UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐	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 001-39338

CIMG Inc.

(Exact name of registrant as specified in its charter)

Nevada

38-3849791

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Room R2, FTY D, 16/F, Kin Ga Industrial Building,

9 San On Street, Tuen Mun, Hong Kong00000.

(Address of principal executive offices)

+ 852 70106695

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value		IMG		The NASDAQ Stock Market LLC

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. Yes ☐ No ☒

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). Yes ☐ No ☒

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 ☐
	Non-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 Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2025, there were 196,514,084 shares of the registrant’s Common Stock outstanding.

CIMG INC.

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2025

PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements	2
	Consolidated Balance Sheets (unaudited)	2
	Consolidated Statements of Operations (unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited)	5
	Consolidated Statements of Cash Flows (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
PART II.	OTHER INFORMATION	23
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
	SIGNATURES	24

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and the documents incorporated by reference contain “forward-looking statements”, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; expectations that regulatory developments or other matters will or will not have a material adverse effect on our consolidated financial position, results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operating results and future economic performance; and statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

	●	our plans to obtain funding for our operations, including funding necessary to develop, manufacture and commercialize our products, provide our co-packing services, and to continue as a going concern;
	●	our expectation that our existing capital resources will be sufficient to fund our operations for at least the next three months and our expectation to need additional capital to fund our planned operations beyond that;
	●	the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
	●	our expectations regarding our ability to maintain compliance with the listing requirements of the Nasdaq Capital Market;
	●	the impact to our business, including any supply chain interruptions, resulting from changes in general economic, business and political conditions, including changes in the financial markets and macroeconomic conditions resulting from a pandemic;
	●	the evolving coffee preferences of coffee consumers in North America and East Asia;
	●	the size and growth of the markets for our products and co-packing services;
	●	our ability to compete with companies producing similar products or providing similar co-packing services;
	●	our ability to successfully achieve the anticipated results of strategic transactions;
	●	our expectation regarding our future co-packing revenues;
	●	our ability to develop or offer innovative new products and services, and expand our co-packing services to other products that are complementary to our current single serve coffee product offerings;
	●	our expectations regarding additional manufacturing, coffee roasting and co-packing capabilities to be provided through our manufacturing partners, as well as our manufacturing partners’ ability to successfully facilitate distribution efforts;
	●	our reliance on third-party roasters or manufacturing partners to roast coffee beans necessary to manufacture our products and to fulfill every aspect of our co-packing services;
	●	regulatory developments in the U.S. and in non-U.S. countries;
	●	our ability to retain key management, sales and marketing personnel;
	●	the scope of protection we are able to establish and maintain for intellectual property rights covering our products and technology;
	●	our ability to develop and maintain our corporate infrastructure, including our internal control over financial reporting;
	●	the outcome of pending, threatened or future litigation;
	●	our financial performance; and
	●	our use of the net proceeds from our recent offering.
	●	other factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as applicable.

Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the United States Securities and Exchange Commission, we undertake no obligation to update or revise forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. We caution you not to unduly rely on the forward-looking statements when evaluating the information presented herein.

Item 1. Financial Statements

CIMG Inc.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,			September 30,
	2025			2024
ASSETS
Current assets:
Cash & cash equivalent	$	35,958		$	464,222
Accounts receivable, net		75,630			-
Inventories, net		11,882,544			4,548,035
Assets Held for Sale-Current		-			10,736
Prepaid expenses and other current assets		1,248,957			382,648
Total current assets		13,243,089			5,405,641

Non-current assets:
Property and equipment, net		2,318			2,268
Right-of-use asset - operating lease		6,395			99,746
Intangible assets, net		57,500			80,000
Total non-current assets		66,213			182,014

Total assets	$	13,309,302		$	5,587,655

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1,628,598		$	2,240,337
Short term loan		433,512			1,920,507
Current portion of lease liability - operating lease		3,476			100,962
Convertible Notes		-			1,063,624
Convertible Note-related party		-			319,220
Convertible Note		-			319,220
Other payables-related party		39,000			7,500
Other current liabilities		567,399			586,173
Total current liabilities		2,671,985			6,238,323

