Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 12, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Period Focus | Q2 | |
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, $0.001 par value | |
Trading Symbol | MAMO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,322,485 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,277,878 | $ 765,814 |
Accounts receivable, net | 11,466,849 | 9,566,445 |
Inventories, net | 30,831,548 | 25,800,912 |
Advance to suppliers | 902,234 | 1,589,328 |
Other current assets | 762,675 | 637,509 |
Total current assets | 45,241,184 | 38,360,008 |
NON-CURRENT ASSETS | ||
Property and equipment at cost, net | 548,849 | 399,981 |
Right of use operating lease assets, net | 3,492,910 | 1,478,221 |
Right of use financing lease assets, net | 92,790 | 113,549 |
Deferred offering assets | 1,457,119 | |
Other non-current assets | 49,500 | |
Deferred tax assets | 431,845 | 134,601 |
Total non-current assets | 4,615,894 | 3,583,471 |
TOTAL ASSETS | 49,857,078 | 41,943,479 |
CURRENT LIABILITIES | ||
Short-term loans | 2,668,762 | 303,583 |
Accounts payable | 8,213,379 | 12,678,077 |
Other payable, accrued expenses and other current liabilities | 70,601 | 98,097 |
Accrued return liabilities | 202,273 | 283,276 |
Accrued warranty liabilities | 732,565 | 619,113 |
Contract liabilities | 1,205,431 | 1,835,411 |
Current portion of obligations under operating leases | 908,584 | 847,368 |
Current portion of obligations under financing leases | 42,524 | 41,647 |
Income tax payable | 4,079,950 | 2,121,083 |
Total current liabilities | 18,124,069 | 18,827,655 |
NON-CURRENT LIABILITIES | ||
Obligations under operating leases, non-current | 2,643,681 | 630,853 |
Obligations under financing leases, non-current | 55,540 | 77,024 |
Loan from a shareholder | 4,316,525 | 7,920,141 |
Total non-current liabilities | 7,015,746 | 8,628,018 |
TOTAL LIABILITIES | 25,139,815 | 27,455,673 |
Commitments and Contingencies | ||
EQUITY | ||
Common shares, $0.001 par value, 100,000,000 shares authorized, 41,322,485 and 40,000,000 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 41,322 | 40,000 |
Preferred shares, $0.01 par value, 5,000,000 preferred shares authorized, no shares were issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | ||
Subscription receivable | (832,159) | |
Additional paid-in-capital | 5,392,664 | 1,994,000 |
Retained earnings | 19,283,277 | 13,285,965 |
Total equity | 24,717,263 | 14,487,806 |
TOTAL LIABILITIES AND EQUITY | $ 49,857,078 | $ 41,943,479 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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 | 41,322,485 | 40,000,000 |
Common stock, shares outstanding | 41,322,485 | 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 | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Revenues | $ 35,402,653 | $ 26,735,699 | $ 65,554,330 | $ 45,576,114 | |
Cost of revenues | 23,903,396 | 18,633,003 | 43,603,686 | 31,856,424 | |
Gross profit | 11,499,257 | 8,102,696 | 21,950,644 | 13,719,690 | |
Operating expenses: | |||||
Selling expense | 3,097,362 | 2,486,454 | 5,307,846 | 4,436,739 | |
General and administrative | 4,094,737 | 3,337,493 | 8,201,642 | 6,321,755 | |
Impairment loss on supplier deposit due to lawsuit | 742,897 | 742,897 | |||
Research and development | 162,250 | ||||
Total operating expenses | 7,934,996 | 5,823,947 | 14,414,635 | 10,758,494 | |
Income from operations | 3,564,261 | 2,278,749 | 7,536,009 | 2,961,196 | |
Other income (expense): | |||||
Other income, net | 132,268 | 26,973 | 379,837 | 71,868 | |
Interest expense | (66,647) | (125,012) | (204,341) | (280,110) | |
Total other income (expense), net | 65,621 | (98,039) | 175,496 | (208,242) | |
Income before income taxes | 3,629,882 | 2,180,710 | 7,711,505 | 2,752,954 | |
Provision for income taxes | 813,852 | 106,426 | 1,714,193 | 130,505 | |
Net income and comprehensive income | $ 2,816,030 | $ 2,074,284 | $ 5,997,312 | $ 2,622,449 | |
Earnings per share - basic | $ 0.07 | $ 0.05 | $ 0.15 | $ 0.07 | |
Weighted average number of shares of common stock outstanding - basic | [1] | 41,259,614 | 40,000,000 | 40,629,807 | 40,000,000 |
Earnings per share - diluted | $ 0.07 | $ 0.05 | $ 0.15 | $ 0.07 | |
Weighted average number of shares of common stock outstanding - diluted | [1] | 41,386,842 | 40,000,000 | 40,693,421 | 40,000,000 |
Pro Forma [Member] | |||||
Other income (expense): | |||||
Income before income taxes | $ 2,180,710 | $ 2,752,954 | |||
Provision for income taxes | 457,949 | 578,120 | |||
Net income and comprehensive income | $ 1,722,761 | $ 2,174,834 | |||
Earnings per share - basic | $ 0.04 | $ 0.05 | |||
Weighted average number of shares of common stock outstanding - basic | 40,000,000 | 40,000,000 | |||
Earnings per share - diluted | $ 0.04 | $ 0.05 | |||
Weighted average number of shares of common stock outstanding - diluted | 40,000,000 | 40,000,000 | |||
[1]Retroactively restated for effect of reorganization |
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 | [1] | 40,000,000 | |||||
Subscription received | 620,000 | 620,000 | |||||
Capital dividend declared | (2,200,000) | (2,200,000) | |||||
Net income | 2,622,449 | 2,622,449 | |||||
Balance at Jun. 30, 2023 | $ 40,000 | (1,414,000) | 1,994,000 | 5,493,189 | 6,113,189 | ||
Balance, shares at Jun. 30, 2023 | [1] | 40,000,000 | |||||
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 | [1] | 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 | [1] | 40,000,000 | |||||
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 | [1] | 40,000,000 | |||||
Subscription received | 20,000 | 20,000 | |||||
Capital dividend declared | (2,200,000) | (2,200,000) | |||||
Net income | 2,074,284 | 2,074,284 | |||||
Balance at Jun. 30, 2023 | $ 40,000 | (1,414,000) | 1,994,000 | 5,493,189 | 6,113,189 | ||
Balance, shares at Jun. 30, 2023 | [1] | 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 | [1] | 40,000,000 | |||||
Net income | 5,997,312 | 5,997,312 | |||||
Additional Paid-in capital | 832,159 | 88,172 | 920,331 | ||||
Initial public offering, net of share issuance costs | $ 1,300 | 3,000,248 | $ 3,001,548 | ||||
Initial public offering, net of share issuance costs, shares | 1,300,000 | [1] | 1,322,485 | ||||
Issuance of common stock | $ 22 | 79,978 | $ 80,000 | ||||
Issuance of common stock, shares | [1] | 22,485 | |||||
