Exhibit 99.1
Linkage Global Inc
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2025 AND SEPTEMBER 30, 2024
(In U.S. dollars, except for share and per share data, or otherwise noted)
As of March 31, 2025 | As of September 30, 2024 | |||||||
| USD | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Deposits paid to media platforms | ||||||||
| Prepaid expenses and other current assets, net | ||||||||
| Amount due from related parties | ||||||||
| Short-term loan to third party | ||||||||
| Interest receivable from loan to third party | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Short-term debts | ||||||||
| Current portion of long-term debts | ||||||||
| Contract liabilities | ||||||||
| Amounts due to related parties | ||||||||
| Lease liabilities - current | ||||||||
| Convertible notes | ||||||||
| Interest payable of convertible notes | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Long-term debts | ||||||||
| Lease liabilities – non-current | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 21) | ||||||||
| Shareholders’ equity | ||||||||
| Class A ordinary shares (par value of US$ | ||||||||
| Class B ordinary shares (par value of US$ | ||||||||
| Additional paid in capital | ||||||||
| Treasury Shares | ( | ) | ||||||
| Statutory reserve | ||||||||
| Retained earnings | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| * | The shares and per share information are presented on a retroactive basis to reflect the reorganization completed on February 17, 2023, share split occurred on March 20, 2023, and share consolidation occurred on April 7, 2025 (Note 16). |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-1
Linkage Global Inc
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024
(In U.S. dollars, except for share and per share data, or otherwise noted)
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| USD | ||||||||
| Revenues | ||||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Selling and marketing expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Other expenses | ||||||||
| Interest expenses, net | ( | ) | ( | ) | ||||
| Other non-operating income | ||||||||
| Total other expenses | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax (provision)/ benefit | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Net loss attributable to the Company’s ordinary shareholders | ( | ) | ||||||
| Other comprehensive income/(loss) | ||||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Total comprehensive loss attributable to the Company’s ordinary shareholders | ( | ) | ( | ) | ||||
| Loss per ordinary share attributable to ordinary shareholders | ||||||||
| Basic and Diluted* | ( | ) | ( | ) | ||||
| Weighted average number of ordinary shares outstanding | ||||||||
| Basic and Diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-2
Linkage Global Inc
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024
(In U.S. dollars, except for share and per share data, or otherwise noted)
For the six months ended March 31, 2025
| Ordinary shares* | Additional | Accumulated other | Total | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Treasury | paid-in | Retained | Statutory | comprehensive | Shareholders’ | |||||||||||||||||||||||||||||||||
| Shares* | Amount | Shares* | Amount | Shares | capital | earnings | reserve | income(loss) | Equity | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Pre-delivery shares related to the issuance of convertible notes | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation (Class B) | — | — | ||||||||||||||||||||||||||||||||||||||
| Repurchase of Class A Shares by issuing Class B Shares | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
For the six months ended March 31, 2024
| Ordinary shares* | Additional paid-in | Retained | Statutory | Accumulated other comprehensive | Total Shareholders’ | |||||||||||||||||||||||
| Share | Amount | capital | earnings | reserve | income(loss) | Equity | ||||||||||||||||||||||
| Balance as of September 30, 2023 | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net Proceeds from the initial public offering | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of March 31, 2024 | ( | ) | ||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-3
Linkage Global Inc
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024
(In U.S. dollars, except for share and per share data, or otherwise noted)
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| USD | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Effect of exchange rate changes | ||||||||
| Allowance for credit loss | ||||||||
| Interest payable of convertible notes | ||||||||
| Interest receivable from loan to third party | ( | ) | ||||||
| Stock-Based Compensation | ||||||||
| Depreciation | ||||||||
| Amortization of lease right-of-use assets | ||||||||
| Inventory provision | ||||||||
| Deferred tax benefits | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets, net | ( | ) | ( | ) | ||||
| Inventories, net | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Contract liabilities | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Amounts due from related parties | ||||||||
| Amounts due to related parties | ( | ) | ( | ) | ||||
| Tax payable | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flow from investing activities | ||||||||
| Repayments of loan to a related party | ( | ) | ||||||
| Loan to third party | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flow from financing activities | ||||||||
| Proceeds from issuance of Class A ordinary shares upon the completion of IPO | ||||||||
| Proceeds from Issuance of convertible notes | ||||||||
| Proceeds from short-term debts | ||||||||
| Repayments of short-term debts | ( | ) | ( | ) | ||||
| Repayments of long-term debts | ( | ) | ( | ) | ||||
| Repayments of other long-term debts | ( | ) | ( | ) | ||||
| Payments of listing expenses | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | ||||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Income tax paid | ||||||||
| Interest expense paid | ||||||||
| Supplemental disclosures of non-cash activities: | ||||||||
| Obtaining right-of-use assets in exchange for operating lease liabilities | ||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-4
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Linkage Global Inc (“Linkage Cayman”, or the “Company”) was incorporated as an exempted limited liability company under the laws of the Cayman Islands on March 24, 2022. The Company, through its wholly-owned subsidiaries (collectively, the “Group”), primarily engages in cross-border product sales and integrated e-commerce services (including digital marketing services, training and consulting services) for e-commerce sellers in Japan, Hong Kong and the People’s Republic of China (the “PRC” or “China”).
As of the date of the financial statement, the Company’s major subsidiaries are as follows:
| Name | Date of Incorporation | Percentage of effective ownership | Principal Activities | |||||
| Wholly owned subsidiaries | ||||||||
| Linkage Holding (Hong Kong) Limited (“Linkage Holding”)* | % | |||||||
| Extend Co., Limited (“EXTEND”) | % | |||||||
| Linkage Electronic Commerce Limited (“Linkage Electronic”) | % | |||||||
| HQT Network Co., Limited (“HQT NETWORK”) | % | |||||||
| Linkage (Fujian) Network Technology Limited (“Linkage Tech” or “WFOE”) | % | |||||||
| Fujian Chuancheng Internet Technology Limited (formerly known as “Fujian Haishi Cross border Education Technology Limited”) | % | |||||||
| Fujian Chuancheng Digital Technology Limited | % | |||||||
| * |
History of the Group and Reorganization
The Group carried out cross-border sales and integrated e-commerce services since June 2011 and December 2016, respectively. In anticipation of an initial public offering (“IPO”) of the Company’s equity securities in the United States capital market, Linkage Holding was incorporated by the Company in Hong Kong and Linkage Network was incorporated by Linkage Holding in Fujian, the PRC, as the Company’s direct and indirect wholly owned subsidiaries, on April 13, 2022 and November 24, 2022, respectively.
