UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM_________ to________

COMMISSION FILE NUMBER 001-4147

Treasure Global Inc

(Exact name of registrant as specified in its charter)

Delaware		36-4965082
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

276 5th Avenue, Suite 704 #739, New York, New York 10001		+6012 643 7688
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.00001 per share		TGL		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of February 14, 2024, the registrant had a total of 77,439,309 shares of its common stock, par value $0.00001 per share, issued and outstanding.

INDEX

		Page

PART I. FINANCIAL INFORMATION		1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

	Unaudited Condensed Consolidated Balance Sheets	1

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	2

	Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity (Deficiency)	3

	Unaudited Condensed Consolidated Statements of Cash Flows	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57

Item 4.	Controls and Procedures	57

PART II. OTHER INFORMATION		58

Item 1.	Legal Proceedings	58

Item 1A.	Risk Factors	58

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 3.	Defaults Upon Senior Securities	59

Item 4.	Mine Safety Disclosures	59

Item 5.	Other Information	59

Item 6.	Exhibits	59

SIGNATURES		60

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “intend,” “seek,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “might,” “forecast,” “continue” or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:

●

Our ability to effectively operate our business segments;

●

Our ability to manage our research, development, expansion, growth and operating expenses;

●

Our ability to evaluate and measure our business, prospects and performance metrics;

●

Our ability to compete, directly and indirectly, and succeed in our highly competitive industry;

●

Our ability to respond and adapt to changes in technology and customer behavior; and

●

Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

TREASURE GLOBAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			June 30,
	2023			2023
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,226,570		$	4,593,634
Accounts receivable, net		185,630			163,169
Inventories, net		126,884			400,543
Other receivables and other current assets		426,602			613,125
Other receivable, a related party		12,581			12,379
Prepayments		401,111			248,551
Total current assets		2,379,378			6,031,401

OTHER ASSETS
Property and equipment, net		233,674			279,600
Intangible assets, net		1,626,449			-
Operating lease right-of-use assets		42,557			61,377
Investment in marketable securities		647,565			-
Total other assets		2,550,245			340,977

TOTAL ASSETS	$	4,929,623		$	6,372,378

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Related party loan, current portion	$	5,893		$	5,323
Insurance loan		-			160,292
Convertible notes payable, net of unamortized discounts of $0 and $358,284 as of December 31, 2023 and June 30, 2023, respectively		-			4,791,716
Accounts payable		168,539			42,853
Customer deposits		133,527			161,475
Contract liability		192,506			157,080
Other payables and accrued liabilities		612,988			723,396
Other payables, related parties		14,411			1,660
Amount due to related parties		-			320,960
Operating lease liabilities		33,194			40,274
Income tax payables		65,506			67,546
Total current liabilities		1,226,564			6,472,575

NON-CURRENT LIABILITIES
Operating lease liabilities, non-current		10,785			22,036
Related party loan, non-current portion		5,564			8,099
Total non-current liabilities		16,349			30,135
TOTAL LIABILITIES		1,242,913			6,502,710

COMMITMENTS AND CONTINGENCIES (NOTE 17)

STOCKHOLDERS’ EQUITY (DEFICIENCY)
Common stock, par value $0.00001; 170,000,000 shares authorized, 69,239,309 and 17,901,353 shares issued and outstanding as of December 31, 2023 and June 30, 2023, respectively		692			180
Additional paid-in capital		38,638,562			31,485,556
Accumulated deficit		(34,774,677	)		(31,443,451	)
Accumulated other comprehensive loss		(177,867	)		(172,617	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY)		3,686,710			(130,332	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	4,929,623		$	6,372,378

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

TREASURE GLOBAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Three Months Ended December 31,						For the Six Months Ended December 31,
	2023			2022			2023			2022

REVENUES	$	6,713,805		$	20,444,168		$	20,177,700		$	36,000,508
COST OF REVENUES		(6,368,202	)		(20,210,159	)		(19,669,463	)		(35,729,406	)
GROSS PROFIT		345,603			234,009			508,237			271,102

