Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 14, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-41994 | |
Entity Registrant Name | Massimo Group | |
Entity Central Index Key | 0001952853 | |
Entity Tax Identification Number | 92-0790263 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 3101 W Miller Road | |
Entity Address, City or Town | Garland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75041 | |
City Area Code | (877) | |
Local Phone Number | 881-6376 | |
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | MAMO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,300,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 207,137 | $ 765,814 |
Accounts receivable, net | 14,203,770 | 9,566,445 |
Inventories, net | 27,182,635 | 25,800,912 |
Advance to suppliers | 1,406,100 | 1,589,328 |
Other current assets | 679,319 | 637,509 |
Total current assets | 43,678,961 | 38,360,008 |
NON-CURRENT ASSETS | ||
Property and equipment at cost, net | 384,551 | 399,981 |
Right of use operating lease assets, net | 1,197,431 | 1,478,221 |
Right of use financing lease assets, net | 103,169 | 113,549 |
Deferred offering assets | 1,563,547 | 1,457,119 |
Deferred tax assets | 346,948 | 134,601 |
Total non-current assets | 3,595,646 | 3,583,471 |
TOTAL ASSETS | 47,274,607 | 41,943,479 |
CURRENT LIABILITIES | ||
Short-term loans | 303,583 | |
Accounts payable | 14,772,382 | 12,678,077 |
Other payable, accrued expenses and other current liabilities | 90,463 | 98,097 |
Accrued return liabilities | 138,229 | 283,276 |
Accrued warranty liabilities | 640,525 | 619,113 |
Contract liabilities | 1,052,342 | 1,835,411 |
Current portion of obligations under operating leases | 681,872 | 847,368 |
Current portion of obligations under financing leases | 42,083 | 41,647 |
Income tax payable | 3,221,201 | 2,121,083 |
Total current liabilities | 20,639,097 | 18,827,655 |
NON-CURRENT LIABILITIES | ||
Obligations under operating leases, non-current | 515,559 | 630,853 |
Obligations under financing leases, non-current | 66,338 | 77,024 |
Loan from a shareholder | 7,909,525 | 7,920,141 |
Total non-current liabilities | 8,491,422 | 8,628,018 |
TOTAL LIABILITIES | 29,130,519 | 27,455,673 |
EQUITY | ||
Common shares, $0.001 par value, 100,000,000 shares authorized, 40,000,000 and 40,000,000 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 40,000 | 40,000 |
Preferred shares, $0.01 par value, 5,000,000 preferred shares authorized, no shares were issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | ||
Subscription receivable | (357,159) | (832,159) |
Additional paid-in-capital | 1,994,000 | 1,994,000 |
Retained earnings | 16,467,247 | 13,285,965 |
Total equity | 18,144,088 | 14,487,806 |
TOTAL LIABILITIES AND EQUITY | $ 47,274,607 | $ 41,943,479 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 40,000,000 | 40,000,000 |
Common stock, shares outstanding | 40,000,000 | 40,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | $ 30,151,677 | $ 18,840,415 |
Cost of revenues | 19,700,290 | 13,223,421 |
Gross Profit | 10,451,387 | 5,616,994 |
Operating expenses: | ||
Selling and marketing expenses | 2,210,484 | 1,950,285 |
General and administrative expenses | 4,106,905 | 2,984,262 |
Research and development expenses | 162,250 | |
Total operating expenses | 6,479,639 | 4,934,547 |
Income from operations | 3,971,748 | 682,447 |
Other income (expense): | ||
Other income, net | 247,569 | 44,895 |
Interest expense | (137,694) | (155,098) |
Total other income (expense), net | 109,875 | (110,203) |
Income before income taxes | 4,081,623 | 572,244 |
Pro forma provision for income taxes (pro forma for S Corporation) | 900,341 | 24,079 |
Pro forma net income and comprehensive income (pro forma for S Corporation) | $ 3,181,282 | $ 548,165 |
Earnings par share - basic | $ 0.08 | $ 0.01 |
Earnings par share - diluted | $ 0.08 | $ 0.01 |
Weighted average number of shares of common stock outstanding - basic | 40,000,000 | 40,000,000 |
Weighted average number of shares of common stock outstanding - diluted | 40,000,000 | 40,000,000 |
Pro Forma [Member] | ||
Other income (expense): | ||
Income before income taxes | $ 572,244 | |
Pro forma provision for income taxes (pro forma for S Corporation) | 144,250 | |
Pro forma net income and comprehensive income (pro forma for S Corporation) | $ 427,994 | |
Earnings par share - basic | $ 0.01 | |
Earnings par share - diluted | $ 0.01 | |
Weighted average number of shares of common stock outstanding - basic | 40,000,000 | |
Weighted average number of shares of common stock outstanding - diluted | 40,000,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Receivables from Stockholder [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2022 | $ 40,000 | $ (2,034,000) | $ 1,994,000 | $ 5,070,740 | $ 5,070,740 |
Balance, shares at Dec. 31, 2022 | 40,000,000 | ||||
Subscription received | 600,000 | 600,000 | |||
Net income | 548,165 | 548,165 | |||
Balance at Mar. 31, 2023 | $ 40,000 | (1,434,000) | 1,994,000 | 5,618,905 | 6,218,905 |
Balance, shares at Mar. 31, 2023 | 40,000,000 | ||||
Balance at Dec. 31, 2023 | $ 40,000 | (832,159) | 1,994,000 | 13,285,965 | 14,487,806 |
Balance, shares at Dec. 31, 2023 | 40,000,000 | ||||
Subscription received | 475,000 | 475,000 | |||
Net income | 3,181,282 | 3,181,282 | |||
Balance at Mar. 31, 2024 | $ 40,000 | $ (357,159) | $ 1,994,000 | $ 16,467,247 | $ 18,144,088 |
Balance, shares at Mar. 31, 2024 | 40,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||
Net income | $ 3,181,282 | $ 548,165 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 36,511 | 35,300 | |
Non-cash operating lease expense | 280,790 | 184,316 | |
Accretion of finance lease liabilities | 1,331 | 1,784 | |
Amortization of finance lease right-of-use assets | 10,380 | 9,343 | |
Gain on disposal of fixed asset | (44,655) | ||
Provision for expected credit loss, net | 234,298 | 104,631 | $ 203,301 |
Deferred tax assets | (212,347) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,871,623) | 93,993 | |
Inventories | (1,381,723) | (672,300) | |
Advance to suppliers | 183,228 | 1,423,742 | |
Other current asset | (41,810) | (302,580) | |
Accounts payables | 2,094,305 | (525,990) | |
Other payable, accrued expense and other current liabilities | (7,634) | (33,401) | |
Tax payable | 1,100,118 | 24,079 | |
Accrued warranty liabilities | 21,412 | (37,558) | |
Accrued return liabilities | (145,047) | (292,483) | |
Contract liabilities | (783,069) | 403,760 | |
Due to shareholder | (10,616) | (20,273) | |
Lease liabilities – operating lease | (280,790) | (184,316) | |
Net cash (used in) provided by operating activities | (635,659) | 760,212 | |
Cash flows from investing activities: | |||
Proceed from sales of property and equipment | 128,001 | ||
Acquisition of property and equipment | (104,427) | ||
Net cash provided by investing activities | 23,574 | ||
Cash flows from financing activities: | |||
Proceeds from bank loan | 300,000 | ||
Repayment of bank loan | (900,000) | ||
Repayment of other loans | (303,583) | ||
Repayment of finance lease liabilities | (11,581) | (10,536) | (47,051) |
Repayment to related party | (10,000) | ||
Deferred offering costs | (106,428) | (75,000) | |
Proceeds from subscription deposits | 475,000 | ||
Net cash provided by (used in) financing activities | 53,408 | (695,536) | |
Net (decrease) increase in cash and cash equivalents | (558,677) | 64,676 | |
Cash and cash equivalents, beginning of the period | 765,814 | 947,971 | 947,971 |
Cash and cash equivalents, end of the period | 207,137 | 1,012,647 | 765,814 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for interest | 137,694 | 1 | |
Cash paid for income taxes | 12,570 | ||
NON-CASH ACTIVITIES | |||
Right of use assets obtained in exchange for operating lease obligations | 1,113,140 | ||
Right of use assets obtained in exchange for finance lease | $ 37,430 | $ 60,805 |
ORGANIZATION AND BUSINESS DESCR
ORGANIZATION AND BUSINESS DESCRIPTION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS DESCRIPTION | NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION Massimo Group (the “Company”), is a holding company established on October 10, 2022 under the laws of the State of Nevada. The Company, through its subsidiaries, is primarily engaged in the manufacturing and sales of a wide selection of farm and ranch tested utility terrain vehicles (“UTVs”), recreational all-terrain vehicles (“ATVs”), and pontoon and tritoon boats (“Pontoon Boats”). Mr. David Shan, the Chairman of the Board and Chief Executive Officer (“CEO”), is the controlling shareholder (the “Controlling Shareholder”) of the Company. Reorganization On June 1, 2023, the two shareholders transferred their 100 100 100 Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same Controlling Shareholders, and therefore the Reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been 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 in accordance with ASC 805-50-45-5. Details of the Company and its subsidiaries are set out below upon the Reorganization: SCHEDULE OF SUBSIDIARIES Subsidiaries Date of Incorporation Jurisdiction of Formation Percentage of direct/indirect Economic Ownership Principal Activities Massimo Group October 10, 2022 Nevada 100 Holding company Massimo Motor Sports, LLC June 30, 2009 Texas 100 Manufacture of UTVs and ATVs Massimo Marine, LLC January 6, 2020 Texas 100 Manufacture of Pontoon Boats On June 1, 2023, the Company entered into two agreements with Asian International Securities Exchange Co., Ltd. (“AISE”) and AISE agreed to invest $ 1 1 15 15 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2024, and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of the Company and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Uses of estimates and assumptions In preparing the consolidated financial statements 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 financial statements 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. Significant accounting estimates required to be made by management include allowance for inventories, allowance for credit losses, sales return liabilities, and warranty costs. 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. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, the balances with banks and the liquid investments with maturities of three months or less. The Company maintains all its bank accounts in the United States, which are insured by Federal Deposit Insurance Corporation (“FDIC”). Accounts Receivable, net Accounts receivable represent trade receivable and are recognized initially at fair value and subsequently adjusted for any allowance for expected credit loss. The Company grants credit to customers, without collateral, under normal payment terms. The Company uses a loss rate method to estimate the allowance for credit losses. The Company evaluates the expected credit loss of accounts receivable based on customer financial condition and historical collection information adjusted for current market economic conditions and forecasts of future economic performance when appropriate. Loss-rate approach is based on the historical loss rates and expectations of future conditions. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected. Inventories, net Inventories are stated at the lower of cost or net realizable value, using the first-in, first out (FIFO) method. Costs include the cost of raw materials, freight and duty. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. As of March 31, 2024 and December 31, 2023, the Company had inventory provision of $ 439,900 439,900 nil nil MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Advances to Suppliers Advance to suppliers consists of balances paid to suppliers for purchasing of products, parts and accessories that have not been provided or received. Advances to suppliers are short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for individual advances based on the specific facts and circumstances. Deferred Offering Cost Deferred offering costs were expenses directly related to the Company’s planned initial public offering (“IPO”). These costs consisted of legal, accounting, printing, and filing fees that the Company capitalized, including fees incurred by the independent registered public accounting firm directly related to the offering. Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed. Property and equipment Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight-line method, as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE Useful life Furniture and fixtures 5 7 Machinery equipment 5 7 Electronic equipment 5 Transportation equipment 5 Leasehold improvement Over the shorter of the lease term or estimated useful lives Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense 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 gains or losses on disposals are determined by comparing proceeds with carrying amount and are recognized within “Other income (expense)” in the consolidated statements of operations and comprehensive income. Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02—Leases (Topic 842) since January 1, 2020, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Operating Leases For operating leases, the Company measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company measures right-of-use (“ROU”) assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing lease expense when the lessor makes the underlying asset available to the Company. Lease cost for operating leases includes the amortization of the ROU asset and interest expense related to the operating lease liability. For leases with lease term less than one year (short-term leases), the Company records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. Finance Leases Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation of right-of-use finance asset” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably certain of exercising. Impairment of Long-lived Assets Long-lived assets, primarily consist of property and equipment, 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 Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. 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 fair value are as follows: MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments ● 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. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivables, short-term loans, accounts payable, other liabilities, contract liabilities, due to shareholder, due to related parties, and lease liabilities, approximates their recorded values due to their short-term maturities. The Company determined that the carrying value of the lease liabilities approximated their fair value as the interest rates used to discount the contracts approximate market rates. The Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of March 31, 2024. Revenue recognition The Company adopted 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’s revenue is generated primarily by sales of UTVs, ATVs electric bikes, and Pontoon Boats. Revenue represented the amount of consideration to which the Company expects to be entitled in exchange for promised goods. Revenue is recorded when performance obligations are considered to be satisfied when control is transferred to our customers upon goods delivered to customers and acceptance by customers. Sales returns The Company provides a refund policy to accept returns from end customers, which varies and depends on the different products and customers. The estimated sales returns are determined based upon an analysis of historical sales returns. Return allowances are recorded as a reduction in sales with corresponding sales return liabilities which are included in “accrued return liabilities.” The estimated cost of returned inventory is recorded as a reduction to cost of sales and an increase of right of return assets which is included in “inventories.” As of March 31, 2024 and December 31, 2023, $ 138,229 283,276 425,705 679,522 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Products warranty The Company generally provides a one-year limited warranty against defects in materials related to the sale of products. The Company considers the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon specifications. Estimated future warranty obligations are included in cost of product sales in the period in which the related revenue is recognized. The determination of the Company’s warranty accrual is based on actual historical experience with the product, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors. As of March 31, 2024 and December 31, 2023, $ 640,525 619,113 386,959 348,152 Contract Liabilities The contract liabilities of the Company are primarily related to advances received from customer. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. Contract liabilities are recognized when the Company receives prepayment from customers resulting from purchase order. Contract liabilities will be recognized as revenue when the products are delivered. As of March 31, 2024 and December 31, 2023, the Company records contract liabilities of $ 1,052,342 1,835,411 929,686 696,274 Disaggregation of Revenues The Company disaggregates its revenue from contracts by products, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the three months ended March 31, 2024 and 2023 is disclosed in Note 18 of these consolidated financial statements. Cost of Sales Cost of sales includes all of the costs and expenses directly related to the production of goods and services included in revenues. Cost of sale primarily consist of cost of products, freight and duty allocated and warehouse related overhead, such as salaries and benefits, rent, and depreciation expenses. Shipping and handling costs Shipping and handling costs, which include costs related to the selection of products and their delivery to customers, are presented in cost of revenue and selling expenses. The shipping and freight expense incurred upon goods delivery to customers are included in selling expenses, amounting to $ 1,107,047 1,094,796 2,687,647 2,678,296 Advertising costs The Company expenses all advertising costs as incurred. Advertising cost presented in selling expenses were $ 228,476 191,786 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 401(k) benefit plan The 401(k) benefit plan covers substantially all employees and allows voluntary employee contributions up to the annually adjusted Internal Revenue Service dollar limit. These voluntary contributions are matched equal to 100 4 100 Income taxes Before the Reorganization, the Company elected to be taxed as an S Corporation for federal and state income tax purposes. As an S Corporation, the Company is not subject to federal income tax and state tax in Texas. As such, shareholders are taxed on their pro rata share of earnings and deductions of the Company, regardless of the amount of distributions received. After the Reorganization, the Company is subjected to U.S. federal income tax at 21 Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 740, “Accounting for Uncertainty in Income Taxes.” A 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, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% Significant judgment is also required in evaluating the Company’s uncertain income tax positions and provisions for income taxes. Liabilities for uncertain income tax positions are recognized based on a two-step approach. The first step is to evaluate whether an income tax position has met the recognition threshold by determining if the weight of available evidence indicates that it is more likely than not to be sustained upon examination. The second step is to measure the income tax position that has met the recognition threshold as the largest amount that is more than 50% likely of being realized upon settlement. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that give rise to a revision become known. The Company recognizes interest and penalties related to uncertain income tax positions as interest expense. Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common 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 common 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. For the periods ended March 31, 2024 and 2023, there were no MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Segment reporting The Company follows ASC 280, “Segment Reporting . one reportable segment. The Company operates and manages its business as a single segment. As the Company’s long-lived assets are all located in the United States and substantially all the Company’s revenues are derived from within the United States, no geographical segments are presented. Concentration and risks a. Concentration of credit risk Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents, accounts receivable and other receivable included in other current assets. The maximum exposure of such assets to credit risk is their carrying amounts at the balance sheet dates. The Company maintains all the bank accounts at financial institutions in the United States, where there is $ 250,000 no 330,357 To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the United States. The Company conducts credit evaluations of its customers and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for current expected credit losses based on the individual customer’s financial condition, credit history, and the current economic conditions. b. Foreign Exchange Risk Most of our raw materials are imported from China. The value of the Chinese Yuan against the U.S. dollar is affected by the changes in China and United States economic conditions. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. c. Interest Rate Risk Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Our exposure to interest rate risk primarily relates to the interest rates from our borrowings with banks. We have not been exposed to material risks due to the fact that our borrowing is not significant. And we have not used any derivative financial instruments to manage our interest risk exposure. However, we cannot provide assurance that we will not be exposed to material risks due to changes in market interest rate in the future. d. Liquidity Risk Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. Our objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet our liquidity requirements at any point in time. We achieve this by maintaining sufficient cash and banking facilities. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration and risks e. Significant customers For the three months ended March 31, 2024 and 2023, one and no customer accounted for more than 10% of the Company’s total revenues, respectively. As of March 31, 2024 and December 31, 2023, one and one customers accounted for more than 10% of the Company’s accounts receivable, respectively. f. Significant suppliers For the three months ended March 31, 2024 and 2023, three and t wo 30 Recent Accounting Pronouncements The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. The Jumpstart Our Business Startups Act provides that an emerging growth company (“EGC”) as defined therein can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has adopted the extended transition period. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. This ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard will become effective for us beginning January 1, 2024, using either a modified retrospective or a fully retrospective method of transition, and early adoption is permitted. Management is currently evaluating the impact of the new standard on our financial statements. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures” (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. Management is currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024. In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclousres” (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income tax paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 3 — ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE March 31, 2024 December 31, 2023 Accounts receivable – third parties $ 14,995,428 $ 10,123,805 Accounts receivable – related parties - - Total accounts receivable, gross 14,995,428 10,123,805 Less: allowance for credit loss (791,658 ) (557,360 ) Accounts receivable, net $ 14,203,770 $ 9,566,445 The Company did not write off any uncollectible accounts receivable for the three months ended March 31, 2024 and 2023, respectively. The Company recorded allowance for credit loss of $ 234,298 104,631 The movement of allowance for credit loss are as follow: SCHEDULE OF MOVEMENT OF ALLOWANCE FOR CREDIT LOSS March 31, 2024 December 31, 2023 Balance as of beginning $ 557,360 $ 354,059 Additional (Reversal of) provision 234,298 203,301 Ending balance $ 791,658 $ 557,360 The Company’s accounts receivable balances as of March 31, 2024 and December 31, 2023 are pledged for its line of credit facility at Midfirst Bank (See Note 12(a)). |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 — INVENTORIES Inventories consist of the following: SCHEDULE OF INVENTORIES March 31, 2024 December 31, 2023 Products $ 15,615,936 $ 16,777,928 Parts and accessories 1,215,429 899,188 Inventories in transit 8,082,269 5,399,964 Freight and duty 2,708,901 3,163,732 Inventory, gross 27,622,535 26,240,812 Less: inventory allowance (439,900 ) (439,900 ) Inventories, net $ 27,182,635 $ 25,800,912 Impairment provision of inventories recorded for lower of cost or net realizable value adjustments were $ nil nil The inventories which are pledged for the Company’s line of credit facility at Midfirst Bank are $ 20,080,055 19,961,227 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
ADVANCE TO SUPPLIERS
ADVANCE TO SUPPLIERS | 3 Months Ended |
Mar. 31, 2024 | |
Advance To Suppliers | |
ADVANCE TO SUPPLIERS | NOTE 5 — ADVANCE TO SUPPLIERS Advance to suppliers consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIERS March 31, 2024 December 31, 2023 Advance to suppliers $ 1,406,100 $ 1,589,328 Less: allowance for credit loss - - Advance to suppliers, net $ 1,406,100 $ 1,589,328 No credit loss allowance of advances to suppliers was recorded during the three months ended March 31, 2024 and 2023. We had a prepayment of $ 1.1 1.1 1.1 no |
OTHER CURRENT ASSTS
OTHER CURRENT ASSTS | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSTS | NOTE 6 — OTHER CURRENT ASSTS Other current assts consist of the following: SCHEDULE OF OTHER CURRENT ASSETS March 31, 2024 December 31, 2023 Prepayment $ 591,754 $ 598,481 Other receivables 87,565 39,028 Total $ 679,319 $ 637,509 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 7 — PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET March 31, 2024 December 31, 2023 Furniture and Fixtures $ 125,977 $ 125,977 Machinery equipment 89,418 89,418 Vehicles 534,569 670,793 Electronic equipment 35,303 35,303 Leasehold improvement 90,974 90,974 Subtotal 867,241 1,012,465 Less: accumulated depreciation and amortization (491,690 ) (612,484 ) Property and equipment, net $ 384,551 $ 399,981 Depreciation expense was $ 36,511 35,300 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
LEASES | NOTE 8 — LEASES On August 1, 2018, the Company signed a lease agreement with Miller Creek Holding LLC, a related party owned by the Controlling Shareholder, to rent the warehouse and office space of total 220,000 40,000 July 31, 2021 three years July 31, 2024 60,000 66,000 35,000 April 30, 2026 Total operating lease expense for the three months ended March 31, 2024 and 2023 amounted to $ 311,192 206,192 280,790 184,316 Total accretion of finance lease liabilities for the three months ended March 31, 2024 and 2023 amounted to $ 1,331 1,784 10,380 9,343 Supplemental balance sheet information related to operating and financing leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION Operating leases March 31, 2024 December 31, 2023 Right-of-use assets, net $ 1,197,431 $ 1,478,221 Operating leases - Right-of-use assets, net $ 1,197,431 $ 1,478,221 Operating lease liabilities - current 681,872 847,368 Operating lease liabilities - non-current 515,559 630,853 Total $ 1,197,431 $ 1,478,221 Financing leases March 31, 2024 December 31, 2023 Right-of-use assets, net $ 103,169 $ 113,549 Financing leases - Right-of-use assets, net $ 103,169 $ 113,549 Finance lease liabilities - current 42,083 41,647 Finance lease liabilities - non-current 66,338 77,024 Total $ 108,421 $ 118,671 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 8 — LEASES ( continued) The following table includes supplemental cash flow and non-cash information related to leases: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND NON-CASH INFORMATION March 31, 2024 December 31, 2023 Cash paid of amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 311,192 $ 1,104,769 Financing cash flows used in finance leases $ 11,581 $ 47,051 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ - $ 60,805 Operating lease liabilities $ - $ 1,113,140 The weighted average remaining lease terms and discount rates for all of operating lease and finance leases as of March 31, 2024 and December 31, 2023 were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES March 31, 2024 December 31, 2023 Weighted-average remaining lease term (years): Finance lease 2.62 2.85 Operating leases 1.72 1.82 Weighted average discount rate: Finance leases 4.63 % 4.61 % Operating leases 9.39 % 8.61 % The following is a schedule of maturities of operating and finance lease liabilities as of March 31, 2024: SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES Operating leases Twelve months ending March 31, Operating leases 2025 $ 764,769 2026 503,386 2027 44,799 Total future minimum lease payments 1,312,954 Less: imputed interest (115,523 ) Present value of operating lease liabilities $ 1,197,431 Finance leases Twelve months ending March 31, Finance leases 2025 $ 46,325 2026 46,325 2027 15,766 2028 7,977 Total future minimum lease payments 116,393 Less: imputed interest (7,972 ) Present value of finance lease liabilities $ 108,421 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
ACCRUED RETURN LIABILITIES
ACCRUED RETURN LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED RETURN LIABILITIES | NOTE 9 — ACCRUED RETURN LIABILITIES The following table shows changes in the Company’s accrued return: SCHEDULE OF ACCRUED RETURN LIABILITIES March 31, 2024 December 31, 2023 Balance as of beginning $ 283,276 $ 556,538 Actual recognized products return (570,752 ) (3,355,112 ) Accruals for product return liabilities 425,705 3,081,850 Ending balance $ 138,229 $ 283,276 |
ACCRUED WARRANTY EXPENSES
ACCRUED WARRANTY EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
Guarantees and Product Warranties [Abstract] | |
