CIMG Inc. – Q3 Fiscal 2025 Financial Summary
Financial Position and Performance - Revenue: For the nine months ended June 30, 2025, revenue was $84,431, a significant decrease from $1,641,955 in the prior year period, with Q3 revenue of $61,578 versus $366,888 in Q3 2024. This decline reflects a shift in geographical concentration from North America ($1,641,955 in 2024) to the People’s Republic of China ($84,431 in 2025). - Gross Profit/Loss: Gross profit for the nine months was $20,612, compared to a gross loss of $178,185 a year earlier; in Q3, gross profit was $5,133. - Net Loss: Net loss from continuing operations for the nine months was $(2,990,047), improved from $(4,663,887) in the prior year period. Including discontinued operations, total net loss was $(2,990,047) versus $(5,242,739). - Operating Expenses: Operating expenses dropped to $3,387,725 from $4,748,076 in the comparable period, mainly due to lower personnel and general operating costs. - Other Income/Expense: Other income rose to $452,142 (mainly from settlement/forgiveness of debt) while other expenses fell to $54,866 from $145,140. Loss on acquisition related to new subsidiaries totaled $20,210. - Earnings Per Share: Basic and diluted net loss per share for the nine months was $(0.16), compared to $(3.91) a year ago. Weighted average shares outstanding increased to 18,226,016 from 1,341,072.
Balance Sheet Highlights (as of June 30, 2025) - Total Assets: $13,309,302 (vs $5,587,655 at September 30, 2024), driven by increased inventories ($11,882,544 vs $4,548,035). - Cash Position: $35,958 (significantly down from $464,222 at prior year end). - Accounts Receivable: $75,630 (was $0 at prior year end after full allowance for losses). - Total Liabilities: $2,671,985 (down from $6,238,323 at September 30, 2024), reflecting reduction in short-term loans ($433,512 vs $1,920,507) and elimination of convertible notes. - Stockholders’ Equity: Improved to $10,637,317 from a deficit of $(650,668), attributed to capital raises and reduced debt.
Cash Flow - Net Cash Used in Operating Activities: $(11,233,693) (significantly higher than $(4,270,542) in prior year), mainly from inventory buildup and reduced payables. - Net Cash Provided by Financing Activities: $10,964,632 (increased due to $10 million in new equity). - Net decrease in cash: $(428,264), resulting in quarter-end cash of $35,958.
Equity & Capital Raising - Multiple capital raises, including roughly $10 million from ATM offerings and $2.45 million from private placements during the nine-month period. - Post-quarter events: In August and September 2025, closed additional private placements totaling $59 million for 236.7 million shares (including acceptance of bitcoin).
Material Risks & Uncertainties - Going Concern: Management acknowledges the need to raise additional capital immediately to continue operations; ongoing recurring losses and low cash balance highlight financial vulnerability. - Revenue Dependence: A high degree of customer and market concentration; in 2025, 72% of revenues came from two customers, while in 2024, one customer comprised 70% of revenues. - Legal Proceedings: The company is subject to litigation from a former employee, a former director, and a shareholder lawsuit, which may pose material financial and operational risks. - Inventory Risks: Inventories rose sharply to $11.9 million, posing potential obsolescence and liquidity risks should sales not materialize. - Geographic Shift: Sales are now primarily in China; cessation of North American business and discontinued operations may increase execution and regulatory risks in new markets.
Other Notes - Discontinued Operations: Former North American subsidiaries and other businesses were sold or liquidated in June 2024—loss from disposal and discontinued ops in prior period was $(578,852). - Recent Acquisitions: Acquired 51% control in Xilin Online (Beijing) and Huomao in Q2 2025; no goodwill recognized; each acquisition resulted in minor immediate losses. - Share Dilution: Outstanding shares increased substantially due to large equity issuances; potential dilution risk remains high with further capital raises.
Conclusion CIMG Inc. is transitioning toward China-centred operations after ceasing activities in North America, resulting in substantially lower revenues but improved cost structure and a one-time boost in equity from capital raises. However, with minimal cash remaining, large inventory build-up, and ongoing operating losses, continued viability hinges on successful execution in new markets and ongoing access to external financing. Legal and concentration risks remain significant. Investors should closely monitor liquidity, customer diversification, and resolution of legal contingencies.
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