Creative Global Technology(CGTL) - 2024 Q4 - Annual Report

General Information Form 20-F Filing Details This section details the Form 20-F annual report filing for Creative Global Technology Holdings Limited, a Cayman Islands registrant with Nasdaq-listed Ordinary Shares (CGTL) - The filing is an Annual Report on Form 20-F for the fiscal year ended September 30, 2024[2] - Registrant is Creative Global Technology Holdings Limited, incorporated in the Cayman Islands, with principal executive offices in Hong Kong[3] Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Ordinary Shares, $0.001 par value | CGTL | The Nasdaq Stock Market LLC | Registrant Status and Accounting Standards The registrant reported 21,437,500 outstanding ordinary shares, is a non-accelerated filer and emerging growth company, and prepares financial statements under U.S. GAAP - 21,437,500 ordinary shares (US$0.001 par value) were outstanding as of the close of the period[7] - The registrant is classified as a non-accelerated filer and an emerging growth company[10] - Financial statements are prepared in accordance with U.S. GAAP[11] INTRODUCTION Report Context and Currency Translation This annual report on Form 20-F includes audited consolidated financial statements for the fiscal years ended September 30, 2024, 2023, and 2022, with HKD amounts translated to U.S. dollars at specific year-end rates - The annual report includes audited consolidated financial statements for the years ended September 30, 2024, 2023 and 2022[16] HKD to USD Conversion Rates | Date | Exchange Rate (HKD to US$1.00) | | :--- | :----------------------------- | | September 30, 2024 | 7.7738 | | September 30, 2023 | 7.8330 | | September 30, 2022 | 7.8217 | Definitions This section defines key terms used throughout the annual report, including references to the Company, Group, and geographical terms - The 'Company,' 'CGT Holdings,' 'Registrant' refers to Creative Global Technology Holdings Limited, incorporated in the Cayman Islands[19] - 'We,' 'us,' 'our,' 'the Group' refer to CGT Holdings and its consolidated subsidiaries[19] - 'PRC' or 'China' includes Hong Kong, Macau, and Taiwan for reporting purposes, but PRC laws do not include legislation from these regions[19] FORWARD-LOOKING INFORMATION This section contains forward-looking statements subject to risks and uncertainties, reflecting current expectations of future events, with no obligation for public updates - Forward-looking statements reflect current expectations and views of future events, subject to risks and uncertainties[21] - Factors that could cause actual results to differ include growth strategy, financial results, product development, interest rate fluctuations, market acceptance, competition, government policies, and economic conditions[24] - The company does not intend or have an obligation to update publicly any forward-looking statements after the distribution of this annual report, except as required by federal securities laws[23] PART I ITEM 1-IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS This item is marked as 'Not Applicable,' indicating no specific information is provided regarding directors, senior management, and advisers - This section is marked as 'Not Applicable'[26] ITEM 2-OFFER STATISTICS AND EXPECTED TIMETABLE This item is marked as 'Not Applicable,' indicating no specific information is provided regarding offer statistics and expected timetable - This section is marked as 'Not Applicable'[27] ITEM 3-KEY INFORMATION This section covers key information about the company, including reserved items, capitalization and indebtedness, reasons for the offer and use of proceeds (all marked as 'Not Applicable'), and a comprehensive discussion of various risk factors A. [Reserved] This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[28] B. Capitalization and indebtedness. This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[28] C. Reasons for the offer and use of proceeds. This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[29] D. Risk Factors This extensive section outlines significant risks across business operations, the Hong Kong operating environment, and the trading market for CGT Holdings' Ordinary Shares RISKS RELATED TO OUR BUSINESS The company faces numerous business risks, including industry evolution, customer/supplier engagement, growth management, economic downturns, inspection accuracy, price margin fluctuations, product liability, brand concentration (Apple), new product expansion, store network, privacy, technology adoption, inventory, and supply chain - The pre-owned consumer electronic devices industry is rapidly evolving, and the company's business model, including online retail (since 2021) and device rental (since 2022), is unique and untested, posing risks to its continued success and widespread acceptance[30] - Approximately 98.9% and 99.5% of revenues for fiscal years ended September 30, 2024 and 2023, respectively, were derived from sales of pre-owned Apple products, exposing the company to heightened risks related to Apple's production or quality control[50] - A material weakness was identified in internal control over financial reporting due to a lack of sufficient skilled staff with U.S. GAAP knowledge and formal accounting policies, which could lead to future financial statement misstatements[118] Net Inventories (US$ millions) | Fiscal Year End | Net Inventories (US$ millions) | | :-------------- | :----------------------------- | | September 30, 2024 | 3.8 | | September 30, 2023 | 5.6 | RISKS RELATED TO DOING BUSINESS IN HONG KONG Operating primarily in Hong Kong, CGT Holdings faces risks from the