Total liabilities	$	2,671,985		$	6,238,323

Stockholders’ equity:
36,397,418 and 4,978,245 shares issued and outstanding as of June 30, 2025 and September 30 2024, respectively		364			50
Additional paid in capital		96,353,118			81,260,605
Subscription receivable		(616,474	)		-
Accumulated deficit		(85,335,700	)		(82,344,722	)
Accumulated other comprehensive income		254,766			433,399
Total shareholders’ equity of the Company		10,656,074			(650,668	)

Non-controlling interests		(18,757	)		-
Total stockholders’ equity		10,637,317			(650,668	)

Total liabilities and stockholders’ equity	$	13,309,302		$	5,587,655

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CIMG Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended June 30, 2025			Three Months Ended June 30, 2024			Nine Months Ended June 30, 2025			Nine Months Ended June 30, 2024
Revenues, net	$	61,578		$	366,888		$	84,431		$	1,641,955
Cost of sales		(56,445	)		(513,101	)		(63,819	)		(1,820,140	)
Gross profit(loss)		5,133			(146,213	)		20,612			(178,185	)

Operating expenses		(1,117,290	)		(1,335,371	)		(3,387,725	)		(4,748,076	)
Loss from operations		(1,112,157	)		(1,481,584	)		(3,367,113	)		(4,926,261	)

Other income		48,506			335,838			452,142			412,580
Loss from equity method investment		-			(1,666	)		-			(3,789	)
Other expense		(4,546	)		(44,913	)		(54,866	)		(145,140	)
Loss on acquisition of subsidiary		(45	)		-			(20,210	)		-
Interest expense, net		-			(109	)		-			(1,277	)
Net loss from continuing operations		(1,068,242	)		(1,192,434	)		(2,990,047	)		(4,663,887	)
Losses caused by the termination of business		-			(98,086	)		-			(429,175	)
Loss from disposition of discontinued operations		-			(149,677	)		-			(149,677	)
Net Loss	$	(1,068,242	)	$	(1,440,197	)	$	(2,990,047	)	$	(5,242,739	)

Non-controlling interest		931			-			931			-

Net loss attributable to CIMG Inc.		(1,069,173	)		(1,440,197	)		(2,990,978	)		(5,242,739	)

Basic and diluted loss per common share	$	(0.03	)	$	(0.92	)	$	(0.16	)	$	(3.91	)

Basic and diluted weighted average number of common stock outstanding		32,195,220			1,561,410			18,226,016			1,341,059

The accompanying notes are an integral part of these unaudited consolidated financial statements.

*The discrepancy in financial data as of June 30, 2024 is due to the split of discontinued operations. (Refer to “Note 6. Discontinued operations”)

CIMG Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

	Three Months Ended June 30, 2025			Three Months Ended June 30, 2024
Net loss attributable to CIMG Inc.	$	(1,069,173	)	$	(1,440,197	)

Foreign currency translation		75,922			(16,309	)
Total other comprehensive (loss)/income net of tax		75,922			(16,309	)
Comprehensive loss to CIMG Inc.	$	(993,251	)	$	(1,456,506	)

	Nine Months Ended June 30, 2025			Nine Months Ended June 30, 2024
Net loss attributable to CIMG Inc.	$	(2,990,978	)	$	(5,242,739	)

Foreign currency translation		(178,633	)		34,257
Total other comprehensive (loss)/income net of tax		(178,633	)		34,257
Comprehensive loss to CIMG Inc.	$	(3,169,611	)	$	(5,208,482	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CIMG Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Shares		Amount		capital					deficit			income			interest			Total
					Additional								Accumulated Other			Non-
	Common Stock				paid-in		Subscription			Accumulated			Comprehensive			controlling
	Shares		Amount		capital		receivable			deficit			income			interests			Total
Balance September 30, 2024		4,978,245	$	50	$	81,260,605		-		$	(82,344,722	)	$	433,399			-		$	(650,668	)
Common Stock issued for cash		1,396,813		13		1,382,831		-			-			-			-			1,382,844
Common stock compensation		800,000		8		523,672		-			-			-			-			523,680
Issued private placement		3,508,769		35		1,999,965		-			-			-			-			2,000,000
Issued warrants		55,973		1		-		-			-			-			-			1
Foreign currency translation		-		-		-		-			-			(192,038	)		-			(192,038	)
Net loss		-		-		-		-			(1,536,249	)		-			-			(1,536,249	)

Balance December 31, 2024		10,739,800	$	107	$	85,167,073		-		$	(83,880,971	)	$	241,361			-		$	1,527,570