ACCRUED WARRANTY EXPENSES | NOTE 10 — ACCRUED WARRANTY EXPENSES The following table shows changes in the Company’s accrued warranties and related costs: SCHEDULE OF ACCRUED WARRANTIES AND RELATED COSTS March 31, 2024 December 31, 2023 Balance as of beginning $ 619,113 $ 260,531 Cost of warranty claims (365,546 ) (1,924,203 ) Accruals for product warranty 386,958 2,282,785 Ending balance $ 640,525 $ 619,113 |
OTHER PAYABLE, ACCRUED EXPENSE
OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY | NOTE 11 — OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY The following table shows breakdown of Company’s other payable, accrued expense and other current liabilities: SCHEDULE OF OTHER PAYABLE ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES March 31, 2024 December 31, 2023 Credit card liabilities $ 30,391 $ 7,732 Sales Tax payable 13,299 13,204 Other current liabilities 46,773 77,161 Total $ 90,463 $ 98,097 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
LOANS | NOTE 12 — LOANS Loan balance consists of the following: SCHEDULE OF LOAN BALANCE March 31, 2024 December 31, 2023 Other loans - Northpoint (1) $ - $ 205,440 Other loans – BAC (2) - 98,143 Total $ - $ 303,583 (1) On April 19, 2022, the Company’s subsidiary Massimo Marine obtained a $ 2.0 nil 205,440 (2) On February 18, 2022, the Company’s subsidiary Massimo Marine obtained a credit facility for Mercury Marine in the amount of $ 1.75 nil 98,143 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 — RELATED PARTY TRANSACTIONS The relationship of related parties is summarized as follow: SCHEDULE OF RELATIONSHIP OF RELATED PARTIES Name of Related Party Relationship to the Company David Shan Controlling shareholder of the Company Custom Van Living Controlled by David Shan Miller Creek Holdings LLC Controlled by David Shan SUNL Technology LLC Controlled by David Shan Asia International Securities Exchange Co Ltd Principal owner of the Company (a) Due to shareholder Due to shareholder consists of the following: SCHEDULE OF DUE TO SHAREHOLDER March 31, 2024 December 31, 2023 Due to shareholder - David Shan, opening balance $ 7,920,141 $ 10,984,344 Withdraw (10,616 ) (5,264,203 ) Capital dividend declared - 2,200,000 Due to shareholder – David Shan, ending balance 7,909,525 7,920,141 Non-current (7,909,525 ) (7,920,141 ) Current $ - $ - MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 13 — RELATED PARTY TRANSACTIONS (a) Due to shareholder (continued) The balance represented unsecured, due on demand and interest free borrowings between the Company and the Controlling Shareholder, Mr. David Shan, the Chairman of the Board. Mr. David Shan periodically provides working capital to support the Company’s operations when needed. On January 3, 2024, the Controlling Shareholder, Mr. David Shan signed a promissory note with the Company. Under the promissory note, outstanding amount due to shareholder balance matures on January 3, 2029 and therefore the amount due to shareholder – David Shan is reclassified as long-term liabilities as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company owed $ 7,909,525 7,920,141 (b) Lease arrangement with related party On August 1, 2018, the Company signed a lease agreement with Miller Creek Holding LLC, a related party owned by Mr. David Shan, the Controlling Shareholder, to rent the warehouse and office space of total 220,000 40,000 July 31, 2021 July 31, 2024 60,000 On April 29, 2023, the Company signed a lease agreement with Miller Creek Holding LLC, a related party owned by Mr. David Shan, the Controlling Shareholder, to rent the warehouse and office space of total 66,000 35,000 April 30, 2026 The Company recorded rent expense of $ 285,000 180,000 (c) Loan guarantee provided by related parties In connection with the Company’s bank borrowing, Mr. David Shan, the Controlling Shareholder, Miller Creek Holdings LLC and Massimo Group, the holding company of Massimo Motor provided unlimited guarantee to the Company’s bank loan (See Note 12). MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
TAXES
TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
TAXES | NOTE 14 — TAXES Corporate Income Taxes Massimo Motor and Massimo Marine both terminated their status as a Subchapter S Corporation as of June 1, 2023, in connection with the Reorganization and became a taxable C Corporation. Prior to that date, as an S Corporation, the Company had no U.S. federal income tax expense. As such, any periods prior to June 1, 2023 will only reflect a margin tax for the state of Texas and corresponding tax expense. As a C Corporation, the Company combined effective tax rate for federal income taxes of 21 As of March 31, 2024 and December 31, 2023, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the three months ended March 31, 2024 and 2023, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods. The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 are 27.18 4.21 The provision for income tax consists of the following: SCHEDULE OF INCOME TAX PROVISION March 31, 2024 March 31, 2023 Income tax provision – current $ 1,112,688 $ 24,079 Income tax (recovery) - deferred (212,347 ) - Income tax provision $ 900,341 $ 24,079 The following table reconciles the statutory tax rate to the Company’s effective tax: SCHEDULE OF RECONCILIATION OF INCOME TAXES March 31, 2024 March 31, 2023 Net income before income taxes $ 4,081,623 $ 572,244 Income tax expense at the federal statutory rate 21 % 21 % Statutory U.S. federal income tax 857,141 120,171 S Corporation benefits - (120,171 ) State margin tax 40,737 24,079 Non-deductible expense 2,463 - Other - - Total $ 900,341 $ 24,079 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 14 — TAXES Corporate Income Taxes The Company’s deferred tax assets and liabilities consist of the following: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES March 31, 2024 December 31, 2023 Deferred tax assets: Allowance for credit loss $ 166,248 $ 117,046 Property and equipment 16,059 16,480 Lease liability – operating 251,460 310,426 Lease liability – financing 22,768 24,920 Warranty liabilities 134,510 - Return liabilities 29,028 - Total deferred tax assets 620,073 468,872 Deferred tax liabilities: Right of use assets – operating (21,665 ) (310,426 ) Right of use assets – financing (251,460 ) (23,845 ) Total deferred tax liabilities (273,125 ) (334,271 ) Deferred tax assets (liabilities), net $ 346,948 $ 134,601 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
SHAREHOLDERS’ EQUITY | NOTE 15 — SHAREHOLDERS’ EQUITY Common Shares Massimo Group is a company that was established on October 10, 2022 under the laws of the State of Nevada. Based on the Company’s Articles of Incorporation, the authorized number of common stock was 100,000,000 0.001, 40,000,000 5,000,000 0.01, no Subscription receivable During the three months ended March 31, 2024, the Company’s stockholders made a total of $ 475,000 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 — COMMITMENTS AND CONTINGENCIES Contingencies The Company may be involved in certain legal proceedings, claims and disputes arising from the commercial operations, which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on the Company’s consolidated financial position or results of operations or liquidity as at March 31, 2024 and December 31, 2023. Contractual Commitments As of March 31, 2024, the Company’s contractual obligations consisted of the following: SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease commitment $ 1,429,347 $ 811,094 $ 610,276 $ 7,977 $ – |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 17 — SEGMENT REPORTING An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment. Management of the Company concludes that it has only one The Company’s CEO reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, rather than by product types or geographic area; hence the Company concluded it has only one reporting segment. The following table presents sales by product categories for the three months ended March 31, 2024 and 2023, respectively: SCHEDULE OF SALES BY PRODUCT CATEGORIES 2024 2023 Three months ended March 31, 2024 2023 UTVs, ATVs and electric bikes $ 28,693,141 $ 16,481,157 Pontoon Boats 1,458,536 2,359,258 Total revenue $ 30,151,677 $ 18,840,415 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 18 — SUBSEQUENT EVENTS The Company evaluated all events and transactions that occurred after March 31, 2024 up through the date the Company issued these consolidated financial statements, and unless disclosed below, there are not any material subsequent events that require disclosure in these consolidated financial statements. Initial Public Offering On April 4, 2024, the Company closed its IPO of 1,300,000 4.50 5.85 195,000 41,300,000 Representative’s Warrant Pursuant to the Underwriting Agreement, the Company issued to Craft Capital Management, LLC (the “Representative”) and its designee warrants (the “Representative’s Warrants”) to purchase 87,100 13,065 5.625 April 4, 2029 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2024, and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of the Company and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Uses of estimates and assumptions | Uses of estimates and assumptions In preparing the consolidated financial statements 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 financial statements 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. Significant accounting estimates required to be made by management include allowance for inventories, allowance for credit losses, sales return liabilities, and warranty costs. 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. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand, the balances with banks and the liquid investments with maturities of three months or less. The Company maintains all its bank accounts in the United States, which are insured by Federal Deposit Insurance Corporation (“FDIC”). |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable represent trade receivable and are recognized initially at fair value and subsequently adjusted for any allowance for expected credit loss. The Company grants credit to customers, without collateral, under normal payment terms. The Company uses a loss rate method to estimate the allowance for credit losses. The Company evaluates the expected credit loss of accounts receivable based on customer financial condition and historical collection information adjusted for current market economic conditions and forecasts of future economic performance when appropriate. Loss-rate approach is based on the historical loss rates and expectations of future conditions. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected. |
