Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 8

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1A
Chunk 8
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forwards to offset future taxable income may be subject to certain limitations.

The
Tax Cuts and Jobs Act (the “TCJA”), enacted in 2017, limited the use of net operating loss carryforwards arising in periods
beginning after 2017 to eighty-percent of taxable income in the period to which the losses are carried. The TCJA also extended the expiration
period for net operating losses arising in periods after 2017 from 20 years to an unlimited period.

However,
the taxable income limitation on the use of net operating loss carryforwards was eliminated by the Coronavirus Aid, Relief and Economic
Security Act (the “CARES” Act) for tax years beginning before January 1, 2021. We may not be able to utilize our existing
net operating losses or any portion thereof in the current tax year or any available carryforward period.

24

In
addition, Section 382 may limit the utilization of net operating loss carryforwards. In general, under Section 382 of the Internal Revenue
Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to annual
limitations on its ability to use its pre-change net operating loss carryforwards, or NOLs, and certain other tax attributes to offset
future taxable income or reduce taxes. Our past issuance of stock and other changes in our stock ownership may have resulted in one or
more ownership changes within the meaning of Section 382 of the Code; accordingly, our pre-change NOLs may be subject to limitations
under Section 382. State NOL carryforwards may be similarly limited. Furthermore, transactions in our stock that have occurred in the
past and could occur in the future may trigger another ownership change pursuant to Section 382. Because of the cost and complexity involved
in the analysis of a Section 382 ownership change and the fact that we do not have any taxable income to offset, we have not undertaken
a study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since
we became a “loss corporation” as defined in Section 382. Future changes in our stock ownership could result in ownership
changes under Section 382 of the Code further limiting our ability to utilize our NOLs. Finally, our ability to use NOLs of companies
that we may acquire in the future may be subject to limitations. For these reasons, even if we attain profitability, we may not be