What was NetClass Technology (NTCL)'s net loss and loss per share for the six months ended March 31, 2026?

NetClass Technology reported a net loss of $5,961,289 for the six months ended March 31, 2026. After a retrospective 50:1 reverse stock split, basic and diluted loss per share was $12.69 , based on a weighted average of 469,684 ordinary shares outstanding.

NetClass Technology (NASDAQ: NTCL) grows revenue to $6.36M but logs $5.96M loss

Q: How much revenue did NetClass Technology (NTCL) generate in the six months ended March 31, 2026?

NetClass Technology generated $6,359,907 in revenue for the six months ended March 31, 2026, up from $3,654,410 a year earlier. Revenue came from application development services, subscription services and $1,073,792 of AI computing power support services.

Q: How did NetClass Technology (NTCL) perform in terms of cash flow during the six months ended March 31, 2026?

Net cash used in operating activities was $2,528,346 for the six months ended March 31, 2026. Investing activities used $250,000, while financing activities provided $2,712,863 , mainly from a private placement, resulting in an ending cash balance of $1,701,352 .

Q: How large is NetClass Technology (NTCL)'s long-term prepaid AI and marketing service balance?

Long-term prepaid expenses totaled $3,509,003 at March 31, 2026, up from $2,023,726 at September 30, 2025. This includes $500,000 for brand consulting and $4,602,333 of contracted AI computing and network services, amortized over their respective service terms.

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

6-K

Rhea-AI Filing Summary

NetClass Technology Inc, a Cayman holding company for PRC-focused online professional education and IT solutions, reported unaudited results for the six months ended March 31, 2026. Revenue was $6.36 million, up from $3.65 million a year earlier, driven by application development, subscription services and new AI computing power support services of $1.07 million.

Cost of revenues nearly matched revenue, leaving gross profit of $2,231 versus $305,390 previously. Operating expenses were $5.46 million, similar to the prior period, resulting in a loss from operations of $5.46 million. Net loss widened to $5.96 million, including $469,917 of interest expense tied to a convertible note with a stated effective interest rate of 66.2% and a penalty of $92,352 for a delayed F-1 effectiveness, partly offset by a $204,794 gain from remeasuring the related derivative liability.

Net cash used in operating activities improved to $2.53 million, with cash provided by financing activities of $2.71 million, mainly from a $3.20 million private placement. Cash and cash equivalents were $1.70 million at March 31, 2026. Total assets were $15.82 million, including $3.51 million of long-term prepaid AI and marketing services and $1.24 million of intangible assets. Total liabilities were $11.10 million, including $1.98 million of convertible debt and a $25,585 derivative liability; total equity was $4.72 million. After a 50:1 reverse stock split effective July 6, 2026, basic and diluted loss per share was $12.69 on 469,684 weighted average shares.

Filing Explained

Issued shares diluted existing holders while a convertible note liability remained outstanding at March 31, 2026.

As a Form 6-K, this report furnishes an interim update; the company reports issued shares and a convertible note whose conversion feature remained accounted for as a derivative liability at March 31, 2026. The structural consequence is issued-share dilution for existing holders plus an unresolved conversion feature.

The private placement added 570,540 Class A ordinary shares and produced $3,200,000 of gross proceeds, while partial conversion of the note added 16,394 shares and reduced the note by $180,000.

At March 31, 2026, the convertible note and accrued interest totaled $1,983,108, and its conversion derivative liability was $25,585. The filing describes a conversion price based on 88% of the lowest daily volume-weighted average price over the preceding 10 trading days, subject to a $0.7106 floor.

Separately, two new AI hardware and network-service agreements added $2,104,394 of contracted prepayment obligations; reported long-term prepaid expenses were $3,509,003 net at March 31, 2026. The note's 12-month maturity runs from its August 4, 2025 issuance, and the company reports a $92,352 penalty after the related F-1 was not effective within 90 days.

Key Figures

Revenue: $6,359,907 Net loss: $5,961,289 Operating cash used: $2,528,346 +5 more

8 metrics

Revenue $6,359,907 For the six months ended March 31, 2026

Net loss $5,961,289 For the six months ended March 31, 2026

Operating cash used $2,528,346 Net cash used in operating activities, six months ended March 31, 2026

Cash and cash equivalents $1,701,352 Balance as of March 31, 2026

Convertible debt $1,983,108 Convertible note and related amounts outstanding at March 31, 2026

Derivative liability $25,585 Fair value of derivative liability at March 31, 2026

Long-term prepaid expenses $3,509,003 AI and marketing service prepayments, net, at March 31, 2026

Loss per share $12.69 Basic and diluted loss per share, six months ended March 31, 2026, post 50:1 split

Key Terms

current expected credit loss, derivative liability, finance lease right of use assets, High and New Technology Enterprises, +1 more

5 terms

current expected credit loss financial

"referred to as the current expected credit loss (“CECL”) methodology"

An accounting approach that requires lenders and companies to estimate and record the credit losses they expect on loans and receivables now, using current conditions and reasonable forecasts rather than waiting for a default to occur. It matters to investors because it changes reported reserves and profits up front and gives an earlier, more forward-looking signal of credit quality—like packing an umbrella today because the forecast predicts rain, which affects a company’s cushion against bad loans.

derivative liability financial

"conversion feature bifurcated from the convertible note contract as the derivative liability"

A derivative liability is an obligation a company owes because of a derivatives contract—such as an option, future, swap, or forward—that has moved against it and now has negative value. Think of it like a settled bet that turned into a bill: if market moves go the other way, the company may have to pay cash or deliver assets. Investors care because these liabilities can create sudden losses, add leverage or counterparty risk, and change a company’s true financial exposure beyond its everyday operations.

finance lease right of use assets financial

"classified as finance lease right of use assets, with corresponding lease liabilities recorded"

High and New Technology Enterprises regulatory

"The PRC tax authorities grant preferential tax treatment to High and New Technology Enterprises"

emerging growth company regulatory

"The Company is an “emerging growth company” (“EGC”) as defined in the JOBS Act"

An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google

Form 6-K: How Foreign Companies Report to the SEC →

Available on EDGAR 07/22/2026 - 04:31 PM Accepted by SEC EDGAR 07/22/2026 - 04:30 PM

FAQ

How much revenue did NetClass Technology (NTCL) generate in the six months ended March 31, 2026?

NetClass Technology generated $6,359,907 in revenue for the six months ended March 31, 2026, up from $3,654,410 a year earlier. Revenue came from application development services, subscription services and $1,073,792 of AI computing power support services.

How did NetClass Technology (NTCL) perform in terms of cash flow during the six months ended March 31, 2026?

Net cash used in operating activities was $2,528,346 for the six months ended March 31, 2026. Investing activities used $250,000, while financing activities provided $2,712,863, mainly from a private placement, resulting in an ending cash balance of $1,701,352.

What are the key liabilities on NetClass Technology (NTCL)'s balance sheet as of March 31, 2026?

As of March 31, 2026, NetClass Technology reported total liabilities of $11,098,661, including $1,983,108 of convertible debt, a $25,585 derivative liability, accounts payable of $2,296,958, advances from customers of $3,716,086 and operating lease liabilities totaling $648,221.

How large is NetClass Technology (NTCL)'s long-term prepaid AI and marketing service balance?

Long-term prepaid expenses totaled $3,509,003 at March 31, 2026, up from $2,023,726 at September 30, 2025. This includes $500,000 for brand consulting and $4,602,333 of contracted AI computing and network services, amortized over their respective service terms.

What impact did the convertible note have on NetClass Technology (NTCL)'s results?

The August 2025 convertible note had an outstanding balance of $1,983,108 at March 31, 2026 and generated $469,917 of interest expense plus a $92,352 default penalty. Revaluation of the embedded conversion feature produced a $204,794 gain, reducing the derivative liability to $25,585.

