Note 15 – Shareholders’ equity

Shares Reverse Split

On September 29, 2024, the Company held its 2024 annual meeting of shareholders, pursuant to which the shareholders of the Company approved the proposal to effect a reverse share split at a ratio of up to one-for-two hundred fifty (“Reverse Split”), and immediately after the approval of the Reverse Split, the subdivision of the Company’s authorized share capital to US$32,000,000, divided into: (i) 280,000,000,000 Class A Ordinary Shares of US$0.0001 par value each; and (ii) 40,000,000,000 Class B Ordinary Shares of US$0.0001 par value each. Effective November 15, 2024, the Company effected a 100-for-1 reverse share split of its Class A and Class B ordinary shares. Upon execution of the 100-for-1 reverse share split, the Company recognized additional 7,258 Class A ordinary shares due to round up adjustment. All share amounts have been retroactively restated to reflect the alteration of the authorized issued share capital of the Company.

On June 29, 2025, the Company held its 2025 annual meeting of shareholders, pursuant to which the shareholders of the Company approved the proposal to authorize the Company’s board of directors (the “Board”) to effect a reverse share split (the “Reverse Share Split” and share consolidation (the “Share Consolidation”) (the Reverse Share Split and Share Consolidation, the “Reverse Share Split and Share Consolidation”), of the Company’s authorized and issued share capital, at a ratio of up to one-for-one hundred. Such Reverse Share Split and Share Consolidation to be effected, at the specific Approved Consolidation Ratio (subject to the above maximum), as to be determined by the Board, and in order to effect the Reverse Share Split and Share Consolidation and subject to adjustment pending the Board’s determination of the precise Approved Consolidation Ratio of the Reverse Share Split and Share Consolidation, the authorized share capital of the Company shall be altered from US$32,000,000 divided into (i) 280,000,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, and (ii) 40,000,000,000 Class B Ordinary Shares of a par value of US$0.0001 each, to US$32,000,000 divided into (i) 11,200,000,000 Class A Ordinary Shares of a par value of US$0.0025 each and 1,600,000,000 Class B Ordinary Shares of a par value of US$0.0025 each. Effective August 22, 2025, the Company effected a 25-for-1 reverse share split of its Class A and Class B ordinary shares. All share amounts have been retroactively restated to reflect the alteration of the authorized issued share capital of the Company.

On January 22, 2026, the Company held its extraordinary general meeting of shareholders. The shareholders authorized the Board to effect a reverse share split (the “2026 Reverse Share Split”) and share consolidation (the “2026 Share Consolidation”, together with the 2026 Reverse Share Split, the “2026 Reverse Share Split and Share Consolidation”), of the Company’s authorized and issued share capital, at a ratio of up to one-for-one hundred, but in any case at a ratio of not less than one-for-five (the “Approved Consolidation Ratio”). Such 2026 Reverse Share Split and Share Consolidation to be effected, at the specific Approved Consolidation Ratio (subject to the above maximum and minimum), as to be determined by the Board, and in order to effect the Reverse Share Split and Share Consolidation and subject to adjustment pending the Board’s determination of the precise Approved Consolidation Ratio of the Reverse Share Split and Share Consolidation, the authorized share capital of the Company shall be altered (assuming an Approved Consolidation Ratio of 1:100) from US$32,000,000 divided into 11,200,000,000 Class A Ordinary shares with a nominal or par value of US$0.0025 each and 1,600,000,000 Class B Ordinary shares with a nominal or par value of US$0.0025 each to US$32,000,000.00 divided into as low as 112,000,000 Class A Ordinary Shares of a nominal or par value of US$0.25 each and 16,000,000 Class B Ordinary Shares of a nominal or par value of US$0.25 each. Effective February 10, 2026, the Company effected a 100-for-1 reverse share split of its Class A and Class B ordinary shares. All share amounts have been retroactively restated to reflect the 2026 Reverse Share Split and Share Consolidation.

