# EDGAR Filing Document

**Accession Number:** 0001927578
**File Stem:** 0001104659-25-123760
**Filing Date:** 2025-12
**Character Count:** 158436
**Document Hash:** dfa1e8594d2dbc73218a1c602272e6f2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-123760.hdr.sgml**: 20251222

**ACCESSION NUMBER**: 0001104659-25-123760

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 78

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20251222

**DATE AS OF CHANGE**: 20251222

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NetClass Technology Inc
- **CENTRAL INDEX KEY:** 0001927578
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42440
- **FILM NUMBER:** 251592904

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** UNIT 11-03, ABI PLAZA
- **STREET 2:** 11 KEPPEL ROAD
- **CITY:** SINGAPORE
- **PROVINCE COUNTRY:** U0
- **ZIP:** 089057
- **BUSINESS PHONE:** 65 91821823

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** UNIT 11-03, ABI PLAZA
- **STREET 2:** 11 KEPPEL ROAD
- **CITY:** SINGAPORE
- **PROVINCE COUNTRY:** U0
- **ZIP:** 089057

?xml version='1.0' encoding='ASCII'? NETCLASS TECHNOLOGY INC_2025-03-31

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER**

**PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

**For the month of December 2025**

**Commission File Number: 001-42440**

**NETCLASS TECHNOLOGY INC**

**Unit 11-03, ABI Plaza**

**11 Keppel Road**

**Singapore 089057**

**+65 91821823**

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

------

NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "Company") is hereby furnishing this report on Form 6-K (the "Report") to provide the Unaudited Interim Condensed Consolidated Financial Statements of the Company as of and for the six months ended March 31, 2025, included as Exhibit 99.1 of this Report, and the Management's Discussion and Analysis of Financial Condition and Results of Operations as of and for the six months ended March 31, 2025, included as Exhibit 99.2 of this Report.

#### EXHIBIT INDEX

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended March 31, 2025](ntcl-20250331xex99d1.htm) |
| 99.2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended March 31, 2025](ntcl-20250331xex99d2.htm) |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| Date: December 22, 2025 | By: | */s/ Jianbiao Dai* |
|  | Name: | Jianbiao Dai |
|  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'? NETCLASS TECHNOLOGY INC_2025-03-31

[**Table of Contents**](#TOC)

**Exhibit 99.1**

**NETCLASS TECHNOLOGY INC**

**INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Unaudited Condensed Consolidated Financial Statements** |  |
| [Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025 and September 30, 2024](#CONSOLIDATEDBALANCESHEETS_57014) | F-2 |
| [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended March 31, 2025 and 2024](#CONSOLIDATEDSTATEMENTSOFINCOMEANDCOMPREH) | F-3 |
| [Unaudited Condensed Consolidated Statements of Changes in Equity for the Six Months Ended March 31, 2025 and 2024](#CONSOLIDATEDSTATEMENTSOFCHANGESINEQUITY_) | F-4 |
| [Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2025 and 2024](#CONSOLIDATEDSTATEMENTSOFCASHFLOWS_709495) | F-5 |
| [Notes to Unaudited Condensed Consolidated Financial Statements](#Notes1) | F-6 |

---

[**Table of Contents**](#TOC)

**NETCLASS TECHNOLOGY INC**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **September 30,** |
|  | **2025** | **2024** |
|  | **unaudited** | **audited** |
| **ASSETS** |  |  |
| **CURRENT ASSETS:** |  |  |
| &nbsp;&nbsp;Cash | $1805463 | $410716 |
| &nbsp;&nbsp;Restricted cash | 504058 | 4564 |
| &nbsp;&nbsp;Accounts receivable, net | 4654356 | 5298006 |
| &nbsp;&nbsp;Inventories, net | 199869 | 70681 |
| &nbsp;&nbsp;Advances to vendors | 1645537 | 1124030 |
| &nbsp;&nbsp;Prepayments and other current assets | 441534 | 40990 |
| &nbsp;&nbsp;Deferred issuance costs |  | 138463 |
| **TOTAL CURRENT ASSETS** | 9250817 | 7087450 |
| &nbsp;&nbsp;Property and equipment, net | 32764 | 39707 |
| &nbsp;&nbsp;Long-term prepaid expenses, net | 437500 |  |
| &nbsp;&nbsp;Intangible assets, net | 327071 |  |
| &nbsp;&nbsp;Operating lease right of use assets | 1153272 | 13122 |
| &nbsp;&nbsp;Deferred tax assets, net | 114208 | 88445 |
| **TOTAL NONCURRENT ASSETS** | 2064815 | 141274 |
| **TOTAL ASSETS** | $**11315632** | $**7228724** |
| **LIABILITIES AND EQUITY** |  |  |
| **CURRENT LIABILITIES:** |  |  |
| &nbsp;&nbsp;Accounts payable | $1766033 | $2860703 |
| &nbsp;&nbsp;Advance from customers | 1612363 | 425116 |
| &nbsp;&nbsp;Accrued expenses and other liabilities | 393648 | 297360 |
| &nbsp;&nbsp;Due to related parties | 157114 | 228951 |
| &nbsp;&nbsp;Taxes payable | 310233 | 341217 |
| &nbsp;&nbsp;Operating lease liabilities, current portion | 1272 | 13122 |
| **TOTAL CURRENT LIABILITIES** | 4240663 | 4166469 |
| &nbsp;&nbsp;Long-term bank loan | 372070 |  |
| &nbsp;&nbsp;Operating lease liabilities, non-current portion |  | 12706 |
| **TOTAL NON-CURRENT LIABILITIES** | 372070 | 12706 |
| **TOTAL LIABILITIES** | **4612733** | **2097344** |
| **COMMITMENTS AND CONTINGENCIES** |  |  |
| **SHAREHOLDERS' EQUITY:** |  |  |
| &nbsp;&nbsp;Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share |  |  |
| &nbsp;&nbsp;Class A Ordinary shares,15,830,000 and 13,760,000 ordinary shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively | 3958 | 3440 |
| &nbsp;&nbsp;Class B Ordinary shares, 2,000,000 ordinary shares issued and outstanding | 500 | 500 |
| &nbsp;&nbsp;Additional paid in capital | 13285824 | 4821992 |
| &nbsp;&nbsp;Statutory reserves | 35448 | 35448 |
| &nbsp;&nbsp;Accumulated deficit | (6588434) | (1704065) |
| &nbsp;&nbsp;Accumulated other comprehensive loss | (202103) | (186134) |
| **TOTAL SHAREHOLDERS' EQUITY** | 6535193 | 2971181 |
| Non-controlling interest | 167706 | 91074 |
| **TOTAL EQUITY** | 6702899 | 3062255 |
| **TOTAL LIABILITIES AND EQUITY** | $**11315632** | $**7228724** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

[**Table of Contents**](#TOC)

**NETCLASS TECHNOLOGY INC**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE LOSS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **Revenues** | $3654410 | $3766192 |
| **Cost of revenues** | (3349020) | (3182743) |
| **Gross profit** | 305390 | 583449 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;Selling and marketing | (468864) | (207160) |
| &nbsp;&nbsp;General and administrative | (3975268) | (397873) |
| &nbsp;&nbsp;Research and development | (1039528) | (2213377) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | (5483660) | (2818410) |
| **Loss from operations** | **(5178270)** | **(2234961)** |
| **Other (expense) income:** |  |  |
| &nbsp;&nbsp;Interest income (expense), net | (2939) | 210 |
| &nbsp;&nbsp;Gain on acquisition of a subsidiary | 139724 |  |
| &nbsp;&nbsp;Other (expense) income, net | (12815) | (9673) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total other (expense) income, net** | 123970 | (9463) |
| **Loss before income taxes** | **(5054300)** | **(2244424)** |
| Income tax benefit  | 98657 | 179413 |
| **Net loss** | **(4955643)** | **(2065011)** |
| **Other comprehensive income** |  |  |
| &nbsp;&nbsp;Foreign currency translation adjustments | (15969) | 36523 |
| **Comprehensive loss** | **(4971612)** | **(2028488)** |
| &nbsp;&nbsp;Less: Comprehensive loss attributable to non-controlling interests  | 71274 |  |
| **Comprehensive loss attributable to shareholders**  | $**(4900338)** | $**(2028488)** |
| **Loss per share** |  |  |
| &nbsp;&nbsp;Basic and diluted | $(0.29) | $(0.13) |
| **Weighted average number of shares outstanding** |  |  |
| &nbsp;&nbsp;Basic and diluted | 16927527 | 15760000 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

**NETCLASS TECHNOLOGY INC**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**(Expressed in U.S. dollar, except for the number of shares)**

**Six Months Ended March 31, 2025 and 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | | | | | | | |
|  | **Class A** | **Class A** | **Class B** | **Class B** | | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional**<br>**Paid-in**<br>**Capital** | <br>**Statutory**<br>**Reserve** | <br>**Accumulated**<br>**Deficit** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Loss** | <br>**Shareholders'**<br>**equity** | <br>**Noncontrolling**<br>**Interest** | <br>**Total**<br>**Equity** |
| **Balance at September 30, 2023** | **13760000** | $**3440** | **2000000** | $**500** | $**4821992** | $**35448** | $**(164809)** | $**(252752)** | $**4443819** | $**—** | $**4443819** |
| Cumulative effect adjustment upon adoption of ASC 326 |  |  |  |  |  |  | (61443) |  | (61443) |  | (61443) |
| **Balance at October 1, 2023** | **13760000** | **3440** | **2000000** | **500** | **4821992** | **35448** | **(226252)** | **(252752)** | **4382376** | **—** | **4382376** |
| Net loss |  |  |  |  |  |  | (2065011) |  | (2065011) |  | (2065011 |
| Foreign currency translation adjustment |  |  |  |  |  |  |  | 36523 | 36523 |  | 36523 |
| **Balance at March 31, 2024 (Unaudited)** | **13760000** | $**3440** | **2000000** | $**500** | $**4821992** | $**35448** | $**(2291263)** | $**(216229)** | $**2353888** | $**—** | $**2353888** |
| **Balance at September 30, 2024** | **13760000** | $**3440** | **2000000** | $**500** | $**4821992** | $**35448** | $**(1704065)** | $**(186134)** | $**2971181** | $**91074** | $**3062255** |
| Cash proceeds from IPO  | 2070000 | 518 |  |  | 10349482 |  |  |  | 10350000 |  | 10350000 |
| Offering cost deducted to capital  |  |  |  |  | (1885650) |  |  |  | (1885650) |  | (1885650) |
| Non-controlling interest from acquisition |  |  |  |  |  |  |  |  |  | 147907 | 147907 |
| Net loss |  |  |  |  |  |  | (4884369) |  | (4884369) | (71274) | (4955643) |
| Foreign currency translation adjustment |  |  |  |  |  |  |  | (15969) | (15969) | (1) | (15970) |
| **Balance at March 31, 2025 (Unaudited)** | **15830000** | $**3958** | **2000000** | $**500** | $**13285824** | $**35448** | $**(6588434)** | $**(202103)** | $**6535193** | $**167706** | $**6702899** |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

**NETCLASS TECHNOLOGY INC**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| &nbsp;&nbsp;**Net cash used in operating activities** | $**(7020541)** | $**(211835)** |
| &nbsp;&nbsp;**Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition of property, plant and equipment | (2214) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposal of property, plant and equipment | 2766 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment into a subsidiary | (17158) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash from acquisition of a subsidiary  | 34656 |  |
| &nbsp;&nbsp;**Net cash provided by investing activities** | 18050 |  |
| &nbsp;&nbsp;**Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;Proceeds from bank loans | 373403 |  |
| &nbsp;&nbsp;Deferred issuance costs paid | (1747188) |  |
| &nbsp;&nbsp;Gross proceeds from IPO  | 10350000 |  |
| &nbsp;&nbsp;Proceeds from a related party loan | 2314 | 1502 |
| &nbsp;&nbsp;Repayment to related parties | (68219) |  |
| &nbsp;&nbsp;**Net cash provided by financing activities** | **8910310** | **1502** |
| &nbsp;&nbsp;Effect of exchange rates changes on cash | (13578) | 1827 |
| &nbsp;&nbsp;**Net (decrease) increase in cash** | **1894241** | **(208506)** |
| &nbsp;&nbsp;**Cash and restricted cash, beginning of the period** | **415280** | **524601** |
| &nbsp;&nbsp;**Cash and restricted cash, end of the period** | $**2309521** | $**316095** |
| **Supplemental cash flow disclosures:** |  |  |
| Cash paid for income tax | $— | $— |
| Cash paid for interest | $3536 | $— |
| **Non cash investing and financing activities:** |  |  |
| Settlement of receivable from sales of shares in the way of payment to a supplier | $— | $1900000 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

**NETCLASS TECHNOLOGY INC**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**MARCH 31, 2025 AND 2024**

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION**

NETCLASS TECHNOLOGY INC ("NetClass" or "the Company") is a holding company incorporated under the laws of Cayman Islands on January 4, 2022. NetClass, through its wholly-owned subsidiaries (collectively, "the Group") offers online professional education platform and related courseware, providing smart education IT solutions service in the People's Republic of China ("China" or "PRC"). The Company has no substantive operations other than holding 100% ownership of DRAGONSOFT GROUP CO., LIMITED ("NetClass HK") established under the laws of Hong Kong on December 12, 2006.