0001927578--09-302026Q22026-03-31false00019275782025-10-012026-03-310001927578country:SG2026-03-310001927578country:JP2026-03-310001927578country:HK2026-03-310001927578country:SG2025-09-300001927578country:JP2025-09-300001927578country:HK2025-09-300001927578ntcl:IndependentDirectorMemberus-gaap:CommonClassAMember2025-11-032026-02-250001927578us-gaap:ReceivablesFromStockholderMemberus-gaap:PrivatePlacementMember2025-10-012026-03-310001927578us-gaap:ParentMemberus-gaap:PrivatePlacementMember2025-10-012026-03-310001927578us-gaap:AdditionalPaidInCapitalMemberus-gaap:PrivatePlacementMember2025-10-012026-03-310001927578us-gaap:PrivatePlacementMember2025-10-012026-03-310001927578us-gaap:ParentMemberus-gaap:IPOMember2024-10-012025-03-310001927578us-gaap:AdditionalPaidInCapitalMemberus-gaap:IPOMember2024-10-012025-03-310001927578us-gaap:IPOMember2024-10-012025-03-310001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2025-07-282025-07-280001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2025-04-292025-04-290001927578us-gaap:PrivatePlacementMember2026-03-252026-03-250001927578us-gaap:PrivatePlacementMember2025-11-072025-11-070001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMemberus-gaap:PrivatePlacementMember2025-10-012026-03-310001927578us-gaap:CommonClassAMemberus-gaap:OverAllotmentOptionMember2025-01-032025-01-030001927578us-gaap:IPOMember2024-12-162024-12-160001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMemberus-gaap:IPOMember2024-10-012025-03-3100019275782023-09-202023-09-200001927578ntcl:BangyuanLiuMemberus-gaap:CommonClassAMemberus-gaap:SubsequentEventMember2026-06-152026-06-150001927578ntcl:AkaewoodInvestmentHoldingCo.LtdMemberus-gaap:CommonClassAMemberus-gaap:SubsequentEventMember2026-06-152026-06-1500019275782026-03-122026-03-1200019275782026-03-092026-03-090001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-10-012026-03-310001927578us-gaap:SubsequentEventMember2026-07-062026-07-060001927578us-gaap:SubsequentEventMember2026-06-192026-06-190001927578us-gaap:RetainedEarningsMember2026-03-310001927578us-gaap:ReceivablesFromStockholderMember2026-03-310001927578us-gaap:ParentMember2026-03-310001927578us-gaap:NoncontrollingInterestMember2026-03-310001927578us-gaap:DeferredCompensationShareBasedPaymentsMember2026-03-310001927578us-gaap:AdditionalPaidInCapitalMember2026-03-310001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2026-03-310001927578ntcl:StatutoryReserveMember2026-03-310001927578us-gaap:RetainedEarningsMember2025-09-300001927578us-gaap:ParentMember2025-09-300001927578us-gaap:NoncontrollingInterestMember2025-09-300001927578us-gaap:DeferredCompensationShareBasedPaymentsMember2025-09-300001927578us-gaap:AdditionalPaidInCapitalMember2025-09-300001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-09-300001927578ntcl:StatutoryReserveMember2025-09-300001927578us-gaap:RetainedEarningsMember2025-03-310001927578us-gaap:ParentMember2025-03-310001927578us-gaap:NoncontrollingInterestMember2025-03-310001927578us-gaap:AdditionalPaidInCapitalMember2025-03-310001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310001927578ntcl:StatutoryReserveMember2025-03-310001927578us-gaap:RetainedEarningsMember2024-09-300001927578us-gaap:ParentMember2024-09-300001927578us-gaap:NoncontrollingInterestMember2024-09-300001927578us-gaap:AdditionalPaidInCapitalMember2024-09-300001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001927578ntcl:StatutoryReserveMember2024-09-300001927578us-gaap:PrivatePlacementMember2026-03-250001927578us-gaap:PrivatePlacementMember2025-11-070001927578us-gaap:CommonClassAMemberus-gaap:OverAllotmentOptionMember2025-01-030001927578us-gaap:IPOMember2024-12-1600019275782023-09-2000019275782025-04-300001927578ntcl:SubscriptionServiceMember2025-10-012026-03-310001927578ntcl:ArtificialIntelligencePowerSupportServicesMember2025-10-012026-03-310001927578ntcl:ApplicationDevelopmentServicesMember2025-10-012026-03-310001927578ntcl:SubscriptionServiceMember2024-10-012025-09-300001927578ntcl:ApplicationDevelopmentServicesMember2024-10-012025-09-300001927578srt:MinimumMemberus-gaap:EquipmentMember2026-03-310001927578srt:MaximumMemberus-gaap:EquipmentMember2026-03-310001927578us-gaap:TransportationEquipmentMember2026-03-310001927578us-gaap:FurnitureAndFixturesMember2026-03-310001927578us-gaap:ComputerEquipmentMember2026-03-310001927578us-gaap:ComputerEquipmentMember2025-09-300001927578us-gaap:RetainedEarningsMember2025-10-012026-03-310001927578us-gaap:NoncontrollingInterestMember2025-10-012026-03-310001927578ntcl:JianbiaoDaiMemberus-gaap:RelatedPartyMember2024-10-012025-03-3100019275782026-03-252026-03-2500019275782025-11-072025-11-0700019275782025-08-040001927578ntcl:ShanghaiChuangboEnterpriseDevelopmentCoLtdMemberus-gaap:RelatedPartyMember2026-03-310001927578ntcl:LangWideInvestmentIncMemberus-gaap:RelatedPartyMember2026-03-310001927578ntcl:JianbiaoDaiMemberus-gaap:RelatedPartyMember2026-03-310001927578us-gaap:RelatedPartyMember2026-03-310001927578ntcl:ShanghaiChuangboEnterpriseDevelopmentCoLtdMemberus-gaap:RelatedPartyMember2025-09-300001927578ntcl:LangWideInvestmentIncMemberus-gaap:RelatedPartyMember2025-09-300001927578ntcl:JianbiaoDaiMemberus-gaap:RelatedPartyMember2025-09-300001927578us-gaap:RelatedPartyMember2025-09-300001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-10-012026-03-310001927578country:CN2026-03-310001927578country:CN2025-09-300001927578us-gaap:CommonClassBMemberus-gaap:CommonStockMember2024-10-012025-03-310001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-10-012025-03-310001927578us-gaap:RetainedEarningsMember2024-10-012025-03-310001927578us-gaap:ReceivablesFromStockholderMember2024-10-012025-03-310001927578us-gaap:NoncontrollingInterestMember2024-10-012025-03-310001927578us-gaap:DeferredCompensationShareBasedPaymentsMember2024-10-012025-03-310001927578us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-10-012025-03-310001927578ntcl:StatutoryReserveMember2024-10-012025-03-310001927578ntcl:JianbiaoDaiMemberntcl:ShanghaiYiyunInformationServiceCoLtdMemberus-gaap:RelatedPartyMember2026-03-310001927578ntcl:JianbiaoDaiMemberntcl:ShanghaiLongruanElectronicsGroupCoLtdMemberus-gaap:RelatedPartyMember2026-03-310001927578ntcl:ShanghaiZhimaInformationTechnologyCo.LtdMember2026-03-310001927578ntcl:ShanghaiNetwideEnterpriseManagementCo.LtdMember2026-03-310001927578ntcl:ShanghaiNetclassInformationTechnologyCo.LtdMember2026-03-310001927578ntcl:ShanghaiNetclassHumanResourcesCo.LtdMember2026-03-310001927578ntcl:ShanghaiNetclassEnterpriseManagementCo.LtdMember2026-03-310001927578ntcl:ShanghaiChuangyuanEducationTechnologyCo.LtdMember2026-03-310001927578ntcl:NovaSolutionsIncMember2026-03-310001927578ntcl:NetclassTrainingShanghaiCo.LtdMember2026-03-310001927578ntcl:NetclassInternationalPteLtdMember2026-03-310001927578ntcl:NetclassInternationalLimitedMember2026-03-310001927578ntcl:NetclassDataPteLtdMember2026-03-310001927578ntcl:DragonsoftGroupCo.LimitedMember2026-03-310001927578ntcl:ChinaConstructionBankLoanMember2025-09-300001927578currency:SGD2026-03-310001927578currency:JPY2026-03-310001927578currency:HKD2026-03-310001927578currency:CNY2026-03-310001927578currency:SGD2025-09-300001927578currency:JPY2025-09-300001927578currency:HKD2025-09-300001927578currency:CNY2025-09-300001927578currency:SGD2025-03-310001927578currency:JPY2025-03-310001927578currency:HKD2025-03-310001927578currency:CNY2025-03-310001927578srt:MinimumMemberus-gaap:CustomerListsMember2026-03-310001927578srt:MaximumMemberus-gaap:CustomerListsMember2026-03-310001927578us-gaap:CustomerListsMember2026-03-310001927578us-gaap:ComputerSoftwareIntangibleAssetMember2026-03-310001927578us-gaap:CustomerListsMember2025-09-300001927578us-gaap:ComputerSoftwareIntangibleAssetMember2025-09-300001927578country:SG2024-10-012025-09-300001927578us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-310001927578us-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-310001927578us-gaap:CarryingReportedAmountFairValueDisclosureMember2026-03-310001927578us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-09-300001927578us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-09-300001927578us-gaap:CarryingReportedAmountFairValueDisclosureMember2025-09-300001927578country:SG2025-10-012026-03-310001927578country:JP2025-10-012026-03-310001927578country:HK2025-10-012026-03-310001927578country:HK2024-10-012025-03-310001927578ntcl:ChinaConstructionBankLoanMember2025-10-012026-03-310001927578ntcl:ChinaConstructionBankLoanMember2026-03-310001927578country:SG2024-10-012025-03-310001927578country:JP2024-10-012025-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierFMember2025-10-012026-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierEMember2025-10-012026-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierBMember2025-10-012026-03-310001927578us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierMember2025-10-012026-03-310001927578us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierHMember2025-10-012026-03-310001927578us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierBMember2025-10-012026-03-310001927578ntcl:CustomerMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2025-10-012026-03-310001927578ntcl:CustomerDMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2025-10-012026-03-310001927578ntcl:CustomerBMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2025-10-012026-03-310001927578us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierMember2024-10-012025-09-300001927578us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierGMember2024-10-012025-09-300001927578ntcl:CustomerMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2024-10-012025-09-300001927578ntcl:CustomerDMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2024-10-012025-09-300001927578ntcl:CustomerCMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2024-10-012025-09-300001927578ntcl:CustomerBMemberus-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2024-10-012025-09-300001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierMember2024-10-012025-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierDMember2024-10-012025-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierCMember2024-10-012025-03-310001927578us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMemberntcl:SupplierBMember2024-10-012025-03-310001927578ntcl:CustomerMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2024-10-012025-03-310001927578ntcl:CustomerDMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2024-10-012025-03-310001927578ntcl:CustomerCMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2024-10-012025-03-310001927578us-gaap:CommonClassBMemberus-gaap:CommonStockMember2026-03-310001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2026-03-310001927578us-gaap:CommonClassBMemberus-gaap:CommonStockMember2025-09-300001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-09-300001927578us-gaap:CommonClassBMemberus-gaap:CommonStockMember2025-03-310001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-03-310001927578us-gaap:CommonClassBMemberus-gaap:CommonStockMember2024-09-300001927578us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-09-300001927578us-gaap:CommonClassBMemberus-gaap:SubsequentEventMember2026-06-190001927578us-gaap:CommonClassAMemberus-gaap:SubsequentEventMember2026-06-190001927578us-gaap:CommonClassAMemberus-gaap:SubsequentEventMember2026-06-150001927578us-gaap:CommonClassBMember2026-03-310001927578us-gaap:CommonClassAMember2026-03-310001927578us-gaap:CommonClassBMember2025-09-300001927578us-gaap:CommonClassAMember2025-09-300001927578ntcl:NovaSolutionsInc.Memberus-gaap:CustomerListsMember2025-02-280001927578us-gaap:CustomerListsMember2025-10-012026-03-310001927578us-gaap:CustomerListsMember2024-10-012025-03-3100019275782025-03-3100019275782024-09-300001927578us-gaap:AdditionalPaidInCapitalMember2025-10-012026-03-310001927578us-gaap:ParentMember2024-10-012025-03-310001927578us-gaap:AdditionalPaidInCapitalMember2024-10-012025-03-310001927578country:HKntcl:ProfitsExceedingHkdTwoMillionMember2018-04-012018-04-010001927578country:HKntcl:FirstHkdTwoMillionMember2018-04-012018-04-010001927578ntcl:ServiceProvidersMember2025-07-282025-07-280001927578ntcl:ServiceProvidersMember2025-04-292025-04-290001927578srt:MinimumMemberntcl:AnnouncementOfMinistryOfFinanceAndStateTaxAdministration2022Member2022-01-012024-12-310001927578srt:MaximumMemberntcl:AnnouncementOfMinistryOfFinanceAndStateTaxAdministration2022Member2022-01-012024-12-310001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2026-01-062026-01-060001927578ntcl:IndependentDirectorMemberus-gaap:CommonClassAMember2026-02-252026-02-250001927578ntcl:IndependentDirectorMemberus-gaap:CommonClassAMember2025-11-032025-11-030001927578ntcl:IndependentDirectorMemberus-gaap:CommonClassAMember2025-05-142025-05-140001927578srt:MinimumMemberntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2026-02-240001927578srt:MaximumMemberntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2026-02-240001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2025-01-060001927578ntcl:EmployeesMemberus-gaap:CommonClassAMember2025-01-060001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2026-02-202026-02-240001927578ntcl:ServiceProvidersMember2026-02-202026-02-240001927578ntcl:ServiceProvidersMember2026-01-062026-01-060001927578ntcl:ServiceProvidersMember2025-10-012026-03-310001927578ntcl:IndependentDirectorMember2025-05-142025-05-140001927578ntcl:ServiceProvidersMember2025-01-062025-01-060001927578ntcl:EmployeesMember2025-01-062025-01-060001927578ntcl:ServiceProvidersMember2024-10-012025-09-300001927578us-gaap:CommonClassAMember2025-08-010001927578country:CN2025-10-012026-03-310001927578us-gaap:CommonClassBMember2022-07-260001927578us-gaap:CommonClassAMember2022-07-260001927578us-gaap:SubsequentEventMember2026-05-062026-05-060001927578ntcl:CountriesOtherThanChinaMember2025-10-012026-03-310001927578country:CN2025-10-012026-03-310001927578ntcl:CountriesOtherThanChinaMember2024-10-012025-03-310001927578country:CN2024-10-012025-03-310001927578ntcl:ShanghaiNetclassInformationTechnologyCo.LtdMember2025-10-012026-03-310001927578currency:SGD2025-10-012026-03-310001927578currency:JPY2025-10-012026-03-310001927578currency:HKD2025-10-012026-03-310001927578currency:CNY2025-10-012026-03-310001927578currency:SGD2024-10-012025-09-300001927578currency:JPY2024-10-012025-09-300001927578currency:HKD2024-10-012025-09-300001927578currency:CNY2024-10-012025-09-300001927578currency:SGD2024-10-012025-03-310001927578currency:JPY2024-10-012025-03-310001927578currency:HKD2024-10-012025-03-310001927578currency:CNY2024-10-012025-03-310001927578srt:MinimumMember2025-10-012026-03-310001927578srt:MaximumMember2025-10-012026-03-310001927578ntcl:AnnouncementOfMinistryOfFinanceAndStateTaxAdministration2023Member2023-08-022027-12-310001927578ntcl:AnnouncementOfMinistryOfFinanceAndStateTaxAdministration2022Member2022-01-012024-12-310001927578ntcl:ServiceProvidersMemberus-gaap:CommonClassAMember2025-01-062025-01-060001927578ntcl:EmployeesMemberus-gaap:CommonClassAMember2025-01-062025-01-0600019275782024-10-012025-09-3000019275782022-10-012023-09-300001927578us-gaap:ParentMember2025-10-012026-03-310001927578us-gaap:DeferredCompensationShareBasedPaymentsMember2025-10-012026-03-3100019275782025-08-0100019275782025-08-012025-08-0100019275782022-07-260001927578ntcl:NovaSolutionsInc.Member2025-02-280001927578ntcl:NovaSolutionsInc.Member2025-02-282025-02-2800019275782025-09-3000019275782026-03-3100019275782024-10-012025-03-31ntcl:directoriso4217:CNYiso4217:HKDiso4217:JPYiso4217:USDiso4217:USDxbrli:sharesxbrli:purexbrli:sharesntcl:itemntcl:agreementntcl:Votentcl:individualntcl:employee

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2026

Commission File Number: 001-42440

NETCLASS TECHNOLOGY INC

Unit 11-03, ABI Plaza

11 Keppel Road

Singapore 089057

+65 91821823

(Address of principal executive offices)

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

Form 20-F ☒ Form 40-F ☐

NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the “Company”) is hereby furnishing this report on Form 6-K (the “Report”) to provide the Unaudited Interim Condensed Consolidated Financial Statements of the Company as of and for the six months ended March 31, 2026, included as Exhibit 99.1 of this Report, and the Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the six months ended March 31, 2026, included as Exhibit 99.2 of this Report.