In connection with the IPO, the Group undertook a reorganization of its corporate structure (the “Reorganization”) in the following steps:
| ● | On
April 30, 2022, Linkage Cayman acquired |
| ● | On
October 31, 2022, Linkage Holding acquired |
| ● | On
September 28, 2022, Linkage Holding acquired |
| ● | On
February 17, 2023, Linkage Network acquired |
F-5
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)
Consequently, the Company, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all other entities mentioned above. The Company and its wholly-owned subsidiaries were effectively controlled by the same controlling shareholder immediately before and after the reorganization, and therefore the reorganization was accounted for as a recapitalization.
As a result, the Group’s unaudited interim condensed consolidated financial statements have been prepared as if the current corporate structure has been in existence throughout the periods presented.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s financial position, its results of operations and its cash flows, as applicable, have been made. Interim results are not necessarily indicative of results to be expected for the full year. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and note thereto as of and for the years ended September 30, 2024 and 2023.
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries.
All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
Use of estimates
The preparation of the unaudited interim condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, the allowance for credit losses, inventory provision, depreciable lives and recoverability of property and equipment, and the realization of deferred income tax assets, and valuation of stock-based compensation expense. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited interim condensed consolidated financial statements.
Foreign currency transactions and translations
The Group’s reporting currency is the United States dollars (“US$”). The functional currency of the Company and one of its subsidiaries incorporated in HK is Hong Kong dollars (“HKD”). The functional currency of the other two subsidiaries incorporated in HK is United States dollars (“US$”). The functional currency of the subsidiary which operates mainly in Japan uses Japanese Yen (“JPY”). The functional currency of the other subsidiaries which operate in China is Renminbi (“RMB”). The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate 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 at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, 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 of accumulated other comprehensive income (loss) included in consolidated statements of changes in shareholders’ equity. Gains and losses from foreign currency transactions are included in the results of operations.
F-6
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The value of RMB, HKD and JPY against US$ may fluctuate and is affected by, among other things, changes in the political and economic conditions. Any significant revaluation of RMB, HKD or JPY may materially affect the Company’s financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the unaudited interim condensed consolidated financial statements:
Balance sheet items, except for equity accounts:
| As of March 31, 2025 | As of September 30, 2024 | ||||
| RMB to US | |||||
| JPY to US | |||||
| HKD to US |
Items in the statements of operations and comprehensive income, and statements of cash flows:
| For the six months ended March 31, 2025 | For the six months ended March 31, 2024 | ||||
| RMB to US | |||||
| JPY to US | |||||
| HKD to US |
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, the Group’s demand deposit placed with financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use.
Accounts Receivable, net
Accounts receivable represents the Company’s
right to consideration in exchange for goods and services that the Company has transferred to the customers before payment is due. Accounts
receivable is stated at the historical carrying amount, net of an estimated allowance for uncollectible accounts. The group has adopted
ASU 2016-13 on a modified retrospective basis since October 1, 2023, and the impact on opening balance is $
Specific allowance for credit losses
The Group identify specific allowance for clients
of fully managed e-commerce operation services business based on the credit term. There are 4 clients with account receivables of $
F-7
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
For purposes of this section only, the term “Customers” shall mean (i) cross-border e-commerce sellers (both enterprises and individuals) that purchase products, e-commerce operation training, and software support services, (ii) media that pay the Company’s subsidiaries commissions. (iii) the owners of online store in fully managed e-commerce operation services business.
Inventories, net
Inventories, primarily consisting of finished
goods, are stated at the lower of cost or net realizable value, with net realized value represented by estimated selling prices in the
ordinary course of business, less reasonably predictable costs of disposal and transportation. Cost of inventory is determined using the
weighted average cost method. The Group records inventory valuation allowance for obsolete inventories based upon assumptions on current
and future demand forecast. The Group reviews inventory to determine whether the carrying value exceeds the estimated net realizable value.
If the inventory on hand is in excess of the estimated net realizable value, inventory valuation allowance is estimated and recorded by
lowering the cost of inventory to the estimated net realizable value for slow-moving merchandise and damaged products, which is dependent
upon factors such as historical and forecasted consumer demand. Once inventory valuation allowance is recorded, a new, lower cost basis
for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that
newly established cost basis. Inventory valuation allowance balance as of March 31, 2025 and September 30,2024 were $
Property and equipment, net
Property and equipment, other than freehold land,
are stated at cost less accumulated depreciation and impairment, if any, and depreciated on a straight-line basis over the estimated useful
lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related
assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use.
| Category | Estimated useful lives | |
| Vehicle | ||
| Office equipment | ||
| Leasehold improvements |
Repair and maintenance costs are charged to expenses as incurred, whereas the cost of renewals and betterment that extends the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the costs, accumulated depreciation and impairment with any resulting gain or loss recognized in the consolidated statements of income.
Impairment of long-lived assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events
occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash
flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow
is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over
the fair value of the assets, using the expected future discounted cash flows.
F-8
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Short-term loans to third parties
The Company provides short-term loans to third parties with maturities of less than one year, which are classified as current assets on the balance sheet. These short-term loans are initially recognized at the principal amount lent to the borrower.
Interest Recognition: For loans to third parties with maturities of less than one year, the Company has elected not to apply the effective interest method as permitted under US GAAP for short-term receivables. Instead, interest income is recognized on a straight-line basis over the loan term, which approximates the effective interest method given the short-term nature of these loans.
Impairment: The Company assesses these short-term loans for impairment at each reporting date. If there is objective evidence of impairment, a loss allowance is recognized immediately in the income statement. The allowance is measured as the difference between the loan’s carrying amount and the present value of estimated future cash flows, discounted at the loan’s original effective interest rate.
Stock-Based Compensation
The Company accounts for stock-based compensation under ASC 718 “Compensation - Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the shorter of the service period or the vesting period of the stock-based compensation. This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model. Determining the fair value of stock-based compensation at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based compensation represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment.
When determining fair value of stock options, the Company considers the following assumptions in the Black-Scholes model:
| ● | Exercise price, |
| ● | Expected dividends, |
| ● | Expected volatility, |
| ● | Risk-free interest rate; and |
| ● | Expected life of option |
Convertible notes
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. For share-settled convertible debt and convertible preferred stock, the if-converted method is typically used to account for diluted earnings per share. For public companies, the guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The company adopted this standard beginning October 1, 2023. Following the adoption of ASU 2020-06 Convertible notes are recorded and disclosed as convertible notes payable, net of unamortized discount.