region's unique political and economic status, including potential impacts from PRC government intervention, legal system uncertainties, and evolving PRC laws - CGT Holdings is a Cayman Islands holding company with substantially all operations conducted through its Hong Kong subsidiary, CGTHK, making it susceptible to Hong Kong's economic and political conditions and potential PRC government interventions[145] - The Hong Kong legal system, based on English common law, embodies uncertainties, and potential changes in the PRC's stance on Hong Kong's autonomy could impact the legal protections available and the company's Nasdaq listing[147] - The company does not believe it is subject to PRC filing and approval requirements for overseas offerings or cybersecurity reviews due to having no material operations in mainland China and not processing personal information of over one million users, but uncertainties in interpretation and implementation of new PRC laws (e.g., New Overseas Listing Rules, Data Security Law, PIPL) could change this[78][180][181] RISKS RELATED TO CGT HOLDINGS' ORDINARY SHARES AND THE TRADING MARKET Investors in CGT Holdings' Ordinary Shares face risks including potential delisting under the HFCAA, share price volatility, reduced shareholder protection as a foreign private issuer and emerging growth company, and corporate governance exemptions as a 'controlled company' - CGT Holdings' Ordinary Shares may be delisted under the HFCAA if the PCAOB is unable to inspect its auditors for two consecutive years, despite the current auditor not being headquartered in mainland China or Hong Kong[186][195][196] - The market price for CGT Holdings' Ordinary Shares may be volatile and thinly traded, potentially experiencing extreme price fluctuations unrelated to underlying performance, making it difficult for investors to assess value or sell shares[197][200][211] - As a foreign private issuer and an 'emerging growth company,' CGT Holdings is exempt from certain U.S. disclosure and corporate governance requirements, which may afford less protection or information to investors compared to U.S. domestic issuers[216][217][219] - CGT Holdings is a 'controlled company' under Nasdaq Rules, allowing it to rely on exemptions from certain corporate governance requirements (e.g., independent director majority, independent compensation/nominating committees), which could adversely affect public shareholders[222] ITEM 4-INFORMATION ON THE COMPANY This section provides comprehensive information about Creative Global Technology Holdings Limited, including its corporate history, business operations, organizational structure, physical assets, and intellectual property A. History and Development of the Company Creative Global Technology Holdings Limited was incorporated in the Cayman Islands on January 11, 2023, and through a reorganization, made CGTHK, a Hong Kong-based pre-owned electronics reseller, its wholly-owned operating subsidiary, with its Ordinary Shares now traded on Nasdaq - Creative Global Technology Holdings Limited was incorporated in the Cayman Islands on January 11, 2023[226] - CGTHK, the primary operating entity, was founded in Hong Kong in 2016 and focuses on sourcing pre-owned consumer electronic devices from the U.S., Japan, and other developed countries for resale to wholesalers in Southeast Asia[228] - CGT Holdings' Ordinary Shares are traded on Nasdaq under the ticker symbol 'CGTL'[229] B. Business Overview CGT Holdings, through CGTHK, focuses on recycling and reselling pre-owned consumer electronic devices, primarily Apple products, through wholesale, retail, and rental segments, with strategic plans for expansion and diversification - CGTHK's primary business is the wholesale of pre-owned consumer electronic devices, generating US$35.5 million in revenue for the year ended September 30, 2024[233] - Revenues from Apple products (iPhones, iPads, MacBooks, Apple Watches, etc.) accounted for over 98.9% of total revenue for the year ended September 30, 2024[245] - The company plans to expand its retail business (estimated cost US$1-2 million), develop its rental business, diversify its product portfolio (handheld game consoles, UAVs, digital cameras), and expand into strategic overseas markets like Malaysia, Thailand, and Vietnam (estimated cost US$1-3 million)[276][277][278][279] Revenue by Product Category (Percentage of Total Revenue) | Product Category | 2024 | 2023 | 2022 | | :--------------- | :---- | :---- | :---- | | Smartphones | 73.8% | 81.8% | 45.5% | | Tablets | 7.3% | 7.3% | 36.6% | | Laptops and others | 18.9% | 10.9% | 17.9% | - CGTHK has obtained the Radio Dealers License (Unrestricted), valid until April 30, 2025, which is required for trading in radio-communications apparatus[289] C. Organizational Structure This section illustrates the corporate structure of Creative Global Technology Holdings Limited, showing it as a Cayman Islands exempted company, owning 100% equity in Creative Global Technology (BVI) Limited, which in turn owns 100% of Creative Global Technology Limited (CGTHK), the primary operating entity in Hong Kong - The corporate structure shows Creative Global Technology Holdings Limited (Cayman Islands) as the parent, with Creative Global Technology (BVI) Limited (BVI) as a wholly-owned subsidiary, which in turn wholly owns Creative Global Technology Limited (Hong Kong), the operating entity[348][349] D. Property, Plants, and Equipment The company does not own any real estate, operating instead from leased office and storage space totaling 3,177 sq.ft. in Hong Kong - The company does not own any real estate[350] - CGTHK leases Unit 2, 10/F, and Unit 3, 22/F, Westin Centre, 26 Hung To Road, Kwun Tong, Kowloon, Hong Kong, for its office and storage space, totaling 3,177 sq.ft.