Global Mofy AI Ltd 6-K, filed Jul 28, 2026
Global Mofy AI Ltd (GMM)
About this 6-K
Global Mofy AI Ltd filed this 6-K on July 28, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July
Commission File Number:
No. 102, 1st Floor, No. A12,
Xidian Memory Cultural and Creative Town
Gaobeidian Township, Chaoyang District, Beijing
People’s Republic of China, 100000
(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 ☐
On July 28, 2026, Global Mofy AI Limited announced its Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended March 31, 2026 and 2025, and the Unaudited Interim Consolidated Financial Statements for the same period, which are attached as Exhibit 99.1 and Exhibit 99.2, respectively.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months ended March 31, 2026 and 2025 | |
| 99.2 | Unaudited Interim Consolidated Financial Statements for the Six Months ended March 31, 2026 and 2025 | |
| 99.3 | Press Release dated July 28, 2026 | |
| 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). |
| 1 |
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.
| Global Mofy AI Limited | ||
| Date: July 28, 2026 | By: | /s/ Haogang Yang |
| Name: | Haogang Yang | |
| Title: | Chief Executive Officer | |
| 2 |
Exhibit 99.1
Key Components of Results of Operations
Comparison of Results of Operations for the Six Months Ended March 31, 2026 and 2025
The following tables summarize our results of operations from unaudited condensed consolidated statements of operations and comprehensive loss for the six months ended March 31, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| Amount | % of revenue | Amount | % of revenue | Amount | % | |||||||||||||||||||
| Revenues | $ | 39,932,329 | 100.0 | % | $ | 26,729,054 | 100.0 | % | $ | 13,203,275 | 49.4 | % | ||||||||||||
| Cost of revenues | (31,423,088 | ) | (78.7 | )% | (14,926,118 | ) | (55.8 | )% | (16,496,970 | ) | 110.5 | % | ||||||||||||
| Gross profit | 8,509,241 | 21.3 | % | 11,802,936 | 44.2 | % | (3,293,695 | ) | (27.9 | )% | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling expenses | (735,970 | ) | (1.8 | )% | (78,369 | ) | (0.3 | )% | (657,601 | ) | 839.1 | % | ||||||||||||
| General and administrative expenses | (5,597,888 | ) | (14.0 | )% | (4,229,947 | ) | (15.8 | )% | (1,367,941 | ) | 32.3 | % | ||||||||||||
| Research and development expenses | (14,444,400 | ) | (36.2 | )% | (5,808,899 | ) | (21.7 | )% | (8,635,501 | ) | 148.7 | % | ||||||||||||
| Impairment loss of Intangible assets | (38,438,830 | ) | (96.3 | )% | — | — | (38,438,830 | ) | 100.0 | % | ||||||||||||||
| Total operating expenses | (59,217,088 | ) | (148.3 | )% | (10,117,215 | ) | (37.8 | )% | (49,099,873 | ) | 485.3 | % | ||||||||||||
| (Loss) income from operations | (50,707,847 | ) | (127.0 | )% | 1,685,721 | 6.4 | % | (52,393,568 | ) | (3,108.1 | )% | |||||||||||||
| Other income (expenses): | ||||||||||||||||||||||||
| Interest income | 58,236 | 0.1 | % | 25,227 | 0.1 | % | 33,009 | 130.8 | % | |||||||||||||||
| Interest expenses | (69,386 | ) | (0.2 | )% | (145,354 | ) | (0.5 | )% | 75,968 | (52.3 | )% | |||||||||||||
| Change of fair value of warrant liability | 128,286 | 0.3 | % | 3,734,131 | 14.0 | % | (3,605,845 | ) | (96.6 | )% | ||||||||||||||
| Other income, net | 143 | 0.0 | % | 24,095 | 0.1 | % | (23,952 | ) | (99.4 | )% | ||||||||||||||
| Total other (loss) income, net | 117,279 | 0.2 | % | 3,638,099 | 13.7 | % | (3,520,820 | ) | (96.8 | )% | ||||||||||||||
| (Loss) income before income taxes | (50,590,568 | ) | (126.8 | )% | 5,323,820 | 20.1 | % | (55,914,388 | ) | (1,050.3 | )% | |||||||||||||
| Income taxes expense | (69,168 | ) | (0.2 | )% | (284,284 | ) | (1.1 | )% | 215,116 | (75.7 | )% | |||||||||||||
| Net (loss) income | (50,659,736 | ) | (127.0 | )% | 5,039,536 | 19.0 | % | (55,699,272 | ) | (1,105.2 | )% | |||||||||||||
Revenue
We generate revenue primarily through virtual technology service ,digital asset development and sales of digital asset. Total revenues increased by $13.20 million or 49.4%, from $26.7 million for the six months ended March 31, 2025, to $39.9 million for the six months ended March 31, 2026. The following table sets forth a breakdown of our revenues:
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Virtual technology service | $ | 27,102,442 | 67.9 | % | $ | 15,036,110 | 56.3 | % | $ | 12,066,332 | 80.2 | % | ||||||||||||
| Digital asset development and others | 7,932,537 | 19.9 | % | 11,692,944 | 43.7 | % | (3,760,407 | ) | (32.2 | )% | ||||||||||||||
| Sales of digital asset | 4,897,350 | 12.2 | % | — | — | % | 4,897,350 | 100.0 | % | |||||||||||||||
| Total | $ | 39,932,329 | 100.0 | % | $ | 26,729,054 | 100.0 | % | $ | 13,203,275 | 49.4 | % | ||||||||||||
Revenues from virtual technology service
Revenues from virtual technology service accounted for 67.9% and 56.3% of total revenues for the six months ended March 31, 2026 and 2025, respectively. Revenues from virtual technology service increased by $12.1 million, or 80.2% from $15.0 million for the six months ended March 31, 2025, to $27.1 million for the six months ended March 31, 2026.
Revenues from digital asset development and others
We launched our digital asset development and others business in the fourth quarter of 2021. Revenues from digital assets development and others accounted for 19.9% and 43.7% of total revenues for the six months ended March 31, 2026 and 2025, respectively. Revenues from digital assets development and others decreased by $3.8 million or 32.2% from $11.7 million for the six months ended March 31, 2025, to $7.9 million for the six months ended March 31, 2026. Rapid advancements in AI modeling technologies reduced traditional licensing revenue by $3.8 million.
Sales of digital asset
The Company launched a new revenue stream through selling digital assets to enterprises developing large language models in October, 2025, driving a $4.9 million increase in digital asset sales revenue for the period.
Cost of Revenues
Cost of revenues primarily consists of outsourcing content production costs, payroll and related costs for employees involved with the Company’s operations and product support, such as rental and depreciation expenses. Total cost of revenues increased by $16.5 million or 110.5%, from $14.9 million for the six months ended March 31, 2025, to $31.4 million for the six months ended March 31, 2026. The following table sets forth a breakdown of our cost of revenues by services offered for the six months ended March 31, 2026 and 2025:
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Virtual technology service | $ | 19,309,856 | 61.5 | % | $ | 9,489,173 | 63.6 | % | $ | 9,820,683 | 103.5 | % | ||||||||||||
| Digital asset development and others | 7,714,150 | 24.5 | % | 5,436,945 | 36.4 | % | 2,277,205 | 41.9 | % | |||||||||||||||
| Sales of digital asset | 4,399,082 | 14.0 | % | — | — | % | 4,399,082 | 100.0 | % | |||||||||||||||
| Total | $ | 31,423,088 | 100.0 | % | $ | 14,926,118 | 100.0 | % | $ | 16,496,970 | 110.5 | % | ||||||||||||
| 2 |
Cost of revenues for virtual technology service increased by $9.8 million, or 103.5%, from $9.5 million for the six months ended March 31, 2025 to $19.3 million for the six months ended March 31, 2026. Our cost of revenues of virtual technology service primarily consists of outsourcing costs, staff cost and allocated overhead related to each content production. The cost of revenues was varied in accordance with different projects.
Cost of revenues for digital asset development and others increased by $2.3 million, or 41.9%, from $5.4 million for the six months ended March 31, 2025 to $7.7 million for the six months ended March 31, 2026. The cost of revenue primarily comprised of salary and benefits incurred by staff responsible for the production of the licensed copyrights, cost or amortization of digital assets and out-sourced production and development services.
Cost of revenues for sales of digital asset amounted to $4.4 million for the current period. Such costs primarily reflect the net carrying value of our owned digital asset inventory upon delivery to customers. These long-held digital assets were amortized over their estimated useful lives before the sales transactions, and their residual carrying amounts are recorded as cost of revenues at the delivery date.
Gross Profit and Gross Margin
As a result of changes in revenue and cost of revenues, gross profit decreased by $3.3 million, or 27.9% from $11.80 million for the six months ended March 31, 2025 to $8.5 million for the six months ended March 31, 2026. The following table sets forth a breakdown of our gross profit and gross margin by services offered for the six months ended March 31, 2026 and 2025:
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| Gross profit | GM% | Gross profit | GM% | Amount % | % | |||||||||||||||||||
| Virtual technology service | $ | 7,792,586 | 28.8 | % | $ | 5,546,937 | 36.9 | % | $ | 2,245,649 | 40.5 | % | ||||||||||||
| Digital asset development and others | 218,387 | 2.8 | % | 6,255,999 | 53.5 | % | (6,037,612 | ) | (96.5 | )% | ||||||||||||||
| Sales of digital asset | 498,268 | 10.2 | % | — | — | 498,268 | 100.0 | % | ||||||||||||||||
| Total | $ | 8,509,241 | 21.3 | % | $ | 11,802,936 | 44.2 | % | $ | (3,293,695 | ) | (27.9 | )% | |||||||||||
The gross margin decreased from 44.2% for the six months ended March 31, 2025 to 21.3% for the six months ended March 31, 2026, which was mainly because that (i) the gross profits margin for virtual technology services decreased from 36.9% for the six months ended March 31, 2025 to 28.8% for the six months ended March 31, 2026. Gross margin varied in accordance with different projects. The variance in gross margin for virtual technology services is primarily due to completion of additional lower margin projects in the six months ended March 31, 2026 as compared to the prior period; (ii) the gross profits margin for digital asset development business and others decreased from 53.5% for the six months ended March 31, 2025 to 2.8% for the six months ended March 31, 2026. The decrease in gross margin of this business line is primarily driven by rapid advances in AI modeling technologies, which weighed down traditional licensing revenue; and (iii) the gross profits margin for sales of digital asset was 10.2%, corresponding to the Company’s newly launched business vertical.