Stock based compensation | 230,266 | 230,266 | |||||
Balance at Jun. 30, 2024 | $ 41,322 | 5,392,664 | 19,283,277 | 24,717,263 | |||
Balance, shares at Jun. 30, 2024 | [1] | 41,322,485 | |||||
Balance at Mar. 31, 2024 | $ 40,000 | (357,159) | 1,994,000 | 16,467,247 | 18,144,088 | ||
Balance, shares at Mar. 31, 2024 | [1] | 40,000,000 | |||||
Net income | 2,816,030 | 2,816,030 | |||||
Additional Paid-in capital | 357,159 | 88,172 | 445,331 | ||||
Initial public offering, net of share issuance costs | $ 1,300 | 3,000,248 | $ 3,001,548 | ||||
Initial public offering, net of share issuance costs, shares | 1,300,000 | [1] | 1,322,485 | ||||
Issuance of common stock | $ 22 | 79,978 | $ 80,000 | ||||
Issuance of common stock, shares | [1] | 22,485 | |||||
Stock based compensation | 230,266 | 230,266 | |||||
Balance at Jun. 30, 2024 | $ 41,322 | $ 5,392,664 | $ 19,283,277 | $ 24,717,263 | |||
Balance, shares at Jun. 30, 2024 | [1] | 41,322,485 | |||||
[1]Retroactively restated for effect of reorganization |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||||
Net income | $ 2,816,030 | $ 2,074,284 | $ 5,997,312 | $ 2,622,449 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | 30,473 | 34,992 | 66,984 | 70,292 | |
Non-cash operating lease expense | 358,839 | 241,440 | 639,629 | 425,756 | |
Accretion of finance lease liabilities | 1,224 | 2,285 | 2,555 | 4,069 | |
Amortization of finance lease right-of-use assets | 10,379 | 12,010 | 20,759 | 21,353 | |
Gain on disposal of fixed asset | 8,654 | (36,001) | |||
Provision for expected credit loss, net | 250,780 | 56,087 | $ 203,301 | ||
Impairment loss of advances to supplier due to lawsuit | 742,897 | 742,897 | |||
Stock based compensation | 230,266 | ||||
Deferred tax assets | (297,244) | (12,101) | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (2,151,184) | (3,055,820) | |||
Inventories | (5,030,636) | 2,899,217 | |||
Advance to suppliers | (55,803) | (561,105) | |||
Other assets | (174,666) | 9,459 | |||
Related party payable | (20,000) | ||||
Accounts payables | (4,464,698) | (112,935) | |||
Other payable, accrued expense and other current liabilities | (27,496) | 19,578 | |||
Tax payable | 1,958,867 | 78,606 | |||
Accrued warranty liabilities | 113,452 | 294,242 | |||
Accrued return liabilities | (81,003) | 25,768 | |||
Contract liabilities | (629,980) | 399,447 | |||
Due to shareholder | (3,603,616) | ||||
Lease liabilities – operating lease | (580,274) | (425,755) | |||
Net cash (used in) provided by operating activities | (7,109,100) | 2,738,607 | |||
Cash flows from investing activities: | |||||
Proceed from sales of property and equipment | 162,001 | ||||
Acquisition of property and equipment | (237,425) | (24,661) | (341,852) | (24,661) | |
Net cash used in investing activities | (179,851) | (24,661) | |||
Cash flows from financing activities: | |||||
Net proceeds from bank loan | 2,668,762 | (100,000) | |||
Repayment of other loans | (303,583) | ||||
Repayment of finance lease liabilities | (23,162) | (23,886) | (47,051) | ||
Proceed from common share issuances | 80,000 | ||||
Proceeds from initial public offering, net of share issuance costs | 4,458,667 | ||||
Due to shareholder | (2,626,164) | ||||
Proceeds from subscription deposits | 920,331 | 20,000 | |||
Net cash provided by (used in) financing activities | 7,801,015 | (2,730,050) | |||
Net increase (decrease) in cash and cash equivalents | 512,064 | (16,104) | |||
Cash and cash equivalents, beginning of the period | 765,814 | 947,971 | 947,971 | ||
Cash and cash equivalents, end of the period | $ 1,277,878 | $ 931,867 | 1,277,878 | 931,867 | 765,814 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||
Cash paid for interest | 137,694 | 477,742 | |||
Cash paid for income taxes | 52,570 | 64,000 | |||
NON-CASH ACTIVITIES | |||||
Right of use assets obtained in exchange for operating lease obligations | 2,654,318 | 1,113,140 | 1,113,140 | ||
Right of use assets obtained in exchange for finance lease | $ 60,805 | $ 60,805 |
ORGANIZATION AND BUSINESS DESCR
ORGANIZATION AND BUSINESS DESCRIPTION | 6 Months Ended |
Jun. 30, 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”). On April 4, 2024, the Company closed its initial public offering (“IPO”) of 1,300,000 4.50 5.85 77.6 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 15 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 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 June 30, 2024, and for the three and six months ended June 30, 2024 and 2023. The results of operations for the three and six months ended June 30, 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. 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, warranty costs and the assessment and the disclosure of contingency liabilities. 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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 June 30, 2024 and December 31, 2023, the Company had inventory provision of $ 439,900 439,900 nil nil 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 evaluated the carrying value of individual advances based on specifics facts and circumstances for any impairment at each reporting date. For the three-month period and six-month period ended June 30, 2024 and 2023, the Company recorded the impairment loss of $ 742,897 742,897 nil nil Deferred offering cost Deferred offering costs were expenses directly related to the Company’s planned 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. The deferred offering costs are reclassified to additional paid-in capital upon receipts of the capital raised at IPO closing date. 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 unaudited condensed consolidated statements of operations and comprehensive income. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 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 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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: ● 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, note receivable which was grouped in other current assets, accounts payable, other payable, accrued expense and other liabilities, contract liabilities, due to shareholder and current portion of 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 June 30, 2024 and December 31, 2023. Revenue recognition The Company adopted ASC Topic 606, “Revenue from Contracts with Customers”. 