SELLING		(510,640	)		(1,266,300	)		(1,272,343	)		(2,559,330	)
GENERAL AND ADMINISTRATIVE		(786,043	)		(855,573	)		(2,023,210	)		(1,666,319	)
RESEARCH AND DEVELOPMENT		(138,236	)		(167,933	)		(220,628	)		(297,230	)
STOCK-BASED COMPENSATION		-			-			-			(439,332	)
TOTAL OPERATING EXPENSES		(1,434,919	)		(2,289,806	)		(3,516,181	)		(4,962,211	)

LOSS FROM OPERATIONS		(1,089,316	)		(2,055,797	)		(3,007,944	)		(4,691,109	)

OTHER (EXPENSE) INCOME
Other (expense) income, net		(225,721	)		55,187			(197,321	)		69,512
Interest expense		(21,593	)		(55	)		(69,442	)		(41,840	)
Unrealized holding loss on marketable securities		(412,607	)		-			(352,435	)		-
Other income from software developing service, net of cost		675,131			-			675,131			-
Amortization of debt discount		(119,402	)		-			(358,284	)		(998,076	)
TOTAL OTHER INCOME (EXPENSE), NET		(104,192	)		55,132			(302,351	)		(970,404	)

LOSS BEFORE INCOME TAXES		(1,193,508	)		(2,000,665	)		(3,310,295	)		(5,661,513	)

PROVISION FOR INCOME TAXES		(6,006	)		(11,500	)		(20,931	)		(23,000	)
NET LOSS		(1,199,514	)		(2,012,165	)		(3,331,226	)		(5,684,513	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		(5,293	)		49,998			(5,250	)		(85,278	)
COMPREHENSIVE LOSS	$	(1,204,807	)	$	(1,962,167	)	$	(3,336,476	)	$	(5,769,791	)

LOSS PER SHARE
Basic and diluted	$	(0.03	)	$	(0.12	)	$	(0.12	)	$	(0.36	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		37,794,450			17,288,116			28,106,060			15,598,984

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

TREASURE GLOBAL INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

										ACCUMULATED			TOTAL
	COMMON STOCK				ADDITIONAL					OTHER			STOCKHOLDERS’
	NUMBER OF				PAID IN		ACCUMULATED			COMPREHENSIVE			EQUITY
	SHARES		PAR VALUE		CAPITAL		DEFICIT			LOSS			(DEFICIENCY)
Balance as of June 30, 2023		17,901,353		180		31,485,556	$	(31,443,451	)		(172,617	)		(130,332	)
Net loss		-		-		-		(2,131,712	)		-			(2,131,712	)
Conversion of convertible note payable		2,822,472		28		1,325,610		-			-			1,325,638
Foreign currency translation adjustments		-		-		-		-			43			43
Balance as of September 30, 2023 (Unaudited)		20,723,825	$	208	$	32,811,166	$	(33,575,163	)	$	(172,574	)	$	(936,363	)
Net loss		-		-		-		(1,199,514	)		-			(1,199,514	)
Conversion of convertible note payable		1,941,728		19		485,413		-			-			485,432
Issuance of common stock to related parties for debts cancellation		1,816,735		18		321,544		-			-			321,562
Issuance of common stock for acquiring intangible assets		12,943,021		129		1,562,871		-			-			1,563,000
Issuance of common stock and prefunded warrants in underwritten public offering, net of issuance costs		26,014,000		260		3,457,046		-			-			3,457,306
Exercise of prefunded warrants into common stock		5,800,000		58		522		-			-			580
Foreign currency translation adjustments		-		-		-		-			(5,293	)		(5,293	)
Balance as of December 31, 2023 (Unaudited)		69,239,309		692		38,638,562		(34,774,677	)

SEC Form 10-Q filed by Treasure Global Inc.