Global Mofy(GMM) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the six months ended March 31, 2025, increased to $26,729,054, up 34.4% from $19,918,959 in the same period of 2024[5] - Gross profit remained stable at $11,802,936, compared to $11,818,405 in the prior year, indicating a slight decrease of 0.1%[5] - Operating expenses rose significantly to $10,117,215, up 97.5% from $5,108,225 in the previous year, primarily due to increased research and development expenses[5] - Net income attributable to GLOBAL MOFY AI LIMITED for the six months ended March 31, 2025, was $5,039,635, a decrease of 51.3% from $10,319,418 in the same period of 2024[5] - The company reported a comprehensive income of $4,272,955 for the six months ended March 31, 2025, down 58.7% from $10,345,289 in the prior year[5] - Earnings per share (diluted) decreased to $0.87 from $5.40, reflecting a significant decline in profitability[5] - For the six months ended March 31, 2025, net income decreased to $5,039,536 from $10,319,379 in the same period of 2024, representing a decline of approximately 51.2%[12] Assets and Liabilities - Total assets increased to $64,630,703 as of March 31, 2025, compared to $59,191,858 as of September 30, 2024, reflecting a growth of 9.2%[2] - Total liabilities rose to $15,516,615, up 13.4% from $13,690,255 in the previous period, driven by an increase in accounts payable and tax payable[2] - Cash and cash equivalents decreased to $6,001,157 from $8,068,560, representing a decline of 25.7%[2] - The company’s total equity increased to $49,114,088 as of March 31, 2025, compared to $45,501,603 as of September 30, 2024, marking a growth of 3.5%[2] Cash Flow - Net cash provided by operating activities was $10,131,789, an increase from $9,470,764 in the prior year, reflecting a growth of about 7%[12] - Net cash used in investing activities decreased to $17,407,270 from $25,694,918, a reduction of approximately 32.3%[12] - Net cash provided by financing activities fell to $2,389,612 from $13,662,662, a decline of about 82.5%[12] - As of March 31, 2025, cash at the end of the period was $6,001,157, down from $7,359,109, representing a decrease of approximately 18.4%[12] Revenue Breakdown - Revenue for the six months ended March 31, 2025, was $26,729,054, representing a 34.3% increase from $19,918,959 in the same period of 2024[72] - Revenue from virtual technology services was $15,036,110 for the six months ended March 31, 2025, compared to $8,968,867 in 2024, indicating a growth of 67.0%[72] - Revenue from digital asset development and others reached $11,692,944 in the first half of 2025, up from $10,950,092 in 2024, reflecting a 6.8% increase[72] Investments and Subsidiaries - The company established several new subsidiaries in 2024, including Gauss Intelligence and Anji Century Mofy, focusing on AI-generated content and education consulting, respectively[22] - The company made a long-term investment of $275,607 (RMB 2,000,000) in New Era Technology, acquiring a 6.25% equity interest[47] Financial Management - The company has not used any derivative financial instruments to manage interest rate risk, indicating a straightforward approach to financial management[107] - The company adopted ASU No. 2023-07 on October 1, 2024, which is expected to have no material impact on its consolidated financial statements[108] - The company expects to adopt ASU 2023-09 on October 1, 2025, with no material impact anticipated on consolidated financial statements[109] Tax and Valuation - The effective tax rate for the company was 5.2% for the six months ended March 31, 2025, significantly lower than 19.1% for the same period in 2024[24] - The company has established a valuation allowance of $1,600,774 as of March 31, 2025, due to expected future losses[24] - Unrecognized tax benefits increased to $2,153,877 as of March 31, 2025, from $1,940,649 as of September 30, 2024[24] - The company has a total deferred tax asset of $1,672,777 as of March 31, 2025, net of a valuation allowance[24] - The company is eligible for a preferential tax rate of 15% under the High and New Technology Enterprise certificate, effective from 2020 to 2025[24] Shareholder Activities - The company completed its initial public offering in October 2023, issuing 82,667 ordinary shares at $75.00 per share, resulting in net proceeds of $5.2 million[158] - On December 29, 2023, the company agreed to sell 91,954 ordinary shares at $108.75 per share, generating net proceeds of $8.9 million[159] - The company adopted a share incentive plan on October 7, 2024, providing for the issuance of 220,000 Class A ordinary shares to management[170] - The company issued 2,030,460 Class A ordinary shares at $1.97 each, resulting in net proceeds of $2.42 million on April 15, 2025[180]