As of March 31, 2025, the Company's subsidiaries and consolidated affiliated entities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Subsidiaries** | **Date of** <br>**Incorporation** | **Jurisdiction of** <br>**Formation** | **Percentage of** <br>**direct/indirect** <br>**Economic** <br>**Ownership** | **Principal** <br>**Activities** |
| DRAGONSOFT GROUP CO., LIMITED ("NetClass HK") | December 12, 2006 | Hong Kong, PRC | 100% | Investment Holding/ Subscription and Application development service |
| Shanghai Zhima Information Technology Co., Ltd. ("WFOE") | April 30, 2019 | PRC | 100% | Investment Holding |
| Shanghai Netwide Enterprise Management Co., Ltd. ("Shanghai Netwide") | April 27, 2022 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Information Technology Co., Ltd. ("NetClass China") | May 13, 2003 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Enterprise Management Co., Ltd ("NetClass Management") | August 29, 2016 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Human Resources Co., Ltd ("NetClass HR") | November 09, 2016 | PRC | 100% | Subscription and Application development service |
| Shanghai Chuangyuan Education Technology Co., Ltd ("NetClass Education") | April 14, 2004 | PRC | 100% | Subscription and Application development service |
| NetClass Training (Shanghai) Co., Ltd. ("NetClass Training") | August 19, 2016 | PRC | 100% | Subscription and Application development service |
| Netclass International Limited | July 28, 2023 | Hong Kong, PRC | 100% | No activities |
| NetClass Data Pte Ltd ("NetClass Singapore") | May 13, 2024 | Singapore | 60% | Subscription and Application development service |
| Nova Solutions Inc. ("NetClass Japan", formerly named Create Solutions Inc.) | January 22, 2022 | Japan | 51% | Subscription and Application development service |

---

As described below, the Company, through a series of transactions accounted for as a reorganization of entities under common control (the "Reorganization"), became the ultimate parent of its subsidiaries. Mr. Jianbiao Dai, the CEO and the Chairman of the Board of Directors of the Company, is the ultimate controlling shareholder of the Company.

***Reorganization***

A reorganization of the legal structure was completed on June 10, 2022. The reorganization involved:

&nbsp;&nbsp;&nbsp;&nbsp;(i) the formation of the Company's wholly owned subsidiary NetClass HK; the formation of WFOE controlled by Mr. Jianbiao Dai;

&nbsp;&nbsp;&nbsp;&nbsp;(ii) The transfer of the shareholder equity in WOFE to NetClass HK on May 05, 2022;

(iii)The transfer of the shareholders' equity in NetClass China to WOFE on June 10, 2022.

Before and after the Reorganization, the Company, with its subsidiaries, was controlled by the same shareholders, and therefore the reorganization was considered a recapitalization of entities under common control under Accounting Standards Codification ("ASC") 805-50-25 "Transactions Between Entities Under Common Control". The consolidation of the Company and its subsidiaries was accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements ("CFS") under ASC 805-50-45-5.

[**Table of Contents**](#TOC)

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of consolidation***

The accompanying condensed CFS were prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation were included in the Company's unaudited condensed CFS. The unaudited condensed CFS should be read in conjunction with the Company's CFS and the notes thereto for the years ended September 30, 2024 and 2023 included in the Company's Form 20-F. The accompanying unaudited condensed CFS include the financial statements of the Company and its subsidiaries. All inter-company balances and transactions are eliminated in consolidation. Operating results for the six months ended March 31, 2025 and 2024 are not necessarily indicative of the results that may be expected for the full year.

***Uses of estimates***

In preparing CFS in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the CFS and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements and are adjusted to reflect actual experience when necessary. Significant estimates required to be made by management include, but are not limited to allowance for doubtful accounts, and realization of deferred tax assets. Actual results could differ from those estimates. The Company evaluates its estimates and assumptions on an ongoing basis and its estimates on historical experience, current and expected future conditions and various other assumptions that management believes are reasonable under the circumstances based on the information available to management at the time these estimates and assumptions are made. Actual results and outcomes may differ significantly from these estimates and assumptions.

***Principles of consolidation***

The CFS include the financial statements of the Company and its subsidiaries.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. As of March 31, 2025 and September 30, 2024 (audited), all subsidiaries are controlled through equity investment, and none through contractual arrangements.

***Non-controlling Interest***

Non-controlling interest on the consolidated balance sheets results from the consolidation of a Singapore subsidiary and a Japanese subsidiary. The portion of the income or loss applicable to the non-controlling interest in subsidiary is reflected in the consolidated statements of income and comprehensive income (loss).

***Business Combinations***

Business combinations are accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Identifiable assets acquired and liabilities assumed are recognized at their acquisition-date fair values. The acquisition date is the date on which control is obtained. Determining the fair value ("FV") of assets acquired and liabilities assumed requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. If in a business combination, the aggregate amounts of the consideration transferred, the FV of noncontrolling interest of the acquiree, and the FV of the acquirer's previously held equity interest in the acquiree exceeds the net amount of the FV of the identifiable assets acquired and the liabilities assumed, the Company will recognize goodwill on the acquisition date, measured as the excess amount. If in a business combination, the net amount of the FV of the identifiable assets acquired and the liabilities assumed exceeds the aggregate of the amounts of consideration transferred, the FV of noncontrolling interest of the acquiree, and the FV of the acquirer's previously held equity interest in the acquiree, the Company will recognize the resulting gain in earnings on the acquisition date, measured as the excess amount.

[**Table of Contents**](#TOC)

***Cash***

Cash comprises cash at banks and cash on hand, which includes deposits with original maturities of three months or less with commercial banks in Singapore, Japan, Hong Kong and PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs, but covered by Chinese insurance program where RMB 500,000 deposit insurance limit for a legal entity's aggregated balance at each bank.

***Restricted cash***

Cash that is restricted as to withdrawal is reported separately on the Consolidated Balance Sheets and is included in total cash in the Consolidated Statements of Cash Flows. Restricted cash mainly is required cash deposits reserved for commercial litigation.

***Credit Losses***

On October 1, 2023, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including accounts receivable. The Company uses the roll-rate method to measure the expected credit losses of account receivables on a collective basis when similar risk characteristics exist. The roll-rate method stratifies the receivables balance by delinquency stages and projected forward in one-year increments using historical roll rate. In each period end of the simulation, losses on the receivables are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. This process is repeated on a yearly rolling basis. The loss rate calculated for each delinquency stage is then applied to respective receivables balance. The management adjusts the allowance that is determined by the roll-rate method for both current conditions and forecasts of economic conditions. The Company adopted ASC Topic 326 using the modified retrospective method in scope of the standard. Results for reporting periods beginning after October 1, 2023 are presented under ASC Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP.

Expected provision for credit losses is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

***Accounts Receivable, net***

Accounts receivable, net is the amounts the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for credit losses.

***Inventories, net***

Inventories are the IT equipment used to sell to customers. Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using weighted average method. The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale, no longer meeting quality specifications, or has a cost basis in excess of its estimated realizable value and records a charge to cost of sales for such inventory as appropriate. As of March 31, 2025 and September 30, 2024 (audited), no impairment loss was recognized.

***Advances to Vendors***

Advances to vendors are balances paid to suppliers for services and materials that have not been provided or received. To deliver application development services to customers, the Company needs to purchase IT equipment and tailor-make software to build up a hardware facility with software integrated to run a system. When the prepayment is made to the IT equipment suppliers or software suppliers while the IT equipment or the software is not delivered to the Company, an advance to vendor is recorded. In addition, the Company also purchases services from suppliers with the period more than one year. The unamortized part of prepayment is recorded as an advance to vendors. Suppliers usually ask for a prepayment for the IT equipment or tailor-made software and will deliver in around 1-3 months.

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Advances to vendors are short-term and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets impaired if the relative services or inventory will not be provided or received later. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful advances to vendors by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of March 31, 2025 and September 30, 2024 (audited), no such allowance was recognized.

***Prepayment and other assets***

Prepayments and other assets primarily consist of prepaid expenses, rent deposits, loans to third-parties, security deposits made to customers and advances to employees, which are presented net of allowance for doubtful accounts. Prepayments and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance is also based on management's best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management's estimate of credit worthiness and the economic environment. Other receivables are written off against the allowances only after exhaustive collection efforts. As of March 31, 2025 and September 30, 2024 (audited), no allowance for doubtful accounts were provided on prepayments and other assets.

***Property and equipment, net***

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided in amounts sufficient to depreciate the cost of the related assets over their useful lives using the straight-line method, as follows:

---

| | |
|:---|:---|
|  | **Useful life** |
| Electronic equipment | 3-5 years |
| Office furniture | 5 years |
| Transportation equipment | 5 years |

---

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income in other income or expenses.

***Impairment of long-lived assets***

Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized for the six months ended March 31, 2025 and 2024, respectively.

***Fair Value of Financial Instruments***

ASC 825-10 requires certain disclosures regarding the FV of financial instruments. FV is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard, ASC Topic 820, Fair Value Measurements ("ASC Topic 820") establish a three-level valuation hierarchy for disclosures of FV measurement and enhance disclosure requirements for FV measurements. A three-level FV hierarchy prioritizes the inputs used to measure FV. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure FV are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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&nbsp;&nbsp;&nbsp;&nbsp;● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

&nbsp;&nbsp;&nbsp;&nbsp;● Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the FV of the Company's financial instruments, including cash, accounts receivable, prepayments and other current assets, accounts payable, accrued expenses and other liabilities and bank loans, approximates their recorded values due to their short-term maturities.

***Revenue recognition***

The Company follows ASC Topic 606 Revenue from Contracts with Customers ("ASC 606"). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract (s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Company derives its revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services. All of the Company's contracts with customer do not contain cancelable and refund-type provisions.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Revenue from application development service

The Company's application development service contracts are primarily on a fixed-price basis with no variable consideration, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs and the service may also involve sales of IT equipments. These services also require significant production and customization. These services represent a single performance obligation as they are highly interdependent and interrelated and cannot be separately identifiable. The Company used the stand-alone selling price to allocate the transaction prices between development service and IT equipment sales. Upon delivery of the services, customer acceptance is generally required.

Certain application development service contracts contain a significant financial component, which is a financial service obligation to the customers. In these cases, after deducting the standalone selling price of the financial service, which is calculated based on Chinese Central Bank's suggesting bank loan interest rate for the duration similar to the credit period granted to the customers, the remaining amount of the contract consideration is allocated to the equipment and the application development services based on their relative standalone prices.

For the application development service contract, except for the financial income revenue, the Company believes the application development performance obligation is satisfied upon customer acceptance. The financial income revenue is recognized over the credit period granted to the customers. No significant returns, refund and other similar obligations during each reporting period.

In some arrangements, the Company's ongoing customers purchased general purposed IT equipment from the Company and the Company sells and delivers IT equipment such as servers and computer terminals without any related application development service arrangement after the IT equipment purchase. IT equipments though have an aggregated monetary value, do not represent the underlying core value that the Company would deliver as a result of the service sales contract. Given the not significant portion of total revenue, the Company did not further disaggregate the revenue stream of sales of IT equipments.

The sale of IT equipment is recognized when delivery has occurred and the customer accepts the equipment and the Company has no performance obligation after the acceptance.

(2)Revenue from subscription services

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Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications for a subscribed period. The Company's billing to customer is on the basis of number of users or the actual usage by the customers. The subscription arrangements are considered service contracts because customers do not have the right to take possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts typically include a single performance obligation and the terms of pricing and payment are fixed, no variable consideration is involved. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services. No significant returns, refund and other similar obligations during each reporting period.

Revenue includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net of value added tax ("VAT"), goods and services tax ("GST") or consumption tax ("CT"). The Company's subsidiaries in PRC are subject to a 6% to 13% value added tax ("VAT"). The Company's subsidiaries in Singapore are subject to 0-9% GST. The Company's Japanese subsidiary is subject to 10% consumption tax.

Practical Expedient and Exemptions

The Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC 606-10-55-18. Payment terms and conditions vary by contract type; however, the Company's terms generally include a requirement of payment within 180 days after acceptance of the service. The Company has elected the practical expedient to not assess whether a significant financing component exists if the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service is one year or less.

***Contract balances***

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Company has satisfied the Company's performance obligation and has the unconditional rights to payment. Unearned revenues consist of payments received or awards to customers related to unsatisfied performance obligation at the end of the period. Advance from customers of $425,116 and $302,433 as of September 30, 2024 and 2023 were recognized as revenues in the six months ended March 31, 2025 and 2024, respectively. All unsatisfied performance obligations will be performed within the next 12 months. In certain application development service contracts, it contains a significant financial component, which represents a financial service obligation to the customers.

*Disaggregation of revenue*

For the six months ended March 31, 2025 and 2024, the disaggregation of revenue by major revenue stream is as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Application development services | $2491822 | $2429289 |
| Subscription service | 1162588 | 1330225 |
| Finance income |  | 6678 |
| Total | $3654410 | $3766192 |

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***Advertising expenditures***

Advertising expenditures are expensed as incurred for the periods presented. Advertising expenditures are included in selling expenses. For the six months ended March 31, 2025 and 2024, advertising expenses were $281,211 and $160,854 respectively.

