Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 104

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1A
Chunk 104
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 date).

On August 20, 2024, the Company entered into a convertible note purchase
agreement with certain investors (the “August Notes Investors”) to issue and sell convertible notes in the aggregate principal
amount of $1,300,000 (the “August Notes”).The Notes bear interest at an annual rate of 7% and have a maturity date of one
year from the issuance date. The Notes shall not be converted until the Company obtains shareholder approval for the issuance of shares
underlying the Notes. Upon obtaining such approval, the holder may convert the Notes into a number of shares of Common Stock equal to
(i) the outstanding principal amount of the Notes, plus any accrued but unpaid interest, divided by (ii) $0.94, the conversion price.
Any conversion of the Notes resulting in a fractional share shall be rounded down to the nearest whole share. On October 31, 2024, the
conversion of this convertible note into stocks has been completed.

Per ASC 470-20-25-5, An embedded beneficial conversion
feature (“BCF”) present in a convertible instrument shall be recognized separately at issuance by allocating a portion of
the proceeds equal to the intrinsic value of that feature to additional paid-in capital.

The company evaluated that the fair value of the
instrument is slightly higher than the proceeds from the instrument issuance. The BCF is embedded in the convertible note.

Still, since the converting period is short (only
50 days) and the fair value of the embedded BCF is relatively small, we decided not to separate the feature until the proceeds to paid-in-capital.
Since we do not directly pay the interest expenses, but to put them in the total repayable amount and convert to shares, we do not amortize
the interest expense. 

During the year ended September 30, 2024 and September
30, 2023,the fair value variation on convertible notes is $82,845 and $Nil

Cash and Cash Equivalents

The Company considers all highly liquid
investments with original maturities of three months or less at the date of purchase to be cash equivalents. As
of September 30, 2024 and 2023, the Company had no 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