[350] E. Intellectual Property CGTHK considers its trademarks, domain names, know-how, and proprietary technologies critical to its success, protected by intellectual property laws and contractual agreements - CGTHK relies on trademarks, domain names, know-how, and proprietary technologies as critical intellectual property[351] - The company has a registered trademark in Hong Kong (June 23, 2023) and domain names www.cgt-electronics.com and www.cgt-recycle.com[351](index=351&type=chunk) - An application for trademark registration was filed with the U.S. Patent and Trademark Office on July 12, 2023[351] ITEM 4A-UNRESOLVED STAFF COMMENTS This item states that there are no unresolved staff comments - There are no unresolved staff comments[352] ITEM 5-OPERATING AND FINANCIAL REVIEW AND PROSPECTS This section provides a detailed discussion of the company's financial condition and results of operations, focusing on its business activities through CGTHK in Hong Kong A. Operating Results The company's operating results are primarily driven by its wholesale business of pre-owned consumer electronic devices in Hong Kong, with total revenue decreasing to US$35.6 million in FY2024, but gross profit increasing to US$6.3 million due to a strategic shift towards higher-margin orders Selected Consolidated Statements of Operations Data (US$) | Metric | 2024 | 2023 | 2022 | | :----- | :----------- | :----------- | :----------- | | Revenues | $35,611,761 | $50,278,937 | $27,859,228 | | Cost of goods sold | $(29,275,274) | $(45,309,410) | $(23,409,736) | | Gross profit | $6,336,487 | $4,969,527 | $4,449,492 | | Net income | $4,282,368 | $3,155,321 | $3,406,798 | Revenue by Sales Category (US$ and % of Total Revenue) | Sales Category | 2024 US$ | 2024 % | 2023 US$ | 2023 % | 2022 US$ | 2022 % | | :------------- | :----------- | :----- | :----------- | :----- | :----------- | :----- | | Wholesales | $35,548,886 | 99.8% | $50,199,955 | 99.8% | $27,646,484 | 99.2% | | Retail sales | $62,875 | 0.2% | $73,452 | 0.2% | $212,555 | 0.8% | | Device rental | — | —% | $5,530 | *—% | $189 | *—% | Key Operating Metrics | Metric | 2024 | 2023 | 2022 | | :----- | :-------- | :-------- | :-------- | | Number of products transacted | 164,217 | 257,274 | 197,963 | | Gross profit margin | 17.8% | 9.9% | 16.3% | - The decrease in total revenue from US$50.3 million in FY2023 to US$35.6 million in FY2024 was mainly due to a strategic shift to select higher-margin orders, resulting in decreased volume but increased gross profit and margin[369] B. Liquidity and Capital Resources The company's liquidity primarily stems from existing cash balances, operating cash flows, and shareholder support, with cash and equivalents decreasing to US$443,322 in FY2024 due to a significant increase in accounts receivable Cash and Equivalents (US$) | Fiscal Year End | Cash and Equivalents | | :-------------- | :------------------- | | September 30, 2024 | $443,322 | | September 30, 2023 | $4,305,577 | | September 30, 2022 | $959,300 | Net Cash Flows (US$) | Activity | 2024 | 2023 | 2022 | | :------- | :------------- | :------------- | :----------- | | Operating | $(3,524,152) | $4,874,638 | $654,488 | | Investing | $(18,597) | $(3,784) | $(17,143) | | Financing | $(299,324) | $(1,546,250) | $44,495 | - Net cash used in operating activities for FY2024 was approximately $3.5 million, primarily driven by a $10.5 million increase in accounts receivable due to granting credit periods to customers[404] C. Research and Development, Patents and Licenses This section refers to 'Item 4 – Information on the Company – Intellectual Property' for details on the company's intellectual property - Information on research and development, patents, and licenses is referenced to 'Item 4 – Information on the Company – Intellectual Property'[410] D. Off-Balance Sheet Arrangements The company confirms that it did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships during the periods presented, nor does it currently have any - The company has no off-balance sheet financing arrangements or relationships with unconsolidated entities[411] E. Trend Information. This section reiterates that the company did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships during the periods presented, nor does it currently have any - The company did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships during the periods presented, nor does it currently have any[412] F. Critical Accounting Estimates This section outlines the company's critical accounting estimates, primarily focusing on revenue recognition, leases, and income taxes, all prepared in accordance with U.S. GAAP - Revenue is recognized using a five-step model, with performance obligations for wholesale and retail sales satisfied at a point in time upon product delivery and acceptance[417][419][420] - Device rental revenue is recognized over time on a monthly basis, with the performance obligation satisfied upon delivery and customer acceptance at the beginning of the rental period[421] - The company adopted ASC 842 for leases on October 1, 2020, recognizing operating lease ROU assets and liabilities for leases with terms longer than twelve months[423][424] - Income taxes are accounted for under ASC Topic 740, recognizing deferred tax assets and liabilities and establishing a valuation allowance for deferred tax assets[426] ITEM 6-DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES This section provides details on the company's leadership, compensation, board