Common Stock issued for cash		19,457,618		195		9,999,805		(438,701	)		-			-			-			9,561,299
Foreign currency translation		-		-		-		-			-			(62,517	)		-			(62,517	)
Acquisition of subsidiary		-		-		-		-			-			-			(19,374	)		(19,374	)
Net loss		-		-		-		-			(385,556	)		-			-			(385,556	)
Balance March 31, 2025		30,197,418		302		95,166,878		(438,701	)		(84,266,527	)		178,844			(19,374	)		10,621,422

Common Stock issued for cash		-		-		-		438,701			-			-			-			438,701
Issued private placement		6,000,000		60		1,068,042		(616,474	)		-			-			-			451,628
Common stock compensation		200,000		2		118,198		-			-			-			-			118,200
Foreign currency translation		-		-		-		-			-			75,922			(261	)		75,661
Acquisition of subsidiary		-		-		-		-			-			-			(53	)		(53	)
Net loss		-		-		-		-			(1,069,173	)		-			931			(1,068,242	)
Balance June 30, 2025		36,397,418		364		96,353,118		(616,474	)		(85,335,700	)		254,766			(18,757	)		10,637,317

	Shares		Amount		capital			deficit			income				Total
	Common Stock				Additional paid-in			Accumulated			Accumulated Other Comprehensive
	Shares		Amount		capital			deficit			income				Total

Balance September 30, 2023		748,644	$	8	$	74,925,843	-	$	(73,371,987	)	$	120,493		-	$	1,674,357
Common Stock issued for cash		488,750		5		1,277,113			-			-				1,277,118
Stock option expense		-		-		11,505			-			-				11,505
Issued private placement		46,800		-		129,662			-			-				129,662
Foreign currency translation		-		-		-			-			42,408				42,408
Net loss		-		-		-	-		(2,148,611	)		-		-		(2,148,611	)
Balance December 31, 2023		1,284,194	$	13	$	76,344,123	-	$	(75,520,598	)	$	162,901		-	$	986,439

Stock option expense		-		-		54,443			-			-				54,443
Issued private placement		14,220		-		29,994			-			-				29,994
Foreign currency translation		-		-		-			-			8,158				8,158
Net loss		-		-		-	-		(1,653,931	)		-		-		(1,653,931	)
Balance March 31, 2024		1,298,414		13		76,428,560	-		(77,174,529	)		171,059		-		(574,897	)
Balance		1,298,414		13		76,428,560	-		(77,174,529	)		171,059		-		(574,897	)

Common Stock issued for cash		1,089,020		11		1,819,988			-			-				1,819,999
Stock option expense		-		-		17,791			-			-				17,791
Foreign currency translation		-		-		-			-			(16,309	)			(16,309	)
Net loss		-		-		-	-		(1,440,197	)		-		-		(1,440,197	)
Balance June 30, 2024		2,387,434		24		78,266,339	-		(78,614,726	)		154,750		-		(193,613	)
Balance		2,387,434		24		78,266,339	-		(78,614,726	)		154,750		-		(193,613	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CIMG Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended			Nine Months Ended
	June 30, 2025			June 30, 2024

Operating activities:
Net loss from continuing operations	$	(2,990,047	)	$	(5,242,739	)
Losses caused by the termination of business		-			(429,175	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		23,095			142,107
Noncash lease expense		93,351			308,788
Stock option expense		-			83,739
Bad debt expense		-			24,049
Equity Incentive		641,880			-
Loss from equity method investment		-			3,789
Loss on acquisition of subsidiary		20,210			-
Change in operating assets and liabilities:
Accounts receivable		(62,032	)		103,688
Inventories		(7,278,644	)		(164,341	)
Prepaid expenses and other current assets		(860,895	)		173,142
Other assets		-			4,707
Accounts payable		(691,619	)		564,335
Deferred income		-			(354,668	)
Lease liability – operating lease		(97,486	)		(383,542	)
Accrued expenses and other current liabilities		(31,506	)		-
Other non-current liabilities		-			37,229
Net cash used in operating activities		(11,233,693	)		(4,270,542	)

Discontinued Operations:
Depreciation from discontinued operations		-			3,690
Changes in operating assets and liabilities		-			737,063
Cash flows generated from discontinued business operations		-			311,578