Inventories, net | Inventories, net Inventories are stated at the lower of cost or net realizable value, using the first-in, first out (FIFO) method. Costs include the cost of raw materials, freight and duty. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. As of March 31, 2024 and December 31, 2023, the Company had inventory provision of $ 439,900 439,900 nil nil MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Advances to Suppliers | Advances to Suppliers Advance to suppliers consists of balances paid to suppliers for purchasing of products, parts and accessories that have not been provided or received. Advances to suppliers are short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for individual advances based on the specific facts and circumstances. |
Deferred Offering Cost | Deferred Offering Cost Deferred offering costs were expenses directly related to the Company’s planned initial public offering (“IPO”). These costs consisted of legal, accounting, printing, and filing fees that the Company capitalized, including fees incurred by the independent registered public accounting firm directly related to the offering. Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed. |
Property and equipment | Property and equipment Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight-line method, as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE Useful life Furniture and fixtures 5 7 Machinery equipment 5 7 Electronic equipment 5 Transportation equipment 5 Leasehold improvement Over the shorter of the lease term or estimated useful lives Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense 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 gains or losses on disposals are determined by comparing proceeds with carrying amount and are recognized within “Other income (expense)” in the consolidated statements of operations and comprehensive income. |
Leases | Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02—Leases (Topic 842) since January 1, 2020, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Operating Leases For operating leases, the Company measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company measures right-of-use (“ROU”) assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing lease expense when the lessor makes the underlying asset available to the Company. Lease cost for operating leases includes the amortization of the ROU asset and interest expense related to the operating lease liability. For leases with lease term less than one year (short-term leases), the Company records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. Finance Leases Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation of right-of-use finance asset” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably certain of exercising. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets, primarily consist of property and equipment, 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 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. 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 fair value are as follows: MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments ● 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. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivables, short-term loans, accounts payable, other liabilities, contract liabilities, due to shareholder, due to related parties, and lease liabilities, approximates their recorded values due to their short-term maturities. The Company determined that the carrying value of the lease liabilities approximated their fair value as the interest rates used to discount the contracts approximate market rates. The Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of March 31, 2024. |
Revenue recognition | Revenue recognition The Company adopted 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’s revenue is generated primarily by sales of UTVs, ATVs electric bikes, and Pontoon Boats. Revenue represented the amount of consideration to which the Company expects to be entitled in exchange for promised goods. Revenue is recorded when performance obligations are considered to be satisfied when control is transferred to our customers upon goods delivered to customers and acceptance by customers. Sales returns The Company provides a refund policy to accept returns from end customers, which varies and depends on the different products and customers. The estimated sales returns are determined based upon an analysis of historical sales returns. Return allowances are recorded as a reduction in sales with corresponding sales return liabilities which are included in “accrued return liabilities.” The estimated cost of returned inventory is recorded as a reduction to cost of sales and an increase of right of return assets which is included in “inventories.” As of March 31, 2024 and December 31, 2023, $ 138,229 283,276 425,705 679,522 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Products warranty The Company generally provides a one-year limited warranty against defects in materials related to the sale of products. The Company considers the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon specifications. Estimated future warranty obligations are included in cost of product sales in the period in which the related revenue is recognized. The determination of the Company’s warranty accrual is based on actual historical experience with the product, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors. As of March 31, 2024 and December 31, 2023, $ 640,525 619,113 386,959 348,152 Contract Liabilities The contract liabilities of the Company are primarily related to advances received from customer. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. Contract liabilities are recognized when the Company receives prepayment from customers resulting from purchase order. Contract liabilities will be recognized as revenue when the products are delivered. As of March 31, 2024 and December 31, 2023, the Company records contract liabilities of $ 1,052,342 1,835,411 929,686 696,274 Disaggregation of Revenues The Company disaggregates its revenue from contracts by products, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the three months ended March 31, 2024 and 2023 is disclosed in Note 18 of these consolidated financial statements. |
Cost of Sales | Cost of Sales Cost of sales includes all of the costs and expenses directly related to the production of goods and services included in revenues. Cost of sale primarily consist of cost of products, freight and duty allocated and warehouse related overhead, such as salaries and benefits, rent, and depreciation expenses. |
Shipping and handling costs | Shipping and handling costs Shipping and handling costs, which include costs related to the selection of products and their delivery to customers, are presented in cost of revenue and selling expenses. The shipping and freight expense incurred upon goods delivery to customers are included in selling expenses, amounting to $ 1,107,047 1,094,796 2,687,647 2,678,296 |
Advertising costs | Advertising costs The Company expenses all advertising costs as incurred. Advertising cost presented in selling expenses were $ 228,476 191,786 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
401(k) benefit plan | 401(k) benefit plan The 401(k) benefit plan covers substantially all employees and allows voluntary employee contributions up to the annually adjusted Internal Revenue Service dollar limit. These voluntary contributions are matched equal to 100 4 100 |
Income taxes | Income taxes Before the Reorganization, the Company elected to be taxed as an S Corporation for federal and state income tax purposes. As an S Corporation, the Company is not subject to federal income tax and state tax in Texas. As such, shareholders are taxed on their pro rata share of earnings and deductions of the Company, regardless of the amount of distributions received. After the Reorganization, the Company is subjected to U.S. federal income tax at 21 Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 740, “Accounting for Uncertainty in Income Taxes.” A 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, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% Significant judgment is also required in evaluating the Company’s uncertain income tax positions and provisions for income taxes. Liabilities for uncertain income tax positions are recognized based on a two-step approach. The first step is to evaluate whether an income tax position has met the recognition threshold by determining if the weight of available evidence indicates that it is more likely than not to be sustained upon examination. The second step is to measure the income tax position that has met the recognition threshold as the largest amount that is more than 50% likely of being realized upon settlement. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that give rise to a revision become known. The Company recognizes interest and penalties related to uncertain income tax positions as interest expense. |
Earnings per Share | Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common 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 common 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. For the periods ended March 31, 2024 and 2023, there were no MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Segment reporting | Segment reporting The Company follows ASC 280, “Segment Reporting . one reportable segment. The Company operates and manages its business as a single segment. As the Company’s long-lived assets are all located in the United States and substantially all the Company’s revenues are derived from within the United States, no geographical segments are presented. |