Operating Expenses
Operating expenses increased by $49.1 million, or 485.3%, from $10.1 million for the six months ended March 31, 2025, to $59.2 million for the six months ended March 31, 2026. The change was primarily caused by the increase of $1.4 million in general and administrative expenses ,the increase of $0.7 million in selling expenses , the increase of $8.6 million in research and development expenses and the increase of $38.4 million in impairment loss of Intangible assets, respectively.
| 3 |
Selling Expenses
Selling expenses primarily included salary and benefit expenses incurred by sales and marketing personnel and related office expenses. Selling expenses increased by $0.7 million, or 839.1%, from $78,369 for the six months ended March 31, 2025 to $0.7 million for the six months ended March 31, 2026. Due to industry characteristic, our customer acquisition mainly relies on accumulated reputation in industry and internal recommendations, and there is no direct correlation between selling expenses and revenue growth. The increase in selling expenses was primarily attributable to share-based compensation expense of $0.7 million recognized during the current period.
General and Administrative Expenses
General and administrative expenses primarily consist of salary and benefit incurred by administration department as well as management, professional service fees, operating lease expenses for office rentals, deprecation, travelling expenses and provision for doubtful accounts. General and administrative expenses increased by $1.4 million, or 32.3%, from $4.2 million for the six months ended March 31, 2025 to $5.60 million for the six months ended March 31, 2026. The increase was primarily driven by a $4.1 million rise in share-based compensation expense, partially offset by a $1.5 million reduction in allowance for credit losses and a $0.6 million decrease in professional service fees. General and administrative expenses represent 14.0% and 15.8% of total revenues for the six months ended March 31, 2026 and 2025, respectively.
Research and Development Expenses
Research and development expenses primarily consist of employee salaries and benefits for research and development personnel, allocated overhead and outsourced development expenses. Cost incurred for the internally developed IP of virtual content, scripts and digital assets to be licensed or sold during the planning and designing stage are expensed when incurred and are included in the research and development expenses are expensed when incurred. Research and development expenses increased by $8.6 million, or 148.7%, to $14.4 million for the six months ended March 31, 2026, from $5.8 million for the same period in 2025. The increase in research and development expenses was primarily attributable to share-based compensation expense of $8.7 million recognized in the current period.
Impairment loss of Intangible assets
Impairment of intangible assets was primarily recognized due to technological advancements in the AI industry, which triggered an impairment charge on the digital assets held by the Company. The Company recognized an impairment charge of $38.4 million on its digital assets for the current period.
Other income (expenses)
Interest income
Interest income primarily arise from the loans to third parties. Interest income increased by $33,009, or 130.8%, to $58,236 for the six months ended March 31, 2026, from $25,227 for the same prior-year period.
Interest expenses
Interest expenses primarily arise from bank loans. Interest expenses decreased by $75,968, or 52.3%, to $69,386 for the six months ended March 31, 2026, from $145,354 for the same prior-year period, which was mainly attributable to lower average outstanding borrowings from banks.
Change in Fair Value of Warrant Liability
Warrants classified as liabilities are initially recorded at fair value with gains and losses arising from changes in fair value recognized in the unaudited condensed consolidated statements of operations during the period in which such instruments are outstanding. The fair value change gain for the six months ended March 31, 2026 was $0.1 million.
| 4 |
Income tax expense
We recorded an income tax expense of $69,168 for the six months ended March 31, 2026, compared to an income tax expense of $0.3 million for the same prior-year period.
Net (loss) Income
As a result of the foregoing, we recorded a net loss of $ 50.7 million for the six months ended March 31, 2026, as compared to a net income of $5.0 million for the same prior-year period.
5.B. Liquidity and Capital Resources.
In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. To date, we have financed our operations primarily through cash from operations, short-term borrowings from banks, and capital contributions from shareholders, which have historically been sufficient to meet our working capital requirements.
The Company currently plans to fund its operations mainly through cash flow from its operations, renewal of bank borrowings, funding from public offerings, if necessary, to ensure sufficient working capital. As of March 31, 2026, we had cash in the amount of $2.8 million. As of March 31, 2026, we had bank loans of $2.2 million; management expects that it would be able to obtain new bank loans or renew its existing bank loans upon their maturity based on past experience and the Company’s good credit history. On December 5, 2025, the Company entered into a Securities Purchase Agreement with several investors for a private placement of 300,000 (Pre-split 15,000,000) Class A ordinary shares, at a purchase price of $0.31875 per share. The net proceeds of $4.8 million were received on December 17 and December 18, 2025, respectively.
We believe that the current cash and cash flows provided by future operating activities and loans from banks and third parties will be sufficient to meet the working capital needs in the next 12 months from the date the financial statements were issued. If we experience an adverse operating environment or incurs unanticipated capital expenditure requirements, or if we decide to accelerate growth, then additional financing may be required. We cannot guarantee, however, that additional financing, if required, would be available at all or on favorable terms. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue additional debt or obtain financial support from shareholders. The principal shareholder of the Company has made pledges to provide financial support to the Company whenever necessary.
Substantially all of our current operations are conducted in China and all of our revenue, expenses, cash are denominated in RMB. Current foreign exchange and other regulations in the PRC may restrict our PRC entities in their ability to transfer their net assets to us. However, we have no present plans to declare dividend and we plan to retain our retained earnings to continue to grow business. In addition, these restrictions had no impact on our ability to meet cash obligations as all of current cash obligations are due within the PRC.
Cash Flows Analysis
For the Six Months Ended March 31, 2026 and 2025
The following table sets forth a summary of our cash flows for the periods indicated:
| For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash provided by (used in) operating activities | $ | 1,984,699 | $ | 10,131,789 | ||||
| Net cash (used in) investing activities | (7,046,738 | ) | (17,407,270 | ) | ||||
| Net cash provided by financing activities | 3,686,874 | 2,389,612 | ||||||
| Effect of foreign exchange rate on cash | 35,475 | (181,534 | ) | |||||
| Net (decrease)/increase in cash | (1,339,690 | ) | (5,067,403 | ) | ||||
| Cash and restricted cash at the beginning of the period | 4,172,732 | 11,068,560 | ||||||
| Cash and restricted cash at the end of the period | $ | 2,833,042 | $ | 6,001,157 | ||||
| 5 |
Operating Activities
Net cash provided by operating activities was $2.0 million for the six months ended March 31, 2026, mainly derived from (i) a net loss of $50.66 million adjusted for noncash depreciation amortization of $7.9 million, provision for doubtful accounts of $0.2 million, impairment loss of intangible assets of $38.4 million, equity-settled share based payments of $13.5 million, cost of intangible assets of $4.4 million and change in fair value of warrant liability of $0.1 million, (ii) net changes in the operating assets and liabilities, primarily comprising of (a) an increase in accounts receivable of $11.8 million because of the expansion of our business in this period; (b) an decrease in advance from customers of $1.9 million; (c) an increase accrued expenses and other liabilities of $1.1 million.
Net cash provided by operating activities was $10.1 million for the six months ended March 31, 2025, mainly derived from (i) a net income of $5.0 million adjusted for noncash depreciation amortization of $5.4 million, provision for doubtful accounts of $2.2 million, equity-settled share based payments of $1.4 million and change in fair value of warrant liability of $3.7 million, (ii) net changes in the operating assets and liabilities, primarily comprising of (a) an increase in advance from customers of $1.5 million because of the expansion of our business in this period; (b) an decrease in accounts payable of $0.6 million; (c) an decrease in advance to vendors of $2.5 million mainly for outsourced digital assets. We expect to utilize these prepayments before the fiscal year of 2025.
Investing Activities
Net cash used in investing activities amounted to $7.0 million for the six months ended March 31, 2026 mainly due to the Company purchased intangible assets of $7.0 million this period.
Net cash used in investing activities amounted to $17.4 million for the six months ended March 31, 2025, mainly due to the Company purchased intangible assets of $17.4 million this period.
Financing Activities
Net cash provided by financing activities amounted to $3.7 million for the six months ended March 31, 2026, primarily consisting of net proceeds from issuance of ordinary shares in private placement of $4.9 million and proceeds from bank loans of $1.4 million, partially offset by repayments of bank loans of $2.6 million.
Net cash provided by financing activities amounted to $2.4 million for the six months ended March 31, 2025, primarily consisting of net proceeds from issuance of ordinary shares upon public offering of $2.5 million and proceeds from bank loans of $1.9 million, partially offset by repayments of bank loans of $2.0 million.
Contractual Obligations
As of March 31, 2026 our contractual obligations were as follows:
| Payments due by period | ||||||||||||||||||||
| Total | Less than 1 year | 1 – 2 years | 2 – 3 years | More than 3 years | ||||||||||||||||
| Contractual Obligations | ||||||||||||||||||||
| Bank loans and interest expenses | $ | 2,247,028 | $ | 2,247,028 | $ | — | $ | — | $ | — | ||||||||||
| Loans from third parties | $ | 22,738 | $ | 22,738 | $ | — | $ | — | $ | — | ||||||||||
| Operating Lease Obligations | 243,136 | 144,087 | 99,049 | — | — | |||||||||||||||
| Total | $ | 2,512,902 | $ | 2,413,853 | $ | 99,049 | $ | — | $ | — | ||||||||||
| 6 |
Non-GAAP Financial Measures
We are providing supplemental financial measures for non-GAAP net income from operations that excludes the impact of share-based compensation expense, change in fair value of warrant liability and impairment loss of intangible assets. This supplemental financial measure is not measurement of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, this supplemental financial measure may not be comparable to similarly titled measures of other companies. Management uses this non-GAAP financial measure internally to help understand, manage, and evaluate our business performance and to help make operating decisions.
