UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
The Quarterly Period Ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| Address of principal executive offices, including zip code |
| Registrant’s phone number, including area code |
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name on each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).
Yes
☐ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
N/A
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at April 30, 2026 | |
| Common Stock, $ par value | ||
| Preferred Stock, $0.0001 par value | 10,000,000 |
TABLE OF CONTENTS
| 2 |
PART I — FINANCIAL INFORMATION
Item 1. Financial statements
SYNERGY EMPIRE LIMITED.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 and MARCH 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of share)
As
of | As
of | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other receivables | ||||||||
| TOTAL CURRENT ASSETS | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accrued expenses and other payables | $ | $ | ||||||
| Other payable | ||||||||
| Amount due to a director | ||||||||
| Amount due to related party | ||||||||
| TOTAL CURRENT LIABILITIES | $ | $ | ||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock – Par value $; Authorized: Issued and outstanding: shares as of December 31, 2024 and as of March 31, 2024 | $ | $ | ||||||
| Common stock – Par value $; Authorized: Issued and outstanding: shares as of December 31, 2024 and shares as of March 31, 2024 | ||||||||
| Preferred stock – Additional paid-in capital | ||||||||
| Common stock – Additional paid-in capital | ||||||||
| Subscription receivable | ( | ) | ||||||
| Accumulated other comprehensive income/(loss) | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | $ | ( | ) | ( | ) | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | |||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
| F-1 |
SYNERGY EMPIRE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||
| 2024 | 2023 (Re-presented) | 2024 | 2023 (Re-presented) | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COST AND EXPENSES: | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating costs and expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance cost | ||||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
Loss after income tax from continuing operation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income/(loss) from discontinued operations before tax | ( | ) | ||||||||||||||
| Income tax on discontinued operations | ||||||||||||||||
| Net income/(loss) from discontinued operations | ( | ) | ||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Foreign currency translation (loss)/income – on discontinued operations | ( | ) | ||||||||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share, basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
| F-2 |
SYNERGY EMPIRE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| PREFERRED Stock | Common Stock | PREFERRED STOCK | COMMON STOCK | |||||||||||||||||||||||||||||||||||||
| NUMBER OF Shares | Amount | NUMBER OF Shares | Amount | Additional Paid-in Capital | ADDITIONAL PAID-IN CAPITAL | SUBSCRIPTION RECEIVABLE |
Accumulated DEFICIT | Accumulated comprehensive loss | Total STOCKHOLDERS EQUITY | |||||||||||||||||||||||||||||||
| Balance as of April 1, 2024 (Audited) | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||
| Issuance of new common shares | - | |||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Issuance of new preferred shares | - | |||||||||||||||||||||||||||||||||||||||
| Subscription receivable | - | - | ( |
) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 (Unaudited) | $ | $ | $ | $ | $ | ( |
) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 (Unaudited) | $ | $ | $ | $ | $ | ( |
) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||
| F-3 |
| Common Stock | ||||||||||||||||||||||||
| NUMBER OF Shares | Amount | Additional Paid-in Capital | Accumulated (DEFICIT)/ PROFIT | Accumulated comprehensive loss | Total STOCKHOLDERS EQUITY | |||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Balance as of September 30, 2023 | $ | $ | ( | ) | ( | ) | ||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of December 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements
| F-4 |
SYNERGY EMPIRE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| For the Nine Months Ended, December 31 | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss – continued operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization expenses | ||||||||
| Bad debts written off | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease in accounts receivable | ||||||||
| Decrease in prepaid expenses and other receivables | ||||||||
| Decrease in accrued liabilities | ( | ) | ( | ) | ||||
| Decrease in other payables | ( | ) | ||||||
| Net cash flows used in operating activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advance from director | ||||||||
| Advance from related party | ||||||||
| Net cash flows provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes | $ | $ | ( | ) | ||||
| Net changes in cash and cash equivalents | ( | ) | ( | ) | ||||
| Operating cash flows of the discontinued operation | ( | ) | ||||||
| Investing cash flows of the discontinued operation | ||||||||
| Financing cash flows of the discontinued operation | ( | ) | ||||||
| Effect of exchange rate changes of the discontinued operations | ||||||||
| Net changes in cash and cash equivalents of the discontinued operations | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash balance from discontinued operation | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Issuance of new common stocks | $ | $ | ||||||
| Issuance of new preferred stocks | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
| F-5 |
SYNERGY EMPIRE LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS BACKGROUND
Synergy Empire Limited (“the Company”) was incorporated under the laws of the State of Nevada on October 17, 2018. We have historically conducted our business through Lucky Star F&B Sdn. Bhd. and SH Dessert Sdn. Bhd, both are private limited liability company, incorporated in Malaysia.