On May 8, 2026, the Company held its extraordinary general meeting of shareholders. The shareholders authorized the Board, in its sole discretion, as to how and when to implement and effect the share consolidation (the “2026 Share Consolidation 2”), whereby issued and authorized Class A Ordinary Shares with a nominal or par value of US$0.0025 each and Class B Ordinary shares with a nominal or par value of US$0.0025 each of the Company be consolidated at a ratio of not less than two (2)-for-one (1) and not more than four thousand (4,000)-for-one (1) (the “Consolidation Range”), at a date to be determined by the Board, with the exact ratio to be set at a whole number within Consolidation Range, as determined by the Board in its sole discretion within three years after the conclusion of the meeting. On July 1, 2026, the Board determines to effect the Share Consolidation at the ratio of one (1)-for-eight (8) whereby every eight (8) Class A Ordinary Shares with a nominal or par value of US$0.0025 each be consolidated into one (1) Class A Ordinary Share with a nominal or par value of US$0.02 and every eight (8) Class B Ordinary Shares with a nominal or par value of US$0.0025 each be consolidated into one (1) Class B Ordinary Share with a nominal or par value of US$0.02. As a result of the 2026 Share Consolidation 2, the Company’s authorized share capital share be changed from US$32,000,000 divided into 11,200,000,000 Class A Ordinary Shares with a nominal or par value of US$0.0025 each and 1,600,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0025 each to US$32,000,000 divided into 1,400,000,000 Class A Ordinary Shares with a nominal or par value of US$0.02 each and 200,000,000 Class B Ordinary Shares with a nominal or par value of US$0.02 each. Effective July 27, 2026, the Company effected a 8-for-1 reverse share split of its Class A and Class B ordinary shares. All share amounts have been retroactively restated to reflect the 2026 Share Consolidation 2.

Change in Share Capital

On May 8, 2026, the Company held its extraordinary general meeting of shareholders, at which the shareholders approved (i) a reduction of the authorized share capital from US$32,000,000 divided into 112,000,000 Class A ordinary shares and 16,000,000 Class B ordinary shares, each with a par value of US$0.25 to US$320,000 divided into 112,000,000 Class A ordinary shares and 16,000,000 Class B ordinary shares, each with a par value of US$0.0025, and (ii) a subsequent increase to US$32,000,000 divided into 11,200,000,000 Class A ordinary shares and 1,600,000,000 Class B ordinary shares, each with a par value of US$0.0025. These changes in share capital became effective on June 4, 2026. Effective July 27, 2026, the Company effected a 8-for-1 reverse share split (see above for details), resulting in 1,400,000,000 and 200,000,000 authorized Class A and Class B ordinary shares, respectively, each with a par value of US$0.02. All share amounts have been retroactively restated to reflect these share capital changes.

Issuance of Class A Ordinary Shares

On August 22, 2024, the Company entered into certain securities purchase agreement (the “SPA 8”) with a certain sophisticated investor as such term is defined in Rule 506(b) of Regulation D of the Securities Act of 1933, as amended, pursuant to which the Company agreed to sell 2 Class A ordinary shares, par value $0.02 per share, at a per share purchase price of $800,000.00. The gross proceeds to the Company from this Offering will be $940,000. The Offering closed on September 12, 2024, upon satisfaction of all closing conditions.

On August 13, 2025, the Company entered into securities purchase agreements (the “SPA 9”) with certain institutional investors for the purchase and sale of 573 Class A ordinary shares at a purchase price of $11,200.00 per share, together with warrants to purchase up to 573 Ordinary Shares (the “Warrants”) at an initial exercise price of $11,200.00 per share (the “Offering 1”). Gross proceeds were approximately $6.4 million, less deducting placement agent fees and other Offering 1 expenses of approximately $0.56 million, resulted in net proceeds of approximately $5.8 million. Upon satisfaction of customary closing conditions, the Offering 1 was consummated on August 14, 2025.