We believe that this non-GAAP financial measure is also useful to investors and analysts in comparing our performance across reporting periods on a consistent basis. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that share-based compensation expense, which is excluded from non-GAAP financial measures, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, and consultants. We will exclude impairment losses on intangible assets. Such impairment losses are mostly triggered by non-recurring events including changes in external market conditions and declines in the recoverable amount of assets, and do not represent the company's recurring operating profit or loss. However, the company may still recognize substantial impairment of intangible assets if technological iteration, business contraction, downward market demand or other similar circumstances arise in the future. We will also exclude changes related to the issuance of warrants from non-GAAP financial measures. Since we may still issue warrants, such income or losses may still occur in future periods. Our non-GAAP financial measure is not meant to be considered in isolation and should be read only in conjunction with our Consolidated Financial Statements, which have been prepared in accordance with GAAP. We rely primarily on such Consolidated Financial Statements to understand, manage, and evaluate our business performance and use the non-GAAP financial measure only supplementally.
The following is a reconciliation of our non-GAAP net (loss) income for the years ended March 31, 2026, and 2025 respectively, which excludes the impact of (i) share-based compensation expense, (ii) change in fair value of warrant liability, (iii) Impairment on IA:
| For the Six Months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Reconciliation of non-GAAP net (loss) income: | ||||||||
| Net (loss) income | $ | (50,659,736 | ) | $ | 5,039,536 | |||
| Share-based compensation expense | 13,466,620 | 1,419,000 | ||||||
| Change in fair value of warrant liability | (128,286 | ) | (3,734,131 | ) | ||||
| Impairment loss of intangible asset | 38,438,830 | — | ||||||
| Non-GAAP net income | $ | 1,117,428 | $ | 2,724,405 | ||||
| 7 |
Exhibit 99.2
GLOBAL MOFY AI LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars, except for the number of shares)
March 31, 2026 |
September 30, 2025 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Advances to vendors, net | ||||||||
| Due from related parties | ||||||||
| Investment in short drama | ||||||||
| Prepaid expenses and other current assets, net | ||||||||
| Total current assets | $ | $ | ||||||
| Non-current assets | ||||||||
| Long-term investment | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Advances to vendor – noncurrent | ||||||||
| Other assets | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Short-term bank loans | $ | $ | ||||||
| Loans from third parties | ||||||||
| Accounts payable | ||||||||
| Advances from customers | ||||||||
| Due to a related party | ||||||||
| Tax payable | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Total current liabilities | ||||||||
| Non-current Liabilities | ||||||||
| Operating lease liabilities – non-current | ||||||||
| Warrant liability | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments | ||||||||
| Equity: | ||||||||
| Class A ordinary shares ($ | ||||||||
| Class B Ordinary Shares ($ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Accumulated deficits | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) | ( | ) | ||||||
| Total Global Mofy AI Limited shareholders’ equity | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
GLOBAL MOFY AI LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Expressed in U.S. Dollars, except for the number of shares)
For the Six Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Impairment loss of intangible assets | ( | ) | ||||||
| Total operating expenses | ( | ) | ( | ) | ||||
| (Loss) income from operations | ( | ) | ||||||
| Other income (expenses): | ||||||||
| Interest income | ||||||||
| Interest expenses | ( | ) | ( | ) | ||||
| Change in fair value of warrant liability | ||||||||
| Other income, net | ||||||||
| Total other income, net | ||||||||
| (Loss) income before income taxes | ( | ) | ||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net (loss) income | ( | ) | ||||||
| Net loss attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Net (loss) income attributable to Global Mofy AI Limited | $ | ( | ) | $ | ||||
| Comprehensive income | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Foreign currency translation gain (loss) | ( | ) | ||||||
| Total comprehensive (loss) income | ( | ) | ||||||
| Comprehensive loss attributable to non-controlling interests | ||||||||
| Comprehensive (loss) income attributable to Global Mofy AI Limited | $ | ( | ) | $ | ||||
| (Losses) earnings per common share | ||||||||
| – Basic* | $ | ( | ) | $ | ||||
| – Diluted* | $ | ( | ) | $ | ||||
| Weighted average number of common shares outstanding | ||||||||
| – Basic* | ||||||||
| – Diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
GLOBAL MOFY AI LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in U.S. Dollars, except for the number of shares)
| Ordinary Shares | Additional | Accumulated Other |
Non- | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Statutory | Accumulated | Comprehensive | controlling | Total | |||||||||||||||||||||||||||||||||
| Shares* | Amount | Shares | Amount | Capital | Reserves | Deficit | Income (loss) | Interests | Equity | |||||||||||||||||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares in connection with registered direct offering, net of transaction cost | ||||||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares in connection with exercise of warrant | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||||||
| Cashless exercise of warrants | ||||||||||||||||||||||||||||||||||||||||
| Net income for the period | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Appropriation to statutory reserve | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 (Unaudited) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Issuance of ordinary shares in connection with registered direct offering, net of transaction cost | ||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
GLOBAL MOFY AI LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
For the Six Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Credit losses and allowance for doubtful accounts, net of recovery | ||||||||
| Impairment loss of intangible assets | ||||||||
| Equity-settled share-based payments | ||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Advances to vendors, net | ( | ) | ||||||
| Prepayments and other assets | ||||||||
| Amounts due from related parties | ( | ) | ||||||
| Accounts payable | ||||||||
| Advance from customers | ( | ) | ||||||
| Taxes payable | ( | ) | ||||||
| Cost of intangible assets sold | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Investment in short drama | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from short-term bank loans | ||||||||
| Repayments of short-term bank loans | ( | ) | ( | ) | ||||
| Net proceeds from issuance of ordinary shares and warrant with a private placement | ||||||||
| Net proceeds from issuance of ordinary shares in private placement, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rate on cash | ( | ) | ||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash and restricted cash at the beginning of the period | ||||||||
| Cash and restricted cash at the end of the period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Cash paid for amounts included in the measurement of lease liabilities - operating | $ | |||||||
| Non-cash transactions of investing and financing activities: | ||||||||
| Initial recognition of warrant liabilities | $ | $ | ||||||
| Liability extinguished upon exercise of warrants | $ | $ | ||||||
| Initial issuance cost of warrants allocated to equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION
Global Mofy AI Limited (“Global Mofy Cayman”) was incorporated on
Global Mofy Cayman owns
Global Mofy HK owns
Global Mofy Cayman, Global Mofy HK, and Global Mofy WFOE are currently not engaging in any active business operations and are merely acting as holding companies.
Prior to the reorganization described below, the main operating activities of Global Mofy Cayman and its subsidiaries (the “Company”) were carried out by Global Mofy (Beijing) Technology Co., Ltd. (“Global Mofy China”) and its subsidiaries. Global Mofy China was established on November 22, 2017 under the laws of the PRC. Global Mofy China has three wholly-owned subsidiaries, Kashi Mofy Interactive Digital Technology Co., Ltd. (“Kashi Mofy”), Shanghai Moying Feihuan Technology Co., Ltd. (“Shanghai Mofy”) and Mofy Filming (Hainan) Co., Ltd. (“Mofy Hainan”), which were established on July 31, 2019, May 11, 2020 and January 4, 2021 in China, respectively. Global Mofy China acquired
In preparation for listing in a stock market of the United States of America, the Company underwent a reorganization through entering into various contractual arrangements (the “Contractual Arrangements”), which, effective from January 5, 2022, between Global Mofy WFOE, Global Mofy China and their respective equity holders (the “Corporate Reorganization”) due to regulatory restrictions on foreign ownership in the radio and television program production and operation business and value-added telecommunications business in the PRC. In June, 2022, the Company removed the radio and television program production from its business scope and the reason to use the VIE structure was no longer relevant. Historically, the Company did not produce any radio or television program.
On June 28, 2022, Global Mofy WFOE entered into equity transfer agreements with each shareholder of Global Mofy China to purchase all the equity interest in Global Mofy China. On July 8, 2022, Global Mofy WFOE, Global Mofy China and shareholders of Global Mofy China signed a termination agreement of the VIE Agreements. The VIE structure was dissolved. The restructure was completed on July 8, 2022. As a result, Global Mofy China became a wholly owned subsidiary of Global Mofy WFOE. Immediately before this acquisition, Global Mofy China was a foreign-invested joint venture.
On April 3, 2023, Global Mofy HK owns
Global Mofy Cayman together with its wholly owned subsidiaries Global Mofy HK, Global Mofy WFOE, Zhejiang WOFE and Global Mofy China and its subsidiaries were effectively controlled by the same shareholders before and after the reorganization and therefore the reorganization was considered under common control and included at their historical carrying values. The consolidation of the Company has been prepared on the basis as if the reorganization had become effective as of the beginning of the first period presented in the consolidated financial statements.
On December 14, 2023, the Company established a wholly owned subsidiary, Global Mofy (Beijing) Technology Co., Ltd (“Global Mofy California”), under the laws of the State of California, to develop and expand overseas business. In February 2024, the Company established a wholly owned subsidiary, Gauss Intelligence (Beijing) Technology Co.. Ltd., under the laws of China, which will focus on the monetization of artificial intelligence generated content (AIGC), AI-generated 3D digital assets and synthetic video content creation. In March 2024, the Company established a wholly owned subsidiary, Anji Century Mofy Education Consulting Co., Ltd., under the laws of China, planning education and training operations. In May 2024, the Company established a wholly owned subsidiary GMM Discovery LLC, under the laws of the State of Delaware, to serve a diverse client base and explore new market opportunities. In September 2024, the Company established a wholly owned subsidiary, Kuyu Intelligent Technology (Anji) Co., Ltd., under the laws of China. On January 16, 2025, the Company established a wholly owned subsidiary, Global Mofy (Lianyungang) Technology Co., Ltd. under the laws of China. On July 22,2025, the Company established a wholly owned subsidiary, Mo Fei Xiao Xi (Lingshui) Culture Co., Ltd., under the laws of China. On November 10, 2025, the Company established a wholly owned subsidiary, Global Mofy Cultural Tourism Technology (Beijing) Co., Ltd., under the laws of China. On December 11, 2025, the Company established Xingmo Zhizao (Beijing) Technology Co., Ltd., a subsidiary in which the Company holds a
| 5 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Global Mofy Cayman and its subsidiaries are mainly engaged in providing virtual content production and online advertising services. The Company’s headquarters are located in the city of Beijing, China.