Investing activities:
Purchase of equipment		-			(310,342	)
Proceeds from disposal of equipment		10,736			-
Cash received from the acquisition of subsidiaries		8,956			-
Net cash provided by/( used in) investing activities		19,692			(310,342	)

Financing activities:
Repayment of loans		(1,486,996	)		(429,933	)
Repayment of finance lease		-			(25,224	)
Borrowings from loans		-			398,754
Proceeds from sales of future receipts		-			195,001
Repayment of equipment finance		-			(31,626	)
Proceeds from equipment finance		-			262,893
Proceeds from issuance of convertible note		-			320,000
Proceeds from private placement		2,451,628			1,659,655
Proceeds from issuance of common stock, ATM offering, net of issuance cost		10,000,000			1,277,118
Net cash provided by (used in) financing activities		10,964,632			3,626,638

Effect of foreign exchange on cash		(178,895	)		34,257

Net change in cash		(428,264	)		(608,411	)

Cash, beginning of period		464,222			982,869
Cash, end of period	$	35,958		$	374,458

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	1,416
Cash paid for taxes		-			3,048
Subscription receivable		616,474			-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CIMG Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2025

1. ORGANIZATION

CIMG Inc. is a company incorporated in Nevada and listed on Nasdaq since June 2020. We were formerly known as “Nuzee, Inc.” with a previous ticker symbol “NUZE”, and we changed our corporate name and ticker symbol to “CIMG Inc.” and “IMG” in October 2024. We previously focused on specialty coffee and related technologies but are now expanding our sales and distribution channels in Asia to encompass a broader range of consumer food and beverage products. This expansion is fueled by our online sales platform, which leverages a natural language search function.

CIMG, our holding company, or DZR Tech, its subsidiary incorporated in Hong Kong, or Wewin, our subsidiary incorporated in Florida, may transfer cash to our PRC subsidiaries, Beijing Zhongyan, through capital injections and intra-group loans.

On March 10, 2025, Zhongyan Shangyue Technology Co., Ltd. (“Zhongyan”), CIMG Inc.’s wholly-owned subsidiary, entered into a Business Cooperation Intent Agreement (the “Agreement”) with Shanghai Huomao Cultural Development Co., Ltd. (“Huomao”). Pursuant to the Agreement, the three shareholders of Huomao intend to transfer an aggregate of 51% of their equity interest in Huomao to Zhongyan in exchange for 200,000 shares of Common Stock. The Common Stock shall be subject to a six-month lock-up period.

On March 21, 2025, Zhongyan established a wholly-owned subsidiary, Henan Zhongyan Shangyue Technology Co. Ltd(“Henan Zhongyan”).

On March 27, 2025, Zhongyan entered into a Business Cooperation Intent Agreement (the “Agreement”) with Xilin Online (Beijing) E-commerce Co., Ltd (“Beijing Xilin”). Pursuant to the Agreement, certain shareholders of Beijing Xilin intend to transfer an aggregate of 51% of their equity interest in Beijing Xilin to Zhongyan.

On March 31, 2025, the Company completed its acquisition of Beijing Xilin, along with the necessary business registration updates in China.

On April 22, 2025, the Company completed its acquisition of Huomao, along with the necessary business registration updates in China.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying unaudited consolidated financial statements of CIMG, Inc. and subsidiaries (“the Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting and should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024. Certain information or footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company’s management, these financial statements include all normal and recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented. However, the results of operations included in such financial statements may not necessarily be indicative of future or annual results.

Principles of Consolidation

The Company prepares its financial statements on the basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts, balances and transactions have been eliminated upon consolidation.

Earnings per Share

Basic earnings per common share is equal to net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of June 30, 2025 and June 30, 2024, the total number of common stock equivalents was 25,798,750 and 225,225, respectively, and composed of stock options and warrants. Due to the Company’s net loss for the periods presented, all common stock equivalents were anti-dilutive and therefore excluded from the calculation of diluted net loss per share.

Going Concern and Capital Resources

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets, raising capital and the commercialization and manufacture of its single serve coffee products. As of June 30, 2025, the Company had cash of $35,958 and working capital of $10,571,104.

The Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. Additionally, management’s strategic plans include expanding into new markets.

Management has evaluated the Company’s ability to continue as a going concern under ASC 205-40, Presentation of Financial Statements - Going Concern, and considered its financial condition, projected cash flows, obligations due within 12 months, and sources of liquidity.