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 (“e-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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 June 30, 2024 and December 31, 2023, $ 202,273 283,276 398,058 425,906 823,763 1,105,428 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 June 30, 2024 and December 31, 2023, $ 732,565 619,113 459,366 583,047 846,325 931,199 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 June 30, 2024 and December 31, 2023, the Company records contract liabilities of $ 1,205,431 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 and six months ended June 30, 2024 and 2023 is disclosed in Note 18 of these unaudited condensed consolidated financial statements. Cost of revenues Cost of revenues includes all of the costs and expenses directly related to the production of goods and services included in revenues. Cost of revenues primarily consists of cost of products, freight and duty allocated and warehouse related overhead, such as salaries and benefits, rent, warehouse supplies and depreciation expenses. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 revenues and selling expenses. The shipping and freight expense incurred upon goods delivery to customers are included in selling expenses, amounting to $ 1,954,821 1,340,766 3,061,868 2,435,562 The freights and duty costs incurred when shipping raw materials from suppliers to the Company are included in cost of revenues, amounting to $ 3,488,294 2,480,954 6,175,941 5,159,250 Advertising costs The Company expenses all advertising costs as incurred. Advertising costs presented in selling expenses were $ 175,290 270,877 403,766 462,663 401(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% MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income taxes 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 three and six months ended June 30, 2024, a total of 63,614 no Stock Based compensation The Company follows the provisions of ASC 718, “Compensation - Stock Compensation” (“ASC 260”), which establishes the accounting for employee share-based awards. For employee share-based awards, stock based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. Segment reporting The Company follows ASC 280, “Segment Reporting . one 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 $ 250,000 433,931 330,357 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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration and risks 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 lessors and our borrowings with banks. The shareholder loans bear no interest. Our leasing obligations’ interest rates are fixed at the commencement date of the leases. We have not been exposed to material risks due to the fact that our borrowing from the bank 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. e. Significant customers For the three months ended June 30, 2024 and 2023, one and one customer accounted for more than 10% of the Company’s total revenues, respectively. For the six months ended June 30, 2024 and 2023, one and one customer accounted for more than 10% of the Company’s total revenues, respectively. As of June 30, 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 June 30, 2024 and 2023, three and two suppliers accounted for more than 10% of the Company’s total purchases respectively. For the six months ended June 30, 2024 and 2023, three and two suppliers accounted for more than 10% of the Company’s total purchases respectively. As of June 30, 2024 and December 31, 2023, two and three suppliers accounted for more than 10 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 Disclosures” (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 (UNAUDITED) |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 3 — ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE June 30, 2024 December 31, 2023 Accounts receivable – third parties $ 12,274,989 $ 10,123,805 Accounts receivable – related parties - - Total accounts receivable, gross 12,274,989 10,123,805 Less: allowance for credit loss (808,140 ) (557,360 ) Accounts receivable, net $ 11,466,849 $ 9,566,445 The Company did not write off any uncollectible accounts receivable for the three and six months ended June 30, 2024 and 2023, respectively. The Company recorded allowance for credit loss of $ 16,482 372,423 250,780 56,628 The movement of allowance for credit loss are as follow: SCHEDULE OF MOVEMENT OF ALLOWANCE FOR CREDIT LOSS June 30, 2024 December 31, 2023 Balance as of beginning $ 557,360 $ 354,059 Additional of provision 250,780 203,301 Ending balance $ 808,140 $ 557,360 The Company’s accounts receivable balances as of June 30, 2024 and December 31, 2023 are pledged for its line of credit facility at Midfirst Bank and Cathay Bank (See Note 12). |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 — INVENTORIES Inventories consist of the following: SCHEDULE OF INVENTORIES June 30, 2024 December 31, 2023 Products $ 20,030,666 $ 16,777,928 Parts and accessories 1,470,693 899,188 Inventories in transit 6,328,476 5,399,964 Freight and duty 3,441,613 3,163,732 Inventory, gross 31,271,448 26,240,812 Less: inventory allowance (439,900 ) (439,900 ) Inventories, net $ 30,831,548 $ 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 Cathay Bank/Midfirst Bank are $ 24,365,138 19,961,227 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
ADVANCE TO SUPPLIERS
ADVANCE TO SUPPLIERS | 6 Months Ended |
Jun. 30, 2024 | |
Advance To Suppliers | |
ADVANCE TO SUPPLIERS | NOTE 5 — ADVANCE TO SUPPLIERS Advance to suppliers consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIERS June 30, 2024 December 31, 2023 Advance to suppliers $ 1,645,131 $ 1,589,328 Less: impairment loss allowance due to irrecoverable prepayment (742,897 ) - Advance to suppliers, net $ 902,234 $ 1,589,328 $ 742,897 and $ nil impairment loss allowance of advances to suppliers was recorded during the three and six months ended June 30, 2024 and 2023. In June 2024, we reached a tentative agreement regarding general settlement terms with one supplier who would use approximately $ 342,000 1.1 742,000 1.1 342,000 342,000 |
OTHER NON-CURRENT AND CURRENT A