practices, employee structure, and share ownership A. Directors and Senior Management The company's board of directors consists of five members, including three independent directors, with Mr. Shangzhao (Cizar) Hong, CEO and Chairman, holding 93.29% voting power, making CGT Holdings a 'controlled company' under Nasdaq rules Executive Officers and Directors | Name | Age | Position | | :------------------ | :-- | :------------------------------------------ | | Shangzhao (Cizar) Hong | 43 | Chief Executive Officer and Chairman of the Board of Directors | | Hei Tung (Angel) Siu | 33 | Chief Operations Officer, Director | | Hung Leung (Alan) Tsang | 55 | Chief Financial Officer | | Wai Leung (Alfred) Lau | 44 | Independent Director | | Michael Osofsky | 44 | Independent Director | | Jingeng Chen | 47 | Independent Director | - Mr. Shangzhao (Cizar) Hong, CEO and Chairman, beneficially owns 93.29% of the aggregate voting power, making CGT Holdings a 'controlled company' under Nasdaq rules[440] - The company does not currently intend to rely on the controlled company exemptions under Nasdaq listing rules[441] B. Compensation For FY2024, the company paid $156,129 in aggregate cash compensation to its directors and executive officers, with no equity awards granted, though a 2024 Stock Incentive Plan was approved for future issuances - Aggregate cash compensation paid to directors and executive officers for FY2024 was $156,129, with no equity awards granted[442] - The 2024 Stock Incentive Plan, approved on January 17, 2025, authorizes the issuance of up to 4,287,500 Ordinary Shares for awards to employees, directors, and consultants[444] Director and Executive Officer Compensation (US$) | Name | Fiscal Year | Remuneration | Salary | Bonus | Share Awards | All Other Compensation | Total | | :------------------ | :---------- | :----------- | :------- | :------- | :----------- | :--------------------- | :------- | | Shangzhao (Cizar) Hong | 2024 | $61,935 | $0 | $0 | $0 | $0 | $61,935 | | | 2023 | $61,935 | $0 | $30,968 | $0 | $0 | $92,903 | | | 2022 | $34,065 | $0 | $0 | $0 | $0 | $34,065 | | Hei Tung (Angel) Siu | 2024 | $0 | $30,968 | $6,452 | $0 | $0 | $37,420 | | | 2023 | $0 | $30,968 | $23,226 | $0 | $0 | $54,194 | | | 2022 | $0 | $28,387 | $0 | $0 | $0 | $28,387 | | Hung Leung (Alan) Tsang | 2024 | $0 | $56,774 | $0 | $0 | $0 | $56,774 | | | 2023 | $0 | $56,774 | $0 | $0 | $0 | $56,774 | | | 2022 | $0 | $0 | $0 | $0 | $0 | $0 | C. Board Practices The Board of Directors comprises five members, with three independent directors meeting Nasdaq requirements, and operates under Cayman Islands law, which outlines directors' duties and shareholder rights - The Board of Directors consists of five directors, with three independent directors (Wai Leung (Alfred) Lau, Jingeng Chen, and Michael Osofsky) satisfying Nasdaq independence requirements[457] - Under Cayman Islands law, directors owe statutory, fiduciary, and common law duties, including acting in the company's best interests and avoiding conflicts of interest[458] - Executive officers have employment agreements with automatic renewals and clauses for confidentiality and non-competition[461] D. Employees As of September 30, 2024, CGTHK had 17 employees across various functions, all based in Hong Kong, maintaining good working relationships without major labor disputes - As of September 30, 2024, CGTHK had 17 employees, an increase from 16 in 2023[465] Employees by Function (as of September 30, 2024) | Functions | Number | | :----------------------------- | :----- | | Key Management (CEO, COO, CFO) | 3 | | Accounting and Administration Team | 3 | | Sales Team | 2 | | Purchasing Team | 3 | | Warehouse and Operation Team | 3 | | QC & Technical Team | 3 | | Total | 17 | - All 17 employees are based in Hong Kong, and the company maintains good working relationships without major labor disputes[465][466] E. Share Ownership As of December 31, 2024, Mr. Shangzhao (Cizar) Hong, the CEO and Chairman, beneficially owns 93.29% of the outstanding ordinary shares through controlled entities, with no other individual or entity owning more than 5% Beneficial Ownership of Ordinary Shares (as of December 31, 2024) | Shareholder Category | Number of shares | Percentage of shares | | :------------------- | :--------------- | :------------------- | | Shangzhao (Cizar) Hong | 20,000,000 | 93.29% | | HSZ Holdings Limited | 17,000,000 | 79.30% | | CHSZ Holdings Limited | 3,000,000 | 13.99% | | All directors and executive officers as a group | 20,000,000 | 93.29% | - Mr. Shangzhao (Cizar) Hong controls 93.29% of the voting power through entities he controls[470] - No directors or executive officers held options or restricted shares as of December 31, 2024[472] ITEM 7-MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS This section refers to Item 6.E for major shareholder information and details related party transactions, specifically short-term, interest-free, unsecured loans from Mr. Shangzhao (Cizar) Hong, all of which were repaid as of September 30, 2024 A. Major Shareholders This sub-item refers to 'Item 6. Directors, Senior Management and Employees-E. Share Ownership' for information on major shareholders - Information on major shareholders is provided in 'Item 6. Directors, Senior Management and Employees-E. Share Ownership'[473] B. Related Party Transactions The only related party transactions involved short-term, interest-free, unsecured loans from Mr. Shangzhao (Cizar) Hong for working capital, all of which were repaid as of September 30, 2024 - The only related party transactions were short-term, interest-free, unsecured loans