On
January 16, 2019, the Company acquired
On
December 31, 2018, Synergy Empire Marshall acquired
On
February 21, 2019, Synergy Empire HK acquired
Lucky
Star acquired
On February 26, 2021, Synergy Empire Marshall acquired 100% of Lucky Star F&B Sdn. Bhd from Synergy Empire HK. Subsequently on March 31, 2021, Mr. Leong Will Liam acquired 100% of Synergy Empire HK, as such Synergy Empire HK is no longer a subsidiary of the Company.
Mr. Leong Will Liam was the director of the Company, Synergy Empire Marshall and a director and sole shareholder of Synergy Empire HK.
On July 29, 2022, the Company approved the resignation of Mr. Leong Will Liam concurrently with the appointment of Mr. Vicknesya Naayaker A/L Punosamy as the director of Lucky Star F&B Sdn. Bhd.
On July 29, 2022, the Company approved the resignation of Mr. Leong Will Liam concurrently with the appointment of Mr. Praveen A/L Ravichandran as the director of SH Dessert Sdn. Bhd.
On October 31, 2022, the Company terminated all the tenancy agreements before the expiry of the lease terms as mentioned in the agreements.
On November 30, 2022, the Company had entered into a lease agreement with a third party, Sweet Bakery & Dessert Café Sdn Bhd to lease the Company’s assets (the assets were owned by the disposed subsidiaries, Lucky Star F&B Sdn. Bhd. and SH Dessert Sdn. Bhd.) to the third party. The leasing period was from January 1, 2023 to December 31, 2023. The Company has discontinued the assets leasing business due to disposal of subsidiaries on January 1, 2024. Upon the disposal of subsidiaries, the Company decided to provide consultancy services to restaurant owners, specializing in restaurant and kitchen management.
On October 31, 2023, the director and officers of the Company, Leong Will Liam (President, Secretary, Treasurer, and Director) and Law Jia Ming (Chief Executive Officer and Chief Financial Officer) resigned from their positions with the Company. Upon such resignations, H’sien Loong Wong was appointed as President, Treasurer, Secretary and Director of the Company.
On
January 1, 2024, the Company disposed Synergy Empire Marshall to a shareholder of the Company, Mr. Tan Peh Hin Michael for, a consideration
of $
On
July 29, 2024, the Company executed an Acquisition and Stock Purchase Agreement (“the “Agreement”) with Meluha Therapeutics
Berhad (“Meluha”), a limited company incorporated under the laws of Malaysia, and the shareholders of Meluha. Pursuant to
the Agreement, we agreed to purchase shares of Meluha (the “Meluha Shares”), representing all of the issued and
outstanding shares of common stock of Meluha, which were held by all the shareholders of Meluha. As consideration, we agreed to issue
to the shareholders of Meluha, shares of our series A preferred stock with par value of $ per share (“Preferred
Stock”), at a value of $ per share, for an aggregate value of $
| F-6 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company has adopted March 31 as its fiscal year end.
The reporting currency of the Company is United States Dollars (“US$”), which is also the functional currency of the Company.
Use of Estimates
In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.
Cash and Cash Equivalents
The Company considers short-term, highly liquid investments with an original maturity of 90 days or less to be cash equivalents.
Revenue recognition
The Company adopted ASU 2014-09, Revenue from Contracts with Customers (codified in ASC 606), and accounts for revenue in accordance with ASC 606. Revenue is generated through provision of consultancy services and asset leasing services. However, asset leasing services were discontinued as of January 1, 2024 and has been re-presented within discontinued operations after setting off the relevant costs. Revenue is recognized when a customer obtains control of promised services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those services. The Company applies the following five-step model in order to determine this amount:
(i) identification of the promised goods and services in the contract;
(ii) determination of whether the promised services are performance obligations, including whether they are distinct in the context of the contract;
(iii) measurement of the transaction price, including the constraint on variable consideration;
(iv) allocation of the transaction price to the performance obligations; and
(v) recognition of revenue when (or as) the Company satisfies each performance obligation.
| F-7 |
The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.