OTHER NON-CURRENT AND CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER NON-CURRENT AND CURRENT ASSETS | NOTE 6 — OTHER NON-CURRENT AND CURRENT ASSETS Other current assets consist of the following: SCHEDULE OF OTHER CURRENT ASSETS June 30, 2024 December 31, 2023 Prepayment $ 331,972 $ 598,481 Note receivable 342,000 - Other receivables 88,703 39,028 Deposit 49,500 - Total $ 812,175 $ 637,509 Less: Other non-current assets (49,500 ) - Other current assets 762,675 637,509 In June 2024, we reached a tentative agreement regarding general settlement terms with one supplier who would use approximately $ 342,000 342,000 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Furniture and Fixtures $ 125,977 $ 125,977 Machinery equipment 326,843 89,418 Vehicles 461,666 670,793 Electronic equipment 35,303 35,303 Leasehold improvement 90,974 90,974 Subtotal 1,040,763 1,012,465 Less: accumulated depreciation and amortization (491,914 ) (612,484 ) Property and equipment, net $ 548,849 $ 399,981 Depreciation expense was $ 30,473 34,992 66,984 70,292 There was an addition of $ 237,425 $ 24,661 on property and equipment during the three months ended June 30, 2024 and 2023, respectively. There was an addition of $ 341,852 24,661 42,655 and $ nil with realized (loss) on the disposition of $ (8,654) nil during the three months ended June 30, 2024 and 2023, respectively. There was a disposal of property and equipment with the net book value of $ 126,000 nil 36,001 nil No MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
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 60,000 30,000 33,000 16,500 Total operating lease expense for the three months ended June 30, 2024 and 2023 amounted to $ 405,552 276,192 358,839 241,440 Total operating lease expense for the six months ended June 30, 2024 and 2023 amounted to $ 716,745 482,384 639,629 425,756 Total accretion of finance lease liabilities for the three months ended June 30, 2024 and 2023 amounted to $ 1,224 2,285 10,379 12,010 Total accretion of finance lease liabilities for the six months ended June 30, 2024 and 2023 amounted to $ 2,555 4,069 20,759 21,353 Supplemental balance sheet information related to operating and financing leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION Operating leases June 30, 2024 December 31, 2023 Operating lease liabilities - current $ 908,584 $ 847,368 Operating lease liabilities - non-current 2,643,681 630,853 Total $ 3,552,265 $ 1,478,221 Financing leases June 30, 2024 December 31, 2023 Finance lease liabilities - current $ 42,524 $ 41,647 Finance lease liabilities - non-current 55,540 77,024 Total $ 98,064 $ 118,671 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 June 30, 2024 December 31, 2023 Cash paid of amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 657,388 $ 1,104,769 Financing cash flows used in finance leases $ 23,162 $ 47,051 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ - $ 60,805 Operating lease liabilities $ 2,654,318 $ 1,113,140 The weighted average remaining lease terms and discount rates for all of operating lease and finance leases were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES June 30, 2024 December 31, 2023 Weighted-average remaining lease term (years): Finance lease 2.39 2.85 Operating leases 4.31 1.82 Weighted average discount rate: Finance leases 4.61 % 4.61 % Operating leases 8.98 % 8.61 % The following is a schedule of maturities of operating and finance lease liabilities as of June 30, 2024: SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES Operating leases Twelve months ending June 30, Operating leases 2025 $ 1,094,270 2026 1,010,993 2027 594,000 2028 594,000 2029 594,000 2030 and after 99,000 Total future minimum lease payments 3,986,263 Less: imputed interest (433,998 ) Present value of operating lease liabilities $ 3,552,265 Finance leases Twelve months ending June 30, Finance leases 2025 $ 46,325 2026 41,649 2027 11,036 2028 5,801 Total future minimum lease payments 104,811 Less: imputed interest (6,747 ) Present value of finance lease liabilities $ 98,064 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
ACCRUED RETURN LIABILITIES
ACCRUED RETURN LIABILITIES | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Balance as of beginning $ 283,276 $ 556,538 Actual recognized products return (904,766 ) (3,355,112 ) Accruals for product return liabilities 823,763 3,081,850 Ending balance $ 202,273 $ 283,276 |
ACCRUED WARRANTY EXPENSES
ACCRUED WARRANTY EXPENSES | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Balance as of beginning $ 619,113 $ 260,531 Cost of warranty claims (732,651 ) (1,924,203 ) Accruals for product warranty 846,103 2,282,785 Ending balance $ 732,565 $ 619,113 |
OTHER PAYABLE, ACCRUED EXPENSE
OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Credit card liabilities $ - $ 7,732 Sales Tax payable 22,745 13,204 Other current liabilities 47,856 77,161 Total $ 70,601 $ 98,097 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
LOANS
LOANS | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
LOANS | NOTE 12 — LOANS Loan balance consists of the following: SCHEDULE OF LOAN BALANCE June 30, 2024 December 31, 2023 Bank loan – Cathay Bank (1) $ 2,668,762 $ - Other loans - Northpoint (2) - 205,440 Other loans – BAC (3) - 98,143 Total $ 2,668,762 $ 303,583 (1) On May 13, 2024, the Company’s subsidiary Massimo Motor Sports obtained a line of credit from Cathay Bank, pursuant to which the Company has the availability to borrow a maximum $ 15.0 million out of this line of credit for one year at the U.S. prime rate + 0.75 %. Before then, the company had a line of credit of maximum $ 10.0 from Midfirst bank, which is cancelled upon the grant of the line of credit from Cathay Bank. As of June 30, 2024 and December 31, 2023, the outstanding balance was $ 2.7 million and $ nil . The balance of $ 2.7 million at Cathay Bank was used to pay off the undue letter of credit at Midfirst bank for them to release the first-position right to Cathay bank. The balance is paid off in the subsequent period. This line of credit is also personally guaranteed by Mr. David Shan, the Controlling Shareholder. This line of credit is pledged by the Company’s accounts receivable and inventories. (2) On April 19, 2022, the Company’s subsidiary Massimo Marine obtained a $ 2.0 nil 205,440 (3) 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 (4) On January 15, 2021, the Company’s subsidiary Massimo Motor Sports obtained a line of credit from Midfirst Bank, pursuant to which the Company has the availability to borrow a maximum $ 4.0 two years 0.25 10.0 January 3, 2026 This line of credit is guaranteed by the Massimo Group, and is also personally guaranteed by Mr. David Shan, the Controlling Shareholder, and Miller Creek Holdings LLC, a related party controlled by Mr. David Shan. This line of credit is pledged by the Company’s accounts receivable and inventories. On May 13, 2024, the credit facility was closed due to transferring to Cathy Bank ((1) above), and all guarantees were released and transferred to Cathy Bank. