TREASURE GLOBAL INC

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 September 30, 2022

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

FOR THE TRANSITION PERIOD FROM

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

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

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	x	Smaller reporting company	x
		Emerging growth company	x

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

As of

December 13

, 2022, the registrant had a total of 17,288,116 shares of its common stock, par value $0.001 per share, issued and outstanding.

This Quarterly Report on Form 10-Q 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:

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. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TREASURE GLOBAL INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			June 30,
	2022			2022
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	7,007,815		$	1,845,232
Accounts receivable, net		1,056			-
Inventories		141,467			216,069
Other receivable and other current assets		414,356			8,780
Prepayments		440,944			203,020
Total current assets		8,005,638			2,273,101

OTHER ASSETS
Property and equipment, net		327,832			337,645
Operating lease right-of-use asset		76,671			-
Deferred offering costs		-			93,536
Total other assets		404,503			431,181

TOTAL ASSETS	$	8,410,141		$	2,704,282

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Related party loan, current portion	$	3,734		$	4,505
Convertible notes payable, net of unamortized discounts of $717,260 as of June 30, 2022		-			10,954,042
Convertible notes payable, related parties		-			2,437,574
Loans from third parties		-			1,417,647
Account payable		130,162			25,397
Account payable, related parties		5,119			14,326
Customer deposits		88,462			73,317
Contract liability		165,579			56,757
Other payables and accrued liabilities		290,409			1,161,860
Other payables, related parties		90,270			-
Amount due to related parties		428,857			2,060,088
Operating lease liability		33,429			-
Income tax payables		27,945			16,445
Total current liabilities		1,263,966			18,221,958

NON-CURRENT LIABILITIES
Operating lease liability, non-current		43,326			-
Related party loan, non-current portion		12,585			13,883
Senior note		-			65,000
Total non-current liabilities		55,911			78,883
TOTAL LIABILITIES		1,319,877			18,300,841

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, par value $0.00001; 150,000,000 shares authorized, 17,288,116 and 10,545,251 shares issued and outstanding as of September 30, 2022 and June 30, 2022, respectively		173			105
Additional paid-in capital		30,514,931			4,020,552
Accumulated deficit		(23,388,088	)		(19,715,740	)
Accumulated other comprehensive income (loss)		(36,752	)		98,524
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)		7,090,264			(15,596,559	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$	8,410,141		$	2,704,282

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

TREASURE GLOBAL INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS

	For the Three Months Ended September 30,
	2022			2021

REVENUES	$	15,556,340		$	20,368,518

COST OF REVENUES		(15,519,247	)		(20,296,943	)

GROSS PROFIT		37,093			71,575

SELLING		(1,293,030	)		(1,749,965	)
GENERAL AND ADMINISTRATIVE		(810,746	)		(509,055	)
RESEARCH AND DEVELOPMENT		(129,297	)		(68,373	)
STOCK-BASED COMPENSATION		(439,332	)		(320,823	)
TOTAL OPERATING EXPENSES		(2,672,405	)		(2,648,216	)

LOSS FROM OPERATIONS		(2,635,312	)		(2,576,641	)

OTHER (EXPENSE) INCOME
Other income, net		14,325			10,932
Interest expense		(41,785	)		(73,680	)
Amortization of debt discount		(998,076	)		(130,152	)
TOTAL OTHER EXPENSE, NET		(1,025,536	)		(192,900	)

LOSS BEFORE INCOME TAXES		(3,660,848	)		(2,769,541	)

PROVISION FOR INCOME TAXES		(11,500	)		(3,900	)

NET LOSS		(3,672,348	)		(2,773,441	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment		(135,276	)		(12,807	)

COMPREHENSIVE LOSS	$	(3,807,624	)	$	(2,786,248	)

LOSS PER SHARE
Basic and diluted	$	(0.26	)	$	(0.26	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		13,909,851			10,542,722

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

TREASURE GLOBAL INC. AND SUBSIDIARY

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

											ACCUMULATED			TOTAL
					ADDITIONAL						OTHER			STOCKHOLDERS'
	COMMON STOCK				PAID IN			ACCUMULATED			COMPREHENSIVE			EQUITY
	Number of shares		Par value		CAPITAL			DEFICIT			INCOME (LOSS)			(DEFICIENCY)
Balance as of June 30, 2022		10,545,251	$	105	$	4,020,552		$	(19,715,740	)	$	98,524		$	(15,596,559	)
Beneficial conversion feature from issuance of convertible notes		-		-		537,383			-			-			537,383
Net loss		-		-		-			(3,672,348	)		-			(3,672,348	)
Issuance of common stock - non-employee stock compensation		109,833		1		439,331			-			-			439,332
Conversion of convertible note payable		3,799,801		38		14,097,376			-			-			14,097,414
Conversion of convertible note payable, related parties		376,088		4		2,437,570			-			-			2,437,574
Issuance of common stock in initial public offering, net of issuance costs		2,300,000		23		7,951,202			-			-			7,951,225
Fair value of warrants issued in initial public offering		-		-		175,349			-			-			175,349
Issuance of warrants - non- employee stock compensation		-		-		856,170			-			-			856,170
Cashless exercise of warrants- non- employee stock compensation into common stock		157,143		2		(2	)		-			-			-
Foreign currency translation adjustment		-		-		-			-			(135,276	)		(135,276	)
Balance as of September 30, 2022 (Unaudited)		17,288,116	$	173	$	30,514,931		$	(23,388,088	)	$	(36,752	)	$	7,090,264

										ACCUMULATED
					ADDITIONAL					OTHER			TOTAL
	COMMON STOCK				PAID IN		ACCUMULATED			COMPREHENSIVE			STOCKHOLDERS'
	Number of shares		Par value		CAPITAL		DEFICIT			LOSS			DEFICIENCY
Balance as of June 30, 2021		10,312,585	$	103	$	1,504,950	$	(7,969,726	)	$	(55,580	)	$	(6,520,253	)
Net loss		-		-		-		(2,773,441	)		-			(2,773,441	)
Issuance of common stock - non-employee stock compensation		232,666		2		320,821		-			-			320,823

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	4

	Unaudited Condensed Consolidated Balance Sheets	4

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	5

	Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity (Deficiency)	6

	Unaudited Condensed Consolidated Statements of Cash Flows	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	47
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
SIGNATURES		51