***Operating leases***

The Company mainly leases administrative offices and operating centers from property owners. These are all classified as operating leases. The Company follows FASB Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"),

The determination of whether an arrangement is or contains a lease is made at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset.

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The Company elected not to separate non-lease components from lease components if the lease agreements consist of both lease and non-lease components. However, for all of the Company's long-term lease agreements, lease payment do not contain the consideration for the non-lease component and the non-lease component has its own price and is paid separately. So, the Company calculates the right-of-use ("ROU") assets and lease liabilities by using the lease payment only for the use of the underlying leased assets and has no need to allocate the lease payment between the lease and non-lease component.

Under a lease, the lessees are required to recognize ROU assets and lease liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and are recognized as the amount of the lease liabilities, adjusted for any prepaid or accrued lease payments, net of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset. Lease liabilities represent the Company's obligation to make lease payments arising from the lease and are recognized at the present value of the future lease payments at the lease commencement date. As the interest rate implicit in most of the Company's leases is not readily determinable, the Company uses the 5-year LPR interest rate stipulated by the People's Bank of China (the "PBOC") in China to determine the present value of the future lease payments. The Company's lease terms include options to renew or terminate the lease when it is reasonably certain that it will exercise the option.

Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU asset and lease liabilities accounts on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expenses are recorded on a straight-line basis over the lease term.

Repayments of operating lease liabilities, variable lease payments, and short-term lease payments are classified as operating activities in the consolidated statements of cash flows.

***Value added tax ("VAT"), goods and services tax ("GST") and consumption tax ("CT")***

Revenue is the invoiced value of goods and services, net of VAT, GST or CT.

The VAT is based on gross sales price and VAT rates range from 6% to 13%, depending on the type of products sold or service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All VAT returns filed by the Company's subsidiaries in the PRC remain subject to examination by the tax authorities for five years from the date of filing.

The GST is based on gross sales price and GST rates of 9% or exempted if the revenue is from exported services. Our Singapore subsidiary is allowed to offset input GST paid to suppliers against their output GST liabilities. Net GST balance between input GST and output GST is recorded in taxes payable.

The CT is based on gross sales price and CT rates of 10%. Our Japanese subsidiary is allowed to offset input CT paid to suppliers against their output CT liabilities. Net CT balance between input CT and output CT is recorded in taxes payable.

***Government grant***

Government grants are recognized in other income, net or as a reduction of specific costs and expenses for which the grants are intended to compensate. Such amounts are recognized in the Consolidated Statements of Income and Comprehensive Income (Loss) upon receipt and all conditions attached to the grants are fulfilled. For the six months ended March 31, 2024 and 2024, the Company received $2,960 and $1,499 government subsidy for various research programs, included in other income, net.

***Income taxes***

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the CFS. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

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An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes was incurred for the six months ended March 31, 2025 and 2024. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,250). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. All of the tax returns of the Company's subsidiaries in the PRC remain subject to examination by the tax authorities for five years from the date of filing.

***Loss per Share***

The Company computes (loss) per share ("EPS") in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

***Foreign currency translation***

The functional currencies of the Company are the local currencies of the country in which the subsidiary operates. The Company's CFS are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect on that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component in accumulated other comprehensive income included in consolidated statements of changes in equity. In the financial statements of the Company's subsidiaries, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the consolidated income statements during the year in which they occur.

Since the Company operates primarily in the PRC mainland, Hong Kong, Singapore and Japan, the Company's functional currency is the Chinese Yuan ("RMB"), Hong Kong dollar ("HK$"), Singapore dollar ("SG$") and Japanese Yen ("JPY"). The Company's CFS were translated into the reporting currency of U.S. Dollars ("US$"). The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in the translation.

The following table outlines the currency exchange rates that were used in creating the CFS in this report:

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| | | | |
|:---|:---|:---|:---|
|  | **March 31,**<br>**2025** | **March 31,**<br>**2024** | **September 30,**<br>**2024** |
| RMB Balance sheet items, except for equity accounts | US$1=RMB 7.2567 | US$1=RMB 7.2203 | US$1=RMB 7.0176 |
| RMB Items in the statements of income and cash flows | US$1=RMB 7.2308 | US$1=RMB 7.2060 | US$1=RMB 7.2043 |
| HK$ Balance sheet items, except for equity accounts | US$1=HK$7.7799 | US$1=HK$7.8259 | US$1=HK$7.7693 |
| HK$ Items in the statements of income and cash flows | US$1=HK$7.7771 | US$1=HK$7.8170 | US$1=HK$7.8127 |
| SG$ Balance sheet items, except for equity accounts | US$1=SG$1.3445 | N/A | US$1=SG$1.2831 |
| SG$ Items in the statements of income and cash flows | US$1=SG$1.3399 | N/A | US$1=SG$1.3406 |
| JPY Balance sheet items, except for equity accounts | US$1=JPY149.90 | N/A | N/A |
| JPY Items in the statements of income and cash flows | US$1= JPY149.06 | N/A | N/A |

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***Comprehensive loss***

Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded from net income. Other comprehensive income (loss) consists of foreign currency translation adjustment resulting from the Company not using US$ as its functional currency.

***Segment reporting***

In accordance with ASC Topic 280, Segment Reporting, the Company's chief operating decision maker ("CODM") was identified as the Chief Executive Officer. The Company's CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment.

***Concentrations of risks***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Concentration of credit risk

Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of March 31, 2025 and September 30, 2024 (audited), cash of $187,061 and $410,716 respectively, was held at major financial institutions in mainland PRC, where there RMB 500,000 (approximately $70,000) deposit insurance limit for a legal entity's aggregated balance at each bank. To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the PRC. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for allowance for doubtful accounts based on the individual customer's and supplier's financial condition, credit history, and the current economic conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Significant customers

Customers that make up 10% or more of revenue for the six months ended March 31, 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Customer A | 32.9% | 43.4% |
| Customer B |  | 10.4% |
| Customer C | 13.6% |  |
| Customer D | 10.2% |  |

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Customers that make up 10% or more of accounts receivable as of March 31, 2025 and September 30, 2024 are as follows

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  |  | **audited** |
| Customer A | 47.8% | 36.9% |
| Customer B | 16.9% | 15.2% |
| Customer C |  | 12.3% |
| Customer D | 11.3% |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Significant suppliers

Suppliers that make up 10% or more of purchase for the six months ended March 31, 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Supplier A | \* | 41.5% |
| Supplier B | 22.0% | 13.8% |
| Supplier C | 31.7% | 13.2% |
| Supplier D | \* | 11.1% |
| Supplier E | 10.5% |  |
| Supplier F | 18.3% |  |

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\* The purchases from this supplier are not over 10% of total purchases of the Company.

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Suppliers that make up 10% or more of accounts payable as of March 31, 2025 and September 30, 2024 are as follows

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  |  | **audited** |
| Supplier A | 54% | 33.4% |
| Supplier B | \* | 11.2% |
| Supplier C | 13% | \* |

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\* The accounts payable of this supplier are not over 10% of total accounts payable of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Foreign currency risk

A majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

The Company's functional currency is the RMB, and the Company's financial statements are presented in U.S. dollars. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect the Company's financial results reported in the U.S. dollar terms without giving effect to any underlying changes in the Company's business or results of operations. Currently, the Company's assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.

***Recent accounting pronouncements***

The Company is an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company's operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

In October 2023, the FASB issued ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative". This standard was issued in response to the SEC's disclosure update and simplification initiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities within the scope of the affected topics unless otherwise indicated. This ASU will become effective for each amendment on the date on which the SEC removes the related disclosure from its regulations. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company is currently evaluating the impact of adopting this ASU on its CFS.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures." This ASU expands required public entities' segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment's profit or loss and assets. ASU 2023-07 is applied retroactively to all periods presented in financial statements, unless it is impracticable. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company plans to adopt this guidance effective October 1, 2025 and the Company is currently evaluating the impact of adopting this ASU on its CFS.

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In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company plans to adopt this guidance effective October 1, 2025 and the Company is currently evaluating the impact of adopting this ASU on its CFS.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the CFS upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its CFS.

**NOTE 3 — ACCOUNTS RECEIVABLE, NET**

Accounts receivable as of March 31, 2025 and September 30, 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **September 30,**<br>**2024** |
|  |  | **audited** |
| Accounts receivable | $5686131 | $6078115 |
| Less: allowance for credit losses | (1031775) | (780109) |
| Account receivable, net | $4654356 | $5298006 |

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Allowance for credit losses movement for the six months ended March 31, 2025 and 2024 is as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Beginning balance | $780109 | $634166 |
| Adoption ASU 2016-13 |  | 64930 |
| Reversal |  | (16087) |
| Additions | 273849 |  |
| Foreign currency translation adjustments | (22183) | 7362 |
| Ending balance | $1031775 | $690371 |

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**NOTE 4 — ADVANCES TO VENDORS**

Advance to vendors consisted of prepayments for technical service and IT equipment.

**NOTE 5 — LONG-TERM PREPAID EXPENSES, NET**

Long-term prepaid expenses, net, consisted of the following:

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| | |
|:---|:---|
|  | **March 31, 2025** |
| Marketing expenses \* | $500000 |
| Subtotal | 500000 |
| Less: accumulated amortization | (62500) |
| Long-term prepaid expenses, net | $437500 |

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\*As the marketing work will be conducted by a service provider until December 31, 2026, by which date the Company can benefit from the service, the Company recognizes it as a long-term prepaid expense.

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**NOTE 6 — PROPERTY AND EQUIPMENT, NET**

Property and equipment, net, consist of the following:

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| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **September 30,**<br>**2024** |
|  |  | **audited** |
| Electronic equipment | $581216 | $598738 |
| Office furniture | 4272 | 4417 |
| Transportation equipment |  | 37784 |
| Subtotal | 585488 | 640939 |
| Less: accumulated depreciation | (552724) | (601232) |
| Property and equipment, net | $32764 | $39707 |

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Depreciation for the six months ended March 31, 2025 and 2024 was $4,292 and $6,485, respectively.

**NOTE 7 — INTANGIBLE ASSETS, NET**

Intangible assets, net, consisted of the following:

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| | |
|:---|:---|
|  | **March 31, 2025** |
| Customer list  | $330514 |
| Less: accumulated amortization  | (3443) |
| Intangible assets, net  | $327071 |

---

The Company acquired a customer list from Netclass Japan and expects to benefit from it for around 8 years. Therefore, for prudent purpose, the Company recorded it as an intangible asset and amortized it over 8 years, on a straight-line basis, from acquisition date. Amortization for the six months ended March 31, 2025 was $3,462.

**NOTE 8 — RELATED PARTIES BALANCES AND TRANSACTIONS**

The Company records transactions with various related parties. These related party balances as of March 31, 2025 and September 30, 2024 (audited) and transactions for the six months ended March 31, 2025 and 2024 are identified as follows:

&nbsp;&nbsp;&nbsp;&nbsp;**(1)** **Related parties with transactions and related party relationships** 

---

| | |
|:---|:---|
| **Name of Related Party** | **Relationship to the Company** |
| Jianbiao Dai | Chief Executive Officer ("CEO"); Chairman of the Company |
| Shanghai Youfu Network Co., Ltd. | Shareholder of the Company |
| Lang Wide Investment Inc. | A shareholder of the Company |
| Shanghai Longruan Electronics Group Co., Ltd | Jianbiao Dai serves as legal representative and holds 80% of the shares |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(2)** **Related Party Transactions** 

**Borrowing from a related party**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended** | **For the six months ended** |
|  | **March 31,**<br>**2025** | **March 31,**<br>**2024** |
| Jianbiao Dai | $2314 | $1502 |

---

[**Table of Contents**](#TOC)

&nbsp;&nbsp;&nbsp;&nbsp;**(3)** **Due to related parties** 

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **March 31,**<br>**2025** | **September 30,**<br>**2024** |
|  |  | **audited** |
| Due to related parties |  |  |
| &nbsp;&nbsp;Shanghai Longruan Electronics Group Co., Ltd | $68902 | $71249 |
| &nbsp;&nbsp;Jianbiao Dai | 8091 | 18564 |
| &nbsp;&nbsp;Shanghai Youfu Network Co., Ltd | 55121 | 114138 |
| &nbsp;&nbsp;Lang Wide Investment Inc. | 25000 | 25000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $157114 | $228951 |

---

**NOTE 9 — TAXES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT")** 

Cayman Islands

The Company is incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of the Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.

Singapore

Under Singapore tax laws, the corporate income tax rate varies from year to year. For the six months ended March 31, 2025, the corporate income tax rate was 17%. Platinum Singapore applied the tax rate of 17% for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Singapore profits tax regulation.

Japan

Under Japanese tax laws, the corporate income tax rate varies depending on the size of the tax payer. For the six months ended March 31, 2025, the applicable corporate income tax rate was 15%. Platinum Japan applied the tax rate of 15% for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Japanese profits tax regulation.

