{"url_path":"/sec/sgly/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Legal Proceedings**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1422892/0001213900-26-056602-index.html","accession_number":"0001213900-26-056602","cik":"0001422892","ticker":"SGLY","issuer_name":"Singularity Future Technology Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1422892/0001213900-26-056602-index.html","primary_entity_key":"0001422892","primary_entity_name":"Singularity Future Technology Ltd."},"word_count":1438,"has_tables":true,"body_markdown":"**Item\n1. Legal Proceedings** \n\n \n\n**Litigations**\n\n** **\n\n*Crivellaro\nv. Singularity Future Technology Ltd.*\n\n \n\nAs\npreviously disclosed, on December 17, 2024, the Court issued an order that partially denied the motions to dismiss filed by the Company\nand its former chief executive officer, Yang Jie, arising from various statements made by Yang Jie about two allegedly fraudulent transactions.\nThe rest of the motions are granted. On January 2, 2025, the Company filed an answer to the Second Amended Class Action complaint. On\nJuly 13, 2025, the parties executed a Stipulation and Agreement of Settlement (“Settlement Agreement”). Pursuant to the\nSettlement Agreement, in exchange for the Settlement payment and subject to final approval by the Court, all plaintiffs in the Class Action\nwill release the Company and the other defendants on all claims. The Settlement Payment include cash payment of $3,000,000 and 6,500,000\nfreely tradable shares of the Company’s Common Stock (the “Settlement Shares”), which shall be issued pursuant to\nSection 3(a)(10) of the Securities Act of 1933, subject to the Court’s approval of the Settlement. In the event of a reverse stock\nsplit prior to the effectiveness of the Settlement, the number of Settlement Shares and/or the put option purchase price (described below)\nshall be reformulated so that the value of the Settlement Shares/put option shall not be less than $5,850,0000 as of the effectiveness\nof the Settlement. The settlement class has the right to sell all or a portion of the unsold Settlement Shares back to the Company at\n$0.85 per share if the 10-trading day average closing price immediately prior to the exercise of the put option falls below $0.85 before\nthe class lead counsel sells the Settlement Shares. The Company agreed to maintain a cash balance $3,250,000 in a dedicated escrow account\nto mitigate the risk that it is unable to satisfy the put option.\n\n \n\nOn\nSeptember 22, 2025, the Court imposed a temporary restraining order on the Company, pursuant to which the Company and the Ms. Jia Yang,\nCEO of the Company, (i) were mandated to transfer $6,250,000 amount, plus interest, from the Company’s Silk Road International\nBank S.A. (“Silkroad”) account in Djibouti to the Company’s Bank of America account in the United States by September\n23, 2025; (ii) were mandated to file a status report which identifies the balance of the Bank of America account every Friday until October\n9, 2025; and (iii) are prohibited from taking any further steps toward consummating the merger described in the Company’s Schedule\n14-A filed with the SEC and from participating in any other transaction which might have the effect of divesting this Court’s jurisdiction\nover the Company and its assets.\n\n \n\nThe\nCompany has requested that Silkroad transfer a total of $6.3 million to the Company’s Bank of America account. The Company has\nalso requested clarification from Silkroad regarding the initial $3,000,000 transfer that it instructed Silkroad to remit to the Company’s\nBank of America account in August 2025. However, after the Central Bank in Djibouti notified Silkroad that it did not have sufficient\nforeign exchange quota available, the initial $3,000,000 transfer and the subsequent $3,300,000 transfer have not been reinstated, and\nSilkroad has remained unable to execute these remittances. On October 9, 2025, the Company wired $2,000,000, which are loans from unrelated\nparties, as part of the settlement cash payment to the Escrow Account set forth in the Settlement Agreement and continues to keep the\nCourt updated as to the status of the Bank of America account. In addition, the Company is continuing its efforts to negotiate with potential\nindividual investors regarding making an investment in the Company to help with satisfying the Company’s settlement obligations.\n\n \n\nOn\nOctober 31, 2025, Lead Plaintiff filed a Motion for Final Approval of Class Action Settlement.