EXHIBIT INDEX

Exhibit No.		Description
99.1		Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended March 31, 2026
99.2		Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended March 31, 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).

SIGNATURES

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


	NETCLASS TECHNOLOGY INC

Date: July 21, 2026	By:	/s/ Jianbiao Dai
	Name:	Jianbiao Dai
	Title:	Chief Executive Officer

Table of Contents

Exhibit 99.1

NETCLASS TECHNOLOGY INC

INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and September 30, 2025	F-2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended March 31, 2026 and 2025	F-3
Unaudited Condensed Consolidated Statements of Changes in Equity for the Six Months Ended March 31, 2026 and 2025	F-6
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2026 and 2025	F-7
Notes to Unaudited Condensed Consolidated Financial Statements	F-8

F-1

Table of Contents

NETCLASS TECHNOLOGY INC

CONDENSED CONSOLIDATED BALANCE SHEETS

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


		March 31,			September 30,
		2026			2025
		unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,701,352		$	1,763,888
Accounts receivable, net			6,245,118			5,580,570
Inventories, net			22,504			305,741
Advance to vendors			711,504			926,408
Prepayments and other current assets			675,588			281,230
TOTAL CURRENT ASSETS			9,356,066			8,857,837

Property and equipment, net			6,607			10,887
Long-term prepaid expenses, net			3,509,003			2,023,726
Intangible assets, net			1,235,100			1,110,411
Operating lease right of use assets			622,944			674,885
Finance lease asset			896,000			1,024,000
Deferred tax assets, net			194,568			108,394
TOTAL NONCURRENT ASSETS			6,464,222			4,952,303
TOTAL ASSETS		$	15,820,288		$	13,810,140

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Convertible debt		$	1,983,108		$	1,591,910
Derivative liability			25,585			230,379
Accounts payable			2,296,958			1,901,377
Advance from customers			3,716,086			1,919,206
Accrued expenses and other liabilities			1,573,562			641,127
Due to related parties			100,367			105,400
Taxes payable			319,865			319,475
Operating lease liabilities, current portion			150,644			144,408
TOTAL CURRENT LIABILITIES			10,166,175			6,853,282

Long-term bank loan			434,909			421,408
Operating lease liabilities, non-current portion			497,577			556,584
TOTAL NON-CURRENT LIABILITIES			932,486			977,992
TOTAL LIABILITIES			11,098,661			7,831,274

COMMITMENTS AND CONTINGENCIES			—			—

EQUITY:
Ordinary shares, 800,000,000 shares authorized, consisting of 760,000,000 Class A ordinary shares of $0.0125 par value per share and 40,000,000 Class B ordinary shares of $0.0125 par value per share
Class A Ordinary shares, 1,158,858 and 316,600 ordinary shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively			14,486			4,622
Class B Ordinary shares, 40,000 ordinary shares issued and outstanding as of March 31, 2026 and September 30, 2025			500			500
Additional paid in capital			32,996,432			21,960,872
Deferred stock compensation			(4,540,564)			(3,486,439)
Subscription receivable			(5,200,000)			—
Statutory reserves			35,448			35,448
Accumulated deficit			(18,412,125)			(12,528,647)
Accumulated other comprehensive loss			(291,905)			(204,656)
TOTAL EQUITY ATTRIBUTEABLE TO NETCLASS’ SHAREHOLDERS			4,602,272			5,781,700
Non-controlling interest			119,355			197,166
TOTAL EQUITY			4,721,627			5,978,866

TOTAL LIABILITIES AND EQUITY		$	15,820,288		$	13,810,140

*	The Company effected a 50:1 reverse stock split on July 6, 2026, as a result, the shares issued and outstanding and per share number presented here are adjusted retrospectively.

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

F-2

Table of Contents

NETCLASS TECHNOLOGY INC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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


	For the Six Months Ended
	March 31,
	2026		2025
Revenues	$	6,359,907	$	3,654,410
Cost of revenues		(6,357,676)		(3,349,020)
Gross profit		2,231		305,390

Operating expenses:
Selling and marketing		(441,546)		(468,864)
General and administrative		(4,312,762)		(3,975,268)
Research and development		(707,938)		(1,039,528)
Total operating expenses		(5,462,246)		(5,483,660)
Loss from operations		(5,460,015)		(5,178,270)

Other (expense) income:
Interest expense, net		(469,917)		(2,939)
Gain on acquisition of a subsidiary		—		139,724
Gain on fair value change of derivative liability		204,794		—
Other expense, net		(320,498)		(12,815)
Total other (expense) income, net		(585,621)		123,970
Loss before income taxes		(6,045,636)		(5,054,300)

Income tax benefit		84,347		98,657
Net loss		(5,961,289)		(4,955,643)

Other comprehensive income
Foreign currency translation adjustments		(87,249)		(15,969)
Comprehensive loss		(6,048,538)		(4,971,612)
Less: Comprehensive loss attributable to non-controlling interests		77,811		71,274
Comprehensive loss attributable to shareholders	$	(5,970,727)	$	(4,900,338)

Loss per share
Basic and diluted	$	(12.69)	$	(14.64)

Weighted average number of shares outstanding
Basic and diluted		469,684		338,551

*	The Company effected a 50:1 reverse stock split on July 6, 2026, as a result, the shares issued and outstanding and per share number presented here are adjusted retrospectively.

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

F-3

Table of Contents

NETCLASS TECHNOLOGY INC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

Six Months Ended March 31, 2026 and 2025


																			Accumulated
		Ordinary shares							Additional				Deferred						Other
		Class A				Class B			Paid-in		Subscription		Stock		Statutory				Comprehensive		Shareholders’		Noncontrolling		Total
		Shares	Amount			Shares	Amount		Capital		Receivable		Compensation		Reserve		Deficit		Loss		equity		Interest		Equity
Balance at September 30, 2024		275,200	$	3,440		40,000	$	500	$	4,821,992	$	—	$	—	$	35,448	$	(1,704,065)	$	(186,134)	$	2,971,181	$	91,074	$	3,062,255
Cash proceeds from IPO		41,400		518		—		—		10,349,482		—		—		—		—		—		10,350,000		—		10,350,000
Offering cost deducted to capital		—		—		—		—		(1,885,650)		—		—		—		—		—		(1,885,650)		—		(1,885,650)
Non-controlling interest from acquisition .		—		—		—		—		—		—		—		—		—		—		—		147,907		147,907
Net loss		—		—		—		—		—		—		—		—		(4,884,369)		—		(4,884,369)		(71,274)		(4,955,643)
Foreign currency translation adjustment		—		—		—		—		—		—		—		—		—		(15,969)		(15,969)		(1)		(15,970)
Balance at March 31, 2025 (Unaudited)		316,600	$	3,958		40,000	$	500	$	13,285,824	$	—		—	$	35,448	$	(6,588,434)	$	(202,103)	$	6,535,193	$	167,706	$	6,702,899

Balance at September 30, 2025		369,741	$	4,622		40,000	$	500	$	21,960,872	$	—	$	(3,486,439)	$	35,448	$	(12,528,647)	$	(204,656)	$	5,781,700	$	197,166	$	5,978,866
Cash proceeds from Private placement		570,540		7,132		—		—		8,392,868		(5,200,000)		—		—		—		—		3,200,000		—		3,200,000
Offering cost deducted to capital		—		—		—		—		(480,000)		—		—		—		—		—		(480,000)		—		(480,000)
Shares issued for partially conversion of convertible note		16,394		205		—		—		179,795		—		—		—		—		—		180,000		—		180,000
Shares issued for compensation		202,183		2,527		—		—		2,942,897		—		(2,938,440)		—		—		—		6,984		—		6,984
Amortization of deferred stock compensation		—		—		—		—		—		—		1,884,315		—		—		—		1,884,315		—		1,884,315
Net loss		—		—		—		—		—		—		—		—		(5,883,478)		—		(5,883,478)		(77,811)		(5,961,289)
Foreign currency translation adjustment		—		—		—		—		—		—		—		—		—		(87,249)		(87,249)		—		(87,249)
Balance at March 31, 2026 (Unaudited)		1,158,858	$	14,486		40,000	$	500	$	32,996,432	$	(5,200,000)	$	(4,540,564)	$	35,448	$	(18,412,125)	$	(291,905)	$	4,602,272	$	119,355	$	4,721,627

*The Company effected a 50:1 reverse stock split on July 6, 2026, as a result, the shares issued and outstanding and per share number presented here are adjusted retrospectively.

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

F-6

Table of Contents

NETCLASS TECHNOLOGY INC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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


	For the Six Months Ended
	March 31,
	2026		2025

Net cash used in operating activities	$	(2,528,346)	$	(7,020,541)

Cash flows from investing activities:
Acquisition of property, plant and equipment		—		(2,214)
Acquisition of intangible assets		(250,000)		—
Proceeds from disposal of property, plant and equipment		—		2,766
Investment into a subsidiary		—		(17,158)
Cash from acquisition of a subsidiary		—		34,656
Net cash (used in) provided by investing activities		(250,000)		18,050

Cash flows from financing activities:
Proceeds from bank loans		—		373,403
Gross proceeds from private placement		3,200,000
Deferred issuance costs paid		(480,000)		(1,747,188)
Gross proceeds from IPO		—		10,350,000
Proceeds from a related party loan		—		2,314
Repayment to related parties		(7,137)		(68,219)
Net cash provided by financing activities		2,712,863		8,910,310

Effect of exchange rates changes on cash		2,947		(13,578)
Net (decrease) increase in cash		(62,536)		1,894,241
Cash and restricted cash, beginning of the period		1,763,888		415,280
Cash and restricted cash, end of the period	$	1,701,352	$	2,309,521
Supplemental cash flow disclosures:
Cash paid for income tax	$	—	$	—
Cash paid for interest	$	7,279	$	3,536
Non cash investing and financing activities:
Shares issued for long-term deferred expenses	$	2,938,440	$	—

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

F-7

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

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

As of March 31, 2026, the Company’s subsidiaries and consolidated affiliated entities are as follows:

Subsidiaries		Date of Incorporation		Jurisdiction of Formation		Percentage of direct/indirect Economic Ownership		Principal Activities
DRAGONSOFT GROUP CO., LIMITED (“NetClass HK”)		December 12, 2006		Hong Kong, PRC		100%		Investment Holding/ Subscription and Application development service
Shanghai Zhima Information Technology Co., Ltd. (“WFOE”)		April 30, 2019		PRC		100%		Investment Holding
Shanghai Netwide Enterprise Management Co., Ltd. (“Shanghai Netwide”)		April 27, 2022		PRC		100%		Subscription and Application development service
Shanghai NetClass Information Technology Co., Ltd. (“NetClass China”)		May 13, 2003		PRC		100%		Subscription and Application development service
Shanghai NetClass Enterprise Management Co., Ltd (“NetClass Management”)		August 29, 2016		PRC		100%		Subscription and Application development service
Shanghai NetClass Human Resources Co., Ltd (“NetClass HR”)		November 09, 2016		PRC		100%		Subscription and Application development service
Shanghai Chuangyuan Education Technology Co., Ltd (“NetClass Education”)		April 14, 2004		PRC		100%		Subscription and Application development service
NetClass Training (Shanghai) Co., Ltd. (“NetClass Training”)		August 19, 2016		PRC		100%		Subscription and Application development service
Netclass International Limited		July 28, 2023		Hong Kong, PRC		100%		No activities
NetClass Data Pte Ltd (“NetClass Singapore”)		May 13, 2024		Singapore		60%		Subscription and Application development service
Nova Solutions Inc. (“NetClass Japan”, formerly named Create Solutions Inc.)		January 22, 2022		Japan		51%		Subscription and Application development service
Netclass International PTE Ltd.		July 18, 2025		Singapore		100%		Subscription and Application development service

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

F-8

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (Continued)

Reorganization

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

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

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

(iii)

The transfer of the shareholders’ equity in NetClass China to WOFE on June 10, 2022.

