Financial Performance - CIMG Inc. reported revenues of $15,768,796 for the three months ended December 31, 2025, a significant increase from $22,853 in the same period last year[18]. - The company incurred a net loss of $19,510,872 for the quarter, compared to a net loss of $1,536,249 in the prior year, reflecting a substantial increase in losses[18]. - Gross profit for the quarter was $89,111, with a cost of sales amounting to $15,679,685, indicating a challenging cost structure[18]. - Basic and diluted loss per common share was reported at $(1.43), compared to $(0.17) in the same quarter last year, reflecting worsening financial performance[18]. - For the three months ended December 31, 2025, the net loss was $19,510,872, compared to a net loss of $1,536,249 for the same period in 2024, indicating a significant increase in losses[27]. - The company reported a fair value variation of $17,502,596 for the three months ended December 31, 2025, which was not present in the previous year[27]. - Cash used in operating activities for the three months ended December 31, 2025, was $8,527,698, compared to $1,338,781 for the same period in 2024, reflecting increased operational cash outflows[27]. - The company’s gross profit for the three months ended December 31, 2025, was $89,111, with a loss from operations of $1,957,241[136]. Assets and Liabilities - Total current assets decreased to $3,490,838 from $17,126,342 in the previous quarter, primarily due to a significant drop in cash and cash equivalents[15]. - Total liabilities were reported at $11,051,607, a decrease from $27,645,099 in the previous quarter, indicating improved management of short-term obligations[15]. - The company’s accumulated deficit increased to $106,705,592, up from $87,228,118, highlighting ongoing financial challenges[15]. - As of December 31, 2025, the company had cash of $45,356 and negative working capital of $7,562,771, indicating financial strain[47]. - Accounts payable and accrued expenses totaled $2,864,751 as of December 31, 2025, compared to $1,464,144 as of September 30, 2025, indicating a substantial increase in liabilities[109]. - The company reported short-term loans of $452,764 as of December 31, 2025, including $348,926 related to ongoing litigation with Mr. Sooncha Kim[110][111]. - Total prepaid expenses and other current assets as of December 31, 2025, were $4,948,022, a significant increase from $382,648 as of September 30, 2025[95]. - The total amounts due to related parties as of December 31, 2025, were $612,939, arising from advances and settlements in the ordinary course of business[140]. Capital and Financing - The company anticipates needing additional capital to fund planned operations beyond the next twelve months, indicating potential liquidity concerns[10]. - The company plans to raise additional equity or debt financing to address its financial challenges, although there is substantial doubt about its ability to continue as a going concern[49]. - The Company issued convertible notes totaling $10,000,000 on December 12, 2024, with $8,145,000 subscribed by non-related parties[116]. - For the three months ended December 31, 2025, $1,838,041 worth of convertible notes were converted into the company's common stock, reducing outstanding convertible notes to approximately $Nil[112]. - The Company raised $55,000,000 through a securities purchase agreement, issuing 148,100,000 shares at a price of $0.25 per share, with $37,025,000 issued during the period[144]. - The Company entered into a convertible note and warrant purchase agreement for $5,000,000 on February 11, 2026, with an initial tranche of $1,600,000 issued[157][158]. - The Company completed a private placement of convertible promissory notes totaling $5,000,000, with an initial tranche of $1,600,000 issued at a 7% annual interest rate[170]. Stock and Shareholder Information - CIMG Inc. has 15,483,547 shares of common stock outstanding as of March 5, 2026, following a 1-for-20 reverse stock split[5]. - A reverse stock split of 1-for-20 was executed on December 5, 2025, affecting all share and per-share amounts presented in the financial statements[46]. - The Company’s board approved an increase in the authorized number of Common Stock from 200,000,000 to 600,000,000 shares on September 25, 2025[123]. - The Company executed a 1-for-20 reverse stock split on December 5, 2025, reducing the number of shares from 196,514,084 to 9,825,704[142]. - For the three months ended December 31, 2025, the Company issued 8,333,333 shares for a convertible bond purchase agreement totaling $4,000,000, with a conversion price of $0.24 per share[143]. - The Company has outstanding warrants to purchase 7,886 shares at an average exercise price of $26.19, with 1,282,051 warrants exercised during the period[153]. Operational Developments - CIMG Inc. is focused on technological development and product commercialization, which may impact future financial performance and market positioning[10]. - The company completed several acquisitions, including a 51% stake in Shanghai Huomao and Beijing Xilin, enhancing its market presence in China[32][33]. - The company is expanding its sales and distribution channels in Asia to include a broader range of consumer food and beverage products, supported by an online sales platform[30]. - The company operates a trading model for the Maca Product Series, with costs primarily including the purchase cost of raw materials and processing-related expenses[70]. Legal and Compliance Issues - The Company is involved in ongoing litigation with Mr. Sooncha Kim, seeking damages of $1,041,216[155]. - A judgment of $222,062.28 was entered against the Company in a lawsuit filed by former directors for unpaid fees[156]. - The Company established two wholly-owned subsidiaries: Foshan Dingyue Technology Co., Ltd. and Foshan Lintai Technology Co., Ltd. in February 2026[162]. - The Company's internal control over financial reporting was assessed as not effective as of December 31, 2025[165]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2025, that materially affected the controls[167]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[163]. - No new risk factors were identified for the three months ended December 31, 2025, beyond those previously disclosed[169]. - The Company has not experienced any defaults upon senior securities[173]. Miscellaneous - The company held 730 Bitcoin with a carrying amount of $63,978,821 as of December 31, 2025, subject to significant market volatility[48]. - As of December 31, 2025, the company's cash and cash equivalents denominated in RMB were RMB 212,146 (approximately $30,235), accounting for 66.66% of total cash and cash equivalents[84]. - The company did not hold any cash equivalents as of December 31, 2025 and 2024[57]. - For the three months ended December 31, 2025 and 2024, the company did not record any material sales allowances related to estimated product returns or chargebacks[68]. - The company primarily generates revenue from the trading and sale of goods, recognizing revenue when control of the goods is transferred to the customer[63]. - The company estimates an allowance for credit losses based on historical loss experience and current economic conditions[58]. - The company applies the first-in, first-out (FIFO) method to determine the cost basis of digital assets disposed of, if any[77]. - The company measures certain assets and liabilities at fair value, including digital assets and financial instruments with embedded features[56]. - The Company recorded other income of $74,115 for the three months ended December 31, 2025, compared to $9,047 for the same period in 2024[130][131]. - The Company incurred operating lease expenses of $7,413 for the year ended December 31, 2025, with total lease liabilities amounting to $10,603[105]. - No restricted stock awards were granted or forfeited during the three months ended December 31, 2025[145][147]. - The Company did not issue any shares for services or exercise any stock options during the three months ended December 31, 2025[148][149].
CIMG lnc(IMG) - 2026 Q1 - Quarterly Report