| RELATED PARTY TRANSACTIONS |
Note
16 — RELATED PARTY TRANSACTIONS
The
table below sets forth major related parties of the Company and their relationships with the Company:
SCHEDULE OF MAJOR RELATED PARTIES
| Entity
or individual name |
|
Relationship
with the Company |
| Wuhan
Huiyu |
|
Investee
of the Company |
| Shanghai
Dongying Network Technology Co., Ltd. (“Shanghai Dongying”) |
|
Investee
of the Company |
| Mobile
Motion Co., Limited (“Mobile Motion”) |
|
Wholly-owned
subsidiary of investee of the Company |
(a)
The Company entered into the following related party transactions:
The
Company invested in companies engaged in mobile game development and required the royalty right of the games from such investees to distribute
on third-party platforms. The Company typically pays one-time royalties, continues to share profits, and/or pays customized design fees
to such investees.
SCHEDULE OF ROYALTY FEE AND SERVICE FROM RELATED PARTIES
| | |
2026 | | |
2025 | | |
2024 | |
| | |
For the Years Ended June 30, | |
| | |
2026 | | |
2025 | | |
2024 | |
| Royalty fee and service from related parties | |
| | | |
| | | |
| | |
| Wuhan Huiyu | |
$ | 259,813 | | |
$ | 320,386 | | |
$ | 450,761 | |
| Shanghai Dongying | |
| 1,845,533 | | |
| 2,528,147 | | |
| 2,860,905 | |
| Mobile Motion | |
| 59,811 | | |
| 83,427 | | |
| 1,951,176 | |
| Total | |
$ | 2,165,157 | | |
$ | 2,931,960 | | |
$ | 5,262,842 | |
| 1) |
The
Company entered into an exclusive game agency agreement with Wuhan Huiyu in January 2020. The exclusive agency term is eight years
from the date of launching the game. Pursuant to the exclusive game agency agreement, the Company shares 15% to 18% of gross profit
generated by the game with Wuhan Huiyu on a monthly basis. The Company recorded $259,813, $320,386 and $450,761 of profit-sharing
expenses for the years ended June 30, 2026, 2025 and 2024, respectively. |
| 2) |
The
Company entered into a technology development agreement with Shanghai Dongying in January 2021 to customize design the game. During
the year ended June 30, 2024, the Company entered supplementary agreement with Shanghai Dongying regarding the profit-sharing policy.
Pursuant to supplementary agreement, the Company shares 25% of operating income of the game generated by the game with Shanghai Dongying
on a monthly basis. The Company recorded $1,845,533, $2,528,147 and $2,860,905 of profit-sharing expenses for the years ended June
30, 2026, 2025 and 2024, respectively. |
| |
|
| 3) |
The
Company entered into an exclusive game agency agreement with Mobile Motion in January 2021. The exclusive agency term is eight years
from the date of launching the game. The Company paid an initial royalty fee of approximately $300,000 (RMB1.9 million). The Company
recorded $34,683, $33,616 and $33,567 of amortization of royalty fees for the years ended June 30, 2026, 2025 and 2024, respectively.
The Company recorded $25,128, $49,811, and $1,917,609 of customized design fees for the years ended June 30, 2026, 2025 and 2024. |
(b)
The Company had the following significant related party balances:
Advances
to Suppliers — related parties
As
of June 30, 2026 and 2025, advances to suppliers -
related parties, consisted as following:
SCHEDULE OF ADVANCED TO SUPPLIERS - RELATED PARTIES
| | |
2026 | | |
2025 | |
| | |
As of June 30, | |
| | |
2026 | | |
2025 | |
| Mobile Motion | |
| 876,092 | | |
| 841,070 | |
| Total | |
$ | 876,092 | | |
$ | 841,070 | |
| Advanced
to suppliers - related parties | |
$ | 876,092 | | |
$ | 841,070 | |
Accounts
payable — related parties
As
of June 30, 2026 and 2025, accounts payable - related parties, consisted as following:
SCHEDULE OF ACCOUNTS PAYABLE - RELATED PARTIES
| | |
2026 | | |
2025 | |
| | |
As of June 30, | |
| | |
2026 | | |
2025 | |
| Wuhan Huiyu | |
$ | 35,502 | | |
$ | 35,052 | |
| Shanghai Dongying | |
| 13,742 | | |
| 173,715 | |
| Total | |
$ | 49,244 | | |
$ | 208,767 | |
| Accounts payable - related
parties | |
$ | 49,244 | | |
$ | 208,767 | |
|