A contract with a customer exists when the Company enters into a written agreement that has been approved by both parties and establishes legally enforceable rights and obligations, including the identification of the services to be provided, payment terms, and contract duration. The Company assesses whether the contract has commercial substance and concludes that collectability of the consideration is probable prior to recognizing revenue.
The Company generates revenue from providing restaurant and kitchen management consultancy services, including operational, marketing, and business development support. These activities are highly interdependent and significantly integrated, and together represent a single combined output to the customer. Accordingly, the Company has determined that the promised services are not separately identifiable and constitute a single performance obligation under ASC 606.
The Company satisfies its performance obligation over time, as the customer simultaneously receives and consumes the benefits of the services as they are performed. Progress toward complete satisfaction of the performance obligation is measured on a time-elapsed basis, with revenue recognized ratably over each monthly service period, which the Company considers to faithfully depicts the transfer of control of the services to the customer.
The transaction price consists of a fixed monthly service fee as specified in the contract and does not include variable consideration, a significant financing component, or noncash consideration. Because the contract contains a single performance obligation, the entire transaction price is allocated to that performance obligation.
The Company controls the consultancy services prior to transfer to the customer and is primarily responsible for fulfilling the performance obligation. Accordingly, the Company acts as a principal in these arrangements and recognizes revenue on a gross basis.
Income tax expense
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740,
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations and comprehensive income (loss).
The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiaries maintained their books and record in Malaysian Ringgits (“MYR”) and United States Dollars (“US$”), which were their respective functional currencies, being the primary currency of the economic environment in which the entities operated.
For periods prior to January 1, 2024, the Company had foreign subsidiaries with functional currencies other than US$. For consolidation purposes, the assets, liabilities and stockholders’ equity of these subsidiaries were translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income (“AOCI”).
On January 1, 2024, the Company disposed of all of its foreign subsidiaries. In accordance with ASC 830-30-40, the cumulative foreign currency translation adjustments associated with these subsidiaries that had been included in AOCI were reclassified into earnings as a component of the gain or loss realized upon disposal. Accordingly, no foreign currency translation remained in AOCI as of, and for period subsequent to January 1, 2024.
Translation of amounts from the local currency of the subsidiaries into US$1 has been made at the following exchange rates for the respective periods:
| For the nine months ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Period-end MYR : US$1 exchange rate | ||||||||
| Period-average MYR : US$1 exchange rate | ||||||||
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
| F-8 |
Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivable, deposits and other receivables, account payable and accrued expenses and other payable approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
As of December 31, 2024 and 2023, the Company did not have any non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.
The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Lease
The Company adopted the ASU No. 2016-02, on April 1, 2019 (date of inception). The Company leases central kitchen and restaurants for fixed periods pre-emptive extension options. The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term.
Lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.
Commitments and contingencies
The Company follows the ASC 450-20, “Commitments to report accounting for contingencies”. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s unaudited condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Accounts Receivable
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit terms are dependent upon the customer. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed.
Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability.
| F-9 |
Accounts receivable is recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as identified. For the quarter ended December 31, 2024 and 2023, the Company do not make any allowance for expected credit loss.
Credit losses
The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables. Management considers historical collection rates, the current financial status of the Company’s customers, macroeconomic factors, and other industry-specific factors when evaluating current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, management believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments, including its trade receivables.
Credit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecasts. Based on the aging categorization and the adjusted loss rate per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.
Discontinued operations
The Company has adopted ASC Topic 205, “Presentation of Financial Statements” Subtopic 20-45, in determining whether any of its business component(s) classified as held for sale, disposed of by sale or other than by sale is required to be reported in discontinued operations. In accordance with ASC Topic 205-20-45-1, a discontinued operation may include a component of an entity or a group of components of an entity, or a business or non-profit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).
When a component is classified as a discontinued operation, the results of operations of the discontinued component, including any gain or loss on disposal, are presented as a separate line item, net of tax, in the consolidated statements of income for all periods presented. Prior period financial information is reclassified to reflect the discontinued operation on a comparable basis.
Assets and liabilities of a discontinued operation that meet the criteria to be classified as held for sale are presented separately in the consolidated balance sheets. Such assets and liabilities are classified as current or noncurrent based on their nature and the Company’s normal classification policy.
The cash flows attributable to discontinued operations are presented separately from cash flows from continuing operations in the consolidated statement of cash flows for all periods presented.
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company already adopted this ASU on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires disaggregated information about the reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s financial statement disclosures.
The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements.
