Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 1177

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 16
Chunk 1177
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 of accounting, an investee company’s accounts are not reflected within
the Company’s consolidated balance sheets and consolidated statements of operations; however, the Company’s share of the earnings
or losses of the Investee company is reflected in the caption Gain (loss) from equity method investment in the consolidated statements
of operations. The Company’s carrying value in an equity method investee company is reflected in the caption “Investment in
unconsolidated affiliate’’ in the Company’s consolidated balance sheets.

    F-9

When the Company’s carrying value in an equity
method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless
the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently
reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously
recognized.

Revenue Recognition

In FY 2024, We have reduced our single-serving
pour-over coffee packaging business, and in the portion of bagged coffee sales, we have added other brands, such as “Maca Coffee”
and other finished products with maca as the main raw material, such as “Maca Noni”. In 2024, we sell maca peptide coffee and
other new products on a distribution model. We usually sign distribution contracts with distributors on a batch basis. Based on the contract,
we deliver the goods after full payment to our bank account. We courier the goods to the customer. The customer will sign a receipt after
receiving the goods. The customers can also choose to pick up their goods from our warehouse on their own. Also, the customer will sign
a receipt.

In May 2014, the FASB issued Accounting Standards
Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements
in Topic 605 “Revenue Recognition” (Topic 605). The new standard’s core principle is that an entity will recognize revenue
at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services
to a customer. The principles in the standard are applied in five steps: 1) Identify the contract(s) with a customer; 2) Identify the
performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations
in the contract; and