Hong Kong

Under Hong Kong tax laws, with effect from April 1, 2018, a two-tiered profits tax rate regime applies. The profits tax rate for the first HKD 2 million (approximately $256,000) of corporate profits is 8.25%, while the standard profits tax rate of 16.5% remains for profits exceeding HKD 2 million. For the six months ended March 31, 2025 and 2024, NetClass HK applied the two-tier profits tax rate for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Hong Kong profits tax regulation.

PRC

Under the Enterprise Income Tax ("EIT") Law of PRC, domestic enterprises and Foreign Investment Enterprises (the "FIE") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis.

According to announcement of the Ministry of Finance and the State Taxation Administration [2022] No.13, which became effective on January 1, 2022 and to December 31, 2024, small, low profit enterprises with annual taxable income exceeding RMB 1 million ($141,778) but no more than RMB 3 million ($425,333) are subject to the preferential income tax rate of 5% (only 25% of such taxable income shall be subject to enterprises income tax at a tax rate of 20%).

According to announcement of the Ministry of Finance and the State Taxation Administration [2023] No.12, which became effective on August 2, 2023 to December 31, 2027, small, low profit enterprises are subject to the preferential income tax rate of 5% (only 25% of such taxable income shall be subject to enterprises income tax at a tax rate of 20%).

[**Table of Contents**](#TOC)

For the six months ended March 31, 2025 and 2024, all PRC subsidiaries are small and micro-profit companies as defined, and thus are eligible for the above preferential tax rate for small and micro enterprises for the taxable profit less than RMB3 million.

The PRC tax authorities grant preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Since NetClass China was approved as an HNTE beginning December 2019 and renewed in December 2022, NetClass China is entitled to a reduced income tax rate of 15% from 2019 to 2024. However, as the preferential tax rate for small and micro enterprises and the preferential tax rate for high-tech enterprises cannot be enjoyed simultaneously, NetClass China that meet both requirements chooses to enjoy the tax preferential treatment for small and micro enterprises for the six months ended March 31, 2025 and 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***i)***  ***The components of the income tax provision (benefit) for the six months ended March 31, 2025 and 2024 are as follows:*** 

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Current tax expense (benefit) |  |  |
| &nbsp;&nbsp;PRC | $— | $— |
| &nbsp;&nbsp;Hong Kong |  |  |
| &nbsp;&nbsp;Singapore | (25546) |  |
| &nbsp;&nbsp;Japan | 1 |  |
| &nbsp;&nbsp;Total  | (25545) | $— |
| Deferred tax (benefit) |  |  |
| &nbsp;&nbsp;PRC | 340 | (29895) |
| &nbsp;&nbsp;Hong Kong | (65648) | (149518) |
| &nbsp;&nbsp;Singapore | (350) |  |
| &nbsp;&nbsp;Japan | (7454) |  |
| &nbsp;&nbsp;Total  | (73112) | (179413) |
| Total income tax benefit | $(98657) | $(179413) |

---

Loss before provision for income taxes is attributable to the following geographic locations for the six months ended March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| PRC | $(971211) | $(432079) |
| Hong Kong and other jurisdictions | (4083089) | (1812345) |
| Loss before income taxes | $(5054300) | $(2244424) |

---

***ii)*** ***The following table reconciles PRC statutory rates to the Company's effective tax rate for the six months ended March 31, 2025 and 2024:***

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Income tax (benenfit) at PRC statutory income tax rate | $(1248207) | $(561106) |
| Impact of different tax rates in other jurisdictions | 840758 | 154049 |
| Effect of preferential tax rate | 259890 | 235934 |
| Super deduction of qualified R&D expenditures \* | (8597) | (8581) |
| Effect of change in valuation allowance | 50437 | 196 |
| Non-deductible items and other \*\* | 7062 | 95 |
| Income tax benefit | $(98657) | $(179413) |

---

\* According to laws and regulations of the State Administration of Tax of the PRC effective October 1, 2022, enterprises engaging in R&D activities may claim an additional tax deduction of 100% of the qualified R&D expenses incurred in determining its tax assessable profits for that year.

\*\* Non-deductible items and other represent excess expenses and losses not deductible for PRC tax purposes.

[**Table of Contents**](#TOC)

***iii)*** ***The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting and tax basis of assets and liabilities:***

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **September 30,**<br>**2024** |
|  |  | **audited** |
| **Deferred tax assets:** |  |  |
| Allowance for credit losses | $56801 | $40273 |
| Net operating losses | 460122 | 392874 |
| Operating lease liabilities | 624 | 2254 |
| **Total deferred tax assets** | **517547** | **435401** |
| &nbsp;&nbsp;Less: Valuation allowance | (258673) | (215526) |
| **Total deferred tax assets, net of valuation allowance** | **258874** | **219875** |
| **Deferred tax liabilities:** |  |  |
| Effect of temporary difference \* | (94981) | (129176) |
| Fair value increment on appraisal | (49061) |  |
| Operating lease right of use assets | (624) | (2254) |
| **Total deferred tax liabilities** | **(144666)** | **(131430)** |
| **Total deferred tax assets, net** | $**114208** | $**88445** |

---

\* Mainly due to effect of temporary difference

Valuation allowance movement for the six months ended March 31, 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Beginning balance | $215526 | $21910 |
| Additions | 56808 | 196 |
| Reversals | (6379) |  |
| Foreign currency translation adjustments | (7282) | 229 |
| **Ending balance** | $**258673** | $**22336** |

---

According to PRC tax regulations, PRC net operating loss can generally carry forward for five years from the year subsequent to the year in which the loss was incurred, and that of high-tech enterprises is no more than 10 years. Carryback of losses is not permitted. As of March 31, 2025 and September 30, 2024 (audited), the Company had net operating losses of $6,242,926 and $6,050,433, respectively, which are available to offset future taxable income. If not used, these carryforwards will expire from 2025 through 2030.

The realization of deferred tax assets is dependent upon the generation of taxable income during the periods in which those temporary differences become deductible. Recovery of substantially all of the Company's deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. The valuation allowance is considered on an individual entity basis. As of March 31, 2025 and September 30, 2024, valuation allowances on deferred tax assets are provided because the Company believes that it is more-likely-than-not that certain of the subsidiaries in the PRC will not be able to generate sufficient taxable income in the near future, to realize the deferred tax assets carried-forwards. For the remaining entities, based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of March 31, 2025 and September 30, 2024 (audited).

[**Table of Contents**](#TOC)

**(b)** **Taxes payable**

Taxes payable consist of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **September 30,** <br>**2024** |
|  |  | **audited** |
| PRC | $90316 | $93393 |
| Hong Kong | 199920 | 200193 |
| Singapore | 19997 | 47631 |
| Total taxes payable | $310233 | $341217 |

---

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2025 and September 30, 2024, the Group did not have any unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next 12 months. For the six months ended March 31, 2025 and 2024, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. As of March 31, 2025, the tax years ended December 31, 2019 through 2024 for the Group's subsidiaries in the PRC are generally subject to examination by the PRC tax authorities.

**NOTE 10 — ACQUISITION OF NETCLASS JAPAN**

On February 28, 2025, NetClass Technology Inc. (the "Company") acquired 51% of CreateSolutions Co., Ltd. ("Netclass Japan"), a company incorporated in Japan and principally engaged in software development. Pursuant to the acquisition agreement, the Company invested JPY 2,550,000 ($17,158) into Netclass Japan for 255 newly issued shares of Netclass Japan, which is 51% of total outstanding shares of Netclass Japan. As a result of the transaction, the Company obtained control over Netclass Japan and accounted for the acquisition as a business combination under ASC 805, Business Combinations.

Following table illustrates the FV of the assets and liabilities of Netclass Japan as of the acquisition date and the gain on acquisition:

---

| | |
|:---|:---|
|  | **As of**<br>**February 28,**<br>**2025**<br>**Unaudited** |
| Fair value of identical assets and liabilities as of acquisition date | $— |
| &nbsp;&nbsp;Cash | 34486 |
| &nbsp;&nbsp;Receivables | 91722 |
| &nbsp;&nbsp;Customer list  | 328890 |
| &nbsp;&nbsp;Payables | (103913) |
| &nbsp;&nbsp;Deferred tax liability | (46626) |
| &nbsp;&nbsp;Net assets at acquisition | 304559 |
| Add: |  |
| &nbsp;&nbsp;Foreign currency exchange loss | 230 |
| Less: |  |
| &nbsp;&nbsp;Non-controlling interest | (147907) |
| &nbsp;&nbsp;Total consideration paid for acquisition | (17158) |
| &nbsp;&nbsp;Gain on acquisition | $(139724) |

---

[**Table of Contents**](#TOC)

**NOTE 11 — LEASES**

The Company primarily has operating leases for administrative offices, from third-parties. A summary of supplemental balance sheet information related to operating leases as of March 31, 2025 and September 30, 2024 (audited) was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  |  | **audited** |
| Operating lease right-of-use assets | $1153272 | $13122 |
| Operating lease liabilities, current | 1272 | 13122 |
| Operating lease liabilities, non-current |  |  |
| Total operating lease liabilities | $1272 | $13122 |
| Weighted average remaining lease term | 5<br> months | 4.7<br> months |
| Weighted average discount rate | 4.3% | 4.3% |

---

A summary of lease expenses recognized in the consolidated statements of operations for the six months ended March 31, 2025 and 2024 supplemental cash flow information related to operating leases were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Operating lease expenses – third party | $139660 | $22276 |
| Short-term lease | $24583 | $— |
| Cash paid for operating leases | $1291660 | $21840 |
| ROU assets recognized during the period | $1280000 | $— |

---

Minimum future lease payments under non-cancellable operating leases described above as of March 31, 2025 were as follows:

---

| | |
|:---|:---|
|  | **2025** |
| Twelve months ending March 31, 2026 | $1287 |
| Less: present value discount | (15) |
| Total operating lease liabilities | $1272 |

---

**NOTE 12 — SHAREHOLDERS' EQUITY**

**Ordinary shares**

The Company was established by founding shareholders under the laws of the Cayman Islands on with ordinary shares authorized 50,000, $1.0 par value, 10,000 ordinary shares issued and outstanding.

On July 26, 2022, the Board of Directors and shareholders of the Company unanimously approved the amended and restated memorandum of association, after which, the Company's authorized share capital is $50,000 divided into 200,000,000 shares comprising (i) 190,000,000 Class A ordinary shares of par value $0.00025 each and (ii) 10,000,000 Class B ordinary shares of par value $0.00025 each. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company and each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company. Also, each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof but Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Save and except for voting rights and conversion rights, the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions. As of March 31, 2025, 15,830,000 Class A ordinary shares and 2,000,000 Class B ordinary shares are issued and outstanding.

On September 20, 2023, the Company issued 760,000 shares at $2.5 per share to Dragonsoft Holding Limited, a company wholly owned by Mr. Jianbiao Dai.

[**Table of Contents**](#TOC)

On December 16, 2024, the Company completed its IPO and issued 1,800,000 Class A ordinary shares to public shareholders at $5 per share.

On January 3, 2025, the Company issued 270,000 Class A ordinary shares at $5 per share to the underwriter for its overallotment right.

**Statutory reserve and restricted net assets**

As stipulated by relevant PRC laws and regulations, the Company's subsidiaries and affiliated entities in the mainland PRC (exclusive of Hong Kong) must take appropriations from tax profit to non-distributive funds. These reserves include general reserve and the development reserve.

The statutory reserve requires annual appropriation 10% of after-tax profits at each year-end until the balance reaches 50% of a mainland PRC company's registered capital. Other reserve is set aside at the Company's discretion. These reserves can only be used for general enterprise expansion and are not distributable as cash dividends.

Because some of the Company's operating subsidiaries in the mainland PRC can only be paid out of distributable profits reported in accordance with mainland PRC accounting standards, the Company's operating subsidiaries in the mainland PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Company's entities in the mainland PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Company's operating subsidiaries in the mainland PRC not available for distribution, was $2,957,630 and $2,957,630 as of March 31, 2025 and September 30, 2024 (audited), respectively.

**NOTE 13 — COMMITMENTS AND CONTINGENCIES**

**Contingencies**

From time to time, the Company is subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of March 31, 2025, the Company has no significant outstanding litigation.

**NOTE 14 — SUBSEQUENT EVENTS**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Based on the review, the Company did not identify any material subsequent event except disclosed below that is required disclosure in the CFS.

On July 18, 2025, the Company established a 100% owned subsidiary in Singapore under name of "Netclass International Pte. Ltd." The subsidiary is engaged in AI application service, AI computing power sales and block chain application service.

On August 1, 2025, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with an accredited investor relating to the issuance and sale of (a) a convertible promissory note ("the Note") in the principal amount of $2,200,000, at a purchase price of $2,000,000, convertible into Class A ordinary shares, par value $0.00025 per share of the Company; and (b) 1,069,500 Class A Ordinary Shares (the "Pre-Delivery Shares"), at a purchase price of $0.00025 per share (together, the "Offering"). The Note has a conversion price equal to 88% of the lowest daily VWAP (the dollar volume-weighted average price for ordinary shares on the Nasdaq Capital Market) during the ten (10) consecutive trading days immediately preceding the conversion date or other date of determination, but not lower than US$0.7106 per Class A Ordinary Share (the "Floor Price"). On August 4, 2025, the offering was closed.

