 27.5 % 72.5 % January 1, 2023 March 31, 2023 449,435 81,921 367,514 19.8 % 80.2 % April 1, 2023 June 30, 2023 378,414 93,516 284,898 36.6 % 63.4 % 44 The retention rate and churn rate for our active users are calculated as follows: Retention rate of active users for any quarter = Existing active users Total active users in the past quarter Churn rate of active users for any quarter = Total active users from past quarter minus current quarter existing active users Total active users in the past quarter Over the last 24 months, we have used different strategies to build and maintain our users and increase their engagement.
Accordingly, our churn and retention rates of the active user base at the end of last five quarters as of June 30, 2024 is as follows: Starting Ending Total active users New active users (registered within the quarter) Existing active users Active users churn rate Active users retention rate April 1, 2023 June 30, 2023 378,414 93,516 284,898 36.6 % 63.4 % July 1, 2023 September 30, 2023 187,180 93,836 93,344 75.3 % 24.7 % October 1, 2023 December 31, 2023 156,979 38,934 118,045 36.9 % 63.1 % January 1, 2024 March 31, 2024 41,458 12,705 28,753 81.7 % 18.3 % April 1, 2024 June 30, 2024 26,819 4,634 22,185 46.5 % 53.5 % The retention rate and churn rate for our active users are calculated as follows: Retention rate of active users for any quarter = Existing active users Total active users in the past quarter Churn rate of active users for any quarter = Total active users from past quarter minus current quarter existing active users Total active users in the past quarter We have used different strategies to build and maintain our users and increase their engagement.
The main metrics we consider, and our results for each quarter since we launched ZCITY platform, are set forth in the table below: For the quarters ended June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, June 30, 2021 2021 2021 2022 2022 2022 2022 2023 2023 Number of new registered user (1) 262,784 245,582 288,540 364,218 466,534 234,179 143,654 98,248 98,087 Number of active users (2) 347,596 362,805 421,287 448,247 443,430 488,358 458,177 449,435 378,414 Number of new participating merchants 270 44 15 14 7 13 - 10 2 (1) Registered are persons who have registered on the ZCITY App.
The main metrics we consider, and our results for last five quarters, are set forth in the table below: For the Quarters Ended June 30, September 30, December 31, March 31, June 30, 2023 2023 2023 2024 2024 Number of new registered user (1) 98,087 102,752 38,934 12,405 4,934 Number of active users (2) 378,414 187,180 156,979 41,458 26,819 Number of new participating merchants 2 16 1 - - (1) Registered are persons who have registered on the ZCITY App.
The product and loyalty program revenue decrease by approximately $10.5 million or 13.2% to approximately $68.9 million for the year ended June 30, 2023 from approximately $79.4 million for the same period in 2022. The decrease was mainly attributable to decrease in E-voucher purchasing which resulted in less E-voucher available for sales during the year ended June 30, 2023.
In addition, we also engage in sales of food and beverage products through our subsidiaries, Morgan and AY Food, despite they were disposed in May 2024. The product and loyalty program revenue decrease by approximately $47.4 million or 68.9% to approximately $21.5 million for the year ended June 30, 2024 from approximately $68.9 million for the same period in 2023.
Accordingly, the proportion of total registered users that we consider active users at the end of each quarter is as follows: Starting Ending Total registered users Total active users Total active users to total registered users July 1, 2020 September 30, 2020 14,336 2,945 20.5 % October 1, 2020 December 31, 2020 58,868 42,225 71.7 % January 1, 2021 March 31, 2021 340,338 300,270 88.2 % April 1, 2021 June 30, 2021 603,122 347,596 57.6 % July 1, 2021 September 30, 2021 848,704 362,805 42.7 % October 1, 2021 December 31, 2021 1,137,244 421,287 37.0 % January 1, 2022 March 31, 2022 1,501,462 448,247 29.8 % April 1, 2022 June 30, 2022 1,967,996 443,430 22.5 % July 1, 2022 September 30, 2022 2,202,175 488,358 22.2 % October 1, 2022 December 31, 2022 2,345,829 458,177 19.5 % January 1, 2023 March 31, 2023 2,444,077 449,435 18.4 % April 1, 2023 June 30, 2023 2,542,164 378,414 14.9 % We continuously monitor the development of the churn and retention rates of the active user base.
Accordingly, the proportion of total registered users that we consider active users at the end last five quarters as of June 30, 2024 is as follows: Starting Ending Total registered users Total active users Total active users to total registered users April 1, 2023 June 30, 2023 2,542,164 378,414 14.9 % July 1, 2023 September 30, 2023 2,644,916 187,180 7.1 % October 1, 2023 December 31, 2023 2,542,164 156,979 6.2 % January 1, 2024 March 31, 2024 2,696,555 41,458 1.5 % April 1, 2024 June 30, 2024 2,701,189 26,819 1.0 % 42 We continuously monitor the development of the churn and retention rates of the active user base.
For the years ended June 30, 2023 and 2022, $0, and $8,805 write-downs for estimated obsolescence or unmarketable inventories were recorded, respectively. Other receivables and other current assets, net Other receivables and other current assets primarily include refundable advance to third party service provider and other deposits.
For the years ended June 30, 2024 and 2023, $483 and $0 write down for inventories were recorded, respectively. . Other receivables and other current assets, net Other receivables and other current assets consist of prepayment to third parties for cyber security service, director & officer liability insurance (“D&O Insurance”), and other professional fee.
Overview Treasure Global Inc (“TGL,” “we,” “our” or the “Company”) is a holding company incorporated on March 20, 2020, under the laws of the State of Delaware. TGL has no substantive operations other than holding all of the outstanding shares of Gem Reward Sdn. Bhd.