While we understand that the ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations, the consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the Company’s consolidated financial statements as of June 30, 2025 have been prepared on a going concern basis.

Use of Estimates

In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may or may not maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.

Accounts Receivable, net

Trade accounts receivable is periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. The Company recorded an allowance for credit loss of $Nil and $3,450,141 as of both June 30, 2025, and September 30, 2024 respectively.

SCHEDULE OF ACCOUNTS RECEIVABLES

	June 30, 2025		September 30, 2024
Accounts receivable	$	75,630	$	3,450,141
Less: allowance for credit loss		-		(3,450,141	)
Total accounts receivable	$	75,630	$	-

Assets Held for Sale-Current

As of June 30, 2025 and September 30, 2024, assets held for Sale-Current were $Nil and $10,736. This is mainly the equipment planned for sale.

SCHEDULE OF ASSETS HELD FOR SALE

	June 30, 2025		September 30, 2024
Assets Held for Sale		-		214,709
Current Assets Held for Sale		-		214,709
Property and equipment asset impairment		-		(203,973	)
Total		-		10,736

Major Customers

In the nine months ended June 30, 2025 and 2024, revenue was primarily derived from major customers disclosed below.

SCHEDULE OF REVENUE BY MAJOR CUSTOMERS

Nine months ended June 30, 2025:

Customer Name	Sales Amount		% of Total Revenue			Accounts Receivable Amount		% of Total Accounts Receivable
Customer XG	$	47,289		56	%		-		-
Customer LXM		13,524		16	%		-		-

Nine months ended June 30, 2024:

Customer Name		Sales Amount				% of Total Revenue				Accounts Receivable Amount				% of Total Accounts Receivable
Customer CL		$	1,142,865				70	%		$	138,246				37	%

Lease

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The Company implemented ASU No. 2016-02 on October 1, 2019.

The Company conducts a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. The Company has a long-term operating lease for office and manufacturing space in Plano, Texas. The leased property in Plano, Texas, has a remaining lease term through June 2024 and Tenancy terminated. The Company did not apply the recognition requirements of ASC 842 to operating leases with a remaining lease term of 12 months or less.

In May 2022, the Company renewed the office and manufacturing space in Vista, California through June 30, 2025, which was scheduled to expire on January 31, 2023. The lease has a monthly base rent of $8,451, plus common area expenses. Along with the extension, we leased an additional 1,796 square feet that has a monthly base rent of $2,514 through June 30, 2025.

The Company leased a new larger office and manufacturing space in Seoul, Korea beginning November 15, 2021, through November 15, 2023. The lease has a monthly expense of $7,040. Accordingly, we have added ROU Assets and Lease Liabilities related to those leases as of September 30, 2023.

Effective September 1, 2024, we have leased a principal office space located at 16097 Poppyseed Cir, Unit 1904, Delray Beach, Florida, 33484, which we lease for $3,500 per month until August 31, 2025.

The lease in San On Street, Tuen Mun, Hong Kong has a term of 12 months from December 18, 2024 to December 17, 2025 at a rate of RMB 4,167 ($594) per month. The lease is a short-term lease which has a lease term of 12 months and does not include an option to purchase the underlying asset. The Company did not recognize ROU assets or lease liabilities for short term leases.

As of June 30, 2025, the Company’s operating leases had a weighted average remaining lease term of 1 years and a weighted-average discount rate of 5% or 7.5%. Other information related to our operating leases is as follows:

ROU Asset – October 1, 2024	$	99,746
ROU Asset added during the period		-
Amortization during the period		(93,351	)
ROU Asset – June 30, 2025	$	6,395

Lease Liability – October 1, 2024	$	100,962
Lease Liability added during the period		-
Amortization during the period		(97,486	)
Lease Liability – June 30, 2025	$	3,476

Lease Liability – Short-Term	$	3,476
Lease Liability – Long-Term		-
Lease Liability – Total	$	3,476

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of June 30, 2025:

Amounts due within twelve months of June 30,2025


2025	$	3,541
2026		-
Total Minimum Lease Payments		3,541
Less Effect of Discounting		65
Present Value of Future Minimum Lease Payments		3,476
Less Current Portion of Operating Lease Liabilities		3,476

For nine months ended June 30, 2025, the Company had the following cash and non-cash activities associated with our leases:

Operating cash outflows from operating leases:		$	105,664
Financing cash outflows from finance lease:		$	10,093

Business Combinations

On March 31, 2025, the Company acquired a 51% controlling interest in Xilin Online (Beijing) E-commerce Co., Ltd (“Beijing Xilin”) for no consideration. The transaction was accounted for as a business combination under ASC 805. The fair value of the identifiable net assets acquired was a net liability position of $39,538.