On September 18, 2024, the Company entered into
a securities purchase agreement (“SPA”) with certain institutional investors, pursuant to which, the Company issued to the
investors (the “Holders”), (i) convertible promissory notes in the aggregate principal amount of US$
F-9
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
In addition, pursuant to the securities purchase
agreement, the Company has the option to prepay the notes with payment of an amount equal to
On October 16, 2024 (the “Closing Date”),
the Company completed its issuance and sale of the note and issuance of Class A Ordinary Shares pursuant to the securities purchase agreement.
The gross proceeds from the sale of the notes were $
On December 18, 2024, the Company and the Holders
entered into an amendment to SPA, pursuant to which, (i) the parties mutually agreed to add a conversion floor price of $
The Company has identified and evaluated the embedded features of the convertible notes, and concluded that (i) the Company call option, contingent interest features for event of default, and event of delisting put option are clearly and closely related to the debt host instrument and, therefore, are not required to be bifurcated under ASC 815, (ii) the conversion right is eligible for a scope exception from derivative accounting and is not required to be bifurcated under ASC 815. Consequently, the Company accounts for the convertible notes as a liability following the respective guidance of ASC 815 and ASC 470.
As Pre-delivery shares can be separately exercised,
i.e. each can continue to exist unchanged when the other is exercised, the Company concluded that they were freestanding. The Pre-delivery
Shares are considered a form of stock borrowing facility and are accounted for as own-share lending arrangement. The Company did not receive
any proceeds or pay any consideration related to the Pre-delivery Shares, except that the Company received a one-time nominal fee of US$
Fair value measurement
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
F-10
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs are:
| ● | Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. |
| ● | Level 3 — Unobservable inputs which are supported by little or no market activity. |
Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, accounts receivable, amounts due from related parties, loan to third party, other receivables included in prepayments and other current assets, short-term debts, long-term debts, accounts payable, amounts due to related parties, and other payables included in accrued expenses and other current liabilities. The carrying amounts of these short-term financial instruments approximates their fair value due to their short-term nature. The long-term debts approximate their fair values, because the bearing interest rate approximates market interest rate, and market interest rates have not fluctuated significantly since the commencement of loan contracts signed.
The Group’s non-financial assets, such as property and equipment, would be measured at fair value only if they were determined to be impaired.
Treasury shares
The Company accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the consolidated balance sheets. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid-in capital and retained earnings.
Commitments and contingencies
In the normal course of business, the Group is subject to commitments and contingencies, including operating lease commitments, legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments on liability for contingencies, including historical and the specific facts and circumstances of each matter.
Revenue recognition
The Group’s revenues are mainly generated from (i) cross-border sales, (ii) integrated e-commerce services, (iii) fully managed e-commerce operation services.
F-11
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The Group recognizes revenue pursuant to ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, revenues from contracts with Customers are recognized when control of the promised goods or services is transferred to the Group’s Customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services, reduced by estimates for return allowances, promotional discounts, rebates and business tax and Value Added Tax (“VAT”). To achieve the core principle of this standard, the Group applied the following five steps:
| 1. | Identification of the contract, or contracts, with the Customer; |
| 2. | Identification of the performance obligations in the contract; |
| 3. | Determination of the transaction price; |
| 4. | Allocation of the transaction price to the performance obligations in the contract; and |
| 5. | Recognition of the revenue when, or as, a performance obligation is satisfied. |
Each of our significant performance obligations and our application of ASC 606 to our revenue arrangements are discussed in further detail below.
Cross-border sales
The Group engages in the sale of food, beauty products, health products and other consumer products in Asia, by exploiting its advantages in global supply chain services and networks. The Group fulfils its performance obligation by transferring products to the designated location. In accordance with the Group’s customary business practices, for international sales, the delivery term is “Cost and Freight” (“CFR”, formerly known as “C&F”, which the seller bears the freight costs) and “Free on Board” (“FOB”, which the buyer bears the freight costs) shipping point. The majority of transactions were based on FOB. Under both delivery terms, once the products are loaded on board, control of products has transferred. Since shipping activities are performed after customers obtain control of the products, the Group elects to account for shipping as activities to fulfill the promise to transfer the goods, in accordance with ASC 606-10-25-18B. Therefore, freight costs are accrued when products are delivered to the designated location, before shipping activities occur. For the remaining domestic sales, the control of products has transferred upon the time when the products are delivered to the place designated by customers. Shipping activities are performed before customers obtain control of the goods, and hence, should not be considered a separate performance obligation. As a result, both cost of goods and freight costs are recognized at the same time when products are delivered to the designated location, after shipping activities are completed. Revenue generated from cross-border sales is recognized based on the product value specified in the contract at a point in time when the control of products has transferred for both international sales and domestic sales.
The Company has two logistics methods. For the products exported from mainland China, the suppliers will directly deliver them to customers. For the products purchased directly from suppliers in Japan, the Company has its own warehouse in Japan. The products will be first sent to the company’s warehouse and then delivered to the customers.
For products shipped directly from suppliers to customers, pursuant to ASC 606-10-55-37A(a), the Group concludes that it obtains control of the products as the Group is primarily responsible for the contract and has pricing discretion. The Group is primarily responsible for the contract as it has the supplier discretion when executing orders and it is the only party that has a contractual relationship with customers. The Group establishes and obtains substantially all of the benefits from transactions, i.e. considerations paid by customers. Therefore, the Group considers itself to be the principal in the transactions on the basis that it is primary responsible to fulfill the promise and has the price discretion, pursuant to ASC 606-10-55-39.
For products shipped from the Group to customers, the Group considers itself the principal because it is in control of establishing the transaction price, arranging the whole process of transactions and bearing inventory risk. Therefore, such revenues are reported on a gross basis.
Integrated e-commerce services
The Group partners with premium social media platforms and provides digital marketing solutions to meet the needs of Customers and other cross-border e-commerce sellers and suppliers (the “Merchants”).
For digital marketing services, the Group acts as an authorized agent advocating Merchants to display ads on social media platforms. In return, the Group receives commission from social media platforms. Over the contract period, the Group continues to receive commissions from social media platforms over the contractual period when Merchants placed ads on the social media platforms. Revenue from digital marketing services is recognized over the contractual period for actual qualifying ads placed calculated by social media platforms. The Group has adopted “right to invoice” practical expedient and recognizes revenues based on quarterly billing reports received from social media platforms. The Group considers itself the agent because it is not primarily responsible for fulfilling the promise to render digital marketing services. Therefore, such revenues are reported on a net basis. During the reporting period, all the revenue of the digital marketing services was generated from the Group acting as an authorized agent on behalf of social media platforms.