On August 31, 2025, the Company entered into a securities purchase agreement with an investor relating to the issuance and sale of 1,500,000 Class A ordinary shares, par value $0.00025 per share, of the Company, at $1.60 per share for a total purchase price of $2,400,000. The closing of the transaction contemplated by the Securities Purchase Agreement is expected to take place within sixty (60) days of the date of the Securities Purchase Agreement, subject to the satisfaction or waiver of the closing condition set forth therein.

## Exhibit 99.2

**Exhibit 99.2**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Overview**

We are a holding company incorporated as an exempted company on January 4, 2022 under the laws of the Cayman Islands. As a holding company with no material operations of our own, we conduct substantially all of our operations through our subsidiaries in Hong Kong and mainland China.

We are a provider of subscription service and application development service. Most of our customers are located in mainland China, Hong Kong and Singapore. We currently generate revenues from subscription service from customers accessing our Software-as-a-Service ("SaaS"), which are approximately 31.8% and 35.3% of our total revenue for the six months ended March 31, 2025 and 2024 respectively, and 35.3% and 25.0% of our total revenue for the years ended September 30, 2024 and 2023 respectively. We also generate revenue from application development services, which are 68.2% and 64.7% of our total revenue for the six months ended March 31, 2025 and 2024, respectively, and 64.7% and 75.0% of our total revenue for the years ended September 30, 2024 and 2023, respectively. For the six months ended March 31, 2025 and 2024, our total revenues were $3.7 million and $3.8 million, respectively. For the years ended September 30, 2024 and 2023, our total revenues were $10.1 million and $11.1 million, respectively.

**Key Factors that Affect Operating Results**

We currently derive a majority of revenues from our application development and subscription services. We intend to continually enhance our services and cross-sell new services to our existing customers and acquire new customers by increasing our market penetration with a deeper market coverage and a broader geographical reach. Our ability to maintain and expand our customer base with our application development services and subscription services significantly affects our operating results.

We intend to expand the scope of our offerings to service existing customers and acquire new customers by continuous investment in sales marketing activities as well as remaining our efforts in R&D to increase our subscription revenue and profit. Our ability to drive increased customer adoption and usage of our SaaS services affects our operating results. Our R&D spending could vary depending on the availability of our R&D human capital, the priority setting and the timeframes required for the R&D projects. Our ability to attract, train and retain a cost-effective pool of qualified R&D professionals, including our ability to leverage and expand our proprietary database of qualified R&D professionals and their job satisfaction, affects our financial performance.

**Financial Information Related to the mainland China and outside mainland China market**

During the year ended September 30, 2023, the Company started providing application development outside of mainland China, mainly in Hong Kong and Singapore. For the year ended September 30, 2024 and September 30, 2023, revenue from mainland China was approximately $4.3 million, and $5.5 million, accounted approximately 42.1% and 49.4% of total revenue of the Company for the year; revenue from outside of mainland China was approximately $5.8 million and $5.6 million, accounted for approximately 57.9% and 50.6% of total revenue of the Company for the year. As of September 30, 2024 and 2023, the total assets related the Company's outside of mainland China business was approximately $4.5 million and $3.6 million, were mainly comprised of cash, account receivables, advance to suppliers, which directly related to its operation outside of mainland China. The following tables present selected condensed consolidated statements of income and comprehensive income for the year ended September 30, 2024 and September 30, 2023, and the selected condensed consolidated balance sheets as of September 30, 2024 and September 30, 2023, which showing financial information for mainland China and outside mainland China market and consolidated information.

As of and for the fiscal year ended September 30, 2024:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Year Ended September 30, 2024** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Revenue | $4257832 | $5843815 | $10101647 |
| Net (Loss) / Income | $(1061545) | $(328179) | $(1389724) |

---

------

---

| | | | |
|:---|:---|:---|:---|
| <br>**As of September 30, 2024** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Cash | $44518 | $366198 | $410716 |
| Accounts receivable, net | $1605425 | $3692581 | $5298006 |
| Advance to vendors | $641563 | $482467 | $1124030 |
| Current assets | $2641689 | $4445761 | $7087450 |
| Total assets | $2700778 | $4527946 | $7228724 |
| Total liabilities | $2174214 | $1992255 | $4166469 |
| Net assets | $526564 | $2535691 | $3062255 |

---

As of and for the fiscal year ended September 30, 2023:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Year Ended September 30, 2023** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Revenue | $5482777 | $5606751 | $11089528 |
| Net (Loss) / Income | $(748221) | $910450 | $162229 |

---

---

| | | | |
|:---|:---|:---|:---|
| <br>**As of September 30, 2023** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Cash | $122188 | $402413 | $524601 |
| Accounts receivable, net | $2051881 | $235251 | $2287132 |
| Advance to vendors | $382982 | $674700 | $1057682 |
| Receivable from sale of shares | $— | $1900000 | $1900000 |
| Current assets | $2986842 | $3327718 | $6314560 |
| Total assets | $3207816 | $3333347 | $6541163 |
| Total liabilities | $1885943 | $211401 | $2097344 |
| Net assets | $1321873 | $3121946 | $4443819 |

---

As of and for the fiscal year ended September 30, 2022, the Company only performed business in mainland China.

---

| | | | |
|:---|:---|:---|:---|
| <br>**Year Ended September 30, 2022** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Revenue | $9257607 | $— | $9257607 |
| Net (Loss) / Income | $132687 | $— | $132687 |

---

---

| | | | |
|:---|:---|:---|:---|
| <br>**As of September 30, 2022** | <br>**Mainland**<br>**China** | **Outside of**<br>**mainland**<br>**China** | <br>**Total** |
| Cash | $208206 | $— | $208206 |
| Accounts receivable, net | $3366941 | $— | $3366941 |
| Advance to vendors | $94573 | $— | $94573 |
| Receivable from sale of shares | $— | $— | $— |
| Current assets | $4023516 | $— | $4023516 |
| Total assets | $4353771 | $— | $4353771 |
| Total liabilities | $1942742 | $— | $1942742 |
| Net assets | $2411029 | $— | $2411029 |

---

------

**Results of Operations**

***For the six months ended March 31, 2025 and 2024***

The following table summarizes the results of our operations for the six months ended March 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | | **%** |
|  | **2025** | **2024** | <br>**Change** | **Change** |
| REVENUES: |  |  |  |  |
| Application development services | $2491822 | $2435967 | $55855 | 2.3% |
| Subscription services | 1162588 | 1330225 | (167637) | (12.6)% |
| Total revenues | 3654410 | 3766192 | (111782) | (3.0)% |
| COST OF REVENUES: |  |  |  |  |
| Application development services | 2028759 | 2083493 | (54734) | (2.6)% |
| Subscription services | 1320261 | 1099250 | 221011 | 20.1% |
| Total cost of revenues | 3349020 | 3182743 | 166277 | 5.2% |
| GROSS PROFIT | 305390 | 583449 | (278059) | (47.7)% |
| OPERATING EXPENSES: |  |  |  |  |
| Selling | 468864 | 207160 | 261704 | 126.3% |
| General and administrative | 3975268 | 397873 | 3577395 | 899.1% |
| Research and development | 1039528 | 2213377 | (1173849) | (53.0)% |
| Total operating expenses | 5483660 | 2818410 | 2665250 | 94.6% |
| Income (loss) from operations | (5178270) | (2234961) | (2943309) | 131.7% |
| OTHER INCOME (EXPENSES) |  |  |  |  |
| Interest expenses, net | (2939) | 210 | (3149) | (1499.5)% |
| Gain on acquisition a subsidiary | 139724 |  | 139724 | N/A |
| Other income, net | (12815) | (9673) | (3142) | 32.5% |
| Total other income, net | 123970 | (9463) | 133433 | (1410.0)% |
| INCOME (LOSS) BEFORE INCOME TAXES | (5054300) | (2244424) | (2809876) | 125.2% |
| Income tax provision | (98657) | (179413) | 80756 | (45.0)% |
| NET INCOME (LOSS) | (4955643) | (2065011) | (2890632) | 140.0% |
| Other comprehensive income (loss) | (15969) | 36523 | (52492) | (143.7)% |
| COMPREHENSIVE INCOME (LOSS) | $(4971612) | $(2028488) | $(2943124) | 145.1% |
| Less: Comprehensive income (loss) attributable to non-controlling interests | 71274 |  | 71274 | N/A |
| Comprehensive income (loss) attributable to shareholders | $(4900338) | $(2028488) | $(2871850) | 141.6% |

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*Revenues*

We derive revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services.

The Company focuses on developing applications and solutions equipped with the Company's new technology in SaaS platform. For the six months ended March 31, 2025, our total revenue was approximately $3.7 million compared to approximately $3.8 million for the six months ended March 31, 2024. The Company's total revenue decreased by approximately $0.1 million, or 0.3%. The overall decrease in total revenue was attributable to approximately $0.2 million decrease in revenue from subscription services offset by $0.1 million increase in revenue from application development services.

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*Revenue from application development services*

The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. Most of the application development contracts are completed within three months. Revenue from application development service is recognized at a point of time by customer acceptance.

For the six months ended March 31, 2025, our application development service revenue was approximately $2.5 million compared to approximately $2.4 million for the six months ended March 31, 2024, which was an increase of approximately $0.1 million or 2.3%. The increase in application development service revenue was mainly attributed to the increase of revenue in Singapore, which was established in May 2024.

Certain application development service contracts contain a significant financing component, which is a financial obligation to the customers. In these cases, after deducting the standalone selling price of the financial service, which is calculated using the Chinese Central Bank's suggested bank loan interest rate for the duration similar to the credit period granted to the customers, the remaining amount of the contract consideration is allocated to the equipment and the application development services based on their relative standalone prices. The financial income revenue is recognized over the credit period granted to the customers. There are no significant returns, refund and other similar obligations during each reporting period.

The financial income during the six months ended March 31, 2025 and 2024 was $nil and $6,678, respectively, included in revenue from application development services.

*Revenue from subscription services*

Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications. The Company's monthly or quarterly billing to customer is based on the number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.

Our subscription service revenue decreased approximately $0.2 million, or 12.6%, from approximately $1.3 million for the six months ended March 31, 2024 to approximately $1.1 million for the six months ended March 31, 2025. In prior years, customers benefited from certain government grants during the COVID outbreak for remote trainings. Since the related government incentive policy stopped after COVID in fiscal 2023, some of these customers switched to training packages with lower fees after the expiration of the original service contracts or stopped services. This was not anticipated in our original plan for developing SaaS subscription services. To mitigate the impact from reduced subscription service customer base, the Company made a lot of new efforts to expand its oversea business for application development services in the second half of fiscal 2023. The trend of decreasing demand of SaaS services extended into fiscal 2025, which resulted in the decrease in revenue of SaaS services.

*Cost of Revenues*

Our cost of revenues mainly consists of compensation for our professionals, material and outsourcing costs. For the six months ended March 31, 2025, our total cost was approximately $3.3 million compared to approximately $3.2 million for the six months ended March 31, 2024. The Company's total cost increased by approximately $0.1 million, or 5.2%. The overall decrease in total cost of revenues was mainly attributable to approximately $0.2 million increase in cost of providing subscription services.

Our cost of application development services was approximately $2.0 million for the both six months ended March 31, 2025 and 2024, a decrease of approximately $0.05 million or 2.6%. The slight decrease in cost of application development service, while increase in revenue of application development service was mainly due to the reason the Company can gradually increase its selling price when the Company's services can be accepted by customers in Hong Kong after one year low margin policy adopted in Hong Kong market.

Our cost of subscription services was approximately $1.3 million for the six months ended March 31, 2025, an increase of approximately $0.2 million or 20.1%, from approximately $1.1 million for the six months ended March 31, 2024. The increase in cost of subscription service was mainly due to increased outsourcing costs and professionals.

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*Gross profit*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** | | |
| <br>**GROSS PROFIT** | **Gross**<br>**Profit** | **Profit**<br>**Margin** | **Gross**<br>**Profit** | **Profit**<br>**Margin** | <br>**Change** | <br>**% of**<br>**Change** |
| Application development services | $463063 | 18.6% | $352474 | 14.5% | $110589 | 31.4% |
| Subscription service | (157673) | (13.6)% | 230975 | 17.4% | (388648) | (168.3)% |
| Total gross profit | $305390 | 8.4% | $583449 | 15.5% | $(278059) | (47.7)% |

---

Our gross profit decreased by approximately $0.3 million or 47.7% from approximately $0.6 million for the six months ended March 31, 2024 to approximately $0.3 million for the six months ended March 31, 2025. Profit margin as a percent of overall revenue for the six months ended March 31, 2025 and 2024 was approximately 8.4% and 15.5%, respectively.

Gross profit for application development services increased by approximately $0.1 million or 31.4% from approximately $0.4 million for the six months ended March 31, 2024 to approximately $0.5 million for the six months ended March 31, 2025. Profit margin for the six months ended March 31, 2025 and 2024 was approximately 18.6% and 14.5%, respectively. The increase in profit margin was due to the reason the Company gradually raised its selling price during the six months ended March 31, 2025, and terminated its low margin strategy started in the fiscal year ended September 30, 2023.