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

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

The accompanying condensed CFS were prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation were included in the Company’s unaudited condensed CFS. The unaudited condensed CFS should be read in conjunction with the Company’s CFS and the notes thereto for the years ended September 30, 2025 and 2024 included in the Company’s Form 20-F. The accompanying unaudited condensed CFS include the financial statements of the Company and its subsidiaries. All inter-company balances and transactions are eliminated in consolidation. Operating results for the six months ended March 31, 2026 and 2025 are not necessarily indicative of the results that may be expected for the full year.

Uses of estimates

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

Principles of consolidation

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

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. As of March 31, 2026 and September 30, 2025, all subsidiaries are controlled through equity investment, and none through contractual arrangements with variable interest entities.

F-9

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Non-controlling Interest

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

Business Combinations

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

Cash and cash equivalents

Cash comprises cash at banks and cash on hand, which includes deposits with original maturities of three months or less with commercial banks in Singapore, Hong Kong and PRC. Cash balances in bank accounts in the PRC are covered by a Chinese insurance program where RMB 500,000 (approximately US$70,234) deposit insurance limit for a legal entity’s aggregated balances at each bank. Cash equivalent is highly liquid deposits placed with financial institutions, which are readily convertible into known amounts of cash with original maturities of less than 3 months.

Restricted cash

Cash that is restricted as to withdrawal is reported separately on the Consolidated Balance Sheets and is included in total cash in the Consolidated Statements of Cash Flows.

Credit Losses

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

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

F-10

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable, net

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

Inventories, net

Inventories are the IT equipment used to sell to customers. Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using weighted average method. The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale, no longer meeting quality specifications, or has a cost basis in excess of its estimated realizable value and records a charge to cost of sales for such inventory as appropriate. As of March 31, 2026 and September 30, 2025 (audited), no impairment loss was recognized.

Advances to Vendors

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

Advances to vendors are short-term and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets impaired if the relative services or inventory will not be provided or received later. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful advances to vendors by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of March 31, 2026 and September 30, 2025, no such allowance was recognized.

Prepayment and other assets

Prepayments and other assets primarily consist of prepaid expenses, rent deposits, loans to third-parties, security deposits made to customers and advances to employees, which are presented net of allowance for doubtful accounts. Prepayments and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance is also based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment. Other receivables are written off against the allowances only after exhaustive collection efforts. As of March 31, 2026 and September 30, 2025, no allowance for doubtful accounts were provided on prepayments and other assets.

F-11

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property and equipment, net

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


		Useful life
Electronic equipment		3-5 years
Office furniture		5 years
Transportation equipment		5 years

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

Intangible asset, net

Intangible assets are stated at cost less accumulated amortization and any impairment losses incurred. Amortization is recognized on a basis that reflects the pattern in which the expected future economic benefits of the intangible assets are consumed or utilized. The carrying amount of intangible assets comprises externally purchased customer lists and software, which are amortized on a straight - line basis over 8 years and 5 years, respectively, consistent with the Company’s estimate of the period over which economic benefits will be derived from such assets.

Impairment of long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized for the six months ended March 31, 2026 and 2025, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation under ASC 718 “Compensation - Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award. The Company recognizes the goods acquired or services received in a share-based payment transaction with nonemployees when it obtains the goods or services are received. The Company recognizes an asset before it actually receives goods or services if it first exchanges a share-based payment for an enforceable right to receive those goods or services. The compensation cost for an award of share-based employee compensation classified as equity is recognized over the requisite service period. The requisite service period is the period during which an employee is required to provide services in exchange for an award, which often is the vesting period.

Convertible notes

The Company accounts for convertible debt instruments in accordance with ASC 470-20 and ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under this guidance, the Company no longer separates the liability and equity components of convertible instruments that do not require bifurcation under ASC 815. Instead, the entire convertible instrument is accounted for as a single liability, unless the fair value option under ASC 825-10 is elected or an embedded conversion feature requires separate accounting as a derivative.

F-12

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Convertible notes (Continued)

The Company first evaluates whether to elect the fair value option under ASC 825-10. If the fair value option is not elected, the Company assesses whether the embedded conversion feature requires bifurcation under ASC 815. If bifurcation is not required and the instrument is not issued with a substantial premium, the convertible debt is accounted for as a single liability instrument under the traditional convertible debt model. Any debt discount or premium is amortized over the expected term of the instrument using the effective interest method and recognized as additional non-cash interest expense.

Derivative liability

The Company does not use derivative instruments to hedge exposures to cash flows, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to operations. For option-based simple derivative financial instruments, the Company uses the Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

Fair Value of Financial Instruments

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

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

●

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

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

Financial liabilities reported in fair value hierarchy


		As of March 31, 2026
Financial liabilities		Fair value										Book value
		Level 1		Level 2		Level 3			Total			Total
Derivative liability		—		—		$	25,585		$	25,585		$	25,585
Total financial liabilities in fair value hierarchy		—		—		$	25,585		$	25,585		$	25,585

 

As of September 30, 2025

Financial liabilities

Fair value

Book value

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Total

Derivative liability

—

230,379

Total financial liabilities in fair value hierarchy

—

230,379

The movement, fair value measurement method and key inputs of the derivative liability is included in Note 14 “Derivative liability”.

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

F-13

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue recognition

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

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

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

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

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

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

(1)	Revenue from application development service

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

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

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

F-14

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue recognition (Continued)

(2)Revenue from subscription services

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

(3)Revenue from AI Computing Power support services

Revenue from AI computing power support services consists of usage fees paid by customers for access to the Company’s AI computing power during the service period. The Company bills customers based on the volume of computing power occupied and duration of occupancy. Since customers do not obtain ownership of the computing power and can only enjoy the rights and interests associated with the AI computing power upon gaining access to it, such service arrangements are classified as service contracts. Accordingly, AI computing power support service contracts typically contain a single performance obligation, with fixed pricing and payment terms, and no variable consideration is involved. Revenue from AI computing power support services is recognized over the contract term on either a straight-line basis or based on actual usage, in accordance with the pattern in which customers receive and consume the benefits of such services. There have been no significant returns, refunds or other similar obligations during each reporting period.

The Company reports revenues net of value added tax (“VAT”), goods and services tax (“GST”) or consumption tax (“CT”). The Company’s subsidiaries in PRC are subject to a 6% to 13% value added tax (“VAT”). The Company’s subsidiaries in Singapore are subject to 0-9% GST. The Company’s Japanese subsidiary is subject to 10% consumption tax.

F-15

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Contract balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Company has satisfied the Company’s performance obligation and has the unconditional rights to payment. Unearned revenues consist of payments received or awards to customers related to unsatisfied performance obligation at the end of the period. Advance from customers of $1,919,206 and $425,116 as of September 30, 2025 and 2024 were recognized as revenues in the six months ended March 31, 2026 and 2025, respectively. All unsatisfied performance obligations will be performed within the next 12 months. In certain application development service contracts, it contains a significant financial component, which represents a financial service obligation to the customers.

Disaggregation of revenue

For the six months ended March 31, 2026 and 2025, the disaggregation of revenue by major revenue stream is as follows:


		2026			2025
Application development services		$	3,870,070		$	2,491,822
Subscription service			1,416,045			1,162,588
AI Computing power support service			1,073,792			—
Total		$	6,359,907		$	3,654,410

Advertising expenditures

Advertising expenditures are expensed as incurred for the periods presented. Advertising expenditures are included in selling expenses. For the six months ended March 31, 2026 and 2025, advertising expenses were $350,106 and $281,211 respectively.

Leases

The Company determines whether an arrangement is a lease at inception. Lessee leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria.

The Company leases office spaces, which are classified as operating leases and leases certain AI computing facilities as finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in finance lease right of use assets, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The operating lease right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received.

The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less.

F-16

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Leases (Continued)

The Company has entered into a lease agreement for certain AI computing facilities, with a lease term of 60 months. As the lease term covers a major part of the underlying assets’ remaining economic life, the Company assumes substantially all the risks and rewards incidental to ownership of such facilities. Accordingly, these leases are classified as finance lease right of use assets, with corresponding lease liabilities recorded. The Company paid the full amount of lease payment at the beginning of the lease term.

Expenses for routine operations are expensed as incurred. Amortization of finance lease right of use assets is included within R&D expenses in the consolidated statements of operations. Finance lease right of use assets is depreciated on a straight-line basis over the term of the lease.

Value added tax (“VAT”), goods and services tax (“GST”) and consumption tax (“CT”)

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

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

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

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

Government grant

Government grants are recognized in other income, net or as a reduction of specific costs and expenses for which the grants are intended to compensate. Such amounts are recognized in the Consolidated Statements of Income and Comprehensive Income (Loss) upon receipt and all conditions attached to the grants are fulfilled. For the six months ended March 31, 2026 and 2025, the Company received $27,227 and $2,960 government subsidy for various research programs, included in other income, net.

Income taxes

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

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes was incurred for the six months ended March 31, 2026 and 2025. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,250). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. All of the tax returns of the Company’s subsidiaries in the PRC remain subject to examination by the tax authorities for five years from the date of filing.

F-17

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss per Share

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

Foreign currency translation

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

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

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


		March 31,		March 31,		September 30,
		2026		2025		2025
RMB Balance sheet items, except for equity accounts		US$1=RMB 6.8980		US$1=RMB 7.2567		US$1=RMB 7.1190
RMB Items in the statements of income and cash flows		US$1=RMB 7.0061		US$1=RMB 7.2308		US$1=RMB 7.2125
HK$ Balance sheet items, except for equity accounts		US$1=HK$ 7.8400		US$1=HK$ 7.7799		US$1=HK$7.7809
HK$ Items in the statements of income and cash flows		US$1=HK$ 7.7954		US$1=HK$ 7.7771		US$1=HK$7.7948
SG$ Balance sheet items, except for equity accounts		US$1=SG$1.2893		US$1=SG$1.3445		US$1=SG$1.2903
SG$ Items in the statements of income and cash flows		US$1=SG$1.2857		US$1=SG$1.3399		US$1=SG$1.3156
JPY Balance sheet items, except for equity accounts		US$1=JPY159.080		US$1=JPY149.90		US$1=JPY147.97
JPY Items in the statements of income and cash flows		US$1= JPY155.475		US$1= JPY149.06		US$1= JPY149.15

F-18

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive loss

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

Segment reporting

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

Concentrations of risks

(a)	Concentration of credit risk

Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of March 31, 2026 and September 30, 2025, cash of $235,512 and $187,061 respectively, was held at major financial institutions in mainland PRC, where there RMB 500,000 (approximately $70,000) deposit insurance limit for a legal entity’s aggregated balance at each bank. To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the PRC. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for allowance for doubtful accounts based on the individual customer’s and supplier’s financial condition, credit history, and the current economic conditions.