F-12
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Fully managed e-commerce operation services
The Group provides fully managed e-commerce operation services for sellers on Japanese cross-border e-commerce platforms.
Usually, our clients have their own factories and products, and they open online stores on Japanese e-commerce platforms and then entrust the daily management and marketing of the stores to the group for full handling. The services mainly included:
| 1. | Online shop setup: 1) store page design and decoration, 2) payment Settings, 3) products listing. |
| 2. | Online shop promotion: design marketing plans and product combinations to attract customers. |
| 3. | Customer service: post-sales customer service. |
The clients only need to be responsible for the
delivery of goods. The Group charges
For other integrated e-commerce services revenue is generated from e-commerce related training/consulting services and running TikTok anchors agent. For training/consulting services, the Group fulfils its performance obligation by providing e-commerce related training/consulting services, and revenue is recognized over the service period. For running TikTok anchors agent, the group charges management fee and commission monthly based on the live stream income from TikTok platform.
Contract Balances
Timing of revenue recognition may differ from the timing of invoicing to Customers. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Group has satisfied its performance obligation and has unconditional right to the payment. Contract assets represent the Group’s right to consideration in exchange for goods or services that the Group has transferred to a customer. The Group has no contract assets as of March 31, 2025 and September 30, 2024.
The contract liabilities consist of deferred revenue,
which represent the billings or cash received for services in advance of revenue recognition and is recognized as revenue when all of
the Group’s revenue recognition criteria are met. The Group’s deferred revenue which primarily arises from cross-border sales
amounted to $
Cost of revenues
Cost of revenues consists primarily of (i) cost of goods sold for cross-border sales; (ii) commission costs for digital marketing services; and (iii) the salaries of the staff in the e-commerce operation department for fully managed e-commerce operation services.
Research and development expenses
Research and development expenses consist primarily of (i) payroll and related expenses for research and development professionals; and (ii) technology services fee. Research and development expenses are expensed as incurred.
Selling and marketing expenses
Selling and marketing expenses mainly consist
of (i) salary and social welfare expenses; (ii) freight; and (iii) the advertising costs and market promotion expenses.
The advertising costs were $
General and administrative expenses
General and administrative expenses mainly consist of (i) salary and social welfare expenses; (ii) rental cost for offices; (iii) depreciation expenses; (iv) consulting fees; and (v) allowance for credit loss.
F-13
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Employee benefits
The Company’s subsidiaries
participate in a government mandated, multiemployer, defined contribution plan, pursuant to which certain retirement, medical, housing
and other welfare benefits are provided to employees. PRC labor laws require the entities incorporated in the PRC to pay to the local
labor bureau a monthly contribution calculated at a stated contribution rate on the monthly basic compensation of qualified employees.
The Group has no further commitments beyond its monthly contribution. Employee social benefits included in research and development expenses,
selling and marketing expenses and general and administrative expenses in the accompanying consolidated statements of comprehensive income
amounted to $
Leases
On October 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842), using the non-comparative transition option pursuant to ASU 2018-11. Therefore, the Company has not restated comparative period financial information for the effects of ASC 842, and will not make the new required lease disclosures for comparative periods beginning before October 1, 2022. The adoption of Topic 842 resulted in the presentation of operating lease right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheet. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease; (2) lease classification for any expired or existing leases as of the adoption date; and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Company elected the short-term lease exemption for all contracts with lease terms of 12 months or less. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term.
Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Some of the Company’s lease agreements contained renewal options; however, the Company did not recognize right-of-use assets or lease liabilities for renewal periods unless it was determined that the Company was reasonably certain of renewing the lease at inception or when a triggering event occurred. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements did not contain any material residual value guarantees or material restrictive covenants.
Income taxes
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from, or paid to, the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period.
The Group accounts for income taxes under ASC 740, Income taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases (“Temporary differences”).
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. Deferred tax is calculated at the tax rates that are expected to apply in the periods in which the asset or liability will be settled, based on rates enacted or substantively enacted at the end of the reporting period. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.
F-14
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating uncertain tax positions and determining provision for income taxes. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the six months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and September 30, 2024, the Group did not have any significant unrecognized uncertain tax positions. The Group does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
VAT
The Company’s PRC subsidiaries are subject to VAT and related surcharges on revenue generated from sales of products, facilitation services and platform services. The Group records revenue net of VAT. This VAT may be offset by qualified input VAT paid by the Group to suppliers. Net VAT balance between input VAT and output VAT is recorded in the line item of other current assets on the consolidated balance sheets.
The VAT rate is
Consumption tax
The Japanese subsidiary is subject to consumption
tax. The Consumption Tax Act (Act No. 108 of December 30, 1988, as amended) provides for a multi-step, broad-based tax imposed on
most transactions in goods and services in Japan. Consumption tax is assessed at each stage of the manufacturing, importing, wholesale,
and retail process. The current consumption tax rate is generally
Government subsidies
Government subsidies consist of cash subsidies received by the Group from the PRC local governments. Grants received as incentives for conducting business in certain local districts with no performance obligation or other restriction as to the use are recognized when cash is received. Grants received with government specified performance obligations are recognized when all the obligations have been fulfilled. Government grants received related to the purchases of long-term assets are used to net the cost of the respective assets.
The Group recorded government subsidies of $
Statutory reserves
In accordance with the Companies Law of the People’s
Republic of China, the Company’s PRC subsidiaries must make appropriations from their after-tax profits as determined under the
generally accepted accounting principles in the PRC (“PRC GAAP”) to non-distributable reserve funds including statutory surplus
fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be
The statutory surplus fund and discretionary surplus fund are restricted for use. They may only be applied to offset losses or increase the registered capital of the respective companies. These reserves are not allowed to be transferred to the Company by way of cash dividends, loans or advances, nor can they be distributed except for liquidation.
For the six months ended March 31, 2025 and 2024, and appropriation were made to the statutory surplus fund and discretionary surplus fund by one of the Company’s PRC subsidiaries.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS.
Two-class method
Based on the ASC 260, a reporting entity may have two classes of common stock that have identical rights and privileges, except for voting rights. Generally, the two classes can be combined and presented as one class for EPS purposes when the only difference is related to voting rights, but the classes otherwise share equally in dividends and residual net assets on a per share basis. In this situation, a reporting entity should clearly indicate that the earnings per share amounts reflect both classes of common stock and should appropriately disclose the facts and circumstances in the footnotes.
