Judgment Debt Payable |
12 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Judgment Debt Payable [Abstract] | |
| JUDGMENT DEBT PAYABLE |
Note 8. JUDGMENT DEBT PAYABLE
As of June 30, 2025, judgment debt payable related to a judgment passed in January 2025 against the Company and in favor of plaintiff. In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond, Virginia, alleging that the Company failed to pay certain severance compensation, salary and incentive-based bonus. On January 31, 2025, the court entered a judgment in favor of Mr. Huang and against the Company in the amount of approximately $469,000, plus interest.
However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.
On August 23, 2025, the Company and Mr. Huang entered into a settlement agreement to resolve the claims, pursuant to which the Company agreed to pay Mr. Huang $300,000 and issue 90,000 shares of common stock in exchange for a release of his claims, including the Virginia judgment. The Company subsequently completed the cash payment and share issuance in accordance with the settlement agreement in August and October 2026, respectively.
On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.
As of June 30, 2026, pursuant to ASC 450-20-25-2, the Company reassessed Jing Shan legal matter and determined that a probable settlement liability should be around $150,000. The Company’s subsidiary, SG Shipping & Risk Solution, Inc. (“Plaintiff”), was party to a lawsuit it filed on July 13, 2023, in the United States District Court for the Eastern District of New York (Case No. 2:23-cv-05332-NJC-ARL) (the “SG Shipping Action”), wherein Plaintiff sought an award of monetary damages in connection with the conversion of Plaintiff’s corporate funds that Plaintiff alleges its former chief operations officer, Angela Shan (“Shan”), converted from Plaintiff. The Company dismissed the SG Shipping Action without prejudice on May 30, 2025, reserving the right to refile the case.
On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).
On May 3, 2024, the Circuit Court of Virginia entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity to pay Shan her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order, ordering the Company to pay Shan $82,586.51 (the “Virginia Contempt Judgment”). On September 5, 2025, Shan moved to enforce the Virginia Judgment in New York (the “Enforcement Action”) and incurred attorneys’ fees (the “Enforcement Action Attorneys’ Fees”). Following a trial, on July 13, 2026, the Circuit Court of Virginia entered an additional Final Judgment Order against the Company in favor of Shan in the Virginia Action in the amount of $380,349.66 (the “Virginia Fee Judgment”). The parties have been negotiating a resolution of the Virginia Action and the Enforcement Action, including the Enforcement Action Attorneys’ Fees and the Virginia Fee Judgment. The Company is currently unable to reasonably estimate the total ultimate loss associated with these combined matters, in excess of amounts already accrued, and accordingly no additional liability has been recognized in the consolidated financial statements as of June 30, 2026. The Company will adjust its accruals for these matters in future periods as additional information becomes available to evaluate the probability and estimated range of potential loss. |