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 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 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 13 — RELATED PARTY TRANSACTIONS (a) Due to shareholder Due to shareholder consists of the following: SCHEDULE OF DUE TO SHAREHOLDER June 30, 2024 December 31, 2023 Due to shareholder - David Shan, opening balance $ 7,920,141 $ 10,984,344 Withdraw (3,603,616 ) (5,264,203 ) Capital dividend declared - 2,200,000 Due to shareholder – David Shan, ending balance 4,316,525 7,920,141 Non-current (4,316,525 ) (7,920,141 ) Current $ - $ - 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. 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 June 30, 2024 and December 31, 2023. (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 three years 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 On May 1, 2024, the Company signed two lease agreements with Miller Creek Holding LLC, a related party owned by Mr. David Shan, the Controlling Shareholder, to rent additional warehouse and office space of 60,000 30,000 33,000 16,500 The Company recorded rent expense of $ 379,360 250,000 664,360 430,000 (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 loan (See Note 12). MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
TAXES
TAXES | 6 Months Ended |
Jun. 30, 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 June 30, 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 and six months ended June 30, 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 June 30, 2024 and 2023 are 23.4 5.4 25.4 5.2 The provision for income tax consists of the following: SCHEDULE OF INCOME TAX PROVISION 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Income tax provision – current $ 898,749 $ 118,527 $ 2,011,437 $ 142,606 Income tax (recovery) - deferred (84,897 ) (12,101 ) (297,244 ) (12,101 ) Income tax provision $ 813,852 $ 106,426 $ 1,714,193 $ 130,505 The following table reconciles the statutory tax rate to the Company’s effective tax: SCHEDULE OF RECONCILIATION OF INCOME TAXES 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income before income taxes $ 3,629,882 $ 2,180,710 $ 7,711,505 $ 2,752,954 Income tax at the federal statutory rate 21 % 21 % 21 % 21 % Statutory U.S. federal income tax 762,275 457,949 1,619,416 578,120 S Corporation benefits - (371,679 ) - (491,850 ) State margin tax 43,000 20,156 83,738 44,235 Non-deductible expense 8,577 - 11,039 - Other - - - - Total $ 813,852 $ 106,426 $ 1,714,193 $ 130,505 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 June 30, 2024 December 31, 2023 Deferred tax assets: Allowance for credit loss $ 16,480 $ 117,046 Property and equipment 169,709 16,480 Lease liability – operating 745,976 310,426 Lease liability – financing 20,593 24,920 Other temporary difference 35,768 - Warranty liabilities 153,839 - Return liabilities 42,477 - Total deferred tax assets 1,184,842 468,872 Deferred tax liabilities: Right of use assets – operating (733,511 ) (310,426 ) Right of use assets – financing (19,486 ) (23,845 ) Total deferred tax liabilities (752,997 ) (334,271 ) Deferred tax assets (liabilities), net $ 431,845 $ 134,601 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 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 1,322,485 1,322,485 0.001 As of June 30, 2024 and December 31, 2023, 41,322,485 40,000,000 0.001 Subscription receivable During the six-month period ended June 30, 2024, the Company’s stockholders made a total of $ 920,331 nil 832,159 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 15 — SHAREHOLDERS’ EQUITY Initial Public Offering On April 4, 2024, the Company closed its IPO of 1,300,000 4.50 5.85 5.0 195,000 4.50 Common Shares Issued for Service On June 18, 2024, the Company signed a consulting agreement (the “Consulting Agreement”) with TJCM Asset Management LLC (“TJCM”) to provide strategic consulting and financial advisory services to the Company for twelve months from June 18, 2024. As partial of consideration for the services, TJCM is entitled to receive shares of the Company’s common stock equivalent to a value of $ 160,000 22,485 80,000 Representative’s Warrants Pursuant to the Underwriting Agreement, the Company issued to the Representative and its designee warrants (the “Representative’s Warrants”) to purchase 87,100 shares of common stock. The Representative’s Warrants are exercisable at a per share exercise price equal to $ 5.625 and are exercisable at any time and from time to time, in whole or in part, during the period commencing on October 4, 2024 and terminating on April 4, 2029 . Neither the Representative’s Warrants nor any of the shares issued upon exercise of the Representative’s Warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of six months immediately following the commencement of sales of the offering. Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to their own shares and meet the requirements for equity classification. The warrants were recorded at their fair value on the date of grant as a component of shareholders’ equity. The fair value of these warrants was $ 143,000 4.00 4.3 five years $5.63 56 nil As of June 30, 2024, 87,100 5.63 4.76 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 16 — EARNINGS PER SHARE For the three and six months ended June 30, 2024, the effect of potential shares of common stock from the unexercised options, unexercised warrants, and unvested Restricted Stock Units (“RSU”) are in cluded in the computation 127,228 63,614 For the three and six months ended June 30, 2023, the Company has no stock options, warrants and RSU issued and no impact on diluted earnings per share. The following table presents a reconciliation of basic and diluted net income per share: SCHEDULE OF EARNINGS PER SHARE Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income attributable to the Company $ 2,816,030 $ 2,074,284 $ 5,997,312 $ 2,622,449 Weighted average number of common shares outstanding – basic 41,259,614 40,000,000 40,629,807 40,000,000 Dilutive securities – unvested RSU 127,228 - 63,614 - Weighted average number of common shares outstanding – diluted 41,386,842 40,000,000 40,693,421 40,000,000 Earnings per share – basic $ 0.07 $ 0.05 $ 0.15 $ 0.07 Earnings per share – diluted $ 0.07 $ 0.05 $ 0.15 $ 0.07 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