The Company acquired 51% of Beijing Xilin, while Noncontrolling Interest (NCI) represents the remaining 49%. NCI was measured based on its proportionate share of the net liabilities, resulting in a negative NCI of $19,374 recognized within the equity section of the consolidated balance sheet.

The Company recognized a loss on acquisition of $20,164, representing its proportionate share (51%) of the net liabilities assumed. This amount was recorded in the consolidated statement of operations under “Loss on acquisition”.

On April 22, 2025, the Company acquired a 51% controlling interest in Shanghai Huomao Cultural Development Co., Ltd. (“Huomao”) for no consideration. The transaction was accounted for as a business combination under ASC 805. The fair value of the identifiable net assets acquired was a net liability position of $98.

The Company acquired 51% of Huomao, while non-controlling Interest (NCI) represents the remaining 49%. NCI was measured based on its proportionate share of the net liabilities, resulting in a negative NCI of $53 recognized within the equity section of the consolidated balance sheet.

The Company recognized a loss on acquisition of $45, representing its proportionate share (51%) of the net liabilities assumed. This amount was recorded in the consolidated statement of operations under “Loss on acquisition”.

No goodwill or bargain purchase gain was recognized as the fair value of net assets acquired was negative and no consideration was transferred. The Company concluded that the acquired set of activities constitutes a business under ASC 805-10-20.

Foreign Currency Translation

The financial position and results of operations of each of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of each such subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity, unless there is a sale or complete liquidation of the underlying foreign investment. The foreign currency translation adjustment attributable to CIMG Inc. was recorded in other comprehensive (loss)/income in the amounts of $(178,633) and $34,257 for the nine months ended June 30, 2025 and 2024, respectively.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency.

Revenue Recognition

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605). The new standard’s core principle is that an entity will recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in the standard are applied in five steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) the entity satisfies a performance obligation. We adopted Topic 606 as of October 1, 2018 on a modified retrospective basis. The adoption of Topic 606 did not have a material impact on our consolidated financial statements, including the presentation of revenues in our Consolidated Statements of Operations.

Per ASC 606-10-32-2, an entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Per ASC 606-10-25-23 An entity shall recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer.

Per ASC 606-10-55-37 An entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. However, an entity does not necessarily control a specified good if the entity obtains legal title to that good only momentarily before legal title is transferred to a customer. An entity that is a principal may satisfy its performance obligation to provide the specified good or service itself or it may engage another party (for example, a subcontractor) to satisfy some or all of the performance obligation on its behalf.

ASC 606-10-55-38 An entity is an agent if the entity’s performance obligation is to arrange for the provision of the specified good or service by another party. An entity that is an agent does not control the specified good or service provided by another party before that good or service is transferred to the customer. When (or as) an entity that is an agent satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified goods or services to be provided by the other party. An entity’s fee or commission might be the net amount of consideration that the entity retains after paying the other party the consideration received in exchange for the goods or services to be provided by that party.

Return and Exchange Policy

All products are thoroughly inspected and securely packaged before they are shipped to ensure buyers receive the best possible product. If for any reason buyers are unsatisfied with the products, they can return them, and the Company will exchange or refund the purchase minus any shipping charges. For wholesale customers, return policies vary based on their specific agreements with customers. Under chargebacks agreements with the customers, the Company agrees to reimburse the seller for a portion of the costs incurred by the seller to advertise and promote certain of the Company’s products. The Company estimates, accrues and recognizes such chargebacks. These amounts are included in the determination of net sales. For nine months ended June 30, 2025 and 2024, the Company has no sales allowances for estimated chargebacks and returns, respectively.

Accounts payable and accrued expenses

As of June 30, 2025 and September 30, 2024, the accounts payable are $482,000 and $1,098,582 respectively.

As of June 30, 2025 and September 30, 2024, the accrued expenses are $1,146,598 and $1,141,755 respectively, it mainly includes the accrued expenses of Nuzee single-serving coffee and DRIPKIT products.