from Mr. Shangzhao (Cizar) Hong for working capital[474] Outstanding Balances Due to Mr. Hong (US$) | Nature | Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | | :---------------------- | :----------- | :----------- | :----------- | | To meet company's working capital needs | 0 | 0 | 989,373 | - As of September 30, 2024, all loans due to Mr. Hong have been repaid, and there is no outstanding balance[474] C. Interests of Experts and Counsel This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[475] ITEM 8-FINANCIAL INFORMATION This section directs readers to Item 18 for the audited consolidated financial statements and provides information on legal proceedings, dividend policy, and significant changes A. Consolidated Statements and Other Financial Information This sub-item refers to 'Item 18. Financial Statements' for the audited consolidated financial statements, noting no material legal proceedings and no anticipated cash dividends in the foreseeable future - Audited consolidated financial statements are included in 'Item 18. Financial Statements'[476] - The company is not a party to any material legal or administrative proceedings[477] - The company does not expect to pay any cash dividends in the foreseeable future, and future agreements or repatriation requirements may limit dividend payments[478] B. Significant Changes The company reports no significant changes since the date of its audited consolidated financial statements included in this annual report, other than those disclosed elsewhere - No significant changes have occurred since the date of the audited consolidated financial statements, except as disclosed elsewhere in the report[479] ITEM 9-THE OFFER AND LISTING This section confirms that CGT Holdings' Ordinary Shares are traded on the Nasdaq Capital Market under the ticker symbol 'CGTL' since its IPO on November 26, 2024, with other sub-items marked as 'Not Applicable' - CGT Holdings' Ordinary Shares are traded on the Nasdaq Capital Market under the ticker symbol 'CGTL' since its initial public offering on November 26, 2024[481] - Sub-items B, D, E, and F (Plan of Distribution, Selling Shareholders, Dilution, Expenses of the Issue) are marked as 'Not Applicable'[481] ITEM 10-ADDITIONAL INFORMATION This section provides additional corporate information, including details on share capital, the amended and restated memorandum and articles of association, material contracts, exchange controls, and taxation A. Share Capital As of the report date, CGT Holdings' authorized share capital is US$500,000, divided into 500,000,000 Ordinary Shares of US$0.001 par value each, with 21,437,500 ordinary shares issued and outstanding as of December 31, 2024 - Authorized share capital is US$500,000, divided into 500,000,000 Ordinary Shares of US$0.001 par value each[486] - As of December 31, 2024, 21,437,500 ordinary shares were issued and outstanding[486] - Non-resident shareholders of the Cayman Islands may freely hold and vote their shares[486] B. Amended and Restated Memorandum and Articles of Association The company's corporate affairs are governed by its amended and restated memorandum and articles of association and Cayman Islands law, outlining provisions for dividends, voting rights, shareholder meetings, share transfers, and anti-takeover measures - Dividends may be declared and paid out of profits or share premium, provided the company remains solvent[487] - Ordinary resolutions require a simple majority vote, while special resolutions (for matters like name changes or articles amendments) require a two-thirds affirmative vote[488] - Shareholders holding at least one-third of total votes can requisition an extraordinary general meeting[491] - The company is an exempted company under Cayman Islands law, which provides less stringent requirements compared to ordinary resident companies, such as not needing to file an annual return of shareholders or open its register for inspection[505] C. Material Contracts The company has not entered into any material contracts other than those in the ordinary course of business or as described elsewhere in this annual report on Form 20-F - No material contracts have been entered into outside the ordinary course of business or as described elsewhere in the report[539] D. Exchange Controls Neither Hong Kong, the Cayman Islands, nor the British Virgin Islands currently impose foreign exchange control restrictions or limitations on the import/export of capital, or the remittance of dividends, interest, or other payments to non-resident holders of CGT Holdings' Ordinary Shares - No foreign exchange control restrictions exist in Hong Kong, the Cayman Islands, or the British Virgin Islands[541] - There are no restrictions on the import or export of capital, or the remittance of dividends, interest, or other payments to non-resident holders of Ordinary Shares[541] E. Taxation This section summarizes the material tax consequences for investors in CGT Holdings' Ordinary Shares across the Cayman Islands, British Virgin Islands, Hong Kong, and the United States, including potential Passive Foreign Investment Company (PFIC) rules for U.S. Holders - The Cayman Islands and British Virgin Islands do not levy taxes on income, profits, or capital gains for the company or its BVI subsidiary, nor do they impose withholding taxes on dividends[543][544][547][548] - Hong Kong subsidiaries are subject to a 16.5% profits tax (with a two-tiered regime of 8.25% for the first HK$2 million of profit), but no Hong Kong tax is payable on dividends from the Cayman Islands parent company[398][551] - U.S. Holders are subject to U.S. federal income tax