On October 7, 2025, the Company entered into a securities purchase agreement (the “SPA 10”) with certain institutional investors named thereto (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Offering 2”): (i) 1,000 Class A ordinary shares, par value $0.02 per share of the Company, at a purchase price of $800.00 per share; and (ii) pre-funded warrants to purchase up to 17,750 Class A ordinary shares (the “Pre-Funded Warrants”) at a purchase price of $ 798.00 per Pre-Funded Warrant. Offering 2 closed on October 9, 2025. The Company received approximately $13.8 million in net proceeds from the Offering 2, after deducting placement agent fees and estimated offering expenses of approximately $1.2 million from gross proceeds of $15.0 million.

On October 15, 2025, the Company entered into a securities purchase agreement (the “SPA 11”) with certain investors pursuant to which the Company agreed to issue and sell to each investor in a private placement offering an aggregate of $230,837,060 of the Company’s units (the “Units”) or 169,734 Units, each unit consisting of one Class A ordinary share, par value of $0.02 per Class A ordinary share, and one warrant entitling the investor of a Unit to purchase one Class A ordinary share, at an offering price of $1,360.00 per Unit. The gross consideration of the offering was payable by 2,000 SolvBTC, a 1:1 wrapped Bitcoin-backed token issued by Solv Protocol, an on-chain Bitcoin reserve providing institutional mechanisms for the productive use of Bitcoin holdings. The Company received aggregated net proceeds of approximately $230.7 million from the offering, after deducting placement agent fees and estimated offering expenses of approximately $0.1 million from gross proceeds of approximately $230.8 million.

Restricted Stock Grants

Restricted stock grants are measured based on the market price on the grant date. The Company has granted restricted Class A ordinary shares to the members of the board of directors (the “Board”), senior management and consultants.

In August 2024, the Company granted an aggregate of 1 restricted Class A ordinary shares, which will be issued with a fair value of $2,900 to Ms. Wei Zhang, the Company’s former chairwoman, pursuant to her employment contract. These shares will vest quarterly over the required service period of one year starting from August 9, 2024, to August 8, 2025.

In February 2025, the Company granted an aggregate of 1 restricted Class A ordinary shares, which will be issued with a fair value of $595 to Mr. Louis Luo, the Company’s former CEO, pursuant to his employment contract. These shares will vest quarterly over the required service period of one year starting from February 14, 2025, to February 13, 2026.

In April 2025, the Company granted an aggregate of 1 restricted Class A ordinary shares, which will be issued with a fair value of $22 to Ms. Lili Jiang, the Company’s CFO, pursuant to her employment contract. These shares will vest quarterly over the required service period of one year starting from April 1, 2025, to March 31, 2026.

In August 2025, the Company granted an aggregate of 1 restricted Class A ordinary shares, which will be issued with a fair value of $1,475 to Ms. Wei Zhang, the Company’s former chairwoman, pursuant to her employment contract. These shares will vest quarterly over the required service period of one year starting from August 9, 2025, to August 8, 2026. On September 24, 2025, Ms. Wei Zhang notified the Company of her resignation as a director and as the chairwoman. The unvested awards were forfeited.

In April 2026, the Company granted an aggregate of 1 restricted Class A ordinary shares, which will be issued with a fair value of $1 to Ms. Lili Jiang, the Company’s CFO, pursuant to her employment contract. These shares will vest quarterly over the required service period of one year starting from April 1, 2026, to March 31, 2027. Due to the immaterial amount of the deferred stock compensation, the Company recognized the entire amount as compensation expense upon grant.

For the years ended June 30, 2026, 2025 and 2024, the Company recognized approximately $600, $13,000 and $0.1 million compensation expense related to restricted stock grants, respectively.

Following is a summary of the restricted stock grants:

Class A Ordinary Shares Issued for Compensation

In October 2024, the Board granted an aggregate of 5 Class A ordinary shares, which were issued with a fair value of $1,662,400, determined using the closing price of $400,000.00 on October 21, 2024, to three managements and employees under the 2024 Equity Incentive Plan. These shares vested immediately upon grant.