Basic EPS are computed by dividing income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. As of March 31, 2025 and September 30, 2024, there was no dilution impact.
F-15
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Discontinued operation
A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs:
(1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale;
(2) the component of an entity or group of components of an entity is disposed of by sale;
(3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).
The Company assesses whether a deregistered subsidiary is required to be presented as discontinued operation in its consolidated financial statements on the deconsolidation date. This assessment is based on whether or not the deconsolidation represents a strategic shift that has or will have a major effect on the Company’s operations or financial results.
The revenue contributed by HQT was USD
Segment reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new FASB guidance requires incremental disclosures in annual and interim periods related to a public entity’s reportable segments (particularly on segment expenses) but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. The new guidance is effective for annual financial statements of public entities for fiscal years beginning after December 15, 2023 and in interim periods within fiscal years beginning after December 15 2024 and should be adopted retrospectively unless impracticable.
Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Group’s chief operating decision makers (“CODM”) in deciding how to allocate resources and assess performance. The Group’s chief operating decision maker, CEO, reviews segment results when making decisions about allocating resources and assessing performance of the Group.
As a result of the assessment made by CODM, the Group has two operating segments: EXTEND, and other subsidiaries. The Group considers a “management approach” concept as the basis for identifying reportable segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Group’s reportable segments are business units operate in different countries. EXTEND operates in Japan, which is subject to different regulatory environment than other subsidiaries which operate in the PRC and Hong Kong.
Recent accounting pronouncements
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Group has adopted ASU 2016-13 on a modified retrospective basis since October 1, 2023. The Group evaluated that the impact of the adoption of this ASU on the Group’s unaudited interim condensed consolidated financial statements was immaterial.
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 unaudited interim condensed consolidated financial statements upon adoption. The Group does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.
F-16
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
3. SEGMENT INFORMATION
The CODMs review financial information of operating segments based on internal management report when making decisions about allocating resources and assessing the performance of the Group. As a result of the assessment made by CODMs, the Group has two reportable segments, including EXTEND from Japan, and other subsidiaries from Hong Kong and PRC. The Group’s CODMs evaluate performance based on the operating segment’s revenue and their operating results. The revenue and operating results by segments were as follows:
| For the six months ended March 31, 2025 | ||||||||||||
| EXTEND | Other subsidiaries | Consolidated | ||||||||||
| Revenues from external Customers | $ | $ | $ | |||||||||
| Segment losses before tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| For the six months ended March 31, 2024 | ||||||||||||
| EXTEND | Other subsidiaries | Consolidated | ||||||||||
| Revenues from external Customers | $ | $ | $ | |||||||||
| Segment losses before tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The total assets from continuing operations by segments as of March 31, 2025 and September 30, 2024 were as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Segment assets | ||||||||
| EXTEND | $ | $ | ||||||
| Other subsidiaries | ||||||||
| Total segment assets | $ | $ | ||||||
The property and equipment, net from continuing operations by segments as of March 31, 2025 and September 30, 2024 were as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Property and equipment, net | ||||||||
| EXTEND | $ | $ | ||||||
| Other subsidiaries | ||||||||
| Total property and equipment, net | $ | $ | ||||||
The right-of-use assets, net from continuing operations by segments as of March 31, 2025 and September 30, 2024 were as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Right-of-use assets, net | ||||||||
| EXTEND | $ | $ | ||||||
| Other subsidiaries | ||||||||
| Total right-of-use assets, net | $ | $ | ||||||
F-17
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
4. REVENUE
The following table disaggregates the Group’s revenue for the six months ended March 31, 2025 and 2024:
| For the Six Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| By revenue streams | ||||||||
| Cross-border sales | $ | $ | ||||||
| Integrated e-commerce services | ||||||||
| Fully managed e-commerce operation services | ||||||||
| Digital marketing services | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
5. INVENTORIES, NET
Inventories consisted of the following:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Finished goods | $ | $ | ||||||
| Goods in transit | ||||||||
| Inventory valuation allowance | ( | ) | ( | ) | ||||
| Inventories, net | $ | $ | ||||||
Movement of inventory valuation allowance is as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Balance at the beginning of the year | $ | $ | ||||||
| Addition | ||||||||
| Write-offs | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Balance at the end of the year | $ | $ | ||||||
6. ACCOUNT RECEIVABLE, NET
Accounts receivable, net consists of the following:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for credit loss | ( | ) | ( | ) | ||||
| Total accounts receivable, net | $ | $ | ||||||
Movements of allowance for credit loss are as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Adoption ASU 2016-13 | ||||||||
| Recovery of provision | ( | ) | ( | ) | ||||
| Write off | ( | ) | ||||||
| Exchange rate effect | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
F-18
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
7. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET
Prepayments and other current assets, net consist of the following:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Tax refunds(1) | $ | $ | ||||||
| Deposits | ||||||||
| Advance to suppliers(2) | ||||||||
| Prepaid expenses(3) | ||||||||
| Others | ||||||||
| Prepayments and other current assets, net | $ | |||||||
| (1) |
| (2) |
| (3) |
8. SHORT TERM LOAN TO THIRD PARTY
The Company signed a loan agreement with a third
party Short Selling Capital Group Limited to provide short term loans on September 26, 2024.
| Borrower | Annual Interest Rate | Maturity | As of March 31, 2025, | |||||||||
| Short Selling Capital Group Limited | % | $ | ||||||||||
| Interest receivable from loan to third party | ||||||||||||
| Total | $ | |||||||||||
| Borrower | Annual Interest Rate | Maturity | As of September 30, 2024, | |||||||||
| Short Selling Capital Group Limited | % | $ | ||||||||||
| $ | ||||||||||||
The interest receivable from loan to third party
was $
F-19
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
9. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Cost | ||||||||
| Office equipment | $ | $ | ||||||
| Vehicle | ||||||||
| Leasehold improvement | ||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
| (1) | Depreciation expense was $ |
| (2) | impairment loss was recognized for the six months ended March 31, 2025 and 2024, respectively. |
| (3) | As of March 31, 2025 and September 30, 2024, a vehicle, owned by Chuancheng Digital, for which the carrying value was $ |
10. LEASING
The Group has operating leases for offices and
warehouses.
