CIMG Inc. Swings to $19.5M Net Loss on $17.5M Fair Value Write-Down in Q1 2026

CIMG Inc. (Nevada) reported a net loss of $19.5 million for the three months ended December 31, 2025, compared to a net loss of $1.5 million in the same period a year earlier. The company, which operates in homology medicine and food products, computing power products, and digital asset holdings, saw its loss widen primarily due to a $17.5 million non-cash fair value variation charge. Read more earnings reports.

Revenue for the quarter surged to $15.8 million from $22,853 in the prior-year period, driven by sales of computing power products ($2.4 million), Maca product series ($12.0 million), and homology medicine and food products ($1.4 million). Cost of sales rose to $15.7 million from $7,374, leaving gross profit at $89,111 compared to $15,479 a year earlier.

Operating expenses totaled $2.0 million, up from $1.5 million in the prior-year quarter, resulting in an operating loss of $2.0 million compared to an operating loss of $1.5 million. The fair value variation charge of $17.5 million, which had no prior-year equivalent, drove the quarter's steep net loss.

Net loss attributable to the company was $19.5 million, or $1.43 per share, compared to a loss of $1.5 million, or $0.17 per share, in the December 2024 quarter. The weighted average number of common shares outstanding increased to 13.6 million from 9.0 million.

Balance Sheet and Liquidity

Total assets stood at $67.5 million as of December 31, 2025, down from $74.2 million at September 30, 2025. The decline was driven by a sharp reduction in inventories, which fell to $157 from $11.9 million, and prepaid expenses, which decreased to $1.9 million from $4.9 million. Digital assets, held at fair value, increased to $64.0 million from $57.0 million during the quarter.

Cash and cash equivalents dropped to $45,356 from $137,287 at the prior quarter-end. Total current assets declined to $3.5 million from $17.1 million, reflecting the reduction in inventory and prepaid balances.

Total liabilities fell to $11.1 million from $27.6 million, driven by a decrease in other current liabilities to $3.9 million from $22.3 million. Accounts payable and accrued expenses increased to $2.9 million from $1.5 million. The company eliminated a $1.8 million convertible note payable to a related party during the quarter.

Total stockholders' equity rose to $56.4 million from $46.5 million, supported by $16.2 million in proceeds from a private placement, $10.1 million from warrant issuances, and $2.0 million from common stock sales. These inflows offset the quarter's net loss.

Cash Flow and Financing

Cash used in operating activities totaled $8.5 million for the three months ended December 31, 2025, compared to $1.3 million used in the prior-year period. The increase was driven by the net loss and a $24.5 million increase in digital assets, partially offset by an $11.9 million reduction in inventories and a $3.1 million decrease in prepaid expenses.

Cash provided by financing activities was $8.5 million, consisting entirely of proceeds from common stock issuances. The company issued 416,667 shares for $2.0 million under a convertible note agreement, 3.6 million shares for $16.2 million in a private placement, and 1.3 million warrants generating $10.1 million. Stock-based compensation totaled $1.2 million for the quarter.

The company reported no cash paid for interest or taxes during the quarter.

Segment Performance

The homology medicine and food segment generated revenue of $1.4 million with a segment loss of $147,258. The computing power product segment posted revenue of $2.4 million and a segment loss of $185,842. The Maca product segment reported revenue of $12.0 million with zero gross profit after cost of sales matched revenue dollar-for-dollar. Unallocated headquarters costs, including the fair value variation charge, contributed a loss of $19.2 million.