In September 2025, the Board granted an aggregate of 621 Class A ordinary shares, which were issued with a fair value of $645,778, determined using the closing price of $1,040.00 on September 4, 2025, to two managements and employees under the 2025 Equity Incentive Plan. These shares vested immediately upon grant.

For the years ended June 30, 2026, 2025 and 2024, the Company recorded approximately $0.6 million, $1.7 million and nil stock compensation expense related to Class A ordinary shares grants, respectively.

Class A Ordinary Shares Issued for Acquisitions

The Company entered into certain copyright acquisition agreement (“Copyright Agreement”) dated as of January 9, 2025, by and among Nine Star Parties and Entertainment LLC., an Ohio limited liability company (“Nine Star”), the Company, and Color Star DMCC and wholly owned subsidiary of the Company. Pursuant to the Agreement, Nine Star agreed to sell to Color Star DMCC all of Nine Star’s right, title and interests in and to 27 pieces of music works created by Nine Star (the “Works”), for an aggregate consideration of $8,100,000, to be paid in 113 restricted Class A Ordinary Shares, par value $0.02 per share, of the Company (the “Shares”). The restricted Shares were issued on February 5, 2025. However, as of the date of the issuance of these consolidated financial statements, the Works have not been transferred or assigned to the Company and the Company canceled the 113 shares on September 30, 2025. The Company considered these transactions have never been taken place as Nine Star did not complete its performance duties of transferring or assigning the copyrights to the Company.

On February 26, 2025, Model Queen entered into a certain purchase and sale agreement with BTC KZ (“BTC KZ”), pursuant to which Model Queen shall purchase certain cryptocurrency mining hardware and other equipment (“Equipment”) from BTC KZ from time to time in separate purchase orders.

The parties agreed that the purchase was made using a combination of $9,000,000 in cash (“Cash Consideration”) and $26,000,000 payable in 813 restricted Class A ordinary shares (“Share Consideration”), issued by the Company. The Share Consideration was issued on March 10, 2025, and the Cash Consideration of $3,400,000 was paid in May and June 2025.

On July 25, 2025, the Company, BTC KZ, and ULife entered into a redemption and share cancellation agreement (the “Share Cancellation Agreement”) pursuant to which the Share Consideration previously issued to ULife were redeemed and cancelled effective as of August 6, 2025. Following such cancellation, ULife relinquished all ownership and rights in the cancelled shares. The parties mutually agreed to restructure the unpaid balance into a secured term loan arrangement (see Note 12).

Warrants

Pursuant to the SPA dated September 27, 2024, the Company issued the Initial Note and accompanying with the Series A Warrants to purchase up to an aggregate of 2 Ordinary Shares, with an exercise price of $3,200,000.00 per Ordinary Share (the “Initial Warrants”). The Company estimates that the fair value of the Initial Warrants on the date of grant is approximately $2.9 million, using Black-Scholes Model. The fair value of the warrants is estimated using the following assumptions: (1) expected volatility of 147.79%, (2) risk-free interest rate of 3.50%, (3) expected life of 5.125 years, (4) exercise price of $3,200,000.00 and (5) stock price of $2,260,000.00. The Company then applied the relative fair value of the Initial Warrants of approximately $1.6 million, net of issuance cost of approximately $0.5 million into capital and recognized the same value as a deemed dividend at the time of issuance.

Pursuant to the SPA dated September 27, 2024, the Company issued the New Notes 3 accompanying with the Series B Warrants to purchase up to an aggregate of 124 Ordinary Shares, with an exercise price of $42,200.00 per Ordinary Share (the “New Warrants”). The Company estimates that the fair value of the New Warrants on the date of grant is approximately $4.0 million, using Black-Scholes Model. The fair value of the warrants is estimated using the following assumptions: (1) expected volatility of 160.46%, (2) risk-free interest rate of 4.39%, (3) expected life of 5.0 years, (4) exercise price of $42,200.00 and (5) stock price of $35,000.00. The Company then applied the relative fair value of the New Warrants of approximately $2.3 million, net of issuance cost of approximately $0.4 million into capital and recognized the same value as a deemed dividend at the time of issuance.