on dividends and capital gains from dispositions of Ordinary Shares, with potential application of Passive Foreign Investment Company (PFIC) rules if the company meets certain income or asset tests[559][562][563] - If classified as a PFIC, U.S. Holders face special tax rules for 'excess distributions' and gains, unless a 'mark-to-market' election is made for marketable stock[566][569] F. Dividends and Paying Agents This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[577] G. Statement by Experts This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[577] H. Documents on Display The company is subject to the reporting requirements of the Exchange Act, filing annual reports on Form 20-F and other information with the SEC, and as a foreign private issuer, is exempt from certain U.S. domestic issuer rules - The company is subject to Exchange Act reporting requirements, filing annual reports on Form 20-F and other information with the SEC[577] - As a foreign private issuer, the company is exempt from certain quarterly reporting and proxy statement rules applicable to U.S. domestic issuers[577] I. Subsidiary Information This sub-item refers to 'Item 4. Information on the Company- C. Organizational Structure' for information about the company's subsidiaries - Information about subsidiaries is referenced to 'Item 4. Information on the Company- C. Organizational Structure'[577] J. Annual Report to Security Holders This sub-item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[577] ITEM 11-QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company's primary market risks include foreign currency exchange rate risk, particularly between the HKD and USD, though it manages this with dual-currency deposits and has not been materially exposed to interest rate or credit risk - The company's primary market risk is foreign currency exchange rate risk, specifically between the HKD and USD, due to the Linked Exchange Rate System[578][579] - Depreciation of the HKD against the USD would adversely affect the U.S. dollar amount received from conversions, while appreciation would negatively impact U.S. dollar amounts available for payments[581] - The company has not been exposed to material interest rate risks and does not use derivative contracts for hedging[582] - Credit risk is managed by using high-credit-rated banks for cash and equivalents and conducting credit evaluations for vendors and customers[583] ITEM 12-DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES This item is marked as 'Not Applicable' for all sub-categories (Debt Securities, Warrants and Rights, Other Securities, American Depositary Shares), indicating no information is provided regarding non-equity securities - This section is marked as 'Not Applicable' for all sub-categories of non-equity securities[584] PART II ITEM 13-DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES This item states that there are no defaults, dividend arrearages, or delinquencies to report - There are no defaults, dividend arrearages, or delinquencies[586] ITEM 14-MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS Sub-items A through D are marked as 'Not Applicable', while sub-item E details the company's IPO on November 27, 2024, which raised $5.75 million gross proceeds and $3.50 million net proceeds - Sub-items A through D are marked as 'Not Applicable'[587][588][589][590] - The initial public offering (IPO) closed on November 27, 2024, issuing 1,437,500 ordinary shares at $4.00 per share[591] IPO Proceeds and Expenses (US$) | Metric | Amount | | :------------- | :----------- | | Gross Proceeds | $5.75 million | | Expenses | $1.39 million | | Net Proceeds | $3.50 million | - None of the net proceeds from the IPO were paid, directly or indirectly, to any directors, officers, or affiliates[592] ITEM 15-CONTROLS AND PROCEDURES As of September 30, 2024, the company's disclosure controls and procedures were deemed ineffective due to a material weakness: a lack of sufficient skilled staff with U.S. GAAP knowledge and a formal accounting policies and procedures manual - Disclosure controls and procedures were not effective as of September 30, 2024, due to a material weakness[594] - The material weakness identified is a lack of sufficient skilled staff with U.S. GAAP knowledge and a formal accounting policies and procedures manual[594] - The annual report does not include management's assessment or an independent auditor's attestation report on internal control over financial reporting due to transition period exemptions for newly public companies[595][596][597] ITEM 16-[RESERVED] This item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[598] ITEM 16A-AUDIT COMMITTEE FINANCIAL EXPERT The Board of Directors has determined that Mr. Wai Leung (Alfred) Lau qualifies as an Audit Committee Financial Expert and is independent under Nasdaq Marketplace Rule 5605(c)(2)(A) - Mr. Wai Leung (Alfred) Lau is designated as an Audit Committee Financial Expert and is independent under Nasdaq rules[599] ITEM 16B-CODE OF ETHICS The company has adopted a Code of Business Conduct and Ethics, applicable to all employees, including executive and financial officers, promoting ethical conduct, accurate financial reporting, and compliance with laws - A Code of Business Conduct and Ethics has been adopted, applicable to all employees, including principal executive and financial officers[600] - The Code promotes honest and ethical conduct, full and accurate disclosure, compliance with laws, and internal reporting of violations[600] ITEM 16C-PRINCIPAL ACCOUNTANT FEES AND SERVICES For FY2024 and FY2023, Wei Wei & Co. LLP billed the company $250,000 