Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 14

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1A
Chunk 14
---
 sizes may also result in a reduction in sales volume and/or consumption. If we are
not able to mitigate these inflationary pressures, such as by increasing our selling prices or reducing product sizes sufficiently to
offset increased raw material, energy or other input costs, including but not limited to packaging, direct labor, overhead and employee
benefits, or if our sales volume decreases significantly, there could be a negative impact on our results of operations and financial
condition.

We
may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.

While
we are currently a small company and, therefore, limited in our product development, marketing and sales activities, we anticipate continued
growth in our business operations commensurate with the expansion of our sales and support operations and distribution network and the
commercialization of our coffee products. Any future growth could impose significant added responsibilities on members of our existing
management and create strain on our organizational, administrative, and operational infrastructure, including sales and marketing, quality
control, and customer service. Our ability to manage our growth properly will require us to continue to improve our operational, financial
and management controls, as well as our reporting systems and procedures, which in the past have been determined to be inadequate. Our
status as an exchange-listed public company will require us to increase our investment in financial accounting and reporting. If our
current infrastructure is unable to handle our growth, we may need to expand our infrastructure, to identify and recruit new staff and
to implement new reporting systems. The time and resources required to implement such expansion and systems could adversely affect our
operations. Our future financial performance and our ability to expand and market our single-serve coffee products and to compete effectively
will depend, in part, on our ability to manage this potential future growth effectively, without compromising quality.

28

Any
failure by us to accurately forecast customer demand for our products, or to quickly adjust to forecast changes, could adversely affect
our business and financial results.

There
is inherent risk in forecasting demand due to the uncertainties involved in assessing the current level of maturity of the single serve
component of our business as well as the current and future needs of our customers. We set target levels for the manufacture of our coffee
products and for the purchase of coffee in advance of customer orders based upon our forecasts of customer demand and those of our business
partners. If our forecasts exceed demand, we could experience excess inventory in the short-term, excess manufacturing capacity in the
short and