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Operating lease right-of-use assets, net | $ | $ | ||||||
| Operating lease liabilities-current | ||||||||
| Operating lease liabilities-non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The components of lease expenses were as follows:
| For the six months ended March 31, 2025 | For the six months ended March 31, 2024 | |||||||
| Lease cost | ||||||||
| Amortization of right-of-use assets | $ | $ | ||||||
| Interest of operating lease liabilities | ||||||||
| Total lease cost | $ | $ | ||||||
The weighted average remaining lease term was
approximately
F-20
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
10. LEASING (Cont.)
The maturities of lease liabilities in accordance with Leases (ASC 842) in each of the next five years as of March 31, 2025 were as follows:
| USD | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total minimum lease payments | ||||
| Less: Interest | ( | ) | ||
| Present value of lease obligations | ||||
| Less: Current portion | ||||
| Non - current portion of lease obligations | ||||
11. SHORT-TERM DEBTS
As of March 31, 2025 and September 30, 2024, the short-term debts were for working capital purposes. Short-term debts consist of the following:
| Bank | Annual Interest Rate | Maturity | As of March 31, 2025 | As of September 30, 2024 | ||||||||||||||||
| Higashi-Nippon Bank | % | $ | $ | |||||||||||||||||
| $ | $ | |||||||||||||||||||
12. LONG-TERM DEBTS
As of March 31, 2025 and September 30, 2024, long-term debts consist of the following:
As of | As of September 30, 2024 | |||||||||||||||||||||||||||||||
| Bank and other financial institution | Annual Interest Rate | Start | End | Long- term | Long- term (current portions) | Long- term | Long- term (current portions) | Pledge | ||||||||||||||||||||||||
| USD | USD | |||||||||||||||||||||||||||||||
| The Shoko Chukin Bank | % | |||||||||||||||||||||||||||||||
| The Shoko Chukin Bank | % | |||||||||||||||||||||||||||||||
| Mizuho Bank | % | |||||||||||||||||||||||||||||||
| Mizuho Bank | % | |||||||||||||||||||||||||||||||
| Japan Finance Corporation | % | |||||||||||||||||||||||||||||||
| Musashino Bank | % | |||||||||||||||||||||||||||||||
| Japan Finance Corporation | % | |||||||||||||||||||||||||||||||
| Japan Finance Corporation | % | |||||||||||||||||||||||||||||||
| Kiraboshi Bank | % | |||||||||||||||||||||||||||||||
| Zhongli International Financial Leasing Co. LTD | % | |||||||||||||||||||||||||||||||
| Zhongli International Financial Leasing Co. LTD | % | |||||||||||||||||||||||||||||||
F-21
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
12. LONG-TERM DEBTS (cont.)
The long-term debts as of March 31, 2025 were
primarily obtained from five banks and one financial institution, with interest rates ranging from
The weighted average interest rates of long-term
debts outstanding were
As of March 31, 2025 and September 30, 2024,
there was no event of default on long-term debts occurred. As of March 31, 2025 and September 30, 2024, no long-term debts were guaranteed
by the Company or its subsidiaries. As of March 31, 2025 and September 30, 2024, a vehicle with carrying value of $
On January 17, 2022, the Group bought a vehicle
and paid in full. On July 26, 2022, the Group entered into a loan agreement with Zhongli International Financial Leasing Co. LTD
(the “Lessor”) to pledge the same vehicle and to receive RMB
The Group was not subject to any financial covenants as of March 31, 2025 and September 30, 2024.
Debt Maturities
The contractual maturities of the Group’s long-term debts as of March 31, 2025 were as follows:
| Principle amount | ||||
| Within 1 year | $ | |||
| 1 – 2 years | ||||
| 2 – 3 years | ||||
| 3 – 4 years | ||||
| 4 – 5 years | ||||
| Over 5 years | ||||
| Total | $ | |||
13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Accrued payroll and welfare | $ | $ | ||||||
| Tax Payable | ||||||||
| Accrued service fee | ||||||||
| Others | ||||||||
| $ | $ | |||||||
F-22
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
14. CONVERTIBLE NOTES
On September 18, 2024, the Company entered into
a securities purchase agreement (“SPA”) with certain institutional investors, pursuant to which, the Company issued to the
investors (the “Holders”), (i) convertible promissory notes in the aggregate principal amount of US$
In addition, pursuant to the securities purchase
agreement, the Company has the option to prepay the notes with payment of an amount equal to
On October 16, 2024 (the “Closing Date”),
the Company completed its issuance and sale of the note and issuance of Class A Ordinary Shares pursuant to the securities purchase agreement.
The gross proceeds from the sale of the notes were $
On December 18, 2024, the Company and the Holders
entered into an amendment to SPA, pursuant to which, (i) the parties mutually agreed to add a conversion floor price of $
The Company has identified and evaluated the embedded features of the convertible notes, and concluded that (i) the Company call option, contingent interest features for event of default, and event of delisting put option are clearly and closely related to the debt host instrument and, therefore, are not required to be bifurcated under ASC 815, (ii) the conversion right is eligible for a scope exception from derivative accounting and is not required to be bifurcated under ASC 815. Consequently, the Company accounts for the convertible notes as a liability following the respective guidance of ASC 815 and ASC 470.
As Pre-delivery shares can be separately exercised,
i.e. each can continue to exist unchanged when the other is exercised, the Company concluded that they were freestanding. The Pre-delivery
Shares are considered a form of stock borrowing facility and are accounted for as own-share lending arrangement. The Company did not receive
any proceeds or pay any consideration related to the Pre-delivery Shares, except that the Company received a one-time nominal fee of US$
The amortized cost of the convertible notes as of March 31, 2025 consisted of the following:
| As of March 31, | ||||
| 2025 | ||||
| Convertible notes- Issued in September, 2024 | $ | |||
| Less debt discount and debt issuance cost | ( | ) | ||
| Fair value adjustment for Pre-Delivery Shares related to the issuance of convertible notes | ( | ) | ||
| Convertible Notes | ||||
| Interest payable of convertible notes (including amortization of issuance cost) | ||||
| Total convertible notes and interest payable of convertible notes | $ | |||
Based on the calculation model, the internal rate of return of the
convertible notes is
F-23
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
15. INCOME TAXES
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands.