TGL has no substantive operations other than holding all of the outstanding shares of ZCity Sdn Bhd (“ZCITY”), (formerly known as Gem Reward Sdn. Bhd, underwent a name change on July 20, 2023). It was originally established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization.
As we abandoned the agent subscription program, we will not generate any agent subscription revenue going forward. Member subscription revenue Member subscription revenue primarily consists of fees charged to customers who signed up for Zmember, a membership program that includes exclusive saving, bonus, and referral rewards.
Member subscription revenue Member subscription revenue primarily consists of fees charged to customers who sign up for Zmember, our membership program that offers exclusive savings, bonuses, and referral rewards. For the year ended June 30, 2024, member subscription revenue decreased by 2.0% to approximately $376,000, from approximately $384,000 for the same period in 2023.
Removed
(“GEM”), which was established under the laws of the Malaysia on June 6, 2017, through a reverse recapitalization. Prior to March 11, 2021, TGL and GEM were separate companies under the common control of Kok Pin “Darren,” which resulted from Mr.
Added
Bhd. (“Foodlink”), along with its two wholly-owned subsidiaries, Morgan Global Sdn. Bhd (“Morgan”) and AY Food Ventures Sdn. Bhd. (“AY Food”), for a consideration of approximately $3,000 from DBH. Through Foodlink, Morgan, and AY Food, we have been engaged in the operation of sub-licensing restaurant branding and the selling and trading of food and beverage products.
Removed
We have created an innovative online-to-offline e-commerce platform business model offering consumers and merchants instant rebates and affiliate cashback programs, while providing a seamless e-payment solution with rebates in both e-commerce (i.e., online) and physical retailers/merchant (i.e., offline) settings. Our proprietary product is an application branded “ZCITY App,” which was developed through GEM.
Added
On May 24, 2024, we had disposed Foodlink and its subsidiaries along with the food distribution operation to a third party for a consideration of $148,500. The disposal of Foodlink and its subsidiaries did not have material impact to our operation.
Removed
On May 1, 2023, we entered into a worldwide master license agreement (“License Agreement 1”) with Morganfield’s Holdings Sdn Bhd (“Licensor 1”), an unrelated third party. Pursuant to the License Agreement 1, the Licensor 1 agreed to grant us the exclusive worldwide license for the right to use the Morganfield’s Trademark (“Trademark 2”) for a period of five years.
Added
Meanwhile we received net proceeds of approximately $8.2 million, net of underwriting discounts and commissions and fees, and other estimated offering expenses amounted to approximately $1.0 million.
Removed
During the five-year license period, we agree to pay Licensor 1 for monthly license fee throughout the license period, with minimum aggregate payments of approximately $1.5 million or 40% of the total monthly collections from our sub-licensees, whichever is higher.
Added
On November 30, 2023, we closed our underwritten public offering (the “November 2023 Offering”) of (i) 371,629 (26,014,000 pre reverse split) shares of common stock, at a public offering price of $7 ($0.10 pre reverse split) per share of Common Stock and (ii) 14,000,000 pre-funded warrants (the “Pre-Funded Warrants”), each with the right to purchase 0.01 (one share pre reverse split) of Common Stock, at a public offering price of $0.0999 per Pre-Funded Warrant.
Removed
On June 6, 2023, we entered into a worldwide master license agreement (“License Agreement 2”) with Sigma Muhibah Sdn Bhd (“Licensor 2”), an unrelated third party.
Added
Upon closing of the November 2023 Offering, we received aggregate net proceed of approximately $3.5 million, after deducting underwriting discounts and commission, and non-accountable expense. On March 22, 2024, we have entered into a marketing offering agreement (“Marketing Offering Agreement”) with H.C. Wainwright & Co., LLC, (the “Manager”).
Removed
Pursuant to the License Agreement 2, Licensor 2 agreed to grant the AY Food Ventures Sdn Bhd with the exclusive worldwide license for right of use in Abe Yus’s Trademark (“Trademark 2”) for a period of five years.
Added
Pursuant to the Marketing Offering Agreement, the Company intends to issue and sell through or to the Manager, as sales agent and / or principal from time to time of the Company’s common stock at the Market Offering.
Removed
During the five years license period, we agree to pay the licensor 2 for monthly license fee throughout the license period, with minimum aggregate payments of approximately $1.2 million or 40% of the total monthly collection from our sub-licensees, whichever is higher.
Added
For the year ended June 30, 2024, we have received an aggregated net proceed of $431,811, net of broker fee from issuance of 94,889 shares of common stock which sell through or to the Manager. 40 -Business Development Since December 2022, we have been developing the TAZTE Smart F&B system (“TAZTE”), a comprehensive solution designed to facilitate digital transformation for registered food and beverage (“F&B”) outlets across Malaysia.
Removed
Key Operating Metrics Our management regularly reviews a number of metrics to evaluate our business, measures our performance, identifies trends, formulates financial projections and makes strategic decisions.
Added
TAZTE was conceived as a merchant-centric program, intended to leverage user data to drive substantial business growth for our merchant clientele. We initially offered a complimentary trial period to merchants, which was scheduled to conclude on December 31, 2023. This trial period was later extended until June 2024.
Removed
As of As of As of As of As of As of As of As of As of June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, June 30, 2021 2021 2021 2022 2022 2022 2022 2023 2023 Accumulated registered users 603,122 848,704 1,137,244 1,501,462 1,967,996 2,202,175 2,345,829 2,444,077 2,542,164 Accumulated Participating merchants 1,905 1,949 1,964 1,978 1,985 1,998 1,998 2,008 2,010 We have experienced substantial growth in registered users and active users since we launched ZCITY platform in June 2020.
Added
However, due to insufficient participation from merchant clients, management has decided to discontinue the program as of June 2024.

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