(b)	Significant customers

Customers that make up 10% or more of revenue for the six months ended March 31, 2026 and 2025 are as follows:


		2026		2025

Customer A		*		32.9	%
Customer B		22.6	%	—
Customer C		*		13.6	%
Customer D		*		10.2	%

*	The revenue of this customer is not over 10% of total revenue of the Company.

Customers that make up 10% or more of accounts receivable as of March 31, 2026 and September 30, 2025 are as follows


		2026		2025

Customer A		26.0	%	33.2	%
Customer B		*		11.2	%
Customer C		*		10.3	%
Customer D		12.0	%	12.7	%

*	The accounts receivable of this customer is not over 10% of total accounts receivable of the Company.

F-19

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrations of risks (Continued)

(c)	Significant suppliers

Suppliers that make up 10% or more of purchase for the six months ended March 31, 2026 and 2025 are as follows:


		2026		2025
Supplier A		*		22.0	%
Supplier B		21.6	%	31.7	%
Supplier C		*		10.5	%
Supplier D		*		18.3	%
Supplier E		21.9	%	*
Supplier F		23.8	%	*

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

Suppliers that make up 10% or more of accounts payable as of March 31, 2026 and September 30, 2025 are as follows


		2026		2025
Supplier A		28.6	%	40.0	%
Supplier B		20.2	%	*
Supplier G		*		25.4	%
Supplier H		10.1	%	*

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

(d)	Foreign currency risk

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

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

F-20

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent accounting pronouncements

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

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

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures.” This ASU expands required public entities’ segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is applied retroactively to all periods presented in financial statements, unless it is impracticable. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance effective October 1, 2024 and concluded that the adoption of the ASU does not have material effect on its CFS.

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

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

F-21

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 3 — ACCOUNTS RECEIVABLE, NET

Accounts receivable as of March 31, 2026 and September 30, 2025 are as follows:


		March 31,			September 30,
		2026			2025
Accounts receivable		$	8,037,938		$	6,869,148
Less: allowance for credit losses			(1,792,820)			(1,288,578)
Account receivable, net		$	6,245,118		$	5,580,570

Allowance for credit losses movement for the six months ended March 31, 2026 and 2025 is as follows:


		2026			2025
Beginning balance		$	1,288,578		$	780,109
Additions			471,587			273,849
Foreign currency translation adjustments			32,655			(22,183)
Ending balance		$	1,792,820		$	1,031,775

NOTE 4 — ADVANCES TO VENDORS

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

NOTE 5 — LONG-TERM PREPAID EXPENSES, NET

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


		March 31,		September 30,
		2026		2025
Marketing expenses (i)		$	500,000	$	500,000
Service costs (ii)			4,602,333		1,850,000
Subtotal			5,102,333		2,350,000
Less: accumulated amortization			(1,593,330)		(326,274)
Long-term prepaid expenses, net		$	3,509,003	$	2,023,726

(i)A service provider signed a contract with the Company to provide comprehensive brand consulting services, including formulating brand strategic plans (covering vision, mission, core values, etc.), defining brand positioning based on research and competitor analysis, developing brand communication strategies (channels, content, activities), guiding the establishment of scientific brand management & maintenance systems (asset protection, crisis handling, performance evaluation), and offering supporting value-added services such as market research, competitor analysis and brand training. As the marketing work will be conducted by a service provider until December 31, 2026, by which date the Company can benefit from the service, the Company recognizes it as a long-term prepaid expense. The total contractual consideration amounts to $500,000, and the associated cost will be amortized on a straight-line basis over the 24-month service term.

(ii)This service costs as of March 31, 2026 and September 30, 2025 represent the prepayments made to four and two service providers, respectively, for AI computing hardware and network-related services. The service providers offer remote CPU, GPU and Cloud accessing for AI or high-speed computing purpose. As each service work will be conducted by a service provider until 2 or 3 years later, by which date the Company can benefit from the service, the Company recognizes these costs as long-term prepaid expenses. The total contractual consideration amounts to $4,602,333, and the associated cost will be amortized on a straight-line basis over the service terms. During the six months ended March 31, 2026, the Company executed two new service agreements with two vendors, adding $2,104,394 in total contracted prepayment obligations.

The amortization of long-term prepaid expenses during the six months ended March 31, 2026 was $1,267,056.

F-22

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 6 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consist of the following:


		March 31,			September 30,
		2026			2025
					audited
Electronic equipment		$	15,698		$	87,356
Office furniture			—			—
Transportation equipment			—			—
Subtotal			15,698			87,356
Less: accumulated depreciation			(9,091)			(76,469)
Property and equipment, net		$	6,607		$	10,887

Depreciation for the six months ended March 31, 2026 and 2025 was $1,075 and $4,292, respectively.

NOTE 7 — INTANGIBLE ASSETS, NET

Intangible assets, net, consisted of the following:


		March 31,		September 30,
		2026		2025
				audited
Customer list *			311,441	$	334,825
Software			2,550,000		2,300,000
Subtotal			2,861,441		2,634,825
Less: accumulated amortization			(376,341)		(274,414)
Less: impairment **			(1,250,000)		(1,250,000)
Intangible assets, net			1,235,100	$	1,110,411

* The Company acquired a customer list from Netclass Japan and expects to benefit from it for around 8 years. Therefore, the Company recorded it as an intangible asset and will amortize it over 8 years, on a straight-line basis, from acquisition date.

** In late 2024, the Company engaged third-party service provider and developed AI based learning platform to support future developmental efforts. As of September 30, 2025, the Company assessed that due to significant technological advancements in the artificial intelligence industry, including the rapid evolution of large language models and cloud-based AI infrastructure, which rendered the platform architecture less competitive and subject to significant economic uncertainty. Consequently, the asset was fully impaired, and the remaining unamortized carrying amount was written off.

Amortization for the six months ended March 31, 2026 and 2025 was $104,083 and $3,462, respectively.

Estimated future amortization expense related to intangible assets held as of March 31, 2026 are as follows:


By March 31, 2027	$	248,930
By March 31, 2028		248,930
By March 31, 2029		248,930
By March 31, 2030		248,930
By March 31, 2031		164,763
Thereafter		74,617
Total	$	1,235,100

F-23

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 8 — RELATED PARTIES BALANCES AND TRANSACTIONS

The Company records transactions with various related parties. These related party balances as of March 31, 2026 and September 30, 2025 and transactions for the six months ended March 31, 2026 and 2025 are identified as follows:

(1)

Related parties with transactions and related party relationships


Name of Related Party		Relationship to the Company
Jianbiao Dai		Chief Executive Officer (“CEO”); Chairman of the Company
Shanghai Youfu Network Co., Ltd.		Shareholder of the Company
Shanghai Yiyun Information Service Co., Ltd		Jianbiao Dai served as a supervisor and holds 60% of the shares
Shanghai Chuangbo Enterprise Development Co., Ltd		A director of the Company serving in a corporate supervisory role
Lang Wide Investment Inc.		A shareholder of the Company
Shanghai Longruan Electronics Group Co., Ltd		Jianbiao Dai serves as legal representative and holds 80% of the shares

(2)

Related Party Transactions

Borrowing from a related party


		For the six months ended
		March 31,			March 31,
		2026			2025
Jianbiao Dai		$	—		$	2,314

(3)

Due to related parties


		As of
		March 31,		September 30,
		2026		2025
				audited
Due to related parties
Shanghai Longruan Electronics Group Co., Ltd		$	65,236	$	70,234
Jianbiao Dai			10,131		10,166
Lang Wide Investment Inc.			25,000		25,000
Total		$	100,367	$	105,400

F-24

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 9 — TAXES

(a)

Corporate Income Taxes (“CIT”)

Cayman Islands

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

Singapore

Under Singapore tax laws, the corporate income tax rate varies from year to year. For the six months ended March 31, 2026 and 2025, the corporate income tax rate was 17%. The Company’s Singapore subsidiaries applied the tax rate of 17% for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Singapore profits tax regulation.

Japan

Under Japanese tax laws, the corporate income tax rate varies depending on the size of the tax payer. For the six months ended March 31, 2026 and 2025, the applicable corporate income tax rate was 15%. The Company’s Japanese subsidiary applied the tax rate of 15% for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Japanese profits tax regulation.

Hong Kong

Under Hong Kong tax laws, with effect from April 1, 2018, a two-tiered profits tax rate regime applies. The profits tax rate for the first HKD 2 million (approximately $256,000) of corporate profits is 8.25%, while the standard profits tax rate of 16.5% remains for profits exceeding HKD 2 million. For the six months ended March 31, 2026 and 2025, NetClass HK applied the two-tier profits tax rate for its provision for current income and deferred taxes. Net operating loss will be carried forward indefinitely under Hong Kong profits tax regulation.

F-25

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 9 — TAXES (Continued)

(a)

Corporate Income Taxes (“CIT”) (Continued)

PRC

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

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

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

For the six months ended March 31, 2026 and 2025, all PRC subsidiaries are small and micro-profit companies as defined, and thus are eligible for the above preferential tax rate for small and micro enterprises for the taxable profit less than RMB3 million.

The PRC tax authorities grant preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Since NetClass China was approved as an HNTE beginning December 2019 and renewed in December 2022, NetClass China is entitled to a reduced income tax rate of 15% from 2019 to 2024. However, as the preferential tax rate for small and micro enterprises and the preferential tax rate for high-tech enterprises cannot be enjoyed simultaneously, NetClass China that meet both requirements chooses to enjoy the tax preferential treatment for small and micro enterprises for the six months ended March 31, 2026 and 2025.

i)	The components of the income tax provision(benefit) for the six months ended March 31, 2026 and 2025 are as follows:


		2026			2025
Current tax expense (benefit)
PRC		$	299		$	—
Hong Kong			—			—
Singapore			—			(25,546)
Japan			—			1
Total			299		$	(25,545)

Deferred tax (benefit)
PRC			(145)			340
Hong Kong			(42,850)			(65,648)
Singapore			(18,958)			(350)
Japan			(22,693)			(7,454)
Total			(84,646)			(73,112)

Total income tax benefit		$	(84,347)		$	(98,657)

F-26

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 9 — TAXES (Continued)

i)	The components of the income tax provision for the years ended September 30, 2025, 2024 and 2023 are as follows: (Continued)

Loss before provision for income taxes is attributable to the following geographic locations for the six months ended March 31, 2026 and 2025:


		2026			2025
PRC		$	(1,039,066)		$	(971,211)
Hong Kong and other jurisdictions			(5,006,570)			(4,083,089)
Loss before income taxes		$	(6,045,636)		$	(5,054,300)

ii)	The following table reconciles PRC statutory rates to the Company’s effective tax rate for the six months ended March 31, 2026 and 2025:


		2026			2025
Income tax (benefit) at PRC statutory income tax rate		$	(1,511,409)		$	(1,248,207)
Impact of different tax rates in other jurisdictions			1,124,292			840,758
Effect of preferential tax rate			250,663			259,890
Super deduction of qualified R&D expenditures *			(4,788)			(8,597)
Effect of change in valuation allowance			51,591			50,437
Non-deductible items and other **			5,305			7,062
Income tax benefit		$	(84,347)		$	(98,657)

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

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

The aggregate amount and per share effect of preferential tax rate are as follows:


		2026			2025
The aggregate amount of PRC preferential tax rate		$	250,663		$	259,890
The aggregate effect on basic and diluted net loss per share
- Basic and diluted			(0.53)			(0.77)

F-27

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 9 — TAXES (Continued)

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


		March 31,			September 30,
		2026			2025
					audited
Deferred tax assets:
Allowance for credit losses		$	105,599		$	72,957
Net operating losses			490,637			443,732
Operating lease liabilities			37,052			41,239
Total deferred tax assets			633,288			557,928
Less: Valuation allowance			(324,921)			(264,068)
Total deferred tax assets, net of valuation allowance			308,367			293,860

Deferred tax liabilities:
Effect of other temporary differences			(37,465)			(98,814)
Fair value increment on appraisal			(40,390)			(46,562)
Operating lease right of use assets			(35,944)			(40,090)
Total deferred tax liabilities			(113,799)			(185,466)
Total deferred tax assets, net		$	194,568		$	108,394

Valuation allowance movement for the six months ended March 31, 2026 and 2025 is as follows:


		2026			2025
Beginning balance		$	264,068		$	215,526
Additions			56,803			56,808
Reversals			(5,220)			(6,379)
Foreign currency translation adjustments			9,270			(7,282)
Ending balance		$	324,921		$	258,673

F-28

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 9 — TAXES (Continued)

iii)	The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting basis and tax basis of assets and liabilities as of September 30, 2025 and 2024: (Continued)

According to PRC tax regulations, PRC net operating loss can generally carry forward for five years from the year subsequent to the year in which the loss was incurred, and that of high-tech enterprises is no more than 10 years. Carryback of losses is not permitted. As of March 31, 2026 and September 30, 2025, the Company had net operating losses of $6,727,650 and $6,265,398, respectively, which are available to offset future taxable income. If not used, these carryforwards will expire from 2025 through 2030.