Concentration and risks | Concentration and risks a. Concentration of credit risk Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents, accounts receivable and other receivable included in other current assets. The maximum exposure of such assets to credit risk is their carrying amounts at the balance sheet dates. The Company maintains all the bank accounts at financial institutions in the United States, where there is $ 250,000 no 330,357 To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the United States. The Company conducts credit evaluations of its customers and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for current expected credit losses based on the individual customer’s financial condition, credit history, and the current economic conditions. b. Foreign Exchange Risk Most of our raw materials are imported from China. The value of the Chinese Yuan against the U.S. dollar is affected by the changes in China and United States economic conditions. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. c. Interest Rate Risk Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Our exposure to interest rate risk primarily relates to the interest rates from our borrowings with banks. We have not been exposed to material risks due to the fact that our borrowing is not significant. And we have not used any derivative financial instruments to manage our interest risk exposure. However, we cannot provide assurance that we will not be exposed to material risks due to changes in market interest rate in the future. d. Liquidity Risk Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. Our objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet our liquidity requirements at any point in time. We achieve this by maintaining sufficient cash and banking facilities. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNADUITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration and risks e. Significant customers For the three months ended March 31, 2024 and 2023, one and no customer accounted for more than 10% of the Company’s total revenues, respectively. As of March 31, 2024 and December 31, 2023, one and one customers accounted for more than 10% of the Company’s accounts receivable, respectively. f. Significant suppliers For the three months ended March 31, 2024 and 2023, three and t wo 30 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. The Jumpstart Our Business Startups Act provides that an emerging growth company (“EGC”) as defined therein can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has adopted the extended transition period. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. This ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard will become effective for us beginning January 1, 2024, using either a modified retrospective or a fully retrospective method of transition, and early adoption is permitted. Management is currently evaluating the impact of the new standard on our financial statements. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures” (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. Management is currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024. In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclousres” (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income tax paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
ORGANIZATION AND BUSINESS DES_2
ORGANIZATION AND BUSINESS DESCRIPTION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF SUBSIDIARIES | Details of the Company and its subsidiaries are set out below upon the Reorganization: SCHEDULE OF SUBSIDIARIES Subsidiaries Date of Incorporation Jurisdiction of Formation Percentage of direct/indirect Economic Ownership Principal Activities Massimo Group October 10, 2022 Nevada 100 Holding company Massimo Motor Sports, LLC June 30, 2009 Texas 100 Manufacture of UTVs and ATVs Massimo Marine, LLC January 6, 2020 Texas 100 Manufacture of Pontoon Boats |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE | Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight-line method, as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE Useful life Furniture and fixtures 5 7 Machinery equipment 5 7 Electronic equipment 5 Transportation equipment 5 Leasehold improvement Over the shorter of the lease term or estimated useful lives |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE March 31, 2024 December 31, 2023 Accounts receivable – third parties $ 14,995,428 $ 10,123,805 Accounts receivable – related parties - - Total accounts receivable, gross 14,995,428 10,123,805 Less: allowance for credit loss (791,658 ) (557,360 ) Accounts receivable, net $ 14,203,770 $ 9,566,445 |
SCHEDULE OF MOVEMENT OF ALLOWANCE FOR CREDIT LOSS | The movement of allowance for credit loss are as follow: SCHEDULE OF MOVEMENT OF ALLOWANCE FOR CREDIT LOSS March 31, 2024 December 31, 2023 Balance as of beginning $ 557,360 $ 354,059 Additional (Reversal of) provision 234,298 203,301 Ending balance $ 791,658 $ 557,360 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consist of the following: SCHEDULE OF INVENTORIES March 31, 2024 December 31, 2023 Products $ 15,615,936 $ 16,777,928 Parts and accessories 1,215,429 899,188 Inventories in transit 8,082,269 5,399,964 Freight and duty 2,708,901 3,163,732 Inventory, gross 27,622,535 26,240,812 Less: inventory allowance (439,900 ) (439,900 ) Inventories, net $ 27,182,635 $ 25,800,912 |
ADVANCE TO SUPPLIERS (Tables)
ADVANCE TO SUPPLIERS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Advance To Suppliers | |
SCHEDULE OF ADVANCE TO SUPPLIERS | Advance to suppliers consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIERS March 31, 2024 December 31, 2023 Advance to suppliers $ 1,406,100 $ 1,589,328 Less: allowance for credit loss - - Advance to suppliers, net $ 1,406,100 $ 1,589,328 |
OTHER CURRENT ASSTS (Tables)
OTHER CURRENT ASSTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT ASSETS | Other current assts consist of the following: SCHEDULE OF OTHER CURRENT ASSETS March 31, 2024 December 31, 2023 Prepayment $ 591,754 $ 598,481 Other receivables 87,565 39,028 Total $ 679,319 $ 637,509 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET | Property and equipment, net, consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET March 31, 2024 December 31, 2023 Furniture and Fixtures $ 125,977 $ 125,977 Machinery equipment 89,418 89,418 Vehicles 534,569 670,793 Electronic equipment 35,303 35,303 Leasehold improvement 90,974 90,974 Subtotal 867,241 1,012,465 Less: accumulated depreciation and amortization (491,690 ) (612,484 ) Property and equipment, net $ 384,551 $ 399,981 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION | Supplemental balance sheet information related to operating and financing leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION Operating leases March 31, 2024 December 31, 2023 Right-of-use assets, net $ 1,197,431 $ 1,478,221 Operating leases - Right-of-use assets, net $ 1,197,431 $ 1,478,221 Operating lease liabilities - current 681,872 847,368 Operating lease liabilities - non-current 515,559 630,853 Total $ 1,197,431 $ 1,478,221 Financing leases March 31, 2024 December 31, 2023 Right-of-use assets, net $ 103,169 $ 113,549 Financing leases - Right-of-use assets, net $ 103,169 $ 113,549 Finance lease liabilities - current 42,083 41,647 Finance lease liabilities - non-current 66,338 77,024 Total $ 108,421 $ 118,671 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND NON-CASH INFORMATION | The following table includes supplemental cash flow and non-cash information related to leases: SCHEDULE OF SUPPLEMENTAL CASH FLOW AND NON-CASH INFORMATION March 31, 2024 December 31, 2023 Cash paid of amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 311,192 $ 1,104,769 Financing cash flows used in finance leases $ 11,581 $ 47,051 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ - $ 60,805 Operating lease liabilities $ - $ 1,113,140 |
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES | The weighted average remaining lease terms and discount rates for all of operating lease and finance leases as of March 31, 2024 and December 31, 2023 were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES March 31, 2024 December 31, 2023 Weighted-average remaining lease term (years): Finance lease 2.62 2.85 Operating leases 1.72 1.82 Weighted average discount rate: Finance leases 4.63 % 4.61 % Operating leases 9.39 % 8.61 % |
SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES | The following is a schedule of maturities of operating and finance lease liabilities as of March 31, 2024: SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES Operating leases Twelve months ending March 31, Operating leases 2025 $ 764,769 2026 503,386 2027 44,799 Total future minimum lease payments 1,312,954 Less: imputed interest (115,523 ) Present value of operating lease liabilities $ 1,197,431 Finance leases Twelve months ending March 31, Finance leases 2025 $ 46,325 2026 46,325 2027 15,766 2028 7,977 Total future minimum lease payments 116,393 Less: imputed interest (7,972 ) Present value of finance lease liabilities $ 108,421 |
ACCRUED RETURN LIABILITIES (Tab
ACCRUED RETURN LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED RETURN LIABILITIES | The following table shows changes in the Company’s accrued return: SCHEDULE OF ACCRUED RETURN LIABILITIES March 31, 2024 December 31, 2023 Balance as of beginning $ 283,276 $ 556,538 Actual recognized products return (570,752 ) (3,355,112 ) Accruals for product return liabilities 425,705 3,081,850 Ending balance $ 138,229 $ 283,276 |
ACCRUED WARRANTY EXPENSES (Tabl
ACCRUED WARRANTY EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Guarantees and Product Warranties [Abstract] | |
SCHEDULE OF ACCRUED WARRANTIES AND RELATED COSTS | The following table shows changes in the Company’s accrued warranties and related costs: SCHEDULE OF ACCRUED WARRANTIES AND RELATED COSTS March 31, 2024 December 31, 2023 Balance as of beginning $ 619,113 $ 260,531 Cost of warranty claims (365,546 ) (1,924,203 ) Accruals for product warranty 386,958 2,282,785 Ending balance $ 640,525 $ 619,113 |
OTHER PAYABLE, ACCRUED EXPENS_2
OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF OTHER PAYABLE ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES | The following table shows breakdown of Company’s other payable, accrued expense and other current liabilities: SCHEDULE OF OTHER PAYABLE ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES March 31, 2024 December 31, 2023 Credit card liabilities $ 30,391 $ 7,732 Sales Tax payable 13,299 13,204 Other current liabilities 46,773 77,161 Total $ 90,463 $ 98,097 |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LOAN BALANCE | Loan balance consists of the following: SCHEDULE OF LOAN BALANCE March 31, 2024 December 31, 2023 Other loans - Northpoint (1) $ - $ 205,440 Other loans – BAC (2) - 98,143 Total $ - $ 303,583 (1) On April 19, 2022, the Company’s subsidiary Massimo Marine obtained a $ 2.0 nil 205,440 (2) On February 18, 2022, the Company’s subsidiary Massimo Marine obtained a credit facility for Mercury Marine in the amount of $ 1.75 nil 98,143 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transaction [Line Items] | |
SCHEDULE OF RELATIONSHIP OF RELATED PARTIES | The relationship of related parties is summarized as follow: SCHEDULE OF RELATIONSHIP OF RELATED PARTIES Name of Related Party Relationship to the Company David Shan Controlling shareholder of the Company Custom Van Living Controlled by David Shan Miller Creek Holdings LLC Controlled by David Shan SUNL Technology LLC Controlled by David Shan Asia International Securities Exchange Co Ltd Principal owner of the Company |
Mr David Shan [Member] | |
Related Party Transaction [Line Items] | |
SCHEDULE OF DUE TO SHAREHOLDER | Due to shareholder consists of the following: SCHEDULE OF DUE TO SHAREHOLDER March 31, 2024 December 31, 2023 Due to shareholder - David Shan, opening balance $ 7,920,141 $ 10,984,344 Withdraw (10,616 ) (5,264,203 ) Capital dividend declared - 2,200,000 Due to shareholder – David Shan, ending balance 7,909,525 7,920,141 Non-current (7,909,525 ) (7,920,141 ) Current $ - $ - |
TAXES (Tables)
TAXES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX PROVISION | SCHEDULE OF INCOME TAX PROVISION March 31, 2024 March 31, 2023 Income tax provision – current $ 1,112,688 $ 24,079 Income tax (recovery) - deferred (212,347 ) - Income tax provision $ 900,341 $ 24,079 |
SCHEDULE OF RECONCILIATION OF INCOME TAXES | SCHEDULE OF RECONCILIATION OF INCOME TAXES March 31, 2024 March 31, 2023 Net income before income taxes $ 4,081,623 $ 572,244 Income tax expense at the federal statutory rate 21 % 21 % Statutory U.S. federal income tax 857,141 120,171 S Corporation benefits - (120,171 ) State margin tax 40,737 24,079 Non-deductible expense 2,463 - Other - - Total $ 900,341 $ 24,079 |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The Company’s deferred tax assets and liabilities consist of the following: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES March 31, 2024 December 31, 2023 Deferred tax assets: Allowance for credit loss $ 166,248 $ 117,046 Property and equipment 16,059 16,480 Lease liability – operating 251,460 310,426 Lease liability – financing 22,768 24,920 Warranty liabilities 134,510 - Return liabilities 29,028 - Total deferred tax assets 620,073 468,872 Deferred tax liabilities: Right of use assets – operating (21,665 ) (310,426 ) Right of use assets – financing (251,460 ) (23,845 ) Total deferred tax liabilities (273,125 ) (334,271 ) Deferred tax assets (liabilities), net $ 346,948 $ 134,601 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS | As of March 31, 2024, the Company’s contractual obligations consisted of the following: SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease commitment $ 1,429,347 $ 811,094 $ 610,276 $ 7,977 $ – |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SALES BY PRODUCT CATEGORIES | The following table presents sales by product categories for the three months ended March 31, 2024 and 2023, respectively: SCHEDULE OF SALES BY PRODUCT CATEGORIES 2024 2023 Three months ended March 31, 2024 2023 UTVs, ATVs and electric bikes $ 28,693,141 $ 16,481,157 Pontoon Boats 1,458,536 2,359,258 Total revenue $ 30,151,677 $ 18,840,415 |
SCHEDULE OF SUBSIDIARIES (Detai
SCHEDULE OF SUBSIDIARIES (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Jurisdiction of Formation | NV |
Massimo Group [Member] | |
Subsidiaries | Massimo Group |
Date of Incorporation | Oct. 10, 2022 |
Jurisdiction of Formation | NV |
Percentage of direct/indirect Economic Ownership | 100% |
Principal Activities | Holding company |
Massimo Motor Sports, LLC [Member] | |
Subsidiaries | Massimo Motor Sports, LLC |
Date of Incorporation | Jun. 30, 2009 |
Jurisdiction of Formation | TX |
Percentage of direct/indirect Economic Ownership | 100% |
Principal Activities | Manufacture of UTVs and ATVs |
Massimo Marine, LLC [Member] | |
Subsidiaries | Massimo Marine, LLC |
Date of Incorporation | Jan. 06, 2020 |
Jurisdiction of Formation | TX |
Percentage of direct/indirect Economic Ownership | 100% |
Principal Activities | Manufacture of Pontoon Boats |
ORGANIZATION AND BUSINESS DES_3
ORGANIZATION AND BUSINESS DESCRIPTION (Details Narrative) - USD ($) $ in Millions | Mar. 31, 2024 | Jun. 01, 2023 |
Massimo Motor Sports, LLC [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Motor Sports, LLC [Member] | ATIFUS [Member] | ||
Investments | $ 1 | |
Massimo Motor Sports, LLC [Member] | Two Shareholder [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Marine, LLC [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Marine, LLC [Member] | ATIFUS [Member] | ||
Equity interest ownership percentage | 15% | |
Investments | $ 1 | |
Massimo Marine, LLC [Member] | Shareholder [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Motor Sports and Massimo Marine [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Group [Member] | ||
Equity interest ownership percentage | 100% | |
Massimo Group [Member] | ATIFUS [Member] | ||
Equity interest ownership percentage | 15% |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE (Details) | Mar. 31, 2024 |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Electronic Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Transportation Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeTermOfLeaseMember |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 USD ($) Segment shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Product Information [Line Items] | ||||
Inventory provision | $ 439,900 | $ 439,900 | ||
Impairment provision of inventories | ||||
Impairment charge of long-lived assets | 0 | 0 | ||
Sales return liabilities | 138,229 | 283,276 | $ 556,538 | |
Sales return credits | 425,705 | 679,522 | ||
Products warranty | 640,525 | 619,113 | ||
Warranty expenses | 386,959 | 348,152 | ||
Advance from customers | 1,052,342 | $ 1,835,411 | ||
Contract liabilities, revenue recognized | $ 929,686 | $ 696,274 | ||
Voluntary contribution matching percent | 100% | |||
Matching contribution vesting percent | 100% | |||
Federal income tax percent | 21% | 21% | ||
Largest amount of tax benefit, description | greater than 50% | |||
Dilutive shares | shares | 0 | 0 | ||
Number of Reportable Segments | Segment | 1 | |||
Cash FDIC, insured amount | $ 250,000 | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | One Supplier [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk, percentage | 30% | 30% | ||
Massimo Motor Sports, LLC [Member] | ||||
Product Information [Line Items] | ||||
Cash uninsured amount | $ 0 | $ 330,357 | ||
Maximum [Member] | ||||
Product Information [Line Items] | ||||
Maximum contributions percent | 4% | |||
Selling Expense [Member] | ||||
Product Information [Line Items] | ||||
Cost of revenue | $ 1,107,047 | $ 1,094,796 | ||
Advertising cost | 228,476 | 191,786 | ||
Cost of Sales [Member] | ||||
Product Information [Line Items] | ||||
Cost of revenue | $ 2,687,647 | $ 2,678,296 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total accounts receivable, gross | $ 14,995,428 | $ 10,123,805 | |
Less: allowance for credit loss | (791,658) | (557,360) | $ (354,059) |
Accounts receivable, net | 14,203,770 | 9,566,445 | |
Nonrelated Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total accounts receivable, gross | 14,995,428 | 10,123,805 | |
Related Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total accounts receivable, gross |
SCHEDULE OF MOVEMENT OF ALLOWAN
SCHEDULE OF MOVEMENT OF ALLOWANCE FOR CREDIT LOSS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Receivables [Abstract] | |||
Balance as of beginning | $ 557,360 | $ 354,059 | $ 354,059 |
Additional (Reversal of) provision | 234,298 | $ 104,631 | 203,301 |
Ending balance | $ 791,658 | $ 557,360 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) | Mar. 31, 2024 | Mar. 31, 2023 |
Receivables [Abstract] | ||
Allowance for credit loss | $ 234,298 | $ 104,631 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Products | $ 15,615,936 | $ 16,777,928 |
Parts and accessories | 1,215,429 | 899,188 |
Inventories in transit | 8,082,269 | 5,399,964 |
Freight and duty | 2,708,901 | 3,163,732 |
Inventory, gross | 27,622,535 | 26,240,812 |
Less: inventory allowance | (439,900) | (439,900) |
Inventories, net | $ 27,182,635 | $ 25,800,912 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Inventory provision | |||
Midfirst Bank [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Line of credit facility | $ 20,080,055 | $ 19,961,227 |
SCHEDULE OF ADVANCE TO SUPPLIER
SCHEDULE OF ADVANCE TO SUPPLIERS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Advance To Suppliers | ||
Advance to suppliers | $ 1,406,100 | $ 1,589,328 |
Less: allowance for credit loss | ||
Advance to suppliers, net | $ 1,406,100 | $ 1,589,328 |
ADVANCE TO SUPPLIERS (Details N
ADVANCE TO SUPPLIERS (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Initial claims from supplier | $ 1,100,000 | ||
Impairment charges | 0 | $ 0 | |
Supplier One [Member] | |||
Advance to suppliers | $ 1,100,000 | $ 1,100,000 |
SCHEDULE OF OTHER CURRENT ASSET
SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepayment | $ 591,754 | $ 598,481 |
Other receivables | 87,565 | 39,028 |
Total | $ 679,319 | $ 637,509 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 867,241 | $ 1,012,465 |
Less: accumulated depreciation and amortization | (491,690) | (612,484) |
Property and equipment, net | 384,551 | 399,981 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 125,977 | 125,977 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 89,418 | 89,418 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 534,569 | 670,793 |
Electronic Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 35,303 | 35,303 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 90,974 | $ 90,974 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 36,511 | $ 35,300 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases | ||