annually for audit fees, with no audit-related or tax fees, and the Audit Committee has pre-approved all services Fees Billed by Independent Accountants (US$ thousands) | Category | 2024 | 2023 | | :-------------- | :--- | :--- | | Audit fees | $250 | $250 | | Audit-related fees | - | - | | Tax fees | - | - | | Total | $250 | $250 | - The Audit Committee has pre-approved all audit and non-audit services, ensuring compatibility with auditor independence[603][604] ITEM 16D-EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES This item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[604] ITEM 16E-PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS This item states that there were no purchases of equity securities by the issuer or affiliated purchasers during the reporting period - No purchases of equity securities were made by the issuer or affiliated purchasers[606] ITEM 16F-CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT This item is marked as 'Not Applicable,' indicating no change in the registrant's certifying accountant - This section is marked as 'Not Applicable'[607] ITEM 16G-CORPORATE GOVERNANCE As a Cayman Islands company listed on Nasdaq, CGT Holdings is a foreign private issuer and a 'controlled company', relying on home country practice exemptions from certain Nasdaq corporate governance requirements, which may afford shareholders less protection - CGT Holdings is a foreign private issuer and a 'controlled company' under Nasdaq rules, allowing it to rely on home country practice exemptions from certain corporate governance requirements[608][610] - Exemptions include requirements for board majority independence, independent director selection, and independent compensation/nominating committees[609] - Reliance on these exemptions may provide shareholders with less protection compared to U.S. domestic issuers[610] ITEM 16H-MINE SAFETY DISCLOSURE This item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[612] ITEM 16I-DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS This item is marked as 'Not Applicable,' indicating no information is provided under this heading - This section is marked as 'Not Applicable'[613] ITEM 16J-INSIDER TRADING POLICIES The board of directors has adopted insider trading policies and procedures to ensure compliance with applicable laws, rules, and regulations governing the purchase, sale, and other dispositions of the company's securities by directors, senior management, and employees - Insider trading policies and procedures have been adopted by the board of directors[614] - These policies govern securities transactions by directors, senior management, and employees to ensure compliance with applicable laws[614] ITEM 16K-CYBERSECURITY Cybersecurity is integrated into the company's overall risk management framework, with the CEO and COO responsible for assessment and management, reporting yearly to the Board of Directors, and no material incidents reported for FY2024 - Cybersecurity measures and protocols are integrated into the company's overall risk management framework[615][616] - Cybersecurity risks are assessed and managed by the CEO and COO, with yearly reports to the Board of Directors, and are categorized as 'high relevance'[617] - No cybersecurity incidents materially affected business operations or financial condition for the fiscal year ended September 30, 2024[618] PART III ITEM 17-FINANCIAL STATEMENTS The company has elected to provide its financial statements pursuant to Item 18 of Form 20-F - The company elected to provide financial statements under Item 18[621] ITEM 18-FINANCIAL STATEMENTS This item confirms the inclusion of the audited consolidated financial statements of Creative Global Technology Holdings Limited and its subsidiaries at the end of this annual report - Audited consolidated financial statements of Creative Global Technology Holdings Limited and its subsidiaries are included at the end of this annual report[622] ITEM 19-EXHIBITS This section provides a comprehensive list of exhibits filed as part of the annual report, including corporate governance documents, employment agreements, financial certifications, and XBRL taxonomy documents - The section lists various exhibits, including corporate governance documents, employment agreements, and financial certifications[624] SIGNATURES This section contains the certification that the registrant meets all requirements for filing on Form 20-F and has duly authorized the undersigned to sign the annual report on its behalf - The registrant certifies compliance with Form 20-F filing requirements[626] - The report is signed by Shangzhao (Cizar) Hong, Chief Executive Officer, on January 30, 2025[626] INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Audited Consolidated Financial Statements This section presents the audited consolidated financial statements for Creative Global Technology Holdings Limited and its subsidiaries, prepared in conformity with U.S. GAAP, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Income, Changes in Shareholder's Equity, Cash Flows, and detailed Notes Report of Independent Registered Public Accounting Firm Wei, Wei & Co., LLP issued an unqualified opinion on the consolidated financial statements for FY2024, FY2023, and FY2022, confirming fair presentation in conformity with U.S. GAAP, without auditing internal control over financial reporting - Wei, Wei & Co., LLP issued an unqualified opinion on the consolidated financial statements for the years ended September 30, 2024, 2023, and 2022[630] - The financial statements are presented fairly, in all material respects, in conformity with U.S. GAAP[630] - The