EMPLOYEE STOCK PLANS | NOTE 17 — EMPLOYEE STOCK PLANS Equity Incentive Plans On May 22, 2024, the Company’s Board approved the 2024 Equity Inventive Plan (“2024 Plan”) and Restricted Stock Units (“RSUs”) Award Agreements. The 2024 Plan and RSUs Adward Agreement authorized the award of stock options, RSUs to employees and directors. As of June 30, 2024, approximately 300,556 The Company recorded $ 170,321 170,321 nil nil The following table summarized the Company’s RSU activity: SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY Number of RSUs Weighted Average Grant Date Fair Value Outstanding December 31, 2023 - - Granted 300,556 3.84 Cancelled (500 ) 3.88 Exercised - - Outstanding June 30, 2024 300,056 $ 3.84 Exercisable, June 30, 2024 - $ - Options On May 22, 2024, the Company signed a stock option agreement with Mr. David Shan, the Chief Executive Officer and two other executives of the Company, in connection with the 2024 Plan. As part of the compensation, the Company agrees to grant Mr. Shan options to purchase up to 46,860 4.268 The options were granted on May 22, 2024, and the options vest at a rate of 23,430 per year for two years, effective on May 22, 2024 91,196 3.88 4.30 5 4.3 56.0 nil May 21, 2029 The Company also granted Mr. Shan options to purchase up to 103,140 4.0 The options were granted on May 22, 2024, and vest at a rate of 51,570 shares per year for two years, effective on May 22, 2024 278,891 3.88 4.30 10 4.0 56.0 nil May 21, 2034 The Company also granted two executives options to purchase up to 200,000 4.0 The options were granted on May 22, 2024, and vest at a rate of 100,000 shares per year for two years, effective on May 22, 2024 540,931 3.88 4.30 10 4.0 56.0 nil May 21, 2034 The Company recorded $ 59,945 59,945 nil nil The following table summarized the Company’s share option activity: SCHEDULE OF SHARE OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life in Years Outstanding December 31, 2023 - $ - - Granted 350,000 4.04 9.23 Cancelled - - - Exercised - - - Outstanding June 30, 2024 350,000 $ 4.04 9.23 Exercisable, June 30, 2024 - $ - - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 — 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 June 30, 2024 and December 31, 2023. Legal cases On July 8, 2024, the Company received a court judgment issued in favor of the counterparty in the amount of approximately $ 3.3 2.3 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 18 — COMMITMENTS AND CONTINGENCIES Contractual Commitments As of June 30, 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 $ 4,091,074 $ 1,140,595 $ 1,657,678 $ 1,193,801 $ 99,000 Bank loan 2,668,762 2,668,762 – – – Total $ 6,759,836 $ 3,809,357 $ 1,657,678 $ 1,193,801 $ 99,000 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 19 — 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 and six months ended June 30, 2024 and 2023, respectively: SCHEDULE OF SALES BY PRODUCT CATEGORIES 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 UTVs, ATVs and e-bikes $ 34,233,277 $ 22,330,840 $ 62,926,418 $ 38,811,997 Pontoon Boats 1,169,376 4,404,859 2,627,912 6,764,117 Total $ 35,402,653 $ 26,735,699 $ 65,554,330 $ 45,576,114 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 20 — SUBSEQUENT EVENTS Legal cases On July 8, 2024, the Company received a court judgment issued in favor of the counterparty in the amount of approximately $ 3.3 million for damage related to the breach of the distribution agreement and sales contracts, plus interest and attorneys’ fees. The Company had courter-claims against the party at the same time. On August 7, 2024, the Company filed the notice to appeal and will continue to vigorously defend the Lawsuit. The appeal is likely to take between 12 and 24 months. The Company believes the ultimate outcome is still uncertain and that the likelihood of loss is remote in the near future (see Note 18). As of June 30, 2024, the accounts payable balance regarding this counterpart is approximately $ 2.3 Short-term loan paid of As of June 30, 2024. the outstanding balance of short- term loan was $ 2.7 2.7 The Company evaluated all events and transactions that occurred after June 30, 2024 up through the date the Company issued these condensed consolidated financial statements, and unless disclosed above, there are not any material subsequent events that require disclosure in these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 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 June 30, 2024, and for the three and six months ended June 30, 2024 and 2023. The results of operations for the three and six months ended June 30, 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. |
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, warranty costs and the assessment and the disclosure of contingency liabilities. 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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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 June 30, 2024 and December 31, 2023, the Company had inventory provision of $ 439,900 439,900 nil nil |
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 evaluated the carrying value of individual advances based on specifics facts and circumstances for any impairment at each reporting date. For the three-month period and six-month period ended June 30, 2024 and 2023, the Company recorded the impairment loss of $ 742,897 742,897 nil nil |
Deferred offering cost | Deferred offering cost Deferred offering costs were expenses directly related to the Company’s planned 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. The deferred offering costs are reclassified to additional paid-in capital upon receipts of the capital raised at IPO closing date. |