Gross profit for subscription services decreased by approximately $0.4 million or 168.3% from approximately $0.2 million for the six months ended March 31, 2024 to approximately $(0.2) million for the six months ended March 31, 2025. Profit margin was approximately (13.6)% and 17.4% for the six months ended March 31, 2025 and 2024, respectively. The decrease of profit margin was due to we need to keep competitive price for customers despite cost increases.

*Operating Expenses*

The following table summarizes the operating expenses for the six months ended March 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **Change** | **% Change** |
| OPERATING EXPENSES: |  |  |  |  |
| Selling | $468864 | $207160 | $261704 | 126.3% |
| General and administrative | 3975268 | 397873 | 3577395 | 899.1% |
| Research and development | 1039528 | 2213377 | (1173849) | (53.0)% |
| Total operating expenses | $5483660 | $2818410 | $2665250 | 94.6% |

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Our operating expenses consist of selling, general and administrative ("G&A") and R&D expenses. Operating expenses increased by approximately $2.7 million, or 94.6%, from approximately $2.8 million for the six months ended March 31, 2024 to approximately $5.5 million for the six months ended March 31, 2025. The increase in our operating expenses was primarily due to approximately $3.6 million increase in G&A expenses and $0.3 million in selling expenses, offset by decrease in R&D expenses of $1.2 million.

Selling expenses primarily consisted of salary and compensation expenses for our sales personnel, advertising expenses, promotional service fee, travel and other expenses relating to our sales activities. Selling expenses increased by approximately $0.3 million or 126.3% from approximately $0.2 million for the six months ended March 31, 2024 to approximately $0.5 million for the six months ended March 31, 2025. The increase in selling expenses is mainly due to increase of marketing expenses to enhance promotion of the Company's brands after the Company's initial public offering ("IPO").

G&A expenses primarily consisted of salary and compensation expenses for our accounting, human resources and executive office personnel, and included rental, depreciation and amortization, impairment charges, office overhead, professional service fees and travel and transportation costs. G&A expenses increased by approximately $3.6 million or 899.1% from approximately $0.4 million for the six months ended March 31, 2024 to approximately $4.0 million for the six months ended March 31, 2025, due to the reason the Company incurred certain costs in strategy consulting and business consulting after the Company's IPO.

R&D expenses primarily consisted of compensation and benefit expenses for our R&D personnel as well as office overhead and other expenses for our R&D activities. R&D expenses decreased by approximately $1.2 million or 53.0% from approximately $2.2 million for the six months ended March 31, 2024 to approximately $1.0 million for the six months ended March 31, 2025. The decrease was mainly due to the reason that the Company incurred a one-off R&D expense of $2.0 million for AI training during the six months ended March 31, 2024, while incurred less R&D expense during the six months ended March 31, 2025.

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*Other Income (Expense)*

Other income (expense) primarily consists of interest income (expense), net, and other income, net. Our net other income was $123,970 for the six months ended March 31, 2025, and increased by $133,433 from net other expense of $9,463 for the six months ended March 31, 2024. The increase was mainly due to $139,724 gain on acquisition of a subsidiary resulted from acquisition consideration is less than the fair value of the acquired subsidiary deducted by the fair value of the non-controlling interest.

*Income tax benefit*

Income tax benefit was $98,657 and $179,413 for the six months ended March 31, 2025 and 2024, respectively. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary Shanghai NetClass Information Technology Co., Ltd. enjoys a preferential tax rate of 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. The income tax rate for our Hong Kong Subsidiaries for the first HKD2 million of corporate taxable income is 8.25%, while the standard profits tax rate of 16.5% remains for taxable income exceeding HKD2 million.

*Net Income (loss)*

As a result of the foregoing, our net loss increased by approximately $2.9 million, or 140.0%, from approximately $2.1 million net loss for the six months ended March 31, 2024 to approximately $5.0 million net loss for the six months ended March 31, 2025. The increase of net loss is mainly attributed to approximately $2.7 million increase in operating expenses and $0.3 million decrease of gross profit, offset by $0.1 million increase in net other income.

*Other comprehensive income (loss)*

Foreign currency translation adjustments were $(15,969) and $36,523 for the six months ended March 31, 2025 and 2024, respectively. The foreign currency translation adjustments are mainly due to the currency exchange rate fluctuation of RMB to USD. The balance sheet amounts with the exception of equity as of March 31, 2025 were translated at RMB7.2567 to USD1.00 compared to RMB7.0176 to USD1.00 as of September 30, 2024. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the six months ended March 31, 2025 and 2024 were RMB7.2308 to USD1.00 and RMB7.2060 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

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***For the years ended September 30, 2024 and 2023***

The following table summarizes the results of our operations for the years ended September 30, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | | **%** |
|  | **2024** | **2023** | <br>**Change** | **Change** |
| REVENUES: |  |  |  |  |
| &nbsp;&nbsp;Application development services | $7812841 | $8313353 | $(500512) | (6.0)% |
| &nbsp;&nbsp;Subscription services | 2288806 | 2776175 | (487369) | (17.6)% |
| &nbsp;&nbsp;Total revenues | 10101647 | 11089528 | (987881) | (8.9)% |
| COST OF REVENUES: |  |  |  |  |
| &nbsp;&nbsp;Application development services | 5688947 | 6690665 | (1001718) | (15.0)% |
| &nbsp;&nbsp;Subscription services | 2097770 | 2039191 | 58579 | 2.9% |
| &nbsp;&nbsp;Total cost of revenues | 7786717 | 8729856 | (943139) | (10.8)% |
| GROSS PROFIT | 2314930 | 2359672 | (44742) | (1.9)% |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;Selling | 385513 | 606927 | (221414) | (36.5)% |
| &nbsp;&nbsp;General and administrative | 703233 | 798233 | (95000) | (11.9)% |
| &nbsp;&nbsp;Research and development | 2515015 | 567809 | 1947206 | 342.9% |
| &nbsp;&nbsp;Total operating expenses | 3603761 | 1972969 | 1630792 | 82.7% |
| **Income (loss) from operations** | (1288831) | 386703 | (1675534) | (433.3)% |
| OTHER INCOME (EXPENSES) |  |  |  |  |
| Interest expenses, net | 209 | (4558) | 4767 | (104.6)% |
| Other income, net | (14791) | 37415 | (52206) | (139.5)% |
| Total other income, net | (14582) | 32857 | (47439) | (144.4)% |
| INCOME (LOSS) BEFORE INCOME TAXES | (1303413) | 419560 | (1722973) | (410.7)% |
| Income tax provision | 86311 | 257331 | (171020) | (66.5)% |
| NET INCOME (LOSS) | (1389724) | 162229 | (1551953) | (956.6)% |
| **Other comprehensive income (loss)** | 66618 | (29439) | 96057 | (326.3)% |
| COMPREHENSIVE INCOME (LOSS) | $(1323106) | $132790 | $(1455896) | (1096.4)% |
| Less: Comprehensive income (loss) attributable to non-controlling interests | (88089) |  | (88089) |  |
| **Comprehensive income (loss) attributable to shareholders** | $(1411195) | $132790 | $(1543985) | (1162.7)% |

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*Revenues*

We derive revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services.

The Company focuses on developing applications and solutions equipped with the Company's new technology in SaaS platform. For the year ended September 30, 2024, our total revenue was approximately $10.1 million compared to approximately $11.1 million for the year ended September 30, 2023. The Company's total revenue decreased by approximately $1.0 million, or 8.9%. The overall decrease in total revenue was attributable to approximately $0.5 million decrease in revenue from application development services and approximately $0.4 million decrease in revenue from subscription services.

*Revenue from application development services*

The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. Most of the application development contracts are completed within three months. Revenue from application development service is recognized at a point of time by customer acceptance.

For the year ended September 30, 2024, our application development service revenue was approximately $7.8 million compared to approximately $8.3 million for the year ended September 30, 2023, which was a decrease of approximately $0.5 million or 6.0%. The decrease in application development service revenue was mainly attributed to the decrease of revenue in PRC, which was resulted from the declined demand after the travel restrictions during COVID-19 pandemic are lifted.

Certain application development service contracts contain a significant financing component, which is a financial obligation to the customers. In these cases, after deducting the standalone selling price of the financial service, which is calculated using the Chinese Central Bank's suggested bank loan interest rate for the duration similar to the credit period granted to the customers, the remaining amount of the contract consideration is allocated to the equipment and the application development services based on their relative

------

standalone prices. The financial income revenue is recognized over the credit period granted to the customers. There are no significant returns, refund and other similar obligations during each reporting period.

The financial income during the years ended September 30, 2024 and 2023 was $13,976 and $7,414, respectively, included in revenue from application development services.

*Revenue from subscription services*

Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications. The Company's monthly or quarterly billing to customer is based on the number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.

Our subscription service revenue decreased approximately $0.5 million, or 17.6%, from approximately $2.8 million for the year ended September 30, 2023 to approximately $2.3 million for the year ended September 30, 2024. In prior years, customers benefited from certain government grants during the COVID outbreak for remote trainings. Since the related government incentive policy stopped after COVID in fiscal 2023, some of these customers switched to training packages with lower fees after the expiration of the original service contracts or stopped services. This was not anticipated in our original plan for developing SaaS subscription services. To mitigate the impact from reduced subscription service customer base, the Company made a lot of new efforts to expand its oversea business for application development services in the second half of fiscal 2023. The trend of decreasing demand of SaaS services extended into fiscal 2024, which resulted in the decrease in revenue of SaaS services.

*Cost of Revenues*

Our cost of revenues mainly consists of compensation for our professionals, material and outsourcing costs. For the year ended September 30, 2024, our total cost was approximately $7.8 million compared to approximately $8.7 million for the year ended September 30, 2023. The Company's total cost decreased by approximately $0.9 million, or 10.8%. The overall decrease in total cost of revenues was attributable to approximately $1.0 million decrease in cost of providing application development services, offset by $0.1 million increase in cost of providing subscription services.

Our cost of application development services was approximately $5.7 million for the year ended September 30, 2024, a decrease of approximately $1.0 million or 15.0%, from approximately $6.7 million for the year ended September 30, 2023. The decrease in cost of application development service was in line with the decrease of revenue for application development services. The decrease ratio in cost of revenues was lower than the decrease ratio in revenue for this category, mainly due to the reason the Company can gradually increase its selling price when the Company's services can be accepted by customers in Hong Kong after one year low margin policy adopted in Hong Kong market.

Our cost of subscription services was approximately $2.1 million for the both years ended September 30, 2024 and 2023, an increase of 2.9%.

***Gross profit***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the years Ended** | **For the years Ended** | **For the years Ended** | **For the years Ended** | | |
| | **September 30,** | **September 30,** | **September 30,** | **September 30,** | | |
| | **2024** | **2024** | **2023** | **2023** | | |
| <br>**GROSS PROFIT** | **Gross**<br>**Profit** | **Profit**<br>**Margin** | **Gross**<br>**Profit** | **Profit**<br>**Margin** | <br>**Change** | <br>**% of**<br>**Change** |
| Application development services | $2123894 | 27.2% | $1622688 | 19.5% | $501206 | 30.9% |
| Subscription service | 191036 | 8.3% | 736984 | 26.5% | (545948) | (74.1)% |
| Total gross profit | $2314930 | 22.9% | $2359672 | 21.3% | $(44742) | (1.9)% |

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Our gross profit decreased by approximately $0.1 million or 1.9% from approximately $2.4 million for the year ended September 30, 2023 to approximately $2.3 million for the year ended September 30, 2024. Profit margin as a percent of overall revenue for the years ended September 30, 2024 and 2023 was approximately 22.9% and 21.3%, respectively.

Gross profit for application development services increased by approximately $0.5 million or 30.9% from approximately $1.6 million for the year ended September 30, 2023 to approximately $2.1 million for the year ended September 30, 2024. Profit margin for the years ended September 30, 2024 and 2023 was approximately 27.2% and 19.5%, respectively. The increase in profit margin was due to the reason the Company raised its selling price during the fiscal year ended September 30, 2024, and terminated its low margin strategy started in the fiscal year ended September 30, 2023.

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Gross profit for subscription services decreased by approximately $0.5 million or 74.1% from approximately $0.7 million for the year ended September 30, 2023 to approximately $0.2 million for the year ended September 30, 2024. Profit margin was approximately 8.3% and 26.5% for the years ended September 30, 2024 and 2023, respectively. The decrease of profit margin was due to we need to keep competitive price for customers despite cost increases.

*Operating Expenses*

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | | |
|  | **September 30,** | **September 30,** | | |
|  | **2024** | **2023** | <br>**Change** | <br>**% Change** |
| OPERATING EXPENSES: |  |  |  |  |
| Selling | $385513 | $606927 | $(221414) | (36.5)% |
| General and administrative | 703233 | 798233 | (95000) | (11.9)% |
| Research and development | 2515015 | 567809 | 1947206 | 342.9% |
| Total operating expenses | $3603761 | $1972969 | $1630792 | 82.7% |

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Our operating expenses consist of selling, general and administrative ("G&A") and R&D expenses. Operating expenses increased by approximately $1.6 million, or 82.7%, from approximately $2.0 million for the year ended September 30, 2023 to approximately $3.6 million for the year ended September 30, 2024. The increase in our operating expenses was primarily due to approximately $1.9 million increase in R&D expenses, offset by decrease in selling expenses of $0.2 million and decrease in G&A expenses of $0.1 million.