3. GOING CONCERN UNCERTAINTIES
The
accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going
concern. The company having accumulated deficit of $
The Company’s cash position is not sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to improve profitability and the ability to acquire financial support from the operation of its subsidiary, Meluha Therapeutics Berhad (“Meluha”).
On July 29, 2024, the Company executed an Acquisition
and Stock Purchase Agreement (“the “Agreement”) with Meluha Therapeutics Berhad, a limited company incorporated under
the laws of Malaysia, and the shareholders of Meluha. Pursuant to the Agreement, we agreed to purchase shares of Meluha (the
“Meluha Shares”), representing all of the issued and outstanding shares of common stock of Meluha, which were held by all
the shareholders of Meluha. As a consideration, we agreed to issue to the shareholders of Meluha, shares of our Series A preferred
stock with par value of $ per share (“Preferred Stock”), at a value of $ per share, for an aggregate value of
$
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that unaudited condensed consolidated financial statements are issued. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
| F-10 |
4. ACCOUNTS RECEIVABLE, NET
As of December 31, 2024 | As of March 31, 2024 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Allowance for expected credit loss | ||||||||
| Accounts receivable, net | $ | $ | ||||||
5. PREPAID EXPENSES AND OTHER RECEIVABLES
| As of December 31, 2024 | As of March 31, 2024 | |||||||
| Prepaid expenses | ||||||||
| Other receivables | ||||||||
| Total | $ | $ | ||||||
Prepaid expenses represent OTCQB annual fee and filing agent fee.
Other receivables consist of subscription proceeds receivable from the legal counsel.
6. ACCRUED EXPENSES AND OTHER PAYABLES
| As of December 31, 2024 | As of March 31, 2024 | |||||||
| Accrued expenses | $ | $ | ||||||
| Other payables | ||||||||
| Total | $ | $ | ||||||
Accrued expenses consist of accrued audit fees and professional fees.
Other payables consist of amount due to our previous director, who was resigned on October 31, 2023.
7. AMOUNT DUE TO A DIRECTOR
On October 31, 2023, the director of the Company, Leong Will Liam (President, Secretary, Treasurer, and Director) resigned his positions with the Company. Upon such resignation, H’sien Loong Wong was appointed as President, Treasurer, Secretary and Director of the Company.
As
of December 31, 2024 and March 31, 2024, the Company has an outstanding amount due to director, Mr. H’sien Loong Wong amounted
$
8. AMOUNT DUE TO A RELATED PARTY
On
May 5, 2024, Will Liam Leong, who was the previous director of the Company, had assigned and transferred the amount due to him by
the Company to Michael Tan, who is a substantial shareholder of the Company. As of December 31, 2024, the Company has an outstanding
amount due to a shareholder, Michael Tan amounted $
9. CONCENTRATION OF RISK
(a) Major Customers
For
the nine months ended December 31, 2024, there was one customer who accounted for
For
the nine months ended December 31, 2023, there was one customer who accounted for
(b) Major Suppliers
For
the nine months ended December 31, 2024 and 2023, there were no suppliers who accounted for
10. INCOME TAXES
The loss before income taxes of the Company for the nine months ended December 31, 2024 and 2023 were comprised of the following:
| For the nine months ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Tax jurisdictions from: | ||||||||
| – Local – for continued operations | $ | ( | ) | $ | ( | ) | ||
| – Foreign, representing: | ||||||||
| Marshall Islands (non-taxable jurisdiction) | ||||||||
| Hong Kong | ||||||||
| Malaysia – for discontinued operations | ( | ) | ||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
| F-11 |
Provision for income taxes consisted of the following:
For the nine months ended December 31 |
||||||||
| 2024 | 2023 | |||||||
| Current: | ||||||||
| – Local | $ | $ | ||||||
| – Foreign: | ||||||||
| Marshall Islands (non-taxable jurisdiction) | ||||||||
| Malaysia | ||||||||
| Deferred: | ||||||||
| – Local | ||||||||
| – Foreign | ||||||||
| $ | $ | |||||||
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the periods presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which its subsidiaries operate, as follows:
United States of America
Malaysia
For the nine months ended December 31, 2023, Lucky
Star F&B Sdn. Bhd. and SH Desserts Sdn. Bhd. incurred a loss of $
As of December 31, 2024, the operations in Malaysia have been discontinued due to the disposal of the two subsidiaries, Lucky Star F&B Sdn. Bhd. and SH Desserts Sdn. Bhd. with effect from January 1, 2024.