The realization of deferred tax assets is dependent upon the generation of taxable income during the periods in which those temporary differences become deductible. Recovery of substantially all of the Company’s deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. The valuation allowance is considered on an individual entity basis. As of March 31, 2026 and September 30, 2025, valuation allowances on deferred tax assets are provided because the Company believes that it is more-likely-than-not that certain of the subsidiaries in the PRC will not be able to generate sufficient taxable income in the near future, to realize the deferred tax assets carried-forwards. For the remaining entities, based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of March 31, 2026 and September 30, 2025.

(b)Taxes payable

Taxes payable consist of the following:


					September 30,
		March 31, 2026			2025
					audited
PRC		$	95,417		$	92,062
Hong Kong			198,387			199,894
Singapore			8,429			8,422
Japan			17,632			19,097
Total taxes payable		$	319,865		$	319,475

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2026 and September 30, 2025, the Group did not have any unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next 12 months. For the six months ended March 31, 2026 and 2025, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. As of March 31, 2026, the tax years ended December 31, 2020 through 2025 for the Group’s subsidiaries in the PRC are generally subject to examination by the PRC tax authorities.

F-29

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 10 — ACQUISITION OF NETCLASS JAPAN

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

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


	Unaudited
Fair value of identical assets and liabilities as of acquisition date	$
Cash		34,486
Receivables		91,722
Customer list		328,890
Payables		(103,913)
Deferred tax liability		(46,626)
Net assets at acquisition		304,559
Add:
Foreign currency exchange loss		230
Less:		—
Non-controlling interest		(147,907)
Total consideration paid for acquisition		(17,158)

Gain on acquisition	$	(139,724)

NOTE 11 — LEASES

The Company primarily has operating leases for administrative offices, and finance lease agreements for equipment from third-parties.

A summary of supplemental balance sheet information related to operating leases as of March 31, 2026 and September 30, 2025 was as follows:


		2026			2025
					audited
Operating lease right-of-use assets		$	622,944		$	674,885

Operating lease liabilities, current			150,644			144,408
Operating lease liabilities, non-current			497,577			556,584

Total operating lease liabilities		$	648,221		$	700,992

Weighted average remaining lease term			53.3 months			59.3 months

Weighted average discount rate			4.3	%		4.3	%

F-30

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 11 — LEASE (Continued)

A summary of supplemental balance sheet information related to finance leases as of March 31, 2026 and September 30, 2025 was as follows:


		2026			2025
					audited
Finance lease right of use assets - cost		$	1,280,000		$	1,280,000
Accumulated amortization			(384,000)			(256,000)
Finance lease right of use assets, net			896,000			1,024,000

Weighted average remaining lease term			42 months			48 months
Weighted average discount rate *			N/A			N/A

*As the finance lease for the AI computing facility was paid off at the commerce date of the lease term, no discount is necessary to be adopted.

A summary of lease expenses recognized in the consolidated statements of operations for the six months ended March 31, 2026 and 2025 supplemental cash flow information related to operating leases were as follows:


		2026			2025
Operating lease expenses – third party		$	82,465		$	112,135
Short-term lease		$	1,539		$	30,429

Cash paid for operating leases and finance lease		$	84,145		$	1,295,768
ROU assets recognized during the period		$	—		$	688,556

Minimum future lease payments under non-cancellable operating leases described above as of March 31, 2026 were as follows:


Twelve months ending March 31, 2027	$	170,350
Twelve months ending March 31, 2028		167,752
Twelve months ending March 31, 2029		146,129
Twelve months ending March 31, 2030		146,129
Twelve months ending March 31, 2031		153,436
Total		783,796

Less: present value discount		(135,575)

Total operating lease liabilities	$	648,221

No future payments under the finance lease arrangement as of March 31, 2026.

F-31

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 12 — LONG-TERM BANK LOAN

Summary of long-term bank loan


		Annual
		Interest		Maturity		March			September
		Rate		date		31, 2026			30, 2025
China Construction Bank		3.4	%	November 13, 2027		$	434,909		$	421,408
Total						$	434,909		$	421,408

NOTE 13 — CONVERTIBLE NOTE

On August 1, 2025, the Company entered into a securities purchase agreement with an accredited investor (the “Investor” or “Lender”) relating to the issuance and sale of (a) a convertible promissory note (“the Note”) in the principal amount of $2,200,000, at a purchase price of $2,000,000, convertible into Class A ordinary shares of par value of $0.00025 each; and (b) 1,069,500 ordinary shares (21,390 shares after reverse split) (the “Pre-Delivery Shares). The transaction was closed on August 4, 2025. According to the convertible promissory note, such notes will be convertible into a certain number of Conversion Shares. The debt instrument matures 12 months from the note issuing date, with the full outstanding balance due at maturity, and bears a simple annual interest rate of 9%; an 18% annual default interest rate will apply upon the occurrence of an Event of Default. In connection with the instrument, 1,069,500 Class A Ordinary Shares (21,390 shares after reverse split) (Pre-Delivery Shares) were purchased at a nominal price of $0.00025 per share. Following the full repayment of the note, the Company has the right to repurchase all such Pre-Delivery Shares (adjusted for any share splits) at the same nominal price of $0.00025 per share within 30 Trading Days of the repayment date.

The Company has identified and evaluated the embedded features of the convertible notes and concluded that as the conversion feature contains a net settlement feature and meets all the characteristics of a derivative, therefore it should be bifurcated from the convertible note. Consequently, the Company accounts for the conversion feature as a derivative liability.

As Pre-delivery shares can be separately exercised, i.e. each can continue to exist unchanged when the other is exercised; the Company concluded that they were freestanding. The Pre-delivery Shares are considered a form of stock borrowing facility and are accounted for as own-share lending arrangement. The Company did not receive any proceeds or pay any consideration related to the Pre-delivery Shares, except that the Company received a one-time nominal fee of US$267 upon the issuance of the Pre-delivery Shares and will pay the same amount to the investors upon the return of Pre-delivery Shares. The Pre-delivery Shares were issued on August 4, 2025. The Company accounted for the share lending arrangement as an issuance cost and recorded at fair value on the issuance date of $33,542 which was credited to additional paid-in capital. Although legally issued, the Pre-delivery Shares were not considered outstanding and therefore excluded from basic and diluted earnings (loss) per share unless default of the share lending arrangement occurs, at which time the Pre-delivery Shares would be included in the basic and diluted earnings (loss) per share calculation.

The amortized cost of the convertible note as of March 31, 2026 and September 30, 2025 consisted of the following:


	Amortized cost

Convertible note- issued in August 2025	$	2,200,000
Less: derivative liability fair value		(263,727)
debt discount and debt issuance costs		(460,000)
Fair value adjustment for Pre-Delivery Shares related to the issuance of the convertible note		(33,542)
Convertible Note		1,442,731
Interest payable for the convertible note (including amortization of issuance cost)		149,179
Total convertible notes and interest payable of convertible note as of September 30, 2025	$	1,591,910
Interest payable for the convertible note (including amortization of issuance cost)		478,846
Conversion of the convertible note		(180,000)
Penalty due to late filing of F-1 *		92,352
Total convertible notes and interest payable of convertible note as of March 31, 2026	$	1,983,108

F-32

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

*The Company was not able to have the F-1 filing effective within 90 days after issuance of the convertible note. It triggered a default event, which resulted a penalty of $92,352.

NOTE 13 — CONVERTIBLE NOTES (Continued)

Segregation of interest expenses:


	Amortized cost

Interest accrued	$	101,249
Amortization of issuance cost and discounts		377,597
Total interest expense for the convertible note	$	478,846

The effective interest rate of the note is 66.2%. The discount on the note shall be subject to further amortization over a two-month period.

NOTE 14 — DERIVATIVE LIABILITY

The derivative liability was the conversion feature bifurcated from the convertible note contract as presented in Note 13. The movement of the derivative liability is as follows:


	Fair value
Beginning balance as of September 30, 2025	$	230,379
Change in fair value		(204,794)
Ending balance as of March 31, 2026	$	25,585

There is no transfer between levels during the six months ended March 31, 2026.

A number of subjective input assumptions were used in the Binomial Tree Lattice model in relation to the conversion derivative, including expected term, stock price, conversion price, stock price volatility and dividend yield. The expected term was determined based on the period of time that the Convertible Note granted was expected to be outstanding. The stock price was determined based on the quoted trading price of the Company’s stock. The conversion price was determined based on the terms prescribed in the Convertible Promissory Note. The stock price volatility was calculated based on the historical trading price of the Company’s stock. The dividend yield is determined with reference to the historical dividend record of the Company.

In the Binomial Tree Lattice model, the conversion price was assessed at 88% multiplied by the lowest daily volume weighted average price in the ten trading days period immediately preceding the applicable measurement date, with a floor price of US$ 0.7106.

F-33

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 15 — SHAREHOLDERS’ EQUITY

Ordinary shares

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

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

On June 19, 2026, the Board approved a 50-for-1 reverse stock split of the Company’s Class A and Class B ordinary shares, with all fractional shares arising from the split rounded up to whole shares. The reverse stock split became effective for Nasdaq trading under the Company’s existing “NTCL” symbol upon market open on July 6, 2026, with a new CUSIP number of G6427C116. Concurrently, the par value of the Class A ordinary shares and Class B ordinary shares will be increased in proportion to the ratio of the Reverse Stock Split to US$0.0125 per share, and the number of authorized ordinary shares will be reduced in proportion to the ratio of the Reverse Stock Split to 760,000,000 Class A ordinary shares and 40,000,000 Class B ordinary shares. As a result, the shares issued and outstanding and per share number presented here are adjusted retrospectively.

As of March 31, 2026, 1,158,858 Class A ordinary shares and 40,000 Class B ordinary shares are issued and outstanding.

On September 20, 2023, the Company issued 15,200 shares at $125 per share to Dragonsoft Holding Limited, a company wholly owned by Mr. Jianbiao Dai.

On December 16, 2024, the Company completed its IPO and issued 36,000 Class A ordinary shares to public shareholders at $250 per share.

On January 3, 2025, the Company issued 5,400 Class A ordinary shares at $250 per share to the underwriter for its overallotment right.

On January 6, 2025, the Company granted 11,000 Class A ordinary shares, with a fair value of $270 per share, to two of its employees in recognition of their outstanding performance. The shares were issued on April 29, 2025. As the awards were fully vested upon issuance with no future service conditions attached, the total fair value of the shares was recognized as general and administrative expenses in the CFS.

On January 6, 2025, the Company granted 20,660 Class A ordinary shares, with a fair value of $270 per share, to three service providers as compensation for their IT support services and strategic consulting services, which cover the period from January 1, 2025, to December 31, 2026. 16,000 shares and 4,660 shares were issued on April 29, 2025 and July 28, 2025, respectively. As the services were not received by the Company as of the shares granting date, the Company recorded it in deferred stock compensation as contra-equity and amortized ratably over the respective service period.

