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 December 31, 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

February 1

, 202

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

INDEX

		Page
PART I. FINANCIAL INFORMATION		3

Item 1.	Unaudited Condensed Consolidated Financial Statements	3

	Unaudited Condensed Consolidated Balance Sheets	3

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	4

	Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity (Deficiency)	5

	Unaudited Condensed Consolidated Statements of Cash Flows	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51
SIGNATURES		52

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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:

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 and our national distributor’s ability to compete, directly and indirectly, and succeed in the highly competitive medical devices industry;

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

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

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 SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2022			June 30, 2022
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,720,614		$	1,845,232
Accounts receivable, net		53,436			-
Inventories		197,688			216,069
Other receivable and other current assets		216,915			8,780
Prepayments		530,772			203,020
Total current assets		5,719,425			2,273,101

OTHER ASSETS
Property and equipment, net		347,871			337,645
Other assets, non-current		100,082			-
Operating lease right-of-use asset		72,108			-
Deferred offering costs		-			93,536
Total other assets		520,061			431,181

TOTAL ASSETS	$	6,239,486		$	2,704,282

LIABILITIES AND STOCKHOLDERS' EQUITY ( DEFICIENCY )
CURRENT LIABILITIES
Related party loan, current portion	$	5,164		$	4,505
Convertible notes payable, net of unamortized discounts of $0 and $717,260 as of December 31, 2022 and June 30, 2022, respectively		-			10,954,042
Convertible notes payable, related parties		-			2,437,574
Loans from third parties		-			1,417,647
Account payable		86,545			25,397
Account payable, related parties		-			14,326
Customer deposits		107,604			73,317
Contract liability		139,864			56,757
Other payables and accrued liabilities		288,907			1,161,860
Other payables, related parties		31,393			-
Amount due to related parties		332,188			2,060,088
Operating lease liability		32,320			-
Income tax payables		39,445			16,445
Total current liabilities		1,063,430			18,221,958


NON-CURRENT LIABILITIES
Operating lease liability, non-current		36,674			-
Related party loan, non-current portion		11,285			13,883
Senior note		-			65,000
Total non-current liabilities		47,959			78,883
TOTAL LIABILITIES		1,111,389			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 December 31, 2022 and June 30, 2022, respectively		173			105
Additional paid-in capital		30,514,931			4,020,552
Accumulated deficit		(25,400,253	)		(19,715,740	)
Accumulated other comprehensive income		13,246			98,524
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)		5,128,097			(15,596,559	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$	6,239,486		$	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 December 31,						For the Six Months Ended December 31
	2022			2021			2022			2021
REVENUES	$	20,444,168		$	22,362,136		$	36,000,508		$	42,730,654

COST OF REVENUES		(20,210,159	)		(22,222,652	)		(35,729,406	)		(42,519,595	)

GROSS PROFIT		234,009			139,484			271,102			211,059

SELLING		(1,266,300	)		(1,867,085	)		(2,559,330	)		(3,617,050	)
GENERAL AND ADMINISTRATIVE		(855,573	)		(556,812	)		(1,666,319	)		(1,065,867	)
RESEARCH AND DEVELOPMENT		(167,933	)		(124,849	)		(297,230	)		(193,222	)
STOCK-BASED COMPENSATION		-			(321,058	)		(439,332	)		(641,881	)
TOTAL OPERATING EXPENSES		(2,289,806	)		(2,869,804	)		(4,962,211	)		(5,518,020	)

LOSS FROM OPERATIONS		(2,055,797	)		(2,730,320	)		(4,691,109	)		(5,306,961	)

OTHER (EXPENSE) INCOME
Other income, net		55,187			26,217			69,512			37,149
Interest expense		(55	)		(333,233	)		(41,840	)		(406,913	)
Amortization of debt discount		-			(121,855	)		(998,076	)		(252,007	)
TOTAL OTHER (EXPENSE) INCOME, NET		55,132			(428,871	)		(970,404	)		(621,771	)

LOSS BEFORE INCOME TAXES		(2,000,665	)		(3,159,191	)		(5,661,513	)		(5,928,732	)

PROVISION FOR INCOME TAXES		(11,500	)		(4,800	)		(23,000	)		(8,700	)

NET LOSS		(2,012,165	)		(3,163,991	)		(5,684,513	)		(5,937,432	)

OTHER COMPREHENSIVE INCOME ( LOSS )
Foreign currency translation adjustment		49,998			(24,537	)		(85,278	)		(37,344	)

COMPREHENSIVE LOSS	$	(1,962,167	)	$	(3,188,528	)	$	(5,769,791	)	$	(5,974,776	)

LOSS PER SHARE
Basic and diluted	$	(0.12	)	$	(0.30	)	$	(0.36	)	$	(0.56	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		17,288,116			10,545,251			15,598,984			10,543,987

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

	COMMON STOCK				ADDITIONAL PAID IN		ACCUMULATED			ACCUMULATED OTHER COMPREHENSIVE		TOTAL STOCKHOLDERS' 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		-