The Company’s ordinary shares started to be traded on NASDAQ under the ticker of GMM on October 10, 2023. On October 12, 2023, the Company completed its initial public offering of
On November 26, 2024, the Company effected a reverse stock split at a ratio of
As of March 31, 2026, the Company’s major subsidiaries are as follows:
| Name of Entity | Date of Incorporation | Place of Incorporation | % of Ownership | Principal Activities | ||||||
| Global Mofy HK Limited (“Global Mofy HK”) | % | |||||||||
| Mofy Metaverse (Beijing) Technology Co., Ltd (“Global Mofy WFOE”) | % | |||||||||
| Zhejiang Mofy Metaverse Technology Co., Ltd (“Zhejiang WFOE”) | % | |||||||||
| Global Mofy (Beijing) Technology Co., Ltd. (“Global Mofy China”) | % | |||||||||
| Kashi Mofy Interactive Digital Technology Co., Ltd. (“Kashi Mofy”) | % | |||||||||
| Shanghai Moying Feihuan Technology Co., Ltd. (“Shanghai Mofy”) | % | |||||||||
| Xi’an Shuzi Yunku Technology Co., Ltd (“Xi’an Mofy”) | % | |||||||||
| Mofy (Beijing) Filming Technology Co., Ltd. (“Beijing Mofy”) | % | |||||||||
| Global Mofy (Beijing) Technology Co., Ltd (“Global Mofy California”) | % | |||||||||
| Gauss Intelligence (Beijing) Technology Co.. Ltd. (“Gauss Intelligence”) | % | |||||||||
| Anji Century Mofy EducationConsulting Co., Ltd. (“Century Mofy”) | % | |||||||||
| GMM Discovery LLC (“Gauss Intelligence”) | % | |||||||||
| Kuyu Intelligent Technology (Anji) Co., Ltd. (“Kuyu Intelligence”) | % | |||||||||
| Global Mofy(Lianyungang) Technology Co., Ltd. (“Lianyungang Intelligence”) | % | |||||||||
| Mo Fei Xiao Xi (Lingshui) Culture Co., Ltd. (“Lingshui Intelligence”) | % | |||||||||
| Global Mofy Cultural Tourism Technology (Beijing) Co., Ltd.(“Cultural Tourism Intelligence”) | % | |||||||||
| Xingmo Zhizao (Beijing) Technology Co., Ltd.(“Xingmo Zhizao”) | % | |||||||||
| Eaglepoint AI Inc (“Eaglepoin”) | % | |||||||||
| 6 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
In our opinion, all adjustments of a normal recurring nature necessary for fair financial statement presentation have been made. Results for the interim periods are not necessarily indicative of results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes there to included in the Company’s Annual Report on Form 20-F for the year ended September 30, 2025, which was filed with the SEC on January 9, 2026.
(b) Principles of consolidation
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.
(c) Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
(d) Non-controlling interests
Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. For subsidiaries consolidated by the Company, non-controlling interests represent the equity held by minority shareholders as follows: as of March 31, 2026, minority shareholders held a
Non-controlling interests are presented as a separate line item in the equity section of the Company’s Consolidated Balance Sheets and have been separately disclosed in the Company’s unaudited condensed Consolidated Statements of Comprehensive Income (Loss) to distinguish the interests from that of the Company.
| 7 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(e) Use of estimates
In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the assessment of the allowance for credit losses, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, uncertain tax position and valuation allowance for deferred tax assets, fair value of warrants liabilities and fair value of stock-based compensation. Actual results could differ from those estimates.
(f) Cash and restricted cash
Cash includes cash on hand and demand deposits placed with commercial banks. The Company maintains most of the bank accounts in mainland China.
Restricted cash includes the pledged bank certificates of deposit provided by the company to the pledgee in relation to the company’s bank loans.
(g) Investment in short drama
Investment in short drama mainly involve cooperation between the Company as an investor and third parties. Under this cooperation model, the Company participates in the project by providing capital investment, while the cooperative party is mainly responsible for core links such as the selection of topics, planning, and production execution of the short drama. The Company does not own the distribution rights or ownership of the short drama. After the project is completed and launched, the Company can enjoy corresponding profit sharing in proportion to its investment.
The Company initially measures its investment in short dramas based on the investment cost. Cash receipts from income sharing arrangement are applied to recover the initial investment or advance, with excess recognized as income consistent with ASC 310-10-35-53A. The Company performs an impairment test on investment in short drama every fiscal year. If there is objective evidence indicating that the present value of the estimated future cash flows of such investments is lower than their carrying amount, i.e., the relevant investment income is highly likely to be unrecoverable in full, an impairment provision will be recognized for them. As of March 31, 2026 and September 30, 2025, the balance of impairment provision for the Company’s Investment in short drama is $.
(h) Expected credit losses
The Company’s accounts receivable from both third parties and related parties, and other receivables, which is included in the prepaid expenses and other current assets,net, are within the scope of ASC326. ASC 326 introduces an approach based on expected credit losses on financial assets at amortized cost. Upon adoption of ASC326, the Company estimates the expected credit losses for accounts receivable using the roll-rate method on a collective basis when similar risk characteristics exist. The roll-rate method stratifies the receivables balance by delinquency stages and projected forward in three-month increments using historical roll rate. In each year of the simulation, losses on the receivables are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. The loss rate calculated for each delinquency stage is then adjusted for both current and forecasts of economic conditions. The management then applied the adjusted loss rate to respective receivables balance.
For other receivables, the Company uses the loss-rate method to evaluate the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment on various factors, including historical experience, credit-worthiness of debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.
Expected credit losses are included in general and administrative expenses in the consolidated statements of income and comprehensive income. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
| 8 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(i) Accounts receivable, net
Accounts receivable are presented net of allowance for expected credit losses. Accounts receivable is recognized in the period when the Company has unconditional right to consideration for goods provided to its customers. As of March 31, 2026 and September 30, 2025, the allowance for expected credit losses was $
(j) Property and equipment, net
Property and equipment are stated at cost, net of accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance, 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. When assets are retired or disposed of, the cost and accumulated depreciation and amortization are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation expense was $
Estimated useful lives are as follows:
| Office equipment |
(k) Intangible assets, net
Intangible assets are digital assets acquired from third-party suppliers and mainly include 3D models with finite lives and are carried at cost less accumulated amortization and impairment loss, if any. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic life.
Estimated useful lives are as follows:
| Category | Estimated useful lives | |
| Licensed digital assets |
Licensing assets should be capitalized if they meet the following conditions:
The license provides the Company with the exclusive or non-exclusive right to use the intellectual property for a specific period.
The acquired license has a determinable useful life, and the costs are directly attributable to the acquisition.
The contract is enforceable and provides rights that the Company can rely on for future benefit.
The acquisition of the license is not considered part of ordinary inventory or operating costs.
(l) Long-term investments
The Company’s long-term investments include equity investments in entities. Equity securities without readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.
In December 2023, the Company made an investment of $
| 9 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(m) Impairment of long-lived assets other than goodwill
Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When such events occur, the Company evaluates the impairment for the long-lived assets 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.
Management reviews these intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount, an impairment loss would be recognized to write down the asset to its estimated fair value.
As of March 31, 2026, the Company performed qualitative impairment screening followed by quantitative recoverability testing for certain licensed digital intangible assets. The excess of carrying amount over fair value of these assets amounted to $
As of March 31, 2026, the Company performed qualitative and then quantitative impairment assessments on certain intangible assets, concluding that these licensed digital assets were impaired by $
(n) Fair value of financial instruments
The Company applies ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820’’). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided at fair value measurement.
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
| ● | 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. |
ASC 820 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.
Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, advances to vendors, prepaid expenses and other current assets, short-term bank loans, accounts payable, advances from customers, due to related parties, taxes payable, and accrued expenses and other current liabilities approximate their recorded values due to their short-term maturities. The fair value of longer-term leases approximates their recorded values as their stated interest rates approximate the rates currently available.
The Company’s non-financial assets, such as property and equipment and intangible assets would be measured at fair value only if they were determined to be impaired.
| 10 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(o) Leases
The Company accounted for leases in accordance with ASC Topic 842, Leases. The Company determines if an arrangement is a lease at inception. All the Company’s leases are operating leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and includes initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for minimum lease payments are recognized on a straight-line basis over the lease term. All operating lease right-of-use assets are reviewed for impairment annually. There was impairment for operating lease right-of-use lease assets for the six months ended March 31, 2026 and 2025.
The Company elected not to record assets and liabilities on its consolidated balance sheet for lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term.
(p) Revenue recognition
The Company had adopted ASC Topic 606 since the fiscal year ended September 30, 2023. In accordance with ASC 606, revenues from contracts with customers are recognized when control of the promised goods or services are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: (i) identify the contracts with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when, or as the entity satisfies a performance obligation.
The Company’s revenues are derived principally from virtual technology service, digital marketing and digital asset development and others.
Revenue from virtual technology service
The Company engages in virtual content production for visual effects in movies, television series, animations, games, advertisements, tourism, augmented reality (“AR”) and virtual reality (“VR”) technology, etc. The virtual content production contracts are primarily on a fixed price basis, which requires the Company to perform services for visual effects design, content development, production and integration based on customers’ specific needs. The required production period is generally less than one year.
The virtual content production services are considered to be a single performance obligation because the Company provides a significant service of integrating different services underlying each contract, which are highly interdependent and interrelated with one another. The Company currently does not have any modification of contract, and the contracts currently do not have any variable consideration.