Accounts payable and accrued expenses as of June 30, 2025 and September 30, 2024 are as follows:

	June 30, 2025		September 30, 2024
Accounts payable		482,000		1,098,582
Accrued expenses		1,146,598		1,141,755
Total		1,628,598		2,240,337

Other current liabilities

As of June 30, 2025 and September 30, 2024, the other current liabilities are $567,399 and $586,173 respectively. It mainly includes the finance leasing of equipment and the payment for the goods.

Cost Recognition

The Maca Series products are pure plant products that we purchase maca raw materials and entrust to process. Therefore, the raw materials comprise the procurement cost of maca, the packaging cost of goods, the freight cost of goods and so on.

Operating expenses

For the nine months ended June 30, 2025, the operating expenses were $3,387,725. This mainly includes personnel costs of $908,134, sales and marketing expenses of $202,847, depreciation and amortization of $23,197, professional services such as lawyers, auditors and consultants of $1,941,625, travel expenses of $77,892, office expenses of $196,351 and other expenses of $37,679.

For the nine months ended June 30, 2024, the operating expenses were $4,748,076. It primarily comprised of personnel costs, selling and marketing expenses, depreciation and amortization, insurance expenses, professional services, travel and office expenses, etc. In some cases, the Company bears shipping costs for shipping customer orders, and shipping and handling costs are recorded under operating expenses in the consolidated statement of operations.

Other income

For the nine months ended June 30, 2025, the other income was $452,142. It is mainly because of the settlement and forgiveness of account payable.

For the nine months ended June 30, 2024, the other income was $412,580. It is mainly because of the rental income.

Other Expense

Other expense of $54,866 and $145,140 for the nine months ended June 30, 2025 and 2024, respectively, primarily includes write off of deferred financing costs and sublease expense.

Prepaid expenses and other current assets

Prepaid expenses and other current assets for the nine months ended June 30, 2025 and September 30, 2024 is as follows:

	June 30, 2025		September 30, 2024
Prepaid expenses	$	88,893	$	197,217
Other current assets		1,160,064		185,431
Total	$	1,248,957	$	382,648

The Prepaid expenses and other current assets balance of $1,248,957 as of June 30, 2025 primarily consists of deposit, Barcode fee, a retainer for professional services, employee petty cash advances, and input VAT pending certification for deduction.

Inventory, net

Inventories, net, consisting principally of raw materials and finished goods held for production and sale, is stated at the lower cost or net realizable value, cost being determined using the weighted average cost method. The Company reviews inventory levels at least quarterly and records a valuation allowance when appropriate. On June 30, 2025, the carrying value of inventory of $11,882,544.

SCHEDULE OF INVENTORY

	June 30, 2025		September 30, 2024
Raw materials	$	11,744,380	$	4,490,728
Finished goods	$	138,164		57,307
Total	$	11,882,544	$	4,548,035

Property and Equipment, net

Property and equipment are stated at cost, net of accumulated depreciation. Office equipment is depreciated over a 3-year life, furniture over a 7-year life, and other equipment over a 5-year life. Depreciation expense for nine months ended June 30, 2025 and 2024 was $12,832 and $119,607, respectively. Property and equipment as of June 30, 2025 and September 30, 2024 consist of:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30, 2025			September 30, 2024
Machinery & Equipment	$	15,150		$	1,465,566
Vehicles		-			57,431
Less - Accumulated Depreciation		(12,832	)		(1,127,820	)
Less-Impairment on Property and Equipment		-			(214,709	)
Disposal of property and equipment		-			(178,200	)
Net Property and Equipment	$	2,318		$	2,268

The Company is required to make deposits or prepayments and progress payments on equipment purchases before the Company receives possession and title. As a result, the Company accounts for such payments as Other Assets until it has possession at which time the equipment is recorded as Property and Equipment. There were no such deposits as of June 30, 2025 or September 30, 2024.

Samples

The Company distributes samples of its products as a component of its marketing program. Costs for samples are expensed at the time the samples are produced and recorded under operating expenses in the consolidated statements of operations.

Long-Lived Assets

The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicated that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.

Intangible assets

Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. We have identifiable useful life intangible assets related to acquired Dripkit tradename and customer rel

SEC Form 10-Q filed by CIMG Inc.