On May 14, 2025, the Company issued 30 shares of its Class A ordinary shares to each of its three independent directors as director compensation (91 shares in total), with a fair value of $93,555 in total.

On November 3, 2025 and February 25, 2026, the Company issued 100 shares and 83 shares, respectively, of its Class A ordinary shares to its independent directors as director compensation, with a fair value of $6,984 in total.

On November 7, 2025, the Company issued 30,000 shares to an investor at a price of $80 per share, generating aggregate gross proceeds of $2,400,000, to complete a private placement offering.

F-34

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 15 — SHAREHOLDERS’ EQUITY (Continued)

From February 20, 2026 to February 24, 2026, the Company granted and issued 202,000 Class A ordinary shares, with a fair value of $13.5 or $15 per share, to four service providers as compensation for their IT support services and marketing consulting services, which cover the period from February 1, 2026, to January 31, 2027. As the services were not received by the Company as of the shares granting date, the Company recorded it in deferred stock compensation as contra-equity and amortized ratably over the respective service period.

On March 9 and March 12, 2026, the Company issued 14,117 and 2,277 ordinary shares, respectively, pursuant to conversion requests for convertible notes with principal amounts of $155,000 and $25,000.

On March 25, 2026, the Company issued 540,540 shares to certain investors at a price of $11.1 per share, generating aggregate gross proceeds of $6,000,000, to complete a private placement offering.

Subscription receivable

On March 25, 2026, the Company issued 540,540 shares to certain investors at a price of $11.1 per share, generating aggregate gross proceeds of $6,000,000, to complete a private placement offering. As of March 31, 2026, $5,200,000 gross proceeds were not received by the Company, which resulted in a subscription receivable. The proceeds were fully received as of June 20, 2026.

Statutory reserve and restricted net assets

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

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

Because some of the Company’s operating subsidiaries in the mainland PRC can only be paid out of distributable profits reported in accordance with mainland PRC accounting standards, the Company’s operating subsidiaries in the mainland PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Company’s entities in the mainland PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Company’s operating subsidiaries in the mainland PRC not available for distribution, was $2,957,630 and $2,957,630 as of March 31, 2026 and September 30, 2025(audited), respectively.

F-35

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 16 — EMPLOYEE STOCK OWNERSHIP PLAN

In April 2025, the Board of Directors of the Company approved the 2025 Equity Incentive Plan. Under the 2025 Equity Incentive Plan (“ESOP Plan”), the Company may issue up to 31,660 shares of the Company’s common stock for its officers, employees and consultants.

On January 6, 2025, the Company granted 11,000 Class A ordinary shares, with a fair value of $270 per share, to two of its employees in recognition of their outstanding performance. The shares were issued and vested on April 29, 2025. As the awards were fully vested upon issuance with no future service conditions attached, the total fair value of the shares was recognized as general and administrative expenses in the CFS.

On January 6, 2025, the Company granted 20,660 Class A ordinary shares, with a fair value of $270 per share, to three service providers as compensation for their IT support services and strategic consulting services, which cover the period from January 1, 2025, to December 31, 2026. 16,000 shares and 4,660 shares were issued and vested on April 29, 2025 and July 28, 2025, respectively. These three service providers are employment type consultants and eligible for the ESOP Plan. As the services were not received by the Company as of the shares granting date, the Company recorded it in deferred stock compensation as contra-equity and amortized ratably over the respective service period.

As of March 31, 2026 and September 30, 2025, the shares under the ESOP plan have been fully issued.

Deferred stock compensation

In January 2025, the Company granted 20,660 shares to three IT providers for their IT technical support services and strategic consulting services as mentioned in Note 15 above. The Company also granted and issued 202,000 Class A ordinary shares to four service providers in February 2026 as mentioned in Note 15 above. The IT supporting work and strategic consulting work will be conducted by these service providers until December 31, 2026 or January 31, 2027, by which date the Company can benefit from the service. As the services were not received by the Company as of the shares granting date, the Company recorded it in deferred stock compensation as contra-equity. The aggregate fair value of the share-based consideration totals $8,516,743. Of this amount, $2,938,440 was recognized during the six month ended March 31, 2026. The associated cost will be amortized on a straight-line basis over the service terms. As of March 31, 2026, $3,976,179 has been amortized and the balance of deferred stock compensation is $4,540,564.

NOTE 17 — COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time, the Company is subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of March 31, 2026 the Company has no significant outstanding litigation.

F-36

Table of Contents

NETCLASS TECHNOLOGY INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

NOTE 18 — SUBSEQUENT EVENTS

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

On May 6, 2026, the Company entered into two separate twelve-month technical development and AI research and development service agreements with unaffiliated third parties, Bangyuan Liu and Akaewood Investment Holding Co., Ltd., to support the development of the Company’s LLM-Based Learning APP System. In full consideration for the ongoing technical services to be rendered under the foregoing agreements, the Company issued equity securities on June 15, 2026. Specifically, the Company issued 56,000 Class A ordinary shares (par value $0.0125 per share) to Bangyuan Liu and 64,000 Class A ordinary shares to Akaewood Investment Holding Co., Ltd., respectively.

F-37

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.” All amounts included herein with respect to the six months ended March 31, 2026 and 2025 are derived from our audited consolidated financial statements and unaudited condensed consolidated financial statements included elsewhere in this 6-K. Our consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.

Overview

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

We are a provider of subscription service and application development service. Most of our customers are located in mainland China, Hong Kong and Singapore. We currently generate revenues from subscription service from customers accessing our Software-as-a-Service (“SaaS”), which are approximately 22.3% and 31.8% of our total revenue for the six months ended March 31, 2026 and 2025 respectively. We also generate revenue from application development services, which are 60.9% and 68.2% of our total revenue for the six months ended March 31, 2026 and 2025, respectively. We launch a new service line, named “AI computing support service”, which is approximately 16.8% of total revenue, during the six months ended March 31, 2026. For the six months ended March 31, 2026 and 2025, our total revenues were $6.4 million and $3.7 million, respectively.

Key Factors that Affect Operating Results

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

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

Results of Operations

For the six months ended March 31, 2026 and 2025

The following table summarizes the results of our operations 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.


											%
		2026			2025			Change			Change
REVENUES:
Application development services		$	3,870,070		$	2,491,822		$	1,378,248		55.3	%
Subscription services			1,416,045			1,162,588			253,457		21.8	%
AI Computing support service			1,073,792			—			1,073,792		N/A
Total revenues			6,359,907			3,654,410			2,705,497		74.0	%

COST OF REVENUES:
Application development services			3,353,672			2,028,759			1,324,913		65.3	%
Subscription services			1,861,739			1,320,261			541,478		41.0	%
AI Computing support service			1,142,264			—			1,142,264		N/A
Total cost of revenues			6,357,676			3,349,020			3,008,656		89.8	%
GROSS PROFIT			2,231			305,390			(303,159)		(99.3)	%

OPERATING EXPENSES:
Selling			441,546			468,864			(27,318)		(5.8)	%
General and administrative			4,312,762			3,975,268			337,494		8.5	%
Research and development			707,938			1,039,528			(331,590)		(31.9)	%
Total operating expenses			5,462,246			5,483,660			(21,414)		(0.4)	%
Income (loss) from operations			(5,460,015)			(5,178,270)			(281,745)		5.4	%

OTHER INCOME (EXPENSES)
Interest expenses, net			(469,917)			(2,939)			(466,978)		15,889.0	%
Gain on acquisition a subsidiary			—			139,724			(139,724)		(100.0)	%
Gain on fair value change of derivative liability			204,794			—			204,794		N/A
Other income, net			(320,498)			(12,815)			(307,683)		2,401.0	%
Total other income, net			(585,621)			123,970			(709,591)		(572.4)	%

INCOME (LOSS) BEFORE INCOME TAXES			(6,045,636)			(5,054,300)			(991,336)		19.6	%

Income tax provision			(84,347)			(98,657)			14,310		(14.5)	%

NET INCOME (LOSS)			(5,961,289)			(4,955,643)			(1,005,646)		20.3	%

Other comprehensive income (loss)			(87,249)			(15,969)			(71,280)		446.4	%

COMPREHENSIVE INCOME (LOSS)		$	(6,048,538)		$	(4,971,612)		$	(1,076,926)		21.7	%
Less: Comprehensive income (loss) attributable to non-controlling interests			77,811			71,274			6,537		9.2	%
Comprehensive income (loss) attributable to shareholders		$	(5,970,727)		$	(4,900,338)		$	(1,070,389)		21.8	%

Revenues

We derive revenues from three sources: (1) revenue from application development services, (2) revenue from subscription services, and (3) revenue from AI computing support service.

For the six months ended March 31, 2026, our total revenue was approximately $6.4 million compared to approximately $3.7 million for the six months ended March 31, 2025. The Company’s total revenue increased by approximately $2.7 million, or 74%. The overall increase in total revenue was attributable to approximately $1.4 million increase in revenue from application development services, $1.1 million increase in revenue from AI computing support service and $0.2 million increase in revenue from subscription services.

Revenue from application development services

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

For the six months ended March 31, 2026, our application development service revenue was approximately $3.9 million compared to approximately $2.5 million for the six months ended March 31, 2025, which was an increase of approximately $1.4 million or 55.3%. The increase in application development service revenue was mainly attributed to $1 million increase of revenue in our Japanese subsidiary, which was acquired by the Company on February 28, 2025.

Revenue from subscription services

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

Our subscription service revenue increased approximately $0.2 million, or 21.8%, from approximately $1.2 million for the six months ended March 31, 2025 to approximately $1.4 million for the six months ended March 31, 2026. This growth was primarily driven by the Company’s acquisition of new subscription customers, alongside sustained recurring revenue from our existing customer base.

Revenue from AI computing support services

Revenue from AI computing power support services consists of usage fees paid by customers for access to the Company’s AI computing power during the service period. The Company bills customers based on the volume of computing power occupied and duration of occupancy. Since customers do not obtain ownership of the computing power, and can only enjoy the rights and interests associated with the AI computing power upon gaining access to it, such service arrangements are classified as service contracts. Accordingly, AI computing power support service contracts typically contain a single performance obligation, with fixed pricing and payment terms, and no variable consideration is involved. Revenue from AI computing power support services is recognized over the contract term on either a straight-line basis or based on actual usage, in accordance with the pattern in which customers receive and consume the benefits of such services.

The Company launched the AI computing support service in late 2025 and generated approximately $1.1 million revenue during the six months ended March 31, 2026, and plans to expand this business going forward.

Cost of Revenues

Our cost of revenues mainly consists of compensation for our professionals, material and outsourcing costs (including amortization of prepaid long-term expenses). For the six months ended March 31, 2026, our total cost was approximately $6.4 million compared to approximately $3.3 million for the six months ended March 31, 2025. The Company’s total cost increased by approximately $3.0 million, or 89.8%. The overall increase in total cost of revenues was mainly attributable to approximately $1.3 million increase in cost of providing application development services, $0.5 million increase in cost of providing subscription services, and $1.1 million increase in cost of providing AI computing support service.

Our cost of application development services was approximately $3.4 million for the six months ended March 31, 2026, compared to $2.0 million for the six months ended March 31, 2025, an increase of approximately $1.3 million or 65.3%. The increase in cost of application development service was generally resulted from $1.4 million increase of revenue of application services.

Our cost of subscription services was approximately $1.8 million for the six months ended March 31, 2026, an increase of approximately $0.5 million or 41.0%, from approximately $1.3 million for the six months ended March 31, 2025. The increase in cost of subscription service was mainly due to increased outsourcing costs and professionals.The increase in cost of subscription services was mainly due to increased outsourced technical development costs and outsourced technical manpower costs. Such outsourcing costs were incurred to support customer subscriptions and related technical service requirements. The costs are not fixed and may fluctuate depending on the number, scope and technical requirements of customer subscriptions.

The cost of our AI computing support services primarily consists of rental fees for AI computing resources, including facility rental fees and related power costs. Our cost of AI computing support services was approximately $1.1 million for the six months ended March 31, 2026, an increase of approximately $1.1 million from nil for the six months ended March 31, 2025. The Company launched the AI computing support service line in the second half of fiscal 2025.