The customer of the virtual content production contract can only obtain control of the produced virtual content after the project is completed. The Company satisfies its performance obligation at a point in time only when it transfers the developed content to the customer. The virtual content becomes an asset when it is developed by the Company. The Company can direct the use of the product and obtain substantially all of the remaining benefits of the asset. The customer can direct the use and obtain benefits of the assets only after the development is completed and control has transferred from the Company upon acceptance by the customer. The customer does not simultaneously receive or consume the benefits provided by the Company’s performance as the Company performs. The customer can only benefit from the final output of the virtual content as delivered by the Company. The customer does not have control over the content as it is developed. The developed virtual content may be sold as digital assets by the Company and the payment is collected in advance based on the contract upon each milestone and would be refundable if the Company does not meet the customer’s needs or there is other default. Hence, none of the criteria of ASC 606-10-25-27 is met. Revenue from virtual content production is recognized at the point in time when the Company satisfies the performance obligation by transferring promised virtual content product upon acceptance by customers.
Revenue from digital asset development and others
The Company enters into copyright licensing contracts to authorize production rights, adaptation rights, sublicense rights of licensed copyrights and digital assets with entertainment production companies. The licensing provides customers the right to use the Company’s IP as it exists since neither of the criteria stated in ASC 610-10-55-62 are met. The specific licensed copyrights and digital assets authorized to customers are all developed IP, which are unique and do not require ongoing maintenance or effort from the Company to assure the usefulness of the license. The Company is entitled to receive the license fee under the licensing arrangements and does not have any future obligation once it has provided the underlying IP content to the licensee. The Company may use such authorized assets as a base model to produce new digital assets; however, these customers will not be contractually or practically required to use them. The revenue is recognized at the point in time when the licensed copyright and digital asset are made available for the customer’s use and benefit.
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GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue from sales of digital asset
Since October 1, 2025, the Company has engaged in the digital asset sales business, whereby it transfers fully completed, proprietary self-developed digital intellectual property rights to large model manufacturers to support the customers’ model training activities. The Company satisfies its performance obligations upon document delivery and completion of the IP transfer, with no subsequent maintenance or technical update services required. Contracts specify fixed full consideration and standard payment terms; there are no significant financing components, nor any variable consideration subject to constraint assessment. The Company acts as the principal instead of an agent in these transactions. Subsequent to asset delivery, the Company assumes no obligations for customer returns, refunds, miscellaneous compensation or warranty liabilities. Revenue is recognized at a point in time when customers obtain full control over the digital assets and are able to utilize such assets to generate economic benefits.
Disaggregation of revenue
The following table summarized disaggregated revenue for the six months ended March 31, 2026 and 2025:
| For the Six Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Category of Revenue | ||||||||
| Virtual technology service | $ | $ | ||||||
| Digital asset development and others | ||||||||
| Sales of digital asset | ||||||||
| $ | $ | |||||||
| Timing of Revenue Recognition | ||||||||
| Services transferred at a point in time | $ | $ | ||||||
| Services transferred over time | ||||||||
| $ | $ | |||||||
| Revenue recognized on gross basis | $ | $ | ||||||
| Revenue recognized on net basis | ||||||||
| $ | $ | |||||||
Contract balance
The Company recognizes accounts receivable in its unaudited condensed consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. Payments received from its customers are based on the payment terms established in its contracts. Such payments are initially recorded to advances from customers and are recognized into revenue as the Company satisfies its performance obligations. As of March 31, 2026 and September 30, 2025, the balance of advances from customers amounted to $
(q) Cost of revenue
Cost of revenues consists primarily of outsourcing content production cost, amortization cost of intangible assets, payroll and related costs for employees involved with the Company’s operations and product support, such as rental and depreciation expenses. These costs are charged to the unaudited condensed consolidated statement of comprehensive income as incurred.
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GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
For the Company's digital asset sales business, cost of revenues is recognized when customers obtain control of the assets, rather than as incurred. Such costs are measured at the carrying amount of the digital assets at the delivery date and are recognized as cost of revenues on a one-time basis upon revenue recognition. Specifically: (i) for pre-existing digital assets previously classified as intangible assets, which have been amortized over their estimated useful lives prior to the transfer, the cost of revenues is recognized at their carrying amount upon delivery; and (ii) for digital assets subsequently acquired or developed specifically for external transfer, acquisition costs and capitalized development costs are aggregated as the cost of such assets.
(r) Selling expenses
Selling expenses consist primarily of promotion and advertising expenses, staff costs and other daily expenses which are related to the selling and marketing departments. These expenses are charged to the consolidated statement of comprehensive income (loss) as incurred.
(s) General and administrative expenses
General and administrative expenses consist primarily of salaries and welfare expenses and related expenses for employees involved in general corporate functions, including accounting, legal and human resources, and costs associated with use by these functions of facilities and equipment, such as traveling and general expenses, professional service fees and other related expenses. These expenses are charged to the consolidated statement of comprehensive income (loss) as incurred.
(t) Research and development expenses
Research and development expenses consist primarily of employee salaries and benefits for research and development personnel, allocated overhead and outsourced development expenses. Cost incurred for the internally developed IP of virtual content, scripts and digital assets to be licensed or sold during the planning and designing stage are expensed when incurred and are included in the research and development expenses. Costs incurred in the development phase subsequent to establishing technological feasibility of such IP are capitalized. During the six months ended March 31, 2026 and 2025, as such costs qualified for capitalization, all of the cost incurred for the internally developed IP of virtual content, scripts and digital assets to be licensed or sold are expensed.
(u) Income taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or future deductibility is uncertain. The Company’s subsidiaries in the PRC and Hong Kong are subject to the income tax laws of the PRC and Hong Kong. No taxable income was generated outside the PRC for the six months ended March 31, 2026 and 2025.
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GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The provisions of ASC 740-10-25, Accounting for Uncertainty in Income Taxes, prescribe a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. Tax positions that meet the “more likely than not” recognition threshold are measured, using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The estimated liability for unrecognized tax benefits is periodically assessed for adequacy and may be affected by changing interpretations of laws, rulings by tax authorities, changes and or developments with respect to tax audits, and the expiration of the statute of limitations. Additionally, in future periods, changes in facts and circumstances, and new information may require the Company and its wholly-owned subsidiaries to adjust the recognition and measurement of estimates with regards to changes in individual tax position. Changes in recognition and measurement of estimates are recognized in the period which the change occurs. ASC 740 also provides guidance on the recognition of income tax assets and liabilities, classification accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures.
(v) Value added tax (“VAT”)
The Company’s PRC subsidiaries are subject to value-added tax (“VAT”) and related surcharges based on gross sales or service price depending on the type of services provided in the PRC (“output VAT”), and the VAT may be offset by VAT paid by the Company on service purchases (“input VAT”). The applicable rate of output VAT or input VAT for the Company is
(w) Warrant liabilities
The Company accounts for the warrants issued in connection with ordinary shares (see note 10) in accordance with the guidance contained in ASC Topic 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815”), under which the warrants do not meet the criteria for equity treatment and will be recorded as liabilities. Accordingly at initial recognition, the Company classifies such warrants as liabilities at their fair value. This warrant liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the consolidated statements of operations. For the six months ended March 31, 2026 and 2025, the total change in its fair value was gain of $
(x) Earnings (loss) per share
The Company computes earnings (loss) per share (“EPS”) in accordance with ASC Topic 260, Earnings per Share (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing net income (loss) 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. Potential ordinary share that has an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. For the six months ended March 31, 2026 and 2025, there were dilutive shares.
(y) Foreign currency translation and transactions
The reporting currency of the Company is the U.S. dollar (“US$”), and the accompanying consolidated financial statements have been expressed in US$. The Company’s principal country of operations is the PRC. The financial position and results of its operations are determined using the Chinese Yuan (“RMB”), the local currency, as the functional currency. The Company’s consolidated financial statements have been translated into the reporting currency, US$. The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity (deficit). Gains and losses from foreign currency transactions and balances are included in the results of operations.
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GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of US$ reporting.
March 31, 2026 | September 30, 2025 | |||||||
| Period-end spot rate | ||||||||
For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Average rate | ||||||||
(z) Stock-based compensation
The Company recognizes stock-based compensation expense on a straight-line basis over the applicable requisite service period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects the Company’s assessment of the probability of achieving the performance targets.
Fair value of stock options and shares subject to the Company’s employee stock purchase plan are estimated using the Black-Scholes valuation model; fair value of performance share unit (“PSU”) awards, restricted stock unit (“RSU”) awards and restricted stock awards (“RSA”) is based on the closing market price on the day preceding the grant. The Company’s accounting treatment of forfeiture expenses reversals is at the forfeiture date and does not estimate future forfeitures prior to their actual occurrence.
Shares to be issued upon the exercise of stock options or the requisite service period of stock awards will come from newly issued shares.
(aa) Segment reporting
ASC Topic 280, Segment Reporting (“ASC 280”) establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and the types of customers to help users of financial statements to better understand the Company’s performance, assess its prospects for future cash net cash flow and make more informed judgements about the Company in a whole.
The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company.
Based on the management’s assessment, the Company determined that it has only one operating segment and therefore one reportable segment as defined by ASC 280. The Company’s assets are substantially all located in the PRC and substantially all of the Company’s revenue and expense are derived in the PRC. Therefore, no geographical segments are presented.
(ab) Significant risks and uncertainties
Currency convertibility risk
Substantially all of the Company’s operating activities are settled in RMB, which 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 Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
| 15 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Concentration and credit risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.
The Company maintains certain bank accounts in the PRC, Hong Kong and Cayman. As of March 31, 2026 and September 30, 2025, cash balances in the PRC are $
Accounts receivables are typically unsecured and derived from services rendered to customers that are located in China, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its accounts receivable with specific customers.
Major Customers
For the six months ended March 31, 2026, one customer’s revenue accounts for more than 10% of the total revenue. For the six months ended March 31, 2025, no customer’s revenue accounts for more than 10% of the total revenue.