Selling expenses primarily consisted of salary and compensation expenses for our sales personnel, advertising expenses, promotional service fee, travel and other expenses relating to our sales activities. Selling expenses decreased by approximately $0.2 million or 36.5% from approximately $0.6 million for the year ended September 30, 2023 to approximately $0.4 million for the year ended September 30, 2024. The decrease in selling expenses is mainly due to decrease in advertising expenses of $0.2 million as a result of that management intentionally control the cost in the PRC.

G&A expenses primarily consisted of salary and compensation expenses for our accounting, human resources and executive office personnel, and included rental, depreciation and amortization, impairment charges, office overhead, professional service fees and travel and transportation costs. G&A expenses decreased by approximately $0.1 million or 11.9% from approximately $0.8 million for the year ended September 30, 2023 to approximately $0.7 million for the year ended September 30, 2024, due to the reason the Company cut down certain costs to fit to the decreasing revenue.

R&D expenses primarily consisted of compensation and benefit expenses for our R&D personnel as well as office overhead and other expenses for our R&D activities. R&D expenses increased by approximately $1.9 million or 342.9% from approximately $0.6 million for the year ended September 30, 2023 to approximately $2.5 million for the year ended September 30, 2024. To achieve a better competition position in the market, the Company incurred a one-off R&D expense of $2.0 million for AI training during the year ended September 30, 2024.

*Other Income (Expense)*

Other income (expense) primarily consists of interest expense, net and other income, net. Our net other expense was $14,582 for the year ended September 30, 2024, and decreased by $47,439 from net other income of $32,857 for the year ended September 30, 2023, due to less government subsidy income recorded.

*Income tax provision*

Income tax provision was $86,311 and $257,331 for the years ended September 30, 2024 and 2023, respectively. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary Shanghai NetClass Information Technology Co., Ltd. enjoys a preferential tax rate of 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. The income tax rate for our Hong Kong Subsidiaries for the first HKD2 million of corporate taxable income is 8.25%, while the standard profits tax rate of 16.5% remains for taxable income exceeding HKD2 million.

*Net Income (loss)*

As a result of the foregoing, our net income decreased by approximately $1.6 million, or (956.6)%, from approximately $0.2 million net income for the year ended September 30, 2023 to approximately $1.4 million net loss for the year ended September 30, 2024. The decrease of net income is attributed to approximately $1.7 million increase in operating expenses, offset by a decrease of approximately $0.2 million in income tax provision.

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*Other comprehensive income (loss)*

Foreign currency translation adjustments were $66,618 and $(29,439) for the years ended September 30, 2024 and 2023, respectively. The foreign currency translation adjustments are mainly due to the currency exchange rate fluctuation of RMB to USD. The balance sheet amounts with the exception of equity as of September 30, 2024 were translated at RMB7.1076 to USD1.00 compared to RMB7.2960 to USD1.00 as of September 30, 2023. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the years ended September 30, 2024 and 2023 were RMB7.2043 to USD1.00 and RMB7.0533 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

***For the years ended September 30, 2023 and 2022***

The following table summarizes the results of our operations for the years ended September 30, 2023 and 2022, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | | |
|  | **September 30,** | **September 30,** | | <br>**%** |
|  | **2023** | **2022** | <br>**Change** | **Change** |
| REVENUES: |  |  |  |  |
| &nbsp;&nbsp;Application development services | $8313353 | $3380284 | $4933069 | 145.9% |
| &nbsp;&nbsp;Subscription services | 2776175 | 5877323 | (3101148) | (52.8)% |
| &nbsp;&nbsp;Total revenues | 11089528 | 9257607 | 1831921 | 19.8% |
| COST OF REVENUES: |  |  |  |  |
| &nbsp;&nbsp;Application development services | 6690665 | 2538029 | 4152636 | 163.6% |
| &nbsp;&nbsp;Subscription services | 2039191 | 3678745 | (1639554) | (44.6)% |
| &nbsp;&nbsp;Total cost of revenues | 8729856 | 6216774 | 2513082 | 40.4% |
| GROSS PROFIT | 2359672 | 3040833 | (681161) | (22.4)% |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;Selling | 606927 | 1298462 | (691535) | (53.3)% |
| &nbsp;&nbsp;General and administrative | 798233 | 865690 | (67457) | (7.8)% |
| &nbsp;&nbsp;Research and development | 567809 | 828311 | (260502) | (31.4)% |
| &nbsp;&nbsp;Total operating expenses | 1972969 | 2992463 | (1019494) | (34.1)% |
| **Income from operations** | 386703 | 48370 | 338333 | 699.5% |
| OTHER INCOME (EXPENSES) |  |  |  |  |
| Interest expenses, net | (4558) | (8572) | 4014 | (46.8)% |
| Other income, net | 37415 | 24353 | 13062 | 53.6% |
| Total other income, net | 32857 | 15781 | 17076 | 108.2% |
| INCOME BEFORE INCOME TAXES | 419560 | 64151 | 355409 | 554.0% |
| Income tax provision (benefit) | 257331 | (68536) | 325867 | (475.5)% |
| NET INCOME | 162229 | 132687 | 29542 | 22.3% |
| **Other comprehensive loss** | (29439) | (248101) | 218662 | (88.1)% |
| COMPREHENSIVE INCOME (LOSS) | $132790 | $(115414) | $248204 | (215.1)% |

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*Revenues*

We derive revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services.

The Company focuses on developing applications and solutions equipped with the Company's new technology in SaaS platform. For the year ended September 30, 2023, our total revenue was approximately $11.1 million as compared to approximately $9.3 million for the year ended September 30, 2022. The Company's total revenue increased by approximately $1.8 million, or 19.8%. The overall increase in total revenue was attributable to approximately $4.9 million increase in revenue from application development services, by netting off approximately $3.1 million decrease in revenue from subscription services.

*Revenue from application development services*

The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. Most of the application development contracts are completed within three months. Revenue from application development service is recognized at a point of time by customer acceptance.

For the year ended September 30, 2023, our application development service revenue was approximately $8.3 million as compared to approximately $3.4 million for the year ended September 30, 2022, which representing an increase of approximately $4.9 million or

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145.9%. The increase in application development service revenue was mainly due to the reason that the Company expand its business in Hong Kong, where contributed the revenue from application development services of $5.6 million for the year ended September 30, 2023.

In certain application development service contracts, it contains a significant financial component, which represents a financial service obligation to the customers. In these cases, after deducting the standalone selling price of the financial service, which is calculated based on Chinese Central Bank's suggesting bank loan interest rate for the duration similar to the credit period granted to the customers, the remaining amount of the contract consideration is allocated to the equipment and the application development services based on their relative standalone prices. The financial income revenue is recognized over the credit period granted to the customers. There is no significant returns, refund and other similar obligations during each reporting period.

The financial income revenue during the year ended September 30, 2023 was $7,414, included in revenue from application development services, while no such financial service was provided during the year ended September 30, 2022.

*Revenue from subscription services*

Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications. The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.

Our subscription service revenue decreased by approximately $3.1 million, or 52.8%, from approximately $5.9 million for the year ended September 30, 2022 to approximately $2.8 million for the year ended September 30, 2023. In prior years, customers benefited from certain government grants during the COVID outbreak for remote trainings. Since the related government incentive policy stopped after the COVID in fiscal year 2023, some of these customers switched to training packages with lower fees after the expiration of the original service contracts or stopped services. This was not anticipated in our original plan for developing SaaS subscription services. To mitigate the impact from reduced subscription service customer base, the Company made a lot of new efforts to expand its oversea business for application development services in the second half of fiscal year 2023. As a result, our subscription services slowed down during the year ended September 30, 2023. However, we do not expect the revenue from subscription service continue to decrease in the year ending September 30, 2024.

*Cost of Revenues*

Our cost of revenues mainly consists of compensation benefit expenses for our professionals, material costs and outsourcing costs. For the year ended September 30, 2023, our total cost was approximately $8.7 million as compared to approximately $6.2 million for the year ended September 30, 2022. The Company's total cost increased by approximately $2.5 million, or 40.4%. The overall increase in total cost of revenues was primarily attributable to approximately $4.2 million increase in cost of providing application development services, by netting off $1.6 million decrease in cost of providing subscription services.

Our cost of application development services was approximately $6.7 million for the year ended September 30, 2023, representing an increase of approximately $4.2 million or 163.6%, from approximately $2.5 million for the year ended September 30, 2022. The increase in cost of application development service was mainly contributed to the services provided to Hong Kong customers. The increase in cost of revenues were actually higher than the increase in revenue for this category, mainly due to the Company adopted low margin strategy to achieve more sales and to gain more market share in new Hong Kong market.

Our cost of subscription services was approximately $2.0 million for the year ended September 30, 2023, representing a decrease of approximately $1.6 million or 44.6%, from approximately $3.7 million for the year ended September 30, 2022, which was generally in line with the decrease in subscription services revenue of 52.8%.

***Gross profit***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the years Ended** | **For the years Ended** | **For the years Ended** | **For the years Ended** | | |
| | **September 30,** | **September 30,** | **September 30,** | **September 30,** | | |
| | **2023** | **2023** | | | | |
| <br>**GROSS PROFIT** | **Gross**<br>**Profit** | **Profit**<br>**Margin** | **2022**<br>**Gross**<br>**Profit** | <br>**Profit**<br>**Margin** | <br>**% of**<br>**Change** | <br>**Change** |
| Application development services | $1622688 | 19.5% | $842255 | 24.9% | $780433 | 92.7% |
| Subscription service | 736984 | 26.5% | 2198578 | 37.4% | (1461594) | (66.5)% |
| Total gross profit | $2359672 | 21.3% | $3040833 | 32.8% | $(681161) | (22.4)% |

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Our gross profit decreased by approximately $0.7 million or 22.4% from approximately $3.1 million for the year ended September 30, 2022 to approximately $2.4 million for the year ended September 30, 2023. Gross margin as a percent of overall revenue for the years ended September 30, 2023 and 2022 was approximately 21.3% and 32.8%, respectively.

Gross profit for application development services increased by approximately $0.8 million or 92.7% from approximately $0.8 million for the year ended September 30, 2022 to approximately $1.6 million for the year ended September 30, 2023. Gross profit margin for the years ended September 30, 2023 and 2022 was approximately 19.5% and 24.9%, respectively. The decrease in gross profit margin was due to more IT equipment sales with lower gross profit margin were included in the revenue for the year ended September 30, 2023. Furthermore, in terms of new business in Hong Kong, the Company adopted low margin strategy to achieve more sales and to gain more market shares during the year ended September 30, 2023.

Gross profit for subscription services decreased by approximately $1.5 million or 66.5% from approximately $2.2 million for the year ended September 30, 2022 to approximately $0.7 million for the year ended September 30, 2023. Gross profit margin was approximately 26.5% and 37.4% for the years ended September 30, 2023 and 2022, respectively. The decrease of gross profit margin was due to we need to keep competitive price for customers despite cost increase.

*Operating Expenses*

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | | |
|  | **September 30,** | **September 30,** | | |
|  | **2023** | **2022** | <br>**Change** | <br>**% Change** |
| OPERATING EXPENSES: |  |  |  |  |
| Selling expenses | $606927 | $1298462 | $(691535) | (53.3)% |
| General and administrative expenses | 798233 | 865690 | (67457) | (7.8)% |
| Research and development expenses | 567809 | 828311 | (260502) | (31.4)% |
| Total operating expenses | $1972969 | $2992463 | $(1019494) | (34.1)% |

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Our operating expenses consist of selling, G&A and R&D expenses. Operating expenses decreased by approximately $1.0 million, or 34.1%, from approximately $3.0 million for the year ended September 30, 2022 to approximately $2.0 million for the year ended September 30, 2023. The decrease in our operating expenses was primarily due to approximately $0.7 million decrease in selling expenses and approximately $0.3 million research and development expenses.

Selling expenses primarily consisted of salary and compensation expenses relating to our sales personnel, advertising expenses, promotional service fee, travel and other expenses relating to our sales activities. Selling expenses decreased by approximately $0.7 million or 53.3% from approximately $1.3 million for the year ended September 30, 2022 to approximately $0.6 million for the year ended September 30, 2023. The decrease in selling expenses is mainly due to an approximately $0.7 million decrease in advertising expenses as a result of that management intentionally control the cost in the PRC to reserve more resources for new business in Hong Kong.

G&A expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive office personnel, and included rental expenses, depreciation and amortization expenses, impairment charges, office overhead, professional service fees and travel and transportation costs. G&A expenses decreased by approximately $0.1 million or 7.8% from approximately $0.9 million for the year ended September 30, 2022 to approximately $0.8 million for the year ended September 30, 2023, due to an approximately $0.2 million decrease in audit fees as more audit fee incurred during year ended September 30, 2022 for the initial 2-year-IPO audit. Furthermore, the Company cut-down certain outsourcing service costs to fit the smaller sales in mainland China, which also contributes a decrease of general and administrative expenses.

R&D expenses primarily consisted of compensation and benefit expenses relating to our R&D personnel as well as office overhead and other expenses relating to our R&D activities. R&D expenses decreased by approximately $0.3 million or 31.4% from approximately $0.8 million for the year ended September 30, 2022 to approximately $0.6 million for the year ended September 30, 2023. As less subscription services were provided during the year ended September 30, 2023, less R&D expenses are incurred to fit the decrease of revenue.