Hong Kong
According to Tax (Amendment) (No. 3) Ordinance
2018 published by Hong Kong government, from April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate
for the first HKD
PRC
Under the Enterprise Income Tax Laws of the PRC,
or the EIT Laws, domestic enterprises and Foreign Investment Enterprises, or the FIEs, are usually subject to a unified
Japan
Japan has a progressive tax system, of which
its corporate income tax is calculated on the estimated assessable profits for the six months ended March 31, 2025 and 2024
times applicable tax rates. EXTEND is subject to national corporate income tax, inhabitant tax, and enterprise tax in Japan, which in
the aggregate, resulted in the statutory income tax rate of approximately
The effective income tax rate was approximately
-
The income tax expenses consist of the following components:
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Current income tax expenses | $ | |||||||
| Deferred income tax benefit | ( | ) | ||||||
| Total income tax expenses/(benefit) | $ | $ | ( | ) | ||||
A reconciliation between the Group’s actual provision for income taxes and the provision at Japan statutory rate is as follows:
| For the six months ended March 31, | ||||||||
| 2015 | 2024 | |||||||
| Loss before income tax expenses | $ | ( | ) | $ | ( | ) | ||
| Computed income tax benefit with statutory tax rate | ( | ) | ( | ) | ||||
| Effect of preferential tax rate | ( | ) | ||||||
| Impact of different tax rates in other jurisdictions | ||||||||
| Non-deductible expenses | ||||||||
| Utilized tax gain | ||||||||
| Changes in valuation allowance | ||||||||
| Income tax expenses /(benefit) | $ | $ | ( | ) | ||||
| (1) | Since the company’s main place of business is in Japan, the Japanese tax rate has been chosen as the statutory tax rate. |
F-24
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
15. INCOME TAXES (cont.)
As of March 31, 2025 and September 30, 2024, the significant components of the deferred tax assets are summarized below:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Deferred tax assets: | ||||||||
| Allowance for credit loss | $ | $ | ||||||
| Net operating loss carried forward | ||||||||
| Unrealized foreign exchange loss | ( | ) | ||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | $ | ||||||
The Group operates through subsidiaries and valuation
allowance is considered for each of the entities on an individual basis. The Group recorded valuation allowance against deferred tax
assets of those entities that are in a cumulative financial loss position and are not forecasting profits in the near future as of March
31, 2025 and September 30, 2024. In making such determination, the Group also evaluates a variety of factors including the Group’s
operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. The Group has recognized a valuation
allowance of $
Changes in valuation allowance are as follows:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Valuation allowance: | ||||||||
| Balance at beginning of the year | $ | $ | ||||||
| Additions | ||||||||
| Loss utilized | ||||||||
| Exchange difference | ||||||||
| Balance at end of the year | $ | $ | ||||||
As of March 31, 2025 net operating loss carryforwards will expire, if unused, in the following amounts:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | $ |
16. EQUITY
Ordinary Shares
The Company’s authorized
On March 20, 2023, a resolution of the shareholders
of the Company was adopted to subdivide all of the Company’s
F-25
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
16. EQUITY (cont.)
On December 17, 2023, the Company closed
its initial public offering of
On October 11, 2024, a resolution of the shareholders of the Company was adopted to authorize share capital be re-designated and re-classified as follows with immediate effect (the “Share Capital Reorganization”):
(a)
each share in issue immediately following the Share Capital Reorganization, which is
On
October 16, 2024, the Company completed transactions contemplated under that certain securities purchase agreement (the “SPA”)
with certain institutional investors (the “Investors”),
pursuant to which, the Company issued to the Investors, (i) convertible promissory notes in the aggregate principal amount of US$
On November 7, 2024, a resolution of the directors
of the Company was adopted to issue
On
January 27, 2025, a resolution of the shareholders of the Company was adopted to approve that, the authorized share capital of the Company
be immediately increased from US$
On March 13, 2025, the Company repurchased
On April 7, 2025, the Company consolidated each
F-26
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
16. EQUITY (cont.)
Treasury Shares
Repurchasing of treasury shares resolved at the
Board of Directors meeting held on January 19, 2025. The Company repurchase
Details of matters relating to repurchase
Number of Class A ordinary shares repurchased (Shares consolidated each 10 shares into 1 share) | ||||
| Total purchase price for repurchase of shares | $ |
Statutory Reserve
A portion of the Company’s operations are
conducted through its PRC (excluding Hong Kong) subsidiaries, and the Company’s ability to pay dividends is primarily dependent
on receiving distributions of funds from subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by subsidiaries
only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations, and after it has
met the PRC requirements for appropriation to statutory reserves. The Company’s PRC subsidiaries are required to make appropriations
to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income
determined in accordance with the PRC GAAP. Appropriations to the statutory surplus reserve are required to be at least
As a result of these PRC laws and regulations,
the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. As of
March 31, 2025 and September 30, 2024, net assets restricted in the aggregate, which include paid-in capital, additional paid-in
capital and statutory reserve funds of the Company’s subsidiaries, that are included in the Company’s consolidated net assets
were approximately $
17. OTHER NON-OPERATING INCOME
Others, non-operating income consisted of the following:
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Rental income(1) | $ | $ | ||||||
| Tax subsidies and deductions | ||||||||
| Government subsidies | ||||||||
| Others income(2) | ||||||||
| Total | $ | $ | ||||||
| (1) |
| (2) |
F-27
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
18. EARNINGS PER SHARE
The following table sets forth the basic and diluted earnings per share computation and provides a reconciliation of the numerator and denominator for the years presented:
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Net loss attributable to Linkage Global Inc | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average number of ordinary shares* | ||||||||
| Net loss per ordinary share | ||||||||
| – Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| * |
19. RELATED PARTY TRANSACTIONS
Related parties
The following is a list of related parties which the Group has transactions with:
| No. | Name of Related Parties | Relationship | ||
| 1 | Mrs. Qi Xiaoyu | |||
| 2 | Mr. Fuyunishiki Ryo | |||
| 3 | Mr. Wu Zhihua | |||
| 4 | Ms. Wu Shunyu | |||
| 5 | Hermann Limited | |||
| 6 | Smart Bloom Global Limited |
Amount due from related parties
Amount due from related parties consisted of the following for the periods indicated:
| As of March 31, 2025 | As of September 30, 2024 | |||||||||
| Hermman Limited(1) | Prepayment for service provided by related parties | $ | $ | |||||||
| Mrs. Qi Xiaoyu(2) | Interest bearing loan to related parties | |||||||||
| Total | $ | $ | ||||||||
| (1) |
| (2) |
Amounts due to related parties
Amount due to related parties consisted of the following for the periods indicated:
