Company: IMG
Filing Date: 2025-07-30
Form Type: 10-K/A
Source: 0001641172-25-021542
Chunk: 103

Company: CIMG Inc.
Filing Date: 2025-07-30
Form: 10-K/A
Chunk 103
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 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. Cash and cash
equivalents were $464,222 as of September 30, 2024, compared to $982,869 as of
September 30, 2023.

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

During the year ended September 30, 2024 and
September 30, 2023, accounts receivable was $Nil and $499,582.

Trade accounts receivable is periodically evaluated for
collectability based on past credit