| For the three months ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Loss before income taxes | ( | ) | ||||||
| Malaysia statutory tax rate | % | % | ||||||
| Income tax expense at statutory rate | $ | $ | ( | ) | ||||
| Valuation allowance | ||||||||
| Income tax expense | $ | $ | ||||||
The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2024 and March 31, 2024:
As of December 31, 2024 |
As of March 31, 2024 |
|||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | ||||||||
| – United States of America | $ | $ | ||||||
| – Marshall Islands | ||||||||
| – Malaysia | ||||||||
| Less: valuation allowance | ( |
) | ( |
) | ||||
| Deferred tax assets | $ | $ | ||||||
Management
believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company
provided for a full valuation allowance against its deferred tax assets of $
| F-12 |
11. STOCKHOLDERS’ EQUITY
On
October 31, 2023, 75 shareholders of Synergy Empire Limited (the “Company”), collectively holding shares (the “Purchased
Shares”) of the Company’s outstanding shares of common stock, $ par value, entered into individual stock
purchase agreements for the sale of the Purchased Shares to thirty-two (32) individual investors (individually, each a “Purchaser,”
and collectively, the “Purchasers”) for an aggregate purchase price of $
Following the completion of the transaction, H’sien Loong Wong, became
the beneficial owner of shares of the Company’s common stock (45% of the issued and outstanding shares of common stock of
the Company), and as such he is able to unilaterally control the election of our board of directors, all matters upon which shareholder
approval is required and, ultimately, the direction of our Company. Mr. Wong acquired his shares of common stock from Leong Will
Liam, the Company’s former President, Secretary, Treasurer, Director and controlling shareholder) for $
On
December 20, 2023, the Company issued shares of restricted common stock to 20 individual shareholders at the purchase price of
$, for a total consideration of $
On April 30, 2024, the Company issued 500,000 shares of restricted common stock to 2 individual shareholders at the purchase price of $0.20, for a total consideration of $100,000. The proceeds of $100,000 went to the Company to be used as working capital. The total consideration of $100,000 was off-set by the amount due to the shareholders by the Company.
On May 16, 2024, the Company increase the number of authorized shares of common stock with $ par value per share from shares to shares and preferred stock with $ par value per share from shares to shares.
On May 16, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation (the “Series A Certificate of Designation”) describing the preferences, rights and limitations of the Company’s Series A Preferred Stock, $ par value per share. The Series A Certificate of Designation authorized the issuance of up to shares of Series A preferred stock, par value $ per share (the “Series A Preferred Stock”), with a stated value equal to $ per share.
Holders of the Series A Preferred Stock are entitled to 1 vote per share on matters submitted to a vote of the Company’s stockholders. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary of involuntary, the holders of the Series A Preferred Stock will be entitled to receive out of the assets of the Company an amount equal to the stated value of the Series A Preferred Stock and any other fees or liquidated damages then due and owing, for each share of Series A Preferred Stock before any distribution or payment is made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred Stock will be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
On
July 29, 2024, the Company executed an Acquisition and Stock Purchase Agreement (“the “Agreement”) with Meluha Therapeutics
Berhad (“Meluha”), a limited company incorporated under the laws of Malaysia, and the shareholders of Meluha. Pursuant to
the Agreement, we agreed to purchase shares of Meluha (the “Meluha Shares”), representing all of the issued and
outstanding shares of common stock of Meluha, which were held by all the shareholders of Meluha. As consideration, we agreed to issue
to the shareholders of Meluha, shares of our series A preferred stock with par value of $ per share (“Preferred
Stock”), at a value of $ per share, for an aggregate value of $
As of December 31, 2024, the Company have an issued and outstanding share of common stock of shares and an issued and outstanding share of preferred stock of shares.
12. SEGMENT REPORTING
ASC
280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about services categories, business segments and major customers
in financial statements. Prior to January 1, 2024, the Company had
In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
On January 1, 2024, the Company disposed Synergy Empire Marshall to Mr. Tan Peh Hin Michael for a consideration of $. The disposal indirectly resulted in the divestiture of two subsidiaries in Malaysia, Lucky Star and SH Dessert. As a result, the Company discontinued the asset leasing business as of June 30, 2024. Upon the disposal of the subsidiaries, the Company had one reportable segment based on business units, being consultancy services business and one reportable segment based on country, being United States.