As of March 31, 2026, the balance due from one customer accounted for approximately
Major Suppliers
For the six months ended March 31, 2026, one supplier’s purchase accounted for more than 10% of the total purchases. For the six months ended March 31, 2025, no supplier’s purchase accounted for more than 10% of the total purchases.
As of March 31, 2026, three suppliers accounted for approximately
Interest rate risk
Fluctuations in market interest rates may negatively affect the Company’s financial condition and results of operations. The Company is exposed to floating interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material. The Company has not used any derivative financial instruments to manage the Company’s interest risk exposure.
(ac) Recent accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The Update requires that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). The ASU is effective for public business entities for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. The Company adopted this ASU on October 1, 2025, and the adoption would not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.
| 16 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance primarily will require enhanced disclosures about certain types of expenses. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 and may be applied either on a prospective or retrospective basis. The Company does not expect the adoption will have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial position, statements of comprehensive income and cash flows.
NOTE 3 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
The movement of allowance for credit loss is as follows:
For the March 31, 2026 | For the September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Balance at beginning of the period | $ | $ | ||||||
| Addition | ||||||||
| Foreign exchange translation | ( | ) | ||||||
| Balance at end of the period | $ | $ | ||||||
NOTE 4 — ADVANCES TO VENDORS, NET
Advances to vendors consisted of the following:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Prepayments for virtual technology services | $ | $ | ||||||
| Prepayments for digital assets development | ||||||||
| Subtotal | $ | |||||||
| Less: allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Total advances to vendors, net | $ | |||||||
| Less: advances to vendors – noncurrent | ||||||||
| Advances to vendors – current | $ | $ | ||||||
Advances to vendors primarily consisted of prepayments for virtual technology services, digital marketing and digital assets development outsourced to third party vendors. As of March 31, 2026 and September 30, 2025, the Company recorded allowance for doubtful accounts of $
| 17 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 — ADVANCES TO VENDORS, NET (cont.)
The movement of allowance of doubtful accounts is as follows:
For the March 31, 2026 | For the September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Balance at beginning of the period | $ | $ | ||||||
| Addition | ||||||||
| Foreign exchange translation | ( | ) | ||||||
| Balance at end of the period | $ | $ | ||||||
NOTE 5 — INTANGIBLE ASSETS, NET
Intangible assets, net consisted of the following:
| As of March 31, 2026 | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Impairment | Net Carrying Value | |||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| Intangible assets | ||||||||||||||||
| Licensed digital assets | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Total | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| As of September 30, 2025 | ||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Impairment | Net Carrying Value | |||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| Intangible assets | ||||||||||||||||
| Licensed digital assets | $ | $ | ( | ) | $ | $ | ||||||||||
| Total | $ | $ | ( | ) | $ | $ | ||||||||||
| Estimated Amortization Expenses: | ||||
| For year ended 3/31/2027 | $ | |||
| For year ended 3/31/2028 | ||||
| For year ended 3/31/2029 | ||||
| Total | $ | |||
The Company categorizes its intangible assets into three independent asset groups, including character assets, prop assets and scenario assets, based on the Company’s business model and underlying cash flow generation logic for impairment assessment purposes. Following the launch of the new-generation AI modeling platform, high-quality individual character and prop models that previously required manual production can now be automatically generated within minutes through AI technology based on text or image prompts. This fundamental technological upgrade has resulted in a substantial decline in both the replacement cost and market licensing value of traditional general character and prop assets.
As of March 31, 2026, the Company determined that the character asset group and prop asset group are no longer expected to generate future economic benefits, and clear impairment indicators existed for such assets. By contrast, complex integrated scene assets cannot be fully replicated by current mainstream AI modeling tools given high requirements for spatial logic, structural rationality and overall rendering effects. The scene asset group is expected to generate continuous positive undiscounted cash inflows throughout its revised three-year remaining useful life, and impairment triggers were identified for scene assets as of March 31, 2026.
| 18 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 — INTANGIBLE ASSETS, NET (cont.)
The Company performed a recoverability test on the character asset group and prop asset group as of March 31, 2026 by comparing their aggregate carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset groups. Testing results showed that the undiscounted projected future cash flows generated by the asset group fell below its carrying amount, signifying the asset group’s carrying value was unrecoverable. The aggregate carrying amount of these two asset groups totaled $
Fair value measurement for the impaired character and prop asset groups is classified within Level 3 of the fair value hierarchy in accordance with ASC 820. The Company utilized the income approach for the Level 3 fair value measurement. Significant unobservable inputs incorporated into the valuation model are projected undiscounted future cash flows and estimated remaining useful life for each respective asset group.
The launch of the new-generation AI modeling platform has ushered in a period of rapid iteration for 3D generation technology. Accelerated technological advancements are expected to materially shorten the estimated useful lives of digital intangible assets. Accordingly, the Company revised the remaining period over which its remaining intangible assets are projected to generate economic benefits from the previously estimated five years to three years. This revision constitutes a reasonable change in accounting estimate, which was made based on updated industry landscape outlook and technological development trends.
This change in accounting estimate was effective as of March 31, 2026 and will be applied prospectively beginning with the subsequent reporting period. incremental amortization expense was recognized in the period ended March 31, 2026, and accordingly, there was impact on the Company’s net income or earnings per share for the current reporting period.
The movement of intangible assets is as follows:
| For the six months ended March 31, 2026 | ||||||||
Gross Carrying Amount | Accumulated Amortization | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of the period | $ | |||||||
| Additions(a) | ||||||||
| Sale(b) | ( | ) | ( | ) | ||||
| Foreign exchange translation | ||||||||
| Balance at end of the period | $ | |||||||
| (a) |
| (b) |
For the year ended September 30, 2025 | ||||||||
Gross Carrying Amount | Accumulated Amortization | |||||||
| US$ | US$ | |||||||
| Balance at beginning of the year | $ | $ | ||||||
| Additions(a) | ||||||||
| Disposal | ||||||||
| Foreign exchange translation | ( | ) | ||||||
| Balance at end of the year | $ | $ | ||||||
| (a) |
Amortization expense was $
| 19 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 — LEASES
The Company’s leasing activities primarily consist of three operating leases for offices and vehicles. ASC 842 requires leases to recognize right-of-use assets and lease liabilities on the balance sheet.
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liabilities – current | ||||||||
| Operating lease liabilities – noncurrent | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted-average remaining lease term and the weighted-average discount rate of leases are as follows:
For the 2026 | For the 2025 | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
During the six months ended March 31, 2026 and 2025, the Company incurred total operating lease expenses of $
The following table summarizes the maturity of operating lease liabilities as of March 31, 2026:
| 12 months ending March 31, | Operating | |||
| US$ | ||||
| 2026 | $ | |||
| 2027 | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liabilities | $ | |||
NOTE 7 — SHORT-TERM BANK LOANS
Short-term bank loans represent amounts due to various banks maturing within one year. The principal of the borrowings is due at maturity. Accrued interest is due either monthly or quarterly.
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Bank of China(1) | $ | $ | ||||||
| Bank of Hangzhou(2) | ||||||||
| Bank of Zheshang(3) | ||||||||
| Deferred financing costs(4) | ( | ) | ||||||
| Total | $ | $ | ||||||
| (1) |
| 20 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 — SHORT-TERM BANK LOANS (cont.)
| (2) | On January 8, 2025, Global Mofy China entered into a loan agreement with Bank of Hangzhou to obtain a loan of $ On July 9, 2025, Global Mofy China entered into a loan agreement with Bank of Hangzhou to obtain a loan of $ On September 12, 2025, Global Mofy China entered into a loan agreement with Bank of Hangzhou to obtain a loan of $ On March 23, 2026, Global Mofy China entered into a loan agreement with Bank of Hangzhou to obtain a loan of $ |
| (3) | On March 13, 2025, Global Mofy China entered into a loan agreement with Bank of Zheshang to obtain a loan of $ On May 23, 2025, Global Mofy China entered into a loan agreement with Bank of Zheshang to obtain a loan of $ On December 5, 2025, Global Mofy China entered into a loan agreement with Bank of Zheshang to obtain a loan of $ |
| (4) |
For the six months ended March 31, 2026 and 2025, the weighted average annual interest rate for the bank loans was approximately
| 21 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 — RELATED PARTY TRANSACTIONS AND BALANCES
Nature of relationships with related parties:
| Name | Relationship with the Company | |
| Mr. Haogang Yang | ||
| Mori Enterprise Management (Beijing) Partnership | ||
| Qi Fei Shanghai Technology Co., Ltd. | ||
| Mr. Chen Chen |
Balances with related parties
As of March 31, 2026 and September 30, 2025, the balances with related parties were as follows:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| US$ | US$ | |||||||
| Due to a related party | ||||||||
| Mr. Haogang Yang | $ | $ | ||||||
| Due from related parties | ||||||||
| Mori Enterprise Management (Beijing) | $ | $ | ||||||
| Yuanjie (Huzhou) Technology Co., Ltd. | ||||||||
| Partnership Qi Fei Shanghai Technology Co., Ltd. | ||||||||
| Mr. Chen Chen | ||||||||
| Total | $ | $ | ||||||
| (a) | As of March 31, 2026, the balance of Mr. Haogang Yang showed that the amount of payroll payables was $ |
| (b) | As of March 31, 2026, the balance of Mori Enterprise Management (Beijing) Partnership $ |
NOTE 9 — TAXES
Corporation Income Tax (“CIT”)
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
| 22 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 — TAXES (cont.)
Hong Kong
Global Mofy HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$
PRC
Under the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified
Kashi Mofy is subject to a five- year income tax holiday since generating revenues, as it is incorporated in the Kashi Economic District, Xinjiang province. The five-year income tax holiday of Kashi Mofy will end on December 31, 2023. Starting from January 1, 2024, Kashi Mofy is eligible for a preferential tax rate of
Zhejiang Mofy has complied with PRC tax laws and met the qualifications for domestic small and micro enterprises, Zhejiang Mofy is eligible for a preferential tax rate of
In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of
The Company’s pre-tax (loss) income is derived from the following tax jurisdictions:
| For the Six Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| PRC | $ | ( | ) | $ | ||||
| HK | ( | ) | ||||||
| US | ( | ) | ||||||
| Cayman | ( | ) | ||||||
| (Loss) income before income taxes | $ | ( | ) | $ | ||||
| 23 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 — TAXES (cont.)