Gross profit


		2026					2025
		Gross			Profit		Gross			Profit					% of
GROSS PROFIT		Profit			Margin		Profit			Margin		Change			Change
Application development services		$	516,398		13.3	%	$	463,063		18.6	%	$	53,335		11.5	%
Subscription service			(445,694)		(31.5)	%		(157,673)		(13.6)	%		(288,021)		182.7	%
AI Computing support service			(68,472)		(6.4)			—		—			(68,472)		N/A
Total gross profit		$	2,231		0.0	%	$	305,390		8.4	%	$	(303,159)		(99.3)	%

Our gross profit decreased by approximately $0.3 million or 99.3% from approximately $0.3 million for the six months ended March 31, 2025 to approximately $0.00 million for the six months ended March 31, 2026. Profit margin as a percent of overall revenue for the six months ended March 31, 2026 and 2025 was approximately 0.0% and 8.4%, respectively.

Gross profit for application development services increased by approximately $0.1 million or 11.5% from approximately $0.4 million for the six months ended March 31, 2025 to approximately $0.5 million for the six months ended March 31, 2026. Profit margin for the six months ended March 31, 2026 and 2025 was approximately 13.3% and 18.6%, respectively. The margin decrease was mainly due to lower selling prices adopted by the Company to attract more customers.

Gross loss from subscription services increased by approximately $0.3 million, or 182.7%, growing from $0.1 million for the six months ended 31 March 2025 to $0.4 million for the six months ended 31 March 2026. The gross loss margin stood at 31.5% for the six months ended 31 March 2026, versus 13.6% recorded in the corresponding period of 2025. The deterioration in margin was primarily attributable to the Company’s decision to maintain competitive pricing for customers amid rising operating costs.

Gross loss for AI computing services was $0.1 million for the six months ended March 31, 2026. The resulting 6.4% gross loss margin primarily stemmed from the Company’s adoption of a penetration pricing strategy to launch this new business line.

Operating Expenses

The following table summarizes the operating expenses 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.


	2026		2025		Change		% Change
OPERATING EXPENSES:
Selling	$	441,546	$	468,864	$	(27,318)	(5.8)	%
General and administrative		4,312,762		3,975,268		337,494	8.5	%
Research and development		707,938		1,039,528		(331,590)	(31.9)	%
Total operating expenses	$	5,462,246	$	5,483,660	$	(21,414)	(0.4)	%

Our operating expenses consist of selling, general and administrative (“G&A”) and R&D expenses. Operating expenses decreased by approximately $0.02 million, or 0.4%, from approximately $5.48 million for the six months ended March 31, 2025 to approximately $5.46 million for the six months ended March 31, 2026. The decrease in our operating expenses was primarily due to approximately decrease in R&D expenses of $0.33 million and decrease in selling expense of $0.03 million, offset by $0.34 million increase in G&A expenses.

Selling expenses primarily consisted of salary and compensation expenses for our sales personnel, advertising expenses, promotional service fee, travel and other expenses relating to our sales activities. Selling expenses decreased by approximately $0.03 million or 5.8% from approximately $0.47 million for the six months ended March 31, 2025 to approximately $0.44 million for the six months ended March 31, 2026. The slight decrease in selling expenses is mainly due to decrease of marketing expenses.

G&A expenses primarily consisted of salary and compensation expenses for our accounting, human resources and executive office personnel, and included rental, depreciation and amortization, impairment charges, office overhead, professional service fees and travel and transportation costs. G&A expenses increased by approximately $0.34 million or 8.5% from approximately $4.0 million for the six months ended March 31, 2025 to approximately $4.3 million for the six months ended March 31, 2026, due to the reason the Company incurred certain costs in strategy consulting and business consulting after the Company’s IPO.

R&D expenses primarily consisted of compensation and benefit expenses for our R&D personnel as well as office overhead and other expenses for our R&D activities. R&D expenses decreased by approximately $0.33 million or 31.9% from approximately $1.04 million for the six months ended March 31, 2025 to approximately $0.71 million for the six months ended March 31, 2026. The decrease was mainly due to the reason that the Company incurred more R&D expense for AI training during the six months ended March 31, 2025, compared to that in the six months ended March 31, 2026.

Other Income (Expense)

Other income (expense) mainly comprises net interest income (expense) and net other income. We recorded a net other expense of $0.6 million for the six months ended March 31, 2026, representing a $0.7 million decrease from the net other income of $0.1 million recognized in the prior-year six-month period ended March 31, 2025. This decline was primarily attributable to four factors: (i) a $0.5 million increase in interest expense in the six months ended March 31, 2026, arising from the convertible debt issued in late 2025; (ii) $0.3 million of additional other expenses incurred in the current period, relating to penalties for the late filing of convertible debt documents; (iii) a $0.1 million one-time gain recognized in the six months ended March 31, 2025, in connection with a subsidiary acquisition. The prior-year gain resulted from the excess of the fair value of the acquired subsidiary (net of the fair value of non-controlling interests) over the total acquisition consideration transferred; and offset by (iv) $0.2 million gain on fair value change on derivative liability recognized in the six months ended March 31, 2026.

Income tax benefit

Income tax benefit was $84,347 and $98,657 for the six months ended March 31, 2026 and 2025, respectively. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary Shanghai NetClass Information Technology Co., Ltd. enjoys a preferential tax rate of 15%. According to announcement of the Ministry of Finance and the State Taxation Administration [2023] No.12, which became effective on August 2, 2023 to December 31, 2027, small, low profit enterprises are subject to the preferential income tax rate of 5%. As most of our subsidiaries in PRC were in loss stage, they are subject to preferential income tax rate of 5%. The income tax rate for our Hong Kong Subsidiaries for the first HKD2 million of corporate taxable income is 8.25%, while the standard profits tax rate of 16.5% remains for taxable income exceeding HKD2 million.

Net Income (loss)

As a result of the foregoing, our net loss increased by approximately $1.0 million, or 20.3%, from approximately $5.0 million net loss for the six months ended March 31, 2025 to approximately $6.0 million net loss for the six months ended March 31, 2026. The increase of net loss is mainly attributed to approximately $0.7 million decrease in other income (expenses) and $0.3 million decrease of gross profit.

Other comprehensive income (loss)

Foreign currency translation adjustments were $(87,250) and $(15,969) for the six months ended March 31, 2026 and 2025, respectively. The foreign currency translation adjustments are mainly due to the currency exchange rate fluctuation of RMB to USD. The balance sheet amounts with the exception of equity as of March 31, 2026 were translated at RMB6.8980 to USD1.00 compared to RMB7.1190 to USD1.00 as of September 30, 2025. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the six months ended March 31, 2026 and 2025 were RMB7.0061 to USD1.00 and RMB7.2308 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

Liquidity and Capital Resources

A substantial portion of our operations are conducted in the PRC and significant portion of our revenue and cash are denominated in RMB. RMB is subject to the exchange control regulation in mainland China, and, as a result, we may have difficulty distributing any dividends outside of mainland China due to PRC exchange control regulations that restrict our ability to convert RMB into U.S. dollars. As of March 31, 2026 and 2025, cash of $235,512 and $185,955, respectively, was held at major financial institutions in PRC.

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

As of March 31, 2026, the Company had working capital of approximately $(0.8 million). As of September 30, 2025, the Company had working capital of approximately $2.0 million. The Company has historically funded its working capital needs primarily from operations, bank loans, advance payments from customers and shareholders. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections.

In assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. As of March 31, 2026, the Company had cash and restricted cash of approximately $1.7 million. The Company’s current liability includes $2.0 million related to a convertible debt, which is going to convert into equity of the Company soon. If exclusive of this current liability, the working capital of the Company becomes $1.2 million positive. As a result, the Company believes that its cash on hand, operating cash flows and future financing cash inflow will be sufficient to fund its operations over at least the next 12 months from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and may also need additional cash in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.

For the six months ended March 31, 2026 and 2025


		2026			2025
Net cash (used in) operating activities		$	(2,528,346)		$	(7,020,541)
Net cash provided by investing activities			(250,000)			18,050
Net cash provided by financing activities			2,712,863			8,910,310
Effect of exchange rate change on cash			2,947		$	(13,578)
Net increase (decrease) in cash and restricted cash		$	(62,536)		$	1,894,241

Operating Activities

Net cash used in operating activities was approximately $2.5 million for the six months ended March 31, 2026. Net cash used in operating activities for the six months ended March 31, 2026 consisted of approximately $6.0 million of net loss, increase of approximately $1.1 million in accounts receivable, approximately $2.8 million net increase of long-term prepaid expenses, and approximately $0.4 million increase in prepayment, and $0.1 million decrease in operating lease liability, offset by adjustment of $4.2 million non-cash items, a decrease of inventory of approximately $0.3 million, decrease of advance to vendors of $0.2 million, an increase of approximately $1.7 million in advance from customers, $0.4 million increase in accounts payable and $1.0 million increase in accrued expenses and other liabilities.

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

Investing Activities

Net cash used in investing activities was $0.25 million for the six months ended March 31, 2026. Net cash used by investing activities for the six months ended March 31, 2026 represent approximately $0.25 million cash paid for acquisition of intangible asset.

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

Financing Activities

Net cash provided by financing activities was $2.7 million for the six months ended March 31, 2026, mainly consisted of gross proceeds from private placement of $3.2 million, offset by payment for issuance costs in connection with the private placement of approximately $0.5 million.

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

Capital Expenditures

Other than the $0.25 million acquisition of intangible asset as mentioned in investing activities, the Company did not make significant capital expenditures for the six months ended March 31, 2026 and 2025. The Company will make capital expenditures to meet the expected growth of its business when necessary.

Contractual Obligations

The following table sets forth our contractual obligations and commercial commitments as of March 31, 2026:


	Payments Due by Period
			Less than		1 – 3		3 – 5		More than
	Total		1 Year		Years		Years		5 Years
Operating lease arrangements	$	783,796	$	170,350	$	460,010	$	153,436	$	—
Long-term bank loan		434,909		—		434,909		—		—
Total	$	1,218,705	$	170,350	$	894,919	$	153,436	$	—

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements for the six months ended March 31, 2026 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

Important shares consolidation event

Critical Accounting Estimates

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

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

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

●	our selection of critical accounting policies;

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

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

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

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

Allowance for credit losses against accounts receivable

Provision for expected credit losses is included in G&A expenses in the CFS. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for credit losses. Allowance for credit losses for accounts receivable was $1,792,820 and $1,288,578 as of March 31, 2026 and September 30, 2025, respectively.

Valuation of deferred tax assets

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

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Recovery of substantially all of the Company’s deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of March 31, 2026 and September 30, 2025. However, since the deferred tax assets arising from operating loss has a limited window of use, to be conservative, management decided to record a partial valuation allowance. Valuation allowance was $324,921 and $264,068 as of March 31, 2026 and September 30, 2025, respectively. While we consider the facts above, our projections of future income qualified tax-planning strategies may be changed due to the macroeconomic conditions and our business development. The DTAs could be utilized in the future years if we make profits in the future, the valuation allowance shall be reversed.

Recently issued accounting pronouncements

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

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

7 documents

NetClass Technology (NASDAQ: NTCL) grows revenue to $6.36M but logs $5.96M loss

Rhea-AI Filing Summary

Positive

Negative

Filing Explained

Key Figures

Key Terms

FAQ

How much revenue did NetClass Technology (NTCL) generate in the six months ended March 31, 2026?

How did NetClass Technology (NTCL) perform in terms of cash flow during the six months ended March 31, 2026?

What are the key liabilities on NetClass Technology (NTCL)'s balance sheet as of March 31, 2026?

How large is NetClass Technology (NTCL)'s long-term prepaid AI and marketing service balance?

What impact did the convertible note have on NetClass Technology (NTCL)'s results?

Filing Exhibits & Attachments

Press Releases

Other Documents