For the Nine Months Ended and As of December 31, 2024 | ||||||||
| By Business Unit | Consultancy Business | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
| F-13 |
For the Nine Months Ended and As of December 31, 2023 | ||||||||
| By Business Unit | Assets Leasing Business | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
For the Nine Months Ended and As of
December 31, 2024 | ||||||||
| By Country | United States | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
For the Nine Months Ended and As of December 31, 2023 | ||||||||
| By Country | United States | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
13. COMMITMENTS AND CONTINGENCIES
The Company has no commitments and contingencies as of December 31, 2024 and March 31, 2024.
14. RELATED PARTY TRANSACTIONS
As of December 31, 2024, the relationship and the nature of related party of the Company are summarized as follows:
| Name of Related Party | Relationship to the Company | |
| H’sien Loong Wong | Director and Chief Executive Officer of the Company | |
| Michael Tan | Shareholder of the Company | |
| Will Liam Leong | Previous Director of the Company, resigned on October 31, 2023 |
As of December 31, 2024 and 2023, the Company has following transaction balances with the related parties:
| As of December 31, 2024 | As of December 31, 2023 | |||||||
| Amount due to director | ||||||||
| - H’sien Loong Wong | $ | |||||||
| Amount due to related parties | ||||||||
| - Michael Tan | ||||||||
| - Will Liam Leong | ||||||||
| Total | $ | |||||||
The consultancy services are provided by our sole director, Mr. H’sien Loong Wong without any remuneration.
| F-14 |
15. DISCONTINUED OPERATIONS
On
January 1, 2024, the Company disposed Synergy Empire Marshall to a shareholder of the Company, Mr. Tan Peh Hin Michael, for a consideration
of $
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Three months ended December 31, | For the Nine months ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ( | ) | ||||||||||||||
| Income/(loss) from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
| Other income/(loss) | ( | ) | ||||||||||||||
| Income/(loss) before income tax from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
| Income tax expense | ||||||||||||||||
| Net income/(loss) from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
Condensed Consolidated Statements of Cash Flows
| For the Nine Months Ended, December 31 | ||||||||
| 2024 | 2023 Re-presented | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization expenses | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease in prepaid expenses and other receivables | ||||||||
| Decrease in accrued liabilities and other payables | ( | ) | ||||||
| Net cash flows used in operating activities | $ | $ | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advances from director | ||||||||
| Repayment to bank loan | ( | ) | ||||||
| Net cash flows used in financing activities | $ | $ | ( | ) | ||||
| Effect of exchange rate changes | $ | $ | ||||||
| Net changes in cash and cash equivalents | ( | ) | ||||||
16. COMPARATIVE FIGURES
The
Company has re-presented the comparative figures in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the
three and nine months ended December 31, 2023, due to the discontinued operation of asset leasing business upon the disposal of subsidiaries
on January 1, 2024 to conform with the current period presentation. For the three months ended December 31, 2023, revenue was adjusted
from $
17. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2024 up through the date the Company presented these audited financial statements.
On July 29, 2024, the Company
executed an Acquisition and Stock Purchase Agreement (“the “Agreement”) with Meluha Therapeutics Berhad (“Meluha”),
a limited company incorporated under the laws of Malaysia, and the shareholders of Meluha. Pursuant to the Agreement, we agreed to purchase
shares of Meluha (the “Meluha Shares”), representing all of the issued and outstanding shares of common stock of
Meluha, which were held by all the shareholders of Meluha. As consideration, we agreed to issue to the shareholders of Meluha,
shares of our series A preferred stock with par value of $ per share (“Preferred Stock”), at a value of $ per
share, for an aggregate value of $
| F-15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form 10-K dated October 11, 2024, for the year ended March 31, 2024 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and café our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Overview
We are engaged in consultancy services, specializing in food & beverage industry, to restaurant owner.
On October 31, 2022, the Company terminated all the tenancy agreements before the due date of the agreements.
On November 30, 2022, the Company had entered into a lease agreement with a third party, Sweet Bakery & Dessert Cafe Sdn Bhd to lease their assets to a third party. The leasing period was for the period from January 1, 2023 to December 31, 2023. The Company did not cease its business operation nor sell the operating assets. The Company instead, focused onlooking for a new strategic location to continue their business while leasing out their assets to the third party.
On October 31, 2023, 75 shareholders of Synergy Empire Limited (the “Company”), collectively holding 996,500 shares (the “Purchased Shares”) of the Company’s outstanding 1,000,000 shares of common stock, $0.0001 par value, entered into individual stock purchase agreements for the sale of the Purchased Shares to thirty-two (32) individual investors (individually, each a “Purchaser,” and collectively, the “Purchasers”) for an aggregate purchase price of $650,000 ($0.6523 per share). Following the completion of the transaction, the Purchasers collectively hold 99.65% of the Company’s outstanding shares of common stock.