| As of March 31, 2025 | As of September 30, 2024 | |||||||||
| Mr. Fuyunishiki Ryo | Expenses paid on behalf of the Group | $ | $ | |||||||
| Ms. Wu Shunyu | Expenses paid on behalf of the Group | |||||||||
| Total | $ | $ | ||||||||
F-28
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
19. RELATED PARTY TRANSACTIONS (Cont.)
Related party transactions
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Expenses paid on behalf of the Group by related parties | ||||||||
| Mr. Fuyunishiki Ryo | $ | $ | ||||||
| Mrs. Qi Xiaoyu | ||||||||
| Ms. Wu Shunyu | ||||||||
| Total | $ | $ | ||||||
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Repayment to related parties | $ | |||||||
| Ms. Wu Shunyu | $ | |||||||
| Mr. Fuyunishiki Ryo | ||||||||
| Mrs. Qi Xiaoyu | ||||||||
| Total | $ | $ | ||||||
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Interest bearing loan to related parties with an annual interest rate of 4% | ||||||||
| Mrs. Qi Xiaoyu | $ | $ | ||||||
| Total | $ | $ | ||||||
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Service provided by related parties | ||||||||
| Hermann Limited(1) | $ | $ | ||||||
| Total | $ | $ | ||||||
| (1) |
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Stock-based compensation(1) | ||||||||
| Wu Zhihua | $ | $ | ||||||
| Total | $ | $ | ||||||
| (1) |
F-29
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
19. RELATED PARTY TRANSACTIONS (Cont.)
| For the six months ended March 31, | ||||||||
| Nature | 2025 | 2024 | ||||||
| Repurchase of Class A Shares by issuing Class B Shares | ||||||||
| Smart Bloom Global Limited (Wu Zhihua) | $ | $ | ||||||
| Total | $ | $ | ||||||
20. CONCENTRATION OF CREDIT RISK
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of accounts receivable. The Group conducts credit evaluations of its Customers, and generally does not require collateral or other security from them. The allowance for credit losses for accounts receivable is based upon the current expected credit losses (“CECL”) model. The CECL model requires an estimate of the credit losses expected over the life of accounts receivable since initial recognition, and accounts receivable with similar risk characteristics are grouped together when estimating CECL. The Group conducts periodic reviews of the financial condition and payment practices of its Customers to minimize collection risk on accounts receivable.
The following table sets forth a summary of single Customers who represent 10% or more of the Group’s total revenue.
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Percentage of the Group’s total revenue | ||||||||
| Customer N | % | |||||||
| Customer L | % | |||||||
| Customer M | % | |||||||
| Customer O | % | |||||||
| Customer E | % | |||||||
| Customer H | % | |||||||
| Customer G | % | |||||||
The following table sets forth a summary of single Customers who represent 10% or more of the Group’s total accounts receivable:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Percentage of the Group’s accounts receivable | ||||||||
| Customer K | % | % | ||||||
| Customer L | % | % | ||||||
| Customer M | % | % | ||||||
| Customer N | % | % | ||||||
| Customer E | % | |||||||
The following table sets forth a summary of single Customers who represent 10% or more of the Group’s total contract liabilities:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Percentage of the Group’s contract liabilities | ||||||||
| Customer O | % | % | ||||||
| Customer J | % | % | ||||||
| Customer G | % | % | ||||||
| Customer P | % | |||||||
| Customer Q | % | |||||||
F-30
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
20. CONCENTRATION OF CREDIT RISK (cont.)
The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total purchases:
| For the six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Percentage of the Group’s purchase | ||||||||
| Supplier S | % | |||||||
| Supplier B | % | % | ||||||
| Supplier O | % | * | ||||||
| Supplier F | % | |||||||
| Supplier J | % | |||||||
| Supplier H | % | |||||||
| Supplier I | % | |||||||
The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total account payable to suppliers:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Percentage of the Group’s account payable | ||||||||
| Supplier C | % | % | ||||||
| Supplier I | % | |||||||
| Supplier O | % | |||||||
The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total advance to suppliers:
| As of March 31, 2025 | As of September 30, 2024 | |||||||
| Percentage of the Group’s advance to | ||||||||
| Supplier T | % | |||||||
| Supplier P | % | |||||||
| Supplier Q | % | |||||||
| * |
21. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The total future minimum lease payments under the non-cancellable short-term operating lease which are not included in operating lease right-of-use assets and lease liabilities, with respect to the office and the warehouse as of March 31, 2025 are payable as follows:
| Lease Commitment | ||||
| Within 1 year | $ |
Contingencies
In the ordinary course of business, the Group may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Group records contingent liabilities resulting from such claims, when a loss is assessed to be probable and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of March 31, 2025 and through the issuance date of these unaudited interim condensed consolidated financial statements.
F-31
Linkage Global Inc
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
22. SUBSEQUENT EVENTS
Deregistration of HQT Network Co., Limited
HQT Network Co., Limited started the deregistration process on April 1, 2025. According to the Accounting Policy, the deregistration of HQT did not meet the criteria for presentation as a discontinued operation.
Share Consolidation
On April 7, 2025,
Appoint a new CEO
On April 14, 2025, Mr. Zhihua Wu (“Mr. Wu”) notified the Company of his resignation as the chief executive officer (the “CEO”) of the Company, effective on April 14, 2025. Mr. Wu has advised that his resignation was due to personal reasons and not a result of any disagreement with the Company on any matter related to the operations, policies, or practices of the Company. Mr. Wu will remain as the chairman and a member of the board of directors (the “Board”) of the Company. To fill in the vacancy created by the resignation of Mr. Wu as the CEO of the Company, on April 15, 2025, the Board appointed Ms. Yang (Angela) Wang (“Ms. Wang”) to serve as the new CEO of the Company, effective on April 15, 2025.
Establish a new company Linkage Global U.S. Inc. in the USA
On April 22, 2025 Linkage Global U.S. Inc. was established in 31 Hudson Yards OFC 51 New York.
Shareholders repay loans.
Mrs. Qi Xiaoyu had returned the whole amount of the loan of USD
Change of Independent Directors
Ms. Hui Li a member of the board of director of the Company has resigned from the Board of Directors of the Company and as a member of the Company’s audit committee, compensation committee and nominating and corporate governance committee effective as of April 30, 2025. On April 30, 2025, the Board of Directors of the Company (the “Board”) appointed Yang Wang, the Company’s Chief Executive Officer and Hong Chen to the Board.
Entry into Securities Purchase Agreement
On
May 14, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with 4 non-U.S. investors (the “Purchasers”),
pursuant to which the Company agreed to issue and sell in a private placement offering (the “Private
Placement”) an aggregate of
The Group has evaluated subsequent events through the date these unaudited interim condensed consolidated financial statements are issued on July 3, 2025. The Group did not identify any subsequent events with a material financial impact on the Group’s unaudited interim condensed consolidated financial statements.
32