firm did not perform an audit of the company's internal control over financial reporting[632] Consolidated Balance Sheets The consolidated balance sheets as of September 30, 2024, show total assets of $16.3 million, driven by a significant increase in accounts receivable to $10.5 million, while cash and equivalents decreased to $443,322 Consolidated Balance Sheet Highlights (US$) | Metric | Sep 30, 2024 | Sep 30, 2023 | | :---------------------- | :----------- | :----------- | | Total Assets | $16,319,951 | $11,388,573 | | Cash and equivalents | $443,322 | $4,305,577 | | Accounts receivable, net | $10,491,664 | $0 | | Inventories, net | $3,842,072 | $5,750,381 | | Deferred offering costs | $854,684 | $554,220 | | Total Liabilities | $2,859,735 | $2,189,016 | | Total Shareholders' Equity | $13,460,216 | $9,199,557 | - Accounts receivable increased significantly from $0 in 2023 to $10,491,664 in 2024, indicating a change in credit policy or sales terms[636] - Cash and equivalents decreased from $4,305,577 in 2023 to $443,322 in 2024[636] Consolidated Statements of Income and Comprehensive Income For FY2024, revenues decreased to $35.6 million, but gross profit increased to $6.3 million (17.8% margin) and net income rose to $4.3 million, reflecting a strategic focus on higher-margin orders Consolidated Statements of Income Highlights (US$) | Metric | 2024 | 2023 | 2022 | | :---------------------- | :----------- | :----------- | :----------- | | Revenues | $35,611,761 | $50,278,937 | $27,859,228 | | Cost of revenues | $(29,275,274) | $(45,309,410) | $(23,409,736) | | Gross Profit | $6,336,487 | $4,969,527 | $4,449,492 | | Income from operations | $5,185,532 | $3,794,326 | $4,041,678 | | Net income | $4,282,368 | $3,155,321 | $3,406,798 | | Net income per share (basic and diluted) | $0.21 | $0.16 | $0.17 | - Revenues decreased from $50.3 million in 2023 to $35.6 million in 2024, while gross profit increased from $5.0 million to $6.3 million, indicating a shift towards higher-margin orders[638] - Net income increased to $4.3 million in 2024 from $3.2 million in 2023[638] Consolidated Statements of Changes in Shareholder's Equity Total shareholders' equity increased from $9.2 million in 2023 to $13.5 million in 2024, primarily driven by $4.3 million in net income for FY2024 Consolidated Statements of Changes in Shareholders' Equity Highlights (US$) | Metric | Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | | :----------------------------------- | :----------- | :----------- | :----------- | | Ordinary Shares (Amount) | $20,000 | $20,000 | $20,000 | | Accumulated other comprehensive income (loss) | $(15,584) | $6,125 | $(18,572) | | Retained Earnings | $13,455,800 | $9,173,432 | $6,018,111 | | Total Shareholders' Equity | $13,460,216 | $9,199,557 | $6,019,539 | - Total shareholders' equity increased by $4,260,659 from September 30, 2023, to September 30, 2024, primarily due to net income[640] - Accumulated other comprehensive income shifted from a gain of $6,125 in 2023 to a loss of $15,584 in 2024, mainly due to foreign currency translation adjustments[640] Consolidated Statements of Cash Flows For FY2024, the company experienced a net cash outflow from operating activities of $3.5 million, primarily due to a $10.5 million increase in accounts receivable, resulting in cash and equivalents decreasing to $443,322 Consolidated Statements of Cash Flows Highlights (US$) | Activity | 2024 | 2023 | 2022 | | :---------------------------------------- | :------------- | :------------- | :----------- | | Net cash provided by (used in) from operating activities | $(3,524,152) | $4,874,638 | $654,488 | | Net cash (used in) from investing activities | $(18,597) | $(3,784) | $(17,143) | | Net cash provided by (used in) from financing activities | $(299,324) | $(1,546,250) | $44,495 | | Net (decrease) increase in cash, equivalents | $(3,862,255) | $3,346,277 | $661,445 | | Cash, equivalents at end of year | $443,322 | $4,305,577 | $959,300 | - Net cash used in operating activities for 2024 was $3.5 million, primarily due to a $10.5 million increase in accounts receivable[404][643] - Cash and equivalents at year-end 2024 decreased to $443,322 from $4,305,577 in 2023[643] Notes to Consolidated Financial Statements These notes provide detailed explanations and breakdowns of the company's financial statements, covering organization, accounting policies, specific asset/liability accounts, related party balances, equity movements, income tax provisions, segment reporting, risk disclosures, and subsequent events - The company's reporting currency is USD, while its Hong Kong subsidiaries' functional currency is HKD, with translation adjustments included in accumulated other comprehensive income (loss)[654] - Accounts receivable, net, increased from $0 in 2023 to $10,491,664 in 2024, with 100% collected by December 31, 2024[703] Inventories, net (US$) | Category | Sep 30, 2024 | Sep 30, 2023 | | :--------------- | :----------- | :----------- | | Smartphones | $645,832 | $3,623,387 | | Tablets | $570,441 | $1,114,934 | | Laptops and others | $2,625,799 | $1,012,060 | | Total inventories, net | $3,842,072 | $5,750,381 | - The company closed its IPO on November 26, 2024, raising $5.75 million gross proceeds, and approved the 2024 Stock Incentive Plan on January 17, 2025, authorizing 4,287,500 Ordinary Shares for awards[735][736] Customer Concentration Risk (10% or more of total revenues) | Customer | 2024 % | 2023 % | 2022 % | | :------- | :----- | :----- | :----- | | A | - | 11.4 | - | | B | - | 11.1 | 19.8 | | C | - | - | 23.4 | | D | - | - | 15.0 | | E | 43.4 | - | - | | F | 18.9 | - | - |