Following the completion of the transaction, H’sien Loong Wong, is the beneficial owner of 450,000 shares of the Company’s common stock (45% of the issued and outstanding shares of common stock of the Company), and as such he is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. Mr. Wong acquired his 450,000 shares of common stock from Leong Will Liam, the Company’s former President, Secretary, Treasurer, Director and controlling shareholder) for $293,535 ($0.6523 per share). Mr. Wong purchased such shares with his own savings. With the exception of Mr. Wong, upon the completion of the transaction, no other Purchaser owns in excess of 10% of the Company’s common stock.
On October 31, 2023, the previous director and officers of the Company, Leong Will Liam (President, Secretary, Treasurer, and Director) and Law Jia Ming (Chief Executive Officer and Chief Financial Officer) resigned their positions with the Company. Upon such resignations, H’sien Loong Wong was appointed as President, Treasurer, Secretary, and Director of the Company.
On January 1, 2024, the Company disposed Synergy Empire Marshall, which indirectly resulted in the divestiture of two other subsidiaries in Malaysia, Lucky Star and SH Dessert. The disposal of these subsidiaries led to the discontinuation of the Company’s asset leasing business. The Company had decided to shift its focus to providing consultancy services to restaurant owners, specializing in restaurant and kitchen management. This strategic move leveraged upon the Director’s extensive experience in the food and beverage industry.
On July 29, 2024, the Company executed an Acquisition and Stock Purchase Agreement (“the “Agreement”) with Meluha Therapeutics Berhad (“Meluha”), a limited company incorporated under the laws of Malaysia, and the shareholders of Meluha. Pursuant to the Agreement, we agreed to purchase 10,000,000 shares of Meluha (the “Meluha Shares”), representing all of the issued and outstanding shares of common stock of Meluha, which were held by all the shareholders of Meluha. As a consideration, we agreed to issue to the shareholders of Meluha, 10,000,000 shares of our series A preferred stock with par value of $0.0001 per share (“Preferred Stock”), at a value of $0.2155 per share, for an aggregate value of $2,155,000. The acquisition has been consummated on March 28, 2025. Meluha is a biopharmaceutical company, primarily involved in contract manufacturing as well as research and development business of biopharmaceutical and medical products. The Company has changed their business direction from restaurant and kitchen management consultancy services to contract manufacturing business of biopharmaceutical and medical products, which constituted a reverse takeover between the Company and Meluha.
| 3 |
Holders of the Series A Preferred Stock are entitled to 1 vote per share on matters submitted to a vote of the Company’s stockholders. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary of involuntary, the holders of the Series A Preferred Stock will be entitled to receive out of the assets of the Company an amount equal to the stated value of the Series A Preferred Stock and any other fees or liquidated damages then due and owing, for each share of Series A Preferred Stock before any distribution or payment is made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred Stock will be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Results of Operations
Three Months ended December 31, 2024 and 2023
Revenue
For the three months ended December 31, 2024, the Company did not generate revenue from consultancy services business.
For the three months ended December 31, 2024 and 2023, the Company did not generate revenue from asset leasing business. This was primarily due to its discontinuance of the asset leasing business as a result of the disposal of subsidiaries on January 1, 2024.
General and Administrative Expenses
For the three months ended December 31, 2024 and 2023, the Company has incurred general and administrative expenses of $35,234 and $15,038 respectively, which primarily consist of write-off of bad debts, professional fees and compliance expenses. The significant increase in general and administrative expenses was primarily due to the write-off of bad debts, as the Company was unable to collect receivables from the customer.
Net Loss from Continuing Operations
For the three months ended December 31, 2024 and 2023, the Company has incurred a net loss of $35,234 and $15,038 respectively from continuing operations.
Net Loss from Discontinued Operation
For the three months ended December 31, 2023, the Company has earned a net income of $11,094 from discontinued operation.
Nine Months ended December 31, 2024 and 2023
Revenue
For the nine months ended December 31, 2024, the Company earned a consultancy revenue of $15,000 by providing consultancy services to restaurant owner, specializing in restaurant and kitchen management.
For the nine months ended December 31, 2024 and 2023, the Company did not generate revenue from asset leasing business. This was primarily due to its discontinuance of the asset leasing business as a result of the disposal of subsidiaries on January 1, 2024.