*Other Income (Expense)*

Other income (expense) primarily consists of interest expense, net and other income, net. Our net other income amounted to $32,857 for the year ended September 30, 2023, increased by $17,076 or approximately 108.2% from $15,781 for the year ended September 30, 2022, due to less interest expense recorded.

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*Income tax provision (benefit)*

Income tax provision (benefit) was $257,331 and $(68,536) for the years ended September 30, 2023 and 2022, respectively. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary Shanghai NetClass Information Technology Co., Ltd. enjoys a preferential tax rate of 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. The income tax rate for our Hong Kong Subsidiaries for the first HKD2 million of corporate taxable income is 8.25%, while the standard profits tax rate of 16.5% remains for taxable income exceeding HKD2 million.

*Net Income*

As a result of the foregoing, our net income increased by approximately $0.03 million, or 22.3%, from approximately $0.13 million net income for the year ended September 30, 2022 to approximately $0.16 million net income for the year ended September 30, 2023. The increase of net income is attributed to approximately $1.0 million decrease in operating expenses, offset by $0.7 million decrease in gross profit and an increase of approximately $0.3 million in income tax provision.

*Other comprehensive loss*

Foreign currency translation adjustments were $(29,439) and $(248,101) for the years ended September 30, 2023 and 2022, respectively. The balance sheet amounts with the exception of equity as of September 30, 2023 were translated at RMB7.2960 to USD1.00 as compared to RMB7.1135 to USD1.00 as of September 30, 2022. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the years ended September 30, 2023 and 2022 were RMB7.0533 to USD1.00 and RMB6.5532 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

**Liquidity and Capital Resources**

A substantial portion of our operations are conducted in the PRC and significant portion of our revenue and cash are denominated in RMB. RMB is subject to the exchange control regulation in mainland China, and, as a result, we may have difficulty distributing any dividends outside of mainland China due to PRC exchange control regulations that restrict our ability to convert RMB into U.S. dollars. As of March 31, 2025 and 2024, cash of $185,955 and $44,518, respectively, was held at major financial institutions in PRC. As of September 30, 2024, 2023,and 2022, cash of $44,518, $122,067 and $301,067, respectively, was held at major financial institutions in PRC.

The Cayman Islands holding company is a holding company with no material operations. We conduct our operations primarily through our subsidiary in the PRC. As a result, the Company's ability to pay dividends depends upon dividends paid by our subsidiary. Our subsidiaries in the PRC are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year based on PRC accounting standards, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The statutory reserve funds are not distributable as cash dividends. Remittance of dividends by our subsidiary out of the PRC is subject to examination by the banks designated by SAFE. Our subsidiary has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meet the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes if we were to distribute funds from our subsidiary in the PRC to us. We do not intend to repatriate such funds in the foreseeable future, as we plan to use existing cash balance in PRC for general corporate purposes.

As of March 31, 2025, the Company had working capital of approximately $2.9 million. As of September 30, 2024, the Company had working capital of approximately $3.2 million. The Company has historically funded its working capital needs primarily from operations, bank loans, advance payments from customers and shareholders. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections.

In assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. As of March 31, 2025, the Company had cash and restricted cash of approximately $2.3 million. As of September 30, 2024, the Company had cash of approximately $0.4 million. The Company closed an initial public offering in December 2024, from which the Company raised gross proceeds of $9 million. In addition, the Company signed a private placement contract in September 2025, from which the Company can raise gross proceeds of $2.4 million. As a result, the Company believes that its cash on hand, operating cash flows and future financing cash inflow will be sufficient to fund its operations over at least the next 12 months from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and may also need additional cash in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company's amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.

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***For the six months ended March 31, 2025 and 2024***

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Net cash (used in) operating activities | $(7020541) | $(211835) |
| Net cash provided by investing activities | 18050 |  |
| Net cash provided by financing activities | 8910310 | 1502 |
| Effect of exchange rate change on cash | (13578) | $1827 |
| Net increase (decrease) in cash and restricted cash | $1894241 | $(208506) |

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*Operating Activities*

Net cash used in operating activities was approximately $7.0 million for the six months ended March 31, 2025. Net cash used in operating activities for the six months ended March 31, 2025 consisted of approximately $5.0 million of net loss, decrease of approximately $1.0 million in accounts payable, approximately $1.1 million net increase in ROU assets, approximately $0.8 million net increase of long-term prepaid expenses and prepayments and others assets in total, and approximately $0.7 million increase in inventory and advance to vendors in total, and $0.1 million gain on acquisition of a subsidiary, offset by adjustment of $0.2 million non-cash items, a decrease of accounts receivable of approximately $0.4 million, an increase of approximately $1.2 million in advance from customers.

Net cash used in operating activities was approximately $0.2 million for the six months ended March 31, 2024. Net cash used in operating activities for the six months ended March 31, 2024 consisted of approximately $2.1 million of net loss, deferred tax benefits of $0.2 million, increase of accounts receivable of $0.1 million and decrease of accounts payable of $0.1 million, partially offset by decrease of prepayments and other receivables of $2.1 million and decrease of advance to vendors of $0.1 million.

*Investing Activities*

Net cash provided by investing activities was $0.02 million for the six months ended March 31, 2025. Net cash provided by investing activities for the six months ended March 31, 2025 mainly consisted of approximately $0.03 million increase from acquisition of a subsidiary, offset by $0.01 million cash paid for acquisition of this subsidiary.

Net cash provided by investing activities was $nil for the six months ended March 31, 2024.

*Financing Activities*

Net cash provided by financing activities was $9.0 million for the six months ended March 31, 2025, mainly consisted of gross proceeds from IPO of $10.3 million, and proceeds from bank loans of $0.4 million, offset by payment for issuance costs in connection with the IPO of approximately $1.7 million.

Net cash provided by financing activities was $1,502 for the six months ended March 31, 2024, represents proceeds from a related party of $1,502.

Capital Expenditures

The Company did not make significant capital expenditures for the six months ended March 31, 2025 and 2024. The Company will make capital expenditures to meet the expected growth of its business when necessary.

Contractual Obligations

The Company had a long-term bank loan of $372,070 as of March 31, 2025, which is matured on November 13, 2027. The Company also entered into non-cancellable operating leases for several offices. The leases expire through December 31, 2025.

The following table sets forth our contractual obligations and commercial commitments as of March 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  | **Less than**<br>**Total** | **1 – 3**<br>**1 Year** | **3 – 5**<br>**Years** | **More than**<br>**Years** | <br>**5 Years** |
| Operating lease arrangements | $1287 | $1287 | $— | $— | $— |
| Total | $1287 | $1287 | $— | $— | $— |

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***For the years ended September 30, 2024, 2023 and 2022***

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| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2023** | **2022** |
| Net cash provided by (used in) operating activities | $(135655) | $391876 | $(571449) |
| Net cash provided by (used in) financing activities | 10865 | (152913) | (125578) |
| Effect of exchange rate change on cash | 15469 | (16067) | $(43205) |
| Net increase (decrease) in cash and restricted cash | $(109321) | $222896 | $(740232) |

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*Operating Activities*

Net cash used in operating activities was approximately $0.1 million for the year ended September 30, 2024. Net cash used in operating activities for the year ended September 30, 2024 consisted of approximately $1.4 million of net loss, increase of approximately $3.0 million in accounts receivable, approximately $0.1 million increase in inventories and advance to vendors in total, and approximately 0.1 million decrease in operating lease liability, offset by adjustment of $0.2 million non-cash items, a decrease of receivable from sales of shares, prepayments and other current assets of approximately $2.3 million, an increase of approximately $1.6 million in accounts payable, an increase of approximately $0.2 million in advance from customers, and a decrease of approximately $0.1 million in accrued expenses and other liabilities.

Net cash provided by operating activities was approximately $0.4 million for the year ended September 30, 2023. Net cash provided by operating activities for the year ended September 30, 2023 consisted of approximately $0.2 million of net income, adjustment of $0.4 million non-cash items, a decrease of accounts receivable of approximately $1.1 million, an increase of approximately $0.2 million in accounts payable, an increase of approximately $0.2 million in tax payable, offset by an increase of approximately $1.0 million in advance to vendors, an increase of approximately $0.4 million in prepayments and other current assets, a decrease of approximately $0.1 million in advance from customers, and a decrease of approximately $0.1 million in accrued expenses and other liabilities.

Net cash used in operating activities was approximately $0.6 million for the year ended September 30, 2022. Net cash used in operating activities for the year ended September 30, 2022 consisted of approximately $0.1 million of net income, adjustment of $45,563 non-cash items, a decrease in inventory of approximately $0.2 million, an increase of approximately $0.1 million in accounts payable, an increase of approximately $0.1 million in due to a related party, an increase of approximately $0.1 million in accrued expenses and other liabilities, offset by an increase of approximately $1.2 million in accounts receivable and a decrease of approximately $0.1 million in advance from customers.

*Investing Activities*

Net cash provided by investing activities was $nil for fiscal 2024, 2023 and 2022.

*Financing Activities*

Net cash provided by financing activities was $10,867 for fiscal 2024, mainly consisted of proceeds from related parties of $42,147, and contribution from noncontrolling shareholders of $2,985, offset by payment for deferred issuance costs in connection with the initial public offering completed in December 2024 of $33,845 and repayment to related parties of $420.

Net cash used in financing activities was $152,913 for fiscal 2023, mainly consisted of repayment of bank loans of $132,035, repayments to related parties of $1,418 and $92,533 payment for deferred issuance costs in connection with the initial public offering completed in December 2024, offset by proceeds from related parties of $73,073.

Net cash used in financing activities was $125,578 for fiscal 2022, mainly consisted proceeds from bank loan of $177,642, repayment of bank loans of $132,429 and $170,791 payment for deferred issuance costs in connection with this offering.

*Capital Expenditures*

The Company made no capital expenditures for the years ended September 30, 2024 and 2023, respectively. The Company will make capital expenditures to meet the expected growth of its business when necessary.

*Contractual Obligations*

The Company had no outstanding bank loan as of September 30, 2024 and 2023, respectively. The Company also entered into non-cancellable operating leases for several offices. The leases expire through December 31, 2025.

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The following table sets forth our contractual obligations and commercial commitments as of September 30, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  | <br>**Total** | **Less than**<br>**1 Year** | **1 – 3**<br>**Years** | **3 – 5**<br>**Years** | **More than**<br>**5 Years** |
| Operating lease arrangements | $69082 | $55126 | $13956 | $— | $— |
| Total | $69082 | $33463 | $13956 | $— | $— |

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**Off-Balance Sheet Arrangements**

There were no off-balance sheet arrangements for the six months ended March 31, 2025 or the year ended September 30, 2024 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

**Critical Accounting Estimates**

We prepare our consolidated financial statements ("CFS") in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates and assumptions on our own historical data and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates and assumptions on an ongoing basis.

Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable and accurate, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our CFS are described below, which should be read in conjunction with our CFS and accompanying notes and other disclosures included in this annual report. When reviewing our financial statements, you should consider.

● our selection of critical accounting policies;

● the judgments and other uncertainties affecting the application of such policies;

● the sensitivity of reported results to changes in conditions and assumptions;

Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our CFS for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider our critical accounting estimates include (i) allowance for doubtful accounts for accounts receivable and (ii) valuation allowance of deferred tax assets.

***Allowance for credit losses against accounts receivable***

On October 1, 2023, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including accounts receivable. The Company uses the roll-rate method to measure the expected credit losses of account receivables on a collective basis when similar risk characteristics exist. The roll-rate method stratifies the receivables balance by delinquency stages and projected forward in one-year increments using historical roll rate. In each period end of the simulation, losses on the receivables are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. This process is repeated on a yearly rolling basis. The loss rate calculated for each delinquency stage is then applied to respective receivables balance. The management adjusts the allowance that is determined by the roll-rate method for both current conditions and forecasts of economic conditions. The Company adopted ASC Topic 326 using the modified retrospective method in scope of the standard. Results for reporting periods beginning after October 1, 2023 are presented under ASC Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP.

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Provision for expected credit losses is included in G&A expenses in the CFS. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for credit losses. Allowance for credit losses for accounts receivable was $766,831 and $634,166 as of September 30, 2024 and September 30, 2023, respectively.

***Valuation of deferred tax assets***

Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized. In making such a determination, the management consider all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. Deferred tax assets are then reduced by a valuation allowance through a charge to income tax expense when, in the opinion of management, it is more likely than not that a portion of or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Recovery of substantially all of the Company's deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of September 30, 2024 and September 30, 2023. However, since the deferred tax assets arising from operating loss has a limited window of use, to be conservative, management decided to record a partial valuation allowance. Valuation allowance was $203,111 and $21,910 as of September 30, 2024 and September 30, 2023, respectively. While we consider the facts above, our projections of future income qualified tax-planning strategies may be changed due to the macroeconomic conditions and our business development. The DTAs could be utilized in the future years if we make profits in the future, the valuation allowance shall be reversed.

Recently issued accounting pronouncements

A list of recent relevant accounting pronouncements is included in Note 2 "Summary of Principal Accounting Policies" of our CFS.

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