Pursuant to the SPA 9 dated August 13, 2025, the Company issued the Class A ordinary shares accompanying with the Warrants to purchase up to 573 Class A ordinary shares at an initial exercise price of $11,200.00 per share. The Warrants will be immediately exercisable and will expire 5 years from the date of issuance. The Warrants may, at any time following the closing of this Offering 1 and in the holders’ sole discretion, be exercised in whole or in part by means of a zero exercise price option, in which the holders will receive two (2) times the number of Class A ordinary shares that would be issuable upon a cash exercise of the Warrant, without payment of additional consideration. In addition, the exercise price for the Warrants will be adjusted downward on the first trading day following the closing of this Offering 1 to the price that is equal to 50% of the initial exercise price of the Warrants; and upon each adjustment to the exercise price for the Warrants, the number of issuable warrant shares will be proportionately increased so that the nominal aggregate exercise price of the Warrants will remain the same.

In addition, the Company entered into an agreement with certain existing investors holding New Notes 3 issued by the Company in January 2025, pursuant to which such investors have agreed to waive certain rights in consideration of the Company issuing to such investors 144 additional warrants to purchase Class A ordinary shares, identical in all respects to the Warrants issued in the Offering 1. The Company recognized the effect of the modification of warrants as a dividend under ASC 815-40-35-17(d). The fair value of warrants before and after the modification was approximately $0.3 million and $0.4 million, respectively, resulting in a dividend of approximately $0.1 million.

In August 2025, pursuant to the SPA 9 dated August 13, 2025, the holders of the Warrants and New Note 3 investors exercised all their warrants and converted into 2,738 Class A ordinary shares using cashless method.

Pursuant to the SPA 10 dated October 7, 2025, the Company issued the Class A ordinary shares accompanying with the Pre-Funded Warrants to purchase up to 17,750 Class A ordinary shares at a purchase price of $798.00 per Pre-Funded Warrant. The Pre-Funded Warrants were sold to the Purchasers, whose purchase of the shares in the Offering 2 would otherwise have resulted in the Purchasers, together with its affiliates and certain related parties, beneficially owning more than 9.99% of the outstanding share capital of the Company following the consummation of the Offering 2. Each Pre-Funded Warrant represents the right to purchase one Class A ordinary share at an exercise price of $2 per share. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full. As of June 30, 2026, the Purchasers have exercised all the Pre-Funded Warrants to purchase 17,750 Class A ordinary shares.

Pursuant to the SPA 11 dated October 15, 2025, the Company issued an aggregate of $230,837,060 of the Units. Each unit consists of one Class A ordinary share and one warrant entitling the investor of a Unit to purchase one Class A ordinary share. The warrants are immediately exercisable for 60 months after issuance at an exercise price of $2,040.00 per share.

On March 10, 2026, the Company entered into the SPA 12 with certain institutional investors for the purchase and sale of up to $10 million of convertible notes and warrants to purchase the Company’s Class A ordinary shares, having a nominal or par value of $0.02 each to take place in up to two tranches. The first tranche includes (a) $6 million in principal amount of the Company’s Senior 10% Original Issue Discount Convertible Promissory Notes (the “First Tranche Notes”) and (b) warrants (the “First Tranche Warrants”) to purchase up to 33,784 ordinary shares. See Note 13 for detail.

The summary of warrant activity is as follows:

Conversion of convertible notes payable into Class A Ordinary Shares

During the year ended June 30, 2026, convertible note payable of $35,515,400 was converted into the Company’s Class A ordinary shares of 412,566 at an average conversion price of $86.08 per share. See Note 13 – convertible notes payable and derivative liabilities for details. During the year ended June 30, 2025, convertible note payable of $15,280,321 was converted into the Company’s Class A ordinary shares of 518 at an average conversion price of $29,498.69 per share.