General and Administrative Expenses
For the nine months ended December 31, 2024 and 2023, the Company has incurred general and administrative expenses of $78,719 and $44,728 respectively, which primarily consist of write-off of bad debts, professional fees and compliance expenses. The significant increase in general and administrative expenses was primarily due to increase in professional fees and the write-off of bad debts, as the Company was unable to collect receivables from the customer.
| 4 |
Net Loss from Continuing Operations
For the nine months ended December 31, 2024 and 2023, the Company has incurred a net loss of $63,719 and $44,728 respectively from continuing operations.
Net Loss from Discontinued Operation
For the nine months ended December 31, 2023, the Company has incurred a net loss of $29,533 from discontinued operation.
Liquidity and Capital Resources
Cash Used in Operating Activities
For the nine months ended December 31, 2024, the Company has used $426,826 in operating activities, primarily attributable to net loss from operation, decrease in accrued liabilities and decrease in other payables contra by decrease in accounts receivable and decrease in prepaid expenses and other receivables.
For the nine months ended December 31, 2023, the Company has used $48,008 in operating activities, primarily attributable to net loss from operation and decrease in accrued liabilities contra by decrease in prepaid expenses and other receivables.
Cash Used in Investing Activities
The Company has invested $0 in investing activity for the nine months ended December 31, 2024.
The Company has invested $0 in investing activity for the nine months ended December 31, 2023.
Cash Provided by Financing Activities
For the nine months ended December 31, 2024, the Company has received $426,744 from financing activity, primarily consist of advances from director and related party.
For the nine months ended December 31, 2023, the Company received $47,998 from financing activity, primarily consist of advances from director.
Cash Flow Activities of Discontinued Operations
For the nine months ended December 31, 2023, the Company used $23,926 and $7,241 in operating activity and financing activity respectively from discontinued operations. The Company discontinued the operation of asset leasing business due to disposal of subsidiaries on January 1, 2024.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of December 31, 2024 and 2023.
Contractual Obligations
As of December 31, 2024, the Company has no contractual obligations involved.
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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; | |
| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and | |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our management did not evaluate the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Without such an evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2024. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
Identified Items That May be Material Weaknesses
A material weakness in internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.
Management identified the following material weaknesses during its assessment of internal controls over financial reporting as of December 31, 2024.
We do not have adequate segregation of duties and effective risk assessment – Lack of segregation of duties and effective risk assessment may cause the Company to face the likelihood of fraud or theft, due to poor oversight, governance and review to detect errors. We also lack of sufficient and competent financial reporting and accounting personnel with appropriate knowledge of U.S. generally accepted accounting principles (“U.S. GAAP”) and reporting requirements set forth by the SEC to address complex U.S. GAAP technical accounting issues, and to prepare and review combined financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024 based on criteria established in in COSO Internal Control - Integrated Framework (ICIF-2013).
Management’s Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:
| 1. | We intend to add staff members to our management team to ensure that information which is required to be disclosed in our reports filed and submitted under the Exchange Act, is recorded, processed, summarized and reported as and when required and the staff members will have segregated responsibilities with regard to these responsibilities. | |
| 2. | We plan to create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function. The accounting personnel is responsible for reviewing the financing activities, facilitate the approval of the financing, record the information regarding the financing, and submit SEC filing related documents to our legal counsel in order to comply with the filing requirements of SEC. | |
| 3. | We plan to appoint qualified accounting and financial personnel with appropriate knowledge and experience in U.S. GAAP and SEC reporting requirements or hire consultants with the required expertise to address the US GAAP and SEC reporting requirements. |
Changes in Internal Control Over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.
Item 1A. Risk Factors
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
Item 3. Defaults Upon Senior Securities
(a) None.
(b) None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
Insider Trading Arrangements
During
the quarter ended December 31, 2024, none of our directors or officers
Item 6. Exhibits
| 31.1 | Rule 13(a)-14(a) / 15(d)-14(a) Certification of principal executive officer and principal financial officer | |
| 32.1 | Section 1350 Certification of principal executive officer and principal financial officer | |
| 101..INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SYNERGY EMPIRE LIMITED | |||
| (Name of Registrant) | |||
| Date: | April 30, 2026 | ||
| By: | /s/ H’sien Loong Wong | ||
| Name: | H’sien Loong Wong | ||
| Title: | Chief Executive Officer, Chief Financial Officer | ||
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