The provision for income tax consisted of the following:
For the Six Months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current income tax expense | $ | $ | ||||||
| Uncertain tax provisions | ||||||||
| Deferred income tax expense | ||||||||
| Income tax provision | $ | $ | ||||||
The following table reconciles the statutory rate to the Company’s effective tax rate:
For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| PRC statutory tax rate | % | % | ||||||
| Effect of tax holiday and preferential tax rate(a) | ( | )% | ( | )% | ||||
| Additional deduction for R&D expenses | % | ( | )% | |||||
| Non-deductible expenses | % | |||||||
| Effect of change in valuation allowance | )% | % | ||||||
| Effect of different tax rates in a foreign jurisdiction | ( | )% | ( | )% | ||||
| Effective tax rate | ( | )% | % | |||||
| (a) |
Deferred tax assets and liabilities
Components of deferred tax assets and liabilities were as follows:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Provision for doubtful debt | $ | $ | ||||||
| Tax loss carry forwards | ||||||||
| Excess marketing and advertising expense ( | ||||||||
| Operating lease liabilities | ||||||||
| Total deferred tax assets | ||||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net of valuation allowance | $ | $ | ||||||
| 24 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 — TAXES (cont.)
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Right of use assets | $ | $ | ||||||
| Total deferred tax liabilities | ||||||||
| Total deferred tax assets, net | $ | $ | ||||||
The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are composed principally of net operating loss carryforwards. Under the applicable accounting standards, management expects to continue to maintain a significant investment in research and development, given the Company’s history of losses, as the Company increases research and development of its digital assets in the future. At the same time, the Company’s management believes that customer development for digital assets and the Company’s visibility in the digital assets industry will take several years to build, which will result in the Company continuing to lose money over the next few years. So, the management concluded that it is more likely than not that the Company will not generate future taxable income prior to the expiration of the majority of net operating losses, and it was considered that valuation allowance should be fully accrued. Accordingly, as of March 31, 2026 and September 30, 2025, a $
Uncertain Tax Position
A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Balance as of beginning of year | $ | $ | ||||||
| Increase related to prior year tax positions | ( | ) | ||||||
| Increase related to current year tax positions | ||||||||
| Balance as of end of year | $ | $ | ||||||
As of March 31, 2026 and September 30, 2025, there were $
The Company recognizes interest and penalty charges related to uncertain tax positions as necessary in the provision for income taxes. For the six months ended March 31, 2026 and 2025, interest expense or penalty was accrued in relation to the unrecognized tax benefit. The Company has a liability for accrued interest of $ as of March 31, 2026 and 2025, respectively.
In general, the PRC tax authority has up to five years to conduct examinations of the Company’s tax filings. As of March 31, 2026, tax years ended December 31, 2021 through December 31, 2025 for the Company’s PRC subsidiaries remain open for statutory examination by PRC tax authorities.
Tax payable
Tax payable consisted of the following:
March 31, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| VAT payable | $ | $ | ||||||
| Corporate income tax payable | ||||||||
| Other tax | ||||||||
| Tax payable | $ | $ | ||||||
| 25 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY
Ordinary shares
The Company was established under the laws of the Cayman Islands on September 29, 2021. The authorized number of ordinary shares upon incorporation of the Company was
On January 15, 2022, the Company issued
On September 16, 2022, the Company’s shareholders and Board of Directors approved a 1-to-5 share split, following which the authorized share capital of $
On November 15, 2022, all existing shareholders surrendered in an aggregative of
On February 10, 2023, the Company entered into a share purchase agreement with Anguo Jijian Enterprise Management Co., Ltd (“Anguo”), Anjiu Jiheng Enterprise Management Co., Ltd (“Anjiu”), and Anling Management Co., Ltd (“Anling”), pursuant to which the Company issued
In October 2023, the Company completed its initial public offering, issued and sold
On December 29, 2023, the Company reached an agreement to sell
On July 5, 2024, the investors in the United States based on the Transaction, exercised its
| 26 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
On August 15, 2024, the Company filed its Amended and Restated Memorandum and Articles of Association to designate
On August 21, 2024, the Company adopted an equity incentive plan (the “Plan”) which provides
On October 7, 2024, the Company adopted a share incentive plan which provides
On October 31, 2024, the Company issued and sold
On November 1, 2024, the Company effected a reverse stock split at a ratio of 15-to-1. All the shares and share price in the accompanying unaudited condensed consolidated financial statements and notes have been retrospectively adjusted to reflect the effect of a reverse stock split. The Company filed another Amended and Restated Memorandum and Articles of Association to modify authorized shares of Class A ordinary shares to
Holders of Class A and Class B ordinary shares shall at all times vote together as one class on all resolutions submitted to a vote by the shareholders. At a general meeting, each Class A ordinary share entitles the holder thereof to one (1) vote on all matters subject to vote at general meeting of the company, and each Class B ordinary share entitle the holder thereof to twenty (20) votes on all such matter. Each Class A ordinary share confers upon the holder thereof the right to receive dividends and Class B ordinary shares do not confer upon the holders thereof any rights to receive dividends. Class B ordinary shares are not convertible into Class A ordinary shares or any other class of shares under any circumstances. Class A ordinary shares are not convertible into Class B ordinary shares or any other class of shares under any circumstances. Except as set out above, Class A and Class B ordinary shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions.
On December 10, 2024, pursuant to the special resolution, the fractional shares issued to or registered in the name of the Company’s shareholders after or as a result of the share consolidation were rounded up to the nearest whole share, and thus the Company issued
On February 17, 2025, the Holders exercised an aggregate of
| 27 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
On April 22, 2025, the Company issued and sold
In April 2025, the Holders exercised an aggregate of
On April 24, 2025, the Company adopted an equity incentive plan. Under this plan, executives are eligible to receive performance-based equity incentives in the form of the company’s Class B ordinary shares for each fiscal year during their employment period. Pursuant to the plan, the Company issued a total of
In July 2025, the Holders exercised an aggregate of
In September 2025, the Holders exercised an aggregate of
On October 29, 2025, the Company adopted an equity incentive plan (“2025 Equity Incentive Plan B”). Under this plan, the Committee is authorized to grant an aggregate of
On December 5, 2025, the Company entered into a Securities Purchase Agreement with several investors for a private placement of
On February 3, 2026, the Company entered into an amended and restated employment agreement (collectively, the “Amended and Restated Employment Agreements”) with each of Mr. Haogang Yang, the Chief Executive Officer of the Company, Mrs. Wenjun Jiang, the Chief Technology Officer of the Company, and Mr. Nan Zhang, the Chief Marketing Officer of the Company (collectively, the “Officers”). Pursuant to the Amended and Restated Employment Agreements, the Company issued a total of
On June 11, 2026, the Company effected a reverse stock split at a ratio of 50-to-1(“Pre-split”). All the shares and share price in the accompanying unaudited condensed consolidated financial statements and notes have been retrospectively adjusted to reflect the effect of both reverse stock splits.
| 28 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
Warrants (“The Warrant”)
For the six months ended March 31, 2026, the movement of warrants is as follows:
| For the six months ended March 31, 2026 | ||||||||||||||||
Total Valuation | Issuance | |||||||||||||||
| US$ | Share | Valuation | Average exercise price | |||||||||||||
| Balance at beginning of the period | $ | $ | $ | |||||||||||||
| Issuance | ||||||||||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||||||||||
| Exercise | ||||||||||||||||
| Balance at end of the period | $ | $ | $ | |||||||||||||
For the six months ended March 31, 2025, the movement of warrants is as follows:
| For the six months ended March 31, 2025 | ||||||||||||||||
| Total Valuation | Issuance | |||||||||||||||
| US$ | Share | Valuation | Average exercise price | |||||||||||||
| Balance at beginning of the period | $ | $ | $ | |||||||||||||
| Issuance(a) | ||||||||||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||||||||||
| Exercise | ||||||||||||||||
| Balance at end of the period | $ | $ | $ | |||||||||||||
| (a) |
| (b) | The warrants have an initial exercise price of $2,250 (Pre-splits $3) per Ordinary Share. According to the terms of the Warrant and the SPA agreement, on the 14th trading day after the closing date, the exercise price of the Warrant will be adjusted to |
| (c) | On February 17, 2025,
As of March 31, 2026 and September 30, 2025, the number of remaining unexercised warrants is |
| 29 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
The fair value of warrants aforementioned was determined using the Binominal Tree pricing model and the following assumptions:
| March 31, | September 30, | September 22, | April 29, | February 17, | October 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2025 | 2025 | 2024 | |||||||||||||||||||
| Share price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Share price (Pre-splits) | ||||||||||||||||||||||||
| Exercise price | ||||||||||||||||||||||||
| Exercise price (Pre-splits) | ||||||||||||||||||||||||
| Expected dividend yield | ||||||||||||||||||||||||
| Risk free interest rate | % | % | % | % | % | % | ||||||||||||||||||
| Expected life | ||||||||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | ||||||||||||||||||
Stock-based compensation
For the year ended September 30, 2025, the Company’s equity incentive plans are as follows, with the related equity-based compensation expense recognized within the fiscal year ending September 30, 2025 :
On October 7, 2024, the Company adopted a share incentive plan (“2024 Equity incentive plan”) which provides
Pursuant to the 2024 Equity incentive plan, the Company issued
On April 24, 2025, the Company adopted an equity incentive plan(“2025 Equity incentive plan A”). Under this plan, executives are eligible to receive a certain number of performance-based equity incentives in the form of Class B ordinary shares of the company each fiscal year during their tenure, based on the milestones specified in the agreement. The number of incentive shares to be granted shall be determined as follows: divide the performance-based compensation amount by the official average closing price of Class A ordinary shares on NASDAQ, which is announced by NASDAQ and calculated over the
Pursuant to the 2025 Equity incentive plan A, the Company issued a total of
| 30 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
For the six months ended March 31, 2026, the Company’s equity incentive plans are as follows, with the related equity-based compensation expense recognized within the six months ending March 31, 2026:
On October 29, 2025, the Company adopted an equity incentive plan(“2025 Equity incentive plan B”). The Committee is authorised to deliver under the 2025 Equity incentive plan B is
Pursuant to the 2025 Equity incentive plan B, the Company issued a total of
On February 3, 2026, the Company entered into an amended and restated employment agreement (collectively, the “Amended and Restated Employment Agreements”) with each of Mr. Haogang Yang, the Chief Executive Officer of the Company, Mrs. Wenjun Jiang, the Chief Technology Officer of the Company, and Mr. Nan Zhang, the Chief Marketing Officer of the Company (collectively, the “Officers”). Pursuant to the Amended and Restated Employment Agreements, the Officers shall be eligible to received performance-based equity compensation in the form of Class B ordinary shares, par value US$
Pursuant to the Amended and Restated Employment Agreements, the Company issued a total of
As of March 31, 2026 and September 30, 2025, all of the equity related to the above equity incentive plan has been granted.
| 31 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — EQUITY (cont.)