\n\n \n\nOn\nMarch 9, 2026, the Court held a fairness hearing regarding the Class Action settlement (“Fairness Hearing”). During the\nFairness Hearing, the Court denied Lead Plaintiffs’ Motion for Final Approval of Class Action Settlement without prejudice, denied\nas moot the following (1) Lead Plaintiffs’ Motion for Attorney Fees, Litigation Expenses, and Service Awards; (2) Lead Plaintiffs\nMotion for Approval of Amended and Restated Settlement Fund Escrow Agreement; and (3) Singularity’s Motion for Approval of issuance\nof Shares pursuant to 15 U.S.C. § 77c(a)(10) (D.E. 158), and held that the temporary restraining order remains in place. The Court\nalso directed the parties to advise the Court by April 8, 2026, in a joint letter, how they intended to proceed in light of the Court’s\nruling, including (1) moving forward with trial; (2) renewing the Motion for Final Approval of the Class Action Settlement once Singularity\nhas completed payment; or (3) amending the settlement.\n\n \n\nThe\nparties have continued to seek to resolve this matter and have advised the Court of the same through joint letters submitted on April\n8, 24, and May 8, 2026. The parties are due to update the Court on May 15, 2026. \n\n \n\n*Huang\nv. Singularity Future Technology Ltd.*\n\n \n\nAs\npreviously disclosed, in February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company\nin the Circuit Court for the City of Richmond. In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the\nseverance payment, his two months’ salary and the incentive-based bonus. On January 31, 2025, a judgment from the Circuit Court\nfor the City of Richmond was entered in favor of Zhikang Huang and against the Company in the amount of $468,956.75, with interest accruing\nfrom the date of the judgment. On April 23, 2025, said Virginia judgment was filed in the Supreme Court of New York, County of Westchester\n(the “Westchester Court”) and entered in New York in favor of Zhikang Huang and against the Company in the amount of $468,956.75,\nwith interest accruing from January 31, 2025. On August 23, 2025, a settlement agreement was signed between the Company and Zhikang Huang\nto fully settle all claims by paying $300,000 to Zhikang Huang by August 25, 2025 and issuance of 90,000 shares to Zhikang Huang by October\n22, 2025.\n\n \n\n33\n\n \n\n \n\nThe\nCompany has completed the $300,000 settlement payment and issued 90,000 shares of the Company’s common stock to Zhikang Huang by\nOctober 20, 2025. However, on June 15, 2025, Zhikang Huang filed a petition against the Company and certain Company individuals seeking\npayment of the Virginia judgment and attorney’s fees. On September 25, 2025, after the Company completed the $300,000 settlement\npayment but before the transfer of the Company’s common stock was due, Zhikang Huang’s counsel caused the Court to enter\nan order against the Company and certain Company individuals to enforce the payment of the Virginia judgment and attorney’s fees.\nOn October 10, 2025, the Company filed a motion to vacate the September 25, 2025, order and to impose sanctions. On October 13, 2025,\nupon learning funds were transferred from the Company secretary’s account in the amount of the award for attorney’s fees,\nthe Company filed a proposed Order to Show Cause seeking among other things, staying further enforcement of the Virginia judgment. On\nOctober 15, 2025, the Westchester Court entered the Order to Show Cause and provided that pending the resolution of the Order to Show\nCause, all further collection proceedings in the action are stayed. A hearing of the Company’s motion to vacate and Order to Show\nCause are currently set to be heard on February 18, 2026, but adjourned to March 25, 2026. At the March 25, 2026 hearing the Westchester\nCourt stated that when the Company provides proof that the 90,000 shares have been deposited into Zhikang Huang’s brokerage account\n(as set forth in the settlement agreement) at the close of the six (6) month Rule 144 period, the Westchester Court was inclined to grant\nthe Company’s motions. However, the Westchester Court stated that it will allow Zhikang Huang’s counsel to refile a motion\nfor attorneys’ fees that are solely based on attorneys’ fees relating to bringing the special proceeding. The Westchester\nCourt conducted a settlement conference regarding the attorney’s fees issue. However, the matter was not resolved on that date\nand remains pending. The Company is currently working with its transfer agent and Zhikang Huang’s counsel to remove the restrictive\nlegend on the 90,000 shares and transfer them to the brokerage account(s) designated by Zhikang Huang.\n\n \n\nExcept\nas set forth above, there have been no other material development in the legal proceedings that the Company is a party. For a discussion\nof all of our legal proceedings, see the information in Part I, “Item 1. Business - Recent Developments” in our Annual Report\non Form 10-K for the fiscal year ended June 30, 2025."}