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 unaudited condensed consolidated statements of operations and comprehensive income. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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. 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 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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: ● 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, note receivable which was grouped in other current assets, accounts payable, other payable, accrued expense and other liabilities, contract liabilities, due to shareholder and current portion of 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 June 30, 2024 and December 31, 2023. |
Revenue recognition | Revenue recognition The Company adopted ASC Topic 606, “Revenue from Contracts with Customers”. 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 (“e-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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 June 30, 2024 and December 31, 2023, $ 202,273 283,276 398,058 425,906 823,763 1,105,428 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 June 30, 2024 and December 31, 2023, $ 732,565 619,113 459,366 583,047 846,325 931,199 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 June 30, 2024 and December 31, 2023, the Company records contract liabilities of $ 1,205,431 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 and six months ended June 30, 2024 and 2023 is disclosed in Note 18 of these unaudited condensed consolidated financial statements. |
Cost of revenues | Cost of revenues Cost of revenues includes all of the costs and expenses directly related to the production of goods and services included in revenues. Cost of revenues primarily consists of cost of products, freight and duty allocated and warehouse related overhead, such as salaries and benefits, rent, warehouse supplies and depreciation expenses. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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 revenues and selling expenses. The shipping and freight expense incurred upon goods delivery to customers are included in selling expenses, amounting to $ 1,954,821 1,340,766 3,061,868 2,435,562 The freights and duty costs incurred when shipping raw materials from suppliers to the Company are included in cost of revenues, amounting to $ 3,488,294 2,480,954 6,175,941 5,159,250 |
Advertising costs | Advertising costs The Company expenses all advertising costs as incurred. Advertising costs presented in selling expenses were $ 175,290 270,877 403,766 462,663 |
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% MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income taxes 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 three and six months ended June 30, 2024, a total of 63,614 no |
Stock Based compensation | Stock Based compensation The Company follows the provisions of ASC 718, “Compensation - Stock Compensation” (“ASC 260”), which establishes the accounting for employee share-based awards. For employee share-based awards, stock based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. |
Segment reporting | Segment reporting The Company follows ASC 280, “Segment Reporting . one |
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 $ 250,000 433,931 330,357 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. MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration and risks 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 lessors and our borrowings with banks. The shareholder loans bear no interest. Our leasing obligations’ interest rates are fixed at the commencement date of the leases. We have not been exposed to material risks due to the fact that our borrowing from the bank 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. e. Significant customers For the three months ended June 30, 2024 and 2023, one and one customer accounted for more than 10% of the Company’s total revenues, respectively. For the six months ended June 30, 2024 and 2023, one and one customer accounted for more than 10% of the Company’s total revenues, respectively. As of June 30, 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 June 30, 2024 and 2023, three and two suppliers accounted for more than 10% of the Company’s total purchases respectively. For the six months ended June 30, 2024 and 2023, three and two suppliers accounted for more than 10% of the Company’s total purchases respectively. As of June 30, 2024 and December 31, 2023, two and three suppliers accounted for more than 10 MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
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 Disclosures” (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) | 6 Months Ended |
Jun. 30, 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) | 6 Months Ended |
Jun. 30, 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) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE June 30, 2024 December 31, 2023 Accounts receivable – third parties $ 12,274,989 $ 10,123,805 Accounts receivable – related parties - - Total accounts receivable, gross 12,274,989 10,123,805 Less: allowance for credit loss (808,140 ) (557,360 ) Accounts receivable, net $ 11,466,849 $ 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 June 30, 2024 December 31, 2023 Balance as of beginning $ 557,360 $ 354,059 Additional of provision 250,780 203,301 Ending balance $ 808,140 $ 557,360 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consist of the following: SCHEDULE OF INVENTORIES June 30, 2024 December 31, 2023 Products $ 20,030,666 $ 16,777,928 Parts and accessories 1,470,693 899,188 Inventories in transit 6,328,476 5,399,964 Freight and duty 3,441,613 3,163,732 Inventory, gross 31,271,448 26,240,812 Less: inventory allowance (439,900 ) (439,900 ) Inventories, net $ 30,831,548 $ 25,800,912 |
ADVANCE TO SUPPLIERS (Tables)
ADVANCE TO SUPPLIERS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Advance To Suppliers | |
SCHEDULE OF ADVANCE TO SUPPLIERS | Advance to suppliers consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIERS June 30, 2024 December 31, 2023 Advance to suppliers $ 1,645,131 $ 1,589,328 Less: impairment loss allowance due to irrecoverable prepayment (742,897 ) - Advance to suppliers, net $ 902,234 $ 1,589,328 |