The stock-based compensation expenses incurred by the Company for the six months ended March 31, 2026 and 2025 are as follows:
For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Research and development expenses | $ | |||||||
| General and administrative expenses | ||||||||
| Selling and marketing expenses | ||||||||
| Total stock-based compensation | $ | $ | ||||||
Statutory reserve
In accordance with the PRC Company Laws, the Company’s subsidiaries in the PRC are required to provide for statutory reserves, which are appropriated from net profit as reported in the Company’s PRC statutory accounts. They are required to allocate
Restricted net assets
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries.
Foreign exchange and other regulations in the PRC may further restrict the Company’s subsidiaries from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC subsidiaries as determined pursuant to PRC generally accepted accounting principles. As of March 31, 2026 and September 30, 2025, restricted net assets of the Company’s PRC subsidiaries were $
NOTE 11 — EARNINGS PER SHARE
Basic and diluted earnings per share is calculated as follows
For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Numerator: | ||||||||
| Net loss (income) attributable to Global Mofy AI Limited | $ | ( | ) | $ | ||||
| Denominator: | ||||||||
| Denominator for basic earnings per share: | ||||||||
| Weighted average Class A ordinary shares outstanding | ||||||||
| —basic and diluted | ||||||||
| Earnings (loss) per Class A ordinary share – basic and diluted | ( | ) | ||||||
| Weighted average Class B ordinary shares outstanding | ||||||||
| —basic and diluted | ||||||||
| Earnings (loss) per Class B ordinary share – basic and diluted | $ | ( | ) | $ | ||||
| 32 |
GLOBAL MOFY AI LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 — SEGMENT REPORTING
The Company operates in a operating segment and has
The table below provides information about the Company’s segment
| For the Six months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | ||||||||
| -Virtual technology service | $ | $ | ||||||
| -Digital asset development and others | ||||||||
| -Sales of digital asset | ||||||||
| Cost of revenue | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Selling & Distribution expense | ||||||||
| Research and development expenses | ||||||||
| Impairment loss of intangible assets | ||||||||
| Total operating expenses | ||||||||
| Income before income taxes | ( | ) | ||||||
| Income tax expense | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
NOTE 13 — SUBSEQUENT EVENTS
As of the date of this report, the Company’s post-period events are as follows:
On May 22, 2026, the Company issued and sold
On June 5, 2026, the Company fully repaid the bank loan of $
On June 11, 2026, the Company effected a reverse stock split at a ratio of
On July 8, 2026, the Company repaid the bank loan of $
| 33 |
Exhibit 99.3
Global Mofy Reports 49.4% YoY Revenue Increase for the Six Months Ended March 31, 2026,
Driven by Virtual Tech Growth and New AI Digital Asset Business
| ● | Revenue achieved $39.9 million, up 49.4% from $26.7 million. |
| ● | R&D investments totaled $14.4 million, up from $5.8 million in the same period last year. |
| ● | GAAP Net Loss was $50.7 million, while Non-GAAP net income stood at $1.1 million. |
BEIJING, July 28, 2026 (GLOBE NEWSWIRE) -- Global Mofy AI Limited (the “Company” or “Global Mofy”) (Nasdaq: GMM), a generative AI-driven technology solutions provider focused on virtual production services and AIGC 3D digital asset supply for global content and large model enterprises, today reported its financial results for the six months ended March 31, 2026, showing robust 49.4% revenue growth, driven by soaring virtual technology service demand.
“The revenue growth in the first half of 2026 clearly demonstrates the outstanding execution of the Global Mofy team and the remarkable market recognition of our AI-powered virtual content and training assets. It also reflects the surging industry demand for high-quality 3D digital resources and full-stack virtual production services, solidifying our leading position in the generative AI content track. We have maintained our Beijing “Specialized and New” SME certification, kept deep cooperation on short drama projects under the Mofy Clips brand with China Literature, and continuously upgraded our integrated AI infrastructure at Gauss AI Lab established in prior periods, alongside steady progress on our strategic investment in African logistics platform Wetruck AI. Although we recorded GAAP losses due to asset impairment and heavy technical investment, our core operating business provides a solid foundation for sustained long-term growth,” said Haogang Yang, founder and CEO of Global Mofy. “Generative AI is thoroughly reshaping the whole content industry value chain, and we will keep taking the lead in this industry transformation.”
“In terms of research and development, we have ramped up R&D spending on technology in an all-round way this half-year. Following the founding of Gauss AI Lab, we have continuously expanded our R&D team and upgraded the Gausspeed generative 3D platform. Massive R&D investment is vital for us to consolidate our technological moat, expand proprietary high-precision digital asset library and develop our new asset sales business. As we deepen our layout in upstream AI training data supply, continuous investment in cutting-edge AIGC technology will power our multi-line growth and keep us ahead of peers in the AI digital content sector.”
Financial Results for the Six Months Ended March 31, 2026
| ● | Revenue for the six months ended March 31, 2026 increased by 49.4% to $39.9 million, from $26.7 million in the same period last year. This revenue increase reflects the strong market uptake of generative AI solutions, robust growth in virtual technology services and the newly launched digital asset sales business catering to large model developers, all benefiting from the fast development of the AI industry. |
| ● | Cost of revenues increased by 110.5% to $31.4 million, compared to $14.9 million in the same period last year. The increase is primarily due to higher outsourced production expenses and the carrying cost of digital assets delivered to AI enterprise clients, which were allocated to this period. Gross profit was $8.5 million, a decrease of 27.9% compared to $11.8 million in the previous year. The strong revenue growth was tempered by increased costs associated with expanded virtual project production and the early-stage scaling of our new AI asset sales business. Nonetheless, gross margin for virtual technology services remained solid at 28.8%, supported by a steady pipeline of film and drama projects delivered in the first half of 2026. |
| ● | Operating loss was $50.7 million, compared to operating income of $1.7 million in the same period last year. The decrease is primarily due to the asset write-down and substantial increases in R&D investment and share-based compensation costs. However, the Company continues to maintain a viable core business model. |
| ● | GAAP net loss was $50.7 million, compared to net income of $5.0 million in the same period last year. After adjusting for items including asset impairment, stock-based compensation and warrant fair value changes, Non-GAAP net income stood at $1.1 million in the first half of 2026. R&D investments were $14.4 million, up from $5.8 million in the same period last year. This increase is driven by the expansion of the Gauss AI Lab, deepened technical cooperation with NVIDIA Omniverse and expanded equity incentive plans for core technical teams. The Company is positioning itself as a leader in generative AI content creation, and these investments are essential to ensure its continued technological edge. |
| ● | Total cash and restricted cash as of March 31, 2026 stood at $2.8 million, backed by private placement proceeds raised at the end of fiscal 2025. This provides a liquidity position to support Global Mofy’s ongoing growth initiatives in the first half of 2026 and beyond. |
Operational and Strategic Highlights
Global Mofy achieved significant progress across core business and technology development areas since releasing its prior full-year financial results:
| ● | Commercialized New Digital Asset Sales Business for AI Large Model Clients: The Company officially launched a brand-new revenue segment selling standardized 3D digital assets to generative AI and large language enterprises in the first half of 2026. This new business forms a complete upstream supply chain layout for AIGC training data and opening a second major growth curve outside traditional virtual production services. |
| ● | Deepened short drama cooperation via Mofy Clips: The Company continues to advance joint production projects with China Literature under the Mofy Clips brand, capturing more market share in the booming short drama track. |
| ● | Continuous iteration of Gauss AI Lab: We keep upgrading the Gausspeed generative 3D platform built in partnership with NVIDIA Omniverse and enlarge our proprietary high-precision digital asset library. |
| ● | Deepened Global AI Industrial Layout: The Company advanced its strategic investment in African digital logistics platform Wetruck AI. This overseas layout remains the Group’s cross-industry AI deployment in Africa, exploring diversified scenarios for 3D digital asset and AI technology output outside the entertainment content industry. |
About Global Mofy AI Limited
Global Mofy AI Limited (Nasdaq: GMM) is a generative AI-driven technology solutions provider engaged in virtual content production, and the development of digital assets for the digital content industry. Utilizing its proprietary “Mofy Lab” technology platform, which consists of interactive 3D and artificial intelligence (“AI”) technology, the Company creates high-definition virtual versions of a wide range of physical world objects in 3D ranging from characters, objects to scenes and more. The digital assets can be used in different applications, including movies, TV series, AR/VR, animation, advertising, gaming, and more. Global Mofy Metaverse is one of the leading digital asset banks in China, which consists of more than 150,000 high-precision 3D digital assets. For more information, please visit www.globalmofy.ai or ir.globalmofy.cn.
Forward-Looking Statement
This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions, our ability to keep pace with new technology and changing market needs, and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For more information, please contact:
Global Mofy AI Limited
Investor Relations Department
ir@mof-vfx.com