Operating leases - Right-of-use assets, net | $ 1,197,431 | $ 1,478,221 |
Operating lease liabilities - current | 681,872 | 847,368 |
Operating lease liabilities - non-current | 515,559 | 630,853 |
Total | 1,197,431 | 1,478,221 |
Financing leases - Right-of-use assets, net | 103,169 | 113,549 |
Finance lease liabilities - current | 42,083 | 41,647 |
Finance lease liabilities - non-current | 66,338 | 77,024 |
Total | $ 108,421 | $ 118,671 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND NON-CASH INFORMATION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Leases | |||
Operating cash flows used in operating leases | $ 311,192 | $ 1,104,769 | |
Financing cash flows used in finance leases | 11,581 | $ 10,536 | 47,051 |
Finance lease liabilities | 37,430 | 60,805 | |
Operating lease liabilities | $ 1,113,140 |
SCHEDULE OF WEIGHTED AVERAGE RE
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases | ||
Finance lease, Weighted-average remaining lease term (years) | 2 years 7 months 13 days | 2 years 10 months 6 days |
Operating leases, Weighted-average remaining lease term (years) | 1 year 8 months 19 days | 1 year 9 months 25 days |
Finance leases, Weighted average discount rate | 4.63% | 4.61% |
Operating leases, Weighted average discount rate | 9.39% | 8.61% |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Operating leases | ||
2025 | $ 764,769 | |
2026 | 503,386 | |
2027 | 44,799 | |
Total future minimum lease payments | 1,312,954 | |
Less: imputed interest | (115,523) | |
Present value of operating lease liabilities | 1,197,431 | $ 1,478,221 |
Finance leases | ||
2025 | 46,325 | |
2026 | 46,325 | |
2027 | 15,766 | |
2028 | 7,977 | |
Total future minimum lease payments | 116,393 | |
Less: imputed interest | (7,972) | |
Present value of finance lease liabilities | $ 108,421 | $ 118,671 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 3 Months Ended | ||||
Apr. 29, 2023 USD ($) ft² | Aug. 01, 2021 USD ($) | Aug. 01, 2018 USD ($) ft² | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Monthly rent | $ 285,000 | $ 180,000 | |||
Operating lease expense | 311,192 | 206,192 | |||
Amortization of operating lease right of use assets | 280,790 | 184,316 | |||
Accretion of lease liabilities | 1,331 | 1,784 | |||
Amortization of finance lease right of use assets | $ 10,380 | $ 9,343 | |||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Warehouse and office space, rent | ft² | 66,000 | 220,000 | |||
Monthly rent | $ 35,000 | $ 60,000 | $ 40,000 | ||
Lease expiration date | Apr. 30, 2026 | Jul. 31, 2024 | Jul. 31, 2021 | ||
Lease renewal term | 3 years |
SCHEDULE OF ACCRUED RETURN LIAB
SCHEDULE OF ACCRUED RETURN LIABILITIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Payables and Accruals [Abstract] | ||
Balance as of beginning | $ 283,276 | $ 556,538 |
Actual recognized products return | (570,752) | (3,355,112) |
Accruals for product return liabilities | 425,705 | 3,081,850 |
Ending balance | $ 138,229 | $ 283,276 |
SCHEDULE OF ACCRUED WARRANTIES
SCHEDULE OF ACCRUED WARRANTIES AND RELATED COSTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Guarantees and Product Warranties [Abstract] | ||
Balance as of beginning | $ 619,113 | $ 260,531 |
Cost of warranty claims | (365,546) | (1,924,203) |
Accruals for product warranty | 386,958 | 2,282,785 |
Ending balance | $ 640,525 | $ 619,113 |
SCHEDULE OF OTHER PAYABLE ACCRU
SCHEDULE OF OTHER PAYABLE ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Credit card liabilities | $ 30,391 | $ 7,732 |
Sales Tax payable | 13,299 | 13,204 |
Other current liabilities | 46,773 | 77,161 |
Total | $ 90,463 | $ 98,097 |
SCHEDULE OF LOAN BALANCE (Detai
SCHEDULE OF LOAN BALANCE (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total | $ 303,583 | ||
Northpoint Commercial Finance LLC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | [1] | 205,440 | |
Brunswick Acceptance Company LLC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | [2] | $ 98,143 | |
[1]On April 19, 2022, the Company’s subsidiary Massimo Marine obtained a $ 2.0 nil 205,440 1.75 nil 98,143 |
SCHEDULE OF LOAN BALANCE (Det_2
SCHEDULE OF LOAN BALANCE (Details) (Parenthetical) - Massimo Marine, LLC [Member] - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Apr. 19, 2022 | Feb. 18, 2022 |
Northpoint Commercial Finance LLC [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | |||
Line of credit outstanding | $ 205,440 | |||
Brunswick Acceptance Company LLC [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 1,750,000 | |||
Line of credit outstanding | $ 98,143 |
SCHEDULE OF RELATIONSHIP OF REL
SCHEDULE OF RELATIONSHIP OF RELATED PARTIES (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Mr David Shan [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Controlling shareholder of the Company |
Custom Van Living LLC [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Controlled by David Shan |
Miller Creek Holdings LLC [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Controlled by David Shan |
SUNL Technology LLC [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Controlled by David Shan |
Asia International Securities Exchange Co Ltd [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Principal owner of the Company |
SCHEDULE OF DUE TO SHAREHOLDER
SCHEDULE OF DUE TO SHAREHOLDER (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Non-current | $ (7,909,525) | $ (7,920,141) |
Mr David Shan [Member] | ||
Related Party Transaction [Line Items] | ||
Due to shareholder - David Shan, opening balance | 7,920,141 | 10,984,344 |
Withdraw | (10,616) | (5,264,203) |
Capital dividend declared | 2,200,000 | |
Due to shareholder – David Shan, ending balance | 7,909,525 | 7,920,141 |
Non-current | (7,909,525) | (7,920,141) |
Current |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 3 Months Ended | |||||
Apr. 29, 2023 USD ($) ft² | Aug. 01, 2021 USD ($) | Aug. 01, 2018 USD ($) ft² | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Related Party Transaction [Line Items] | ||||||
Rent expense | $ 285,000 | $ 180,000 | ||||
Mr David Shan [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Other Liabilities | $ 7,909,525 | $ 7,920,141 | ||||
Mr David Shan [Member] | Miller Creek Holding LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warehouse and office space, rent | ft² | 66,000 | 220,000 | ||||
Rent expense | $ 35,000 | $ 60,000 | $ 40,000 | |||
Lease expiration date | Apr. 30, 2026 | Jul. 31, 2024 | Jul. 31, 2021 |
SCHEDULE OF INCOME TAX PROVISIO
SCHEDULE OF INCOME TAX PROVISION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision – current | $ 1,112,688 | $ 24,079 |
Income tax (recovery) - deferred | (212,347) | |
Income tax provision | $ 900,341 | $ 24,079 |
SCHEDULE OF RECONCILIATION OF I
SCHEDULE OF RECONCILIATION OF INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Net income before income taxes | $ 4,081,623 | $ 572,244 |
Income tax expense at the federal statutory rate | 21% | 21% |
Statutory U.S. federal income tax | $ 857,141 | $ 120,171 |
S Corporation benefits | (120,171) | |
State margin tax | 40,737 | 24,079 |
Non-deductible expense | 2,463 | |
Other | ||
Income tax provision | $ 900,341 | $ 24,079 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred tax assets: | ||
Allowance for credit loss | $ 166,248 | $ 117,046 |
Property and equipment | 16,059 | 16,480 |
Lease liability – operating | 251,460 | 310,426 |
Lease liability – financing | 22,768 | 24,920 |
Warranty liabilities | 134,510 | |
Return liabilities | 29,028 | |
Total deferred tax assets | 620,073 | 468,872 |
Right of use assets – operating | (21,665) | (310,426) |
Right of use assets – financing | (251,460) | (23,845) |
Total deferred tax liabilities | (273,125) | (334,271) |
Deferred tax assets (liabilities), net | $ 346,948 | $ 134,601 |
TAXES (Details Narrative)
TAXES (Details Narrative) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate for federal income taxes | 21% | 21% |
Effective income tax rate | 27.18% | 4.21% |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Jun. 01, 2023 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares issued | 40,000,000 | 40,000,000 | 40,000,000 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Preferred stock, shares issued | 0 | 0 | |
Adjustment in additional paid in capital | $ 475,000 |
SCHEDULE OF CONTRACTUAL OBLIGAT
SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS (Details) - Lease Commitment [Member] | Mar. 31, 2024 USD ($) |
Registration Payment Arrangement [Line Items] | |
Total | $ 1,429,347 |
Less than 1 year | 811,094 |
1-3 years | 610,276 |
3-5 years | 7,977 |
More than 5 years |
SCHEDULE OF SALES BY PRODUCT CA
SCHEDULE OF SALES BY PRODUCT CATEGORIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue from External Customer [Line Items] | ||
Total revenue | $ 30,151,677 | $ 18,840,415 |
UTVs, ATVs and Electric Bikes [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 28,693,141 | 16,481,157 |
Pontoon Boats [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | $ 1,458,536 | $ 2,359,258 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 3 Months Ended |
Mar. 31, 2024 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 04, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 01, 2023 |
Subsequent Event [Line Items] | ||||
Common stock, shares issued | 40,000,000 | 40,000,000 | 40,000,000 | |
Common stock, shares outstanding | 40,000,000 | 40,000,000 | ||
Subsequent Event [Member] | Representatives Warrant [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of warrant shares | 87,100 | |||
IPO [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Sale of stock, number of shares issued in transaction | 1,300,000 | |||
Sale of stock, price per share | $ 4.50 | |||
Proceeds from issuance initial public offering | $ 5,850 | |||
Over-Allotment Option [Member] | Subsequent Event [Member] | Underwriting Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | 195,000 | |||
Common stock, shares issued | 41,300,000 | |||
Common stock, shares outstanding | 41,300,000 | |||
Over-Allotment Option [Member] | Subsequent Event [Member] | Representatives Warrant [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of warrant shares | 13,065 | |||
Exercise price of warrants | $ 5.625 | |||
Warrants expiration date | Apr. 04, 2029 |