Note 5 – Derivative assets

Contractual Right to Receive Shares – V Gallant

On October 29, 2024, the Company entered into a service agreement with V Gallant Sdn. Bhd. (“V Gallant”) to provide generative AI solutions and AI digital human technology services, which was subsequently amended to include AI cloud infrastructure services. On January 6, 2026, the Company and V Gallant mutually agreed to terminate the service agreement and related supplemental agreements. In connection with the termination, V Gallant agreed to compensate the Company in the amount of $5,200,000 through the issuance of 1,300,000 ordinary shares of V Gallant Limited at an agreed value of $4.00 per share. The shares were placed in escrow and remained subject to certain contractual conditions prior to their release to the Company.

The Company determined that it did not obtain control of the underlying shares and instead obtained a contractual right to receive the shares, which is accounted for as a derivative asset under ASC 815, Derivatives and Hedging. The fair value was determined with reference to an independent third-party valuation using primarily the discounted cash flow (“DCF”) method. The DCF valuation was based on projected cash flows for the financial years 2026 through 2030 and utilized a weighted average cost of capital (“WACC”) of 16.0% as a significant unobservable input, with terminal value determined using a perpetual-growth methodology. The contractual right was initially recognized at a fair value of $3,000,000. As of June 30, 2026, the DCF method indicated a value of $1.71 per underlying share, resulting in a fair value of the derivative asset of $2,223,000. The Company recognized a loss from the change in fair value of $777,000 for the year ended June 30, 2026. The derivative asset was classified within Level 3 of the fair value hierarchy.

Contractual Right to Receive Shares – Reveillon Group Limited (“RG”)

On December 22, 2025, the Company entered into a Share Sale Agreement with a third party to dispose of its entire equity interest in TADAA Ventures and its subsidiary, Bowlcrafted, in exchange for 700,000 ordinary shares of Reveillon Group Limited (“RG Shares”) with an agreed aggregate value of $1,400,000. The RG Shares were placed in escrow and remained subject to certain contractual conditions and restrictions prior to their release to the Company.

The Company determined that it did not obtain control of the underlying RG Shares and instead obtained a contractual right associated with the shares, which is accounted for as a derivative asset under ASC 815. The fair value was determined with reference to an independent third-party valuation using primarily the DCF method. The DCF valuation was based on projected cash flows for the financial years 2026 through 2030 and utilized a WACC of 11.0% as a significant unobservable input, with terminal value determined using a perpetual-growth methodology. The contractual right was initially recognized at a fair value of $1,400,000. As of June 30, 2026, the DCF method indicated a value of $2.06 per underlying share, resulting in a fair value of the derivative asset of $1,442,000. The Company recognized a gain from the change in fair value of $42,000 for the year ended June 30, 2026. The derivative asset was classified within Level 3 of the fair value hierarchy.