OTHER NON-CURRENT AND CURRENT_2
OTHER NON-CURRENT AND CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT ASSETS | Other current assets consist of the following: SCHEDULE OF OTHER CURRENT ASSETS June 30, 2024 December 31, 2023 Prepayment $ 331,972 $ 598,481 Note receivable 342,000 - Other receivables 88,703 39,028 Deposit 49,500 - Total $ 812,175 $ 637,509 Less: Other non-current assets (49,500 ) - Other current assets 762,675 637,509 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Furniture and Fixtures $ 125,977 $ 125,977 Machinery equipment 326,843 89,418 Vehicles 461,666 670,793 Electronic equipment 35,303 35,303 Leasehold improvement 90,974 90,974 Subtotal 1,040,763 1,012,465 Less: accumulated depreciation and amortization (491,914 ) (612,484 ) Property and equipment, net $ 548,849 $ 399,981 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
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 June 30, 2024 December 31, 2023 Operating lease liabilities - current $ 908,584 $ 847,368 Operating lease liabilities - non-current 2,643,681 630,853 Total $ 3,552,265 $ 1,478,221 Financing leases June 30, 2024 December 31, 2023 Finance lease liabilities - current $ 42,524 $ 41,647 Finance lease liabilities - non-current 55,540 77,024 Total $ 98,064 $ 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 June 30, 2024 December 31, 2023 Cash paid of amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 657,388 $ 1,104,769 Financing cash flows used in finance leases $ 23,162 $ 47,051 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ - $ 60,805 Operating lease liabilities $ 2,654,318 $ 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 were as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES June 30, 2024 December 31, 2023 Weighted-average remaining lease term (years): Finance lease 2.39 2.85 Operating leases 4.31 1.82 Weighted average discount rate: Finance leases 4.61 % 4.61 % Operating leases 8.98 % 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 June 30, 2024: SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES Operating leases Twelve months ending June 30, Operating leases 2025 $ 1,094,270 2026 1,010,993 2027 594,000 2028 594,000 2029 594,000 2030 and after 99,000 Total future minimum lease payments 3,986,263 Less: imputed interest (433,998 ) Present value of operating lease liabilities $ 3,552,265 Finance leases Twelve months ending June 30, Finance leases 2025 $ 46,325 2026 41,649 2027 11,036 2028 5,801 Total future minimum lease payments 104,811 Less: imputed interest (6,747 ) Present value of finance lease liabilities $ 98,064 |
ACCRUED RETURN LIABILITIES (Tab
ACCRUED RETURN LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Balance as of beginning $ 283,276 $ 556,538 Actual recognized products return (904,766 ) (3,355,112 ) Accruals for product return liabilities 823,763 3,081,850 Ending balance $ 202,273 $ 283,276 |
ACCRUED WARRANTY EXPENSES (Tabl
ACCRUED WARRANTY EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Balance as of beginning $ 619,113 $ 260,531 Cost of warranty claims (732,651 ) (1,924,203 ) Accruals for product warranty 846,103 2,282,785 Ending balance $ 732,565 $ 619,113 |
OTHER PAYABLE, ACCRUED EXPENS_2
OTHER PAYABLE, ACCRUED EXPENSE AND OTHER CURRENT LIABILITY (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Credit card liabilities $ - $ 7,732 Sales Tax payable 22,745 13,204 Other current liabilities 47,856 77,161 Total $ 70,601 $ 98,097 |
LOANS (Tables)
LOANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LOAN BALANCE | Loan balance consists of the following: SCHEDULE OF LOAN BALANCE June 30, 2024 December 31, 2023 Bank loan – Cathay Bank (1) $ 2,668,762 $ - Other loans - Northpoint (2) - 205,440 Other loans – BAC (3) - 98,143 Total $ 2,668,762 $ 303,583 (1) On May 13, 2024, the Company’s subsidiary Massimo Motor Sports obtained a line of credit from Cathay Bank, pursuant to which the Company has the availability to borrow a maximum $ 15.0 million out of this line of credit for one year at the U.S. prime rate + 0.75 %. Before then, the company had a line of credit of maximum $ 10.0 from Midfirst bank, which is cancelled upon the grant of the line of credit from Cathay Bank. As of June 30, 2024 and December 31, 2023, the outstanding balance was $ 2.7 million and $ nil . The balance of $ 2.7 million at Cathay Bank was used to pay off the undue letter of credit at Midfirst bank for them to release the first-position right to Cathay bank. The balance is paid off in the subsequent period. This line of credit is also personally guaranteed by Mr. David Shan, the Controlling Shareholder. This line of credit is pledged by the Company’s accounts receivable and inventories. (2) On April 19, 2022, the Company’s subsidiary Massimo Marine obtained a $ 2.0 nil 205,440 (3) 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 (4) On January 15, 2021, the Company’s subsidiary Massimo Motor Sports obtained a line of credit from Midfirst Bank, pursuant to which the Company has the availability to borrow a maximum $ 4.0 two years 0.25 10.0 January 3, 2026 This line of credit is guaranteed by the Massimo Group, and is also personally guaranteed by Mr. David Shan, the Controlling Shareholder, and Miller Creek Holdings LLC, a related party controlled by Mr. David Shan. This line of credit is pledged by the Company’s accounts receivable and inventories. On May 13, 2024, the credit facility was closed due to transferring to Cathy Bank ((1) above), and all guarantees were released and transferred to Cathy Bank. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2024 December 31, 2023 Due to shareholder - David Shan, opening balance $ 7,920,141 $ 10,984,344 Withdraw (3,603,616 ) (5,264,203 ) Capital dividend declared - 2,200,000 Due to shareholder – David Shan, ending balance 4,316,525 7,920,141 Non-current (4,316,525 ) (7,920,141 ) Current $ - $ - |
TAXES (Tables)
TAXES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX PROVISION | The provision for income tax consists of the following: SCHEDULE OF INCOME TAX PROVISION 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Income tax provision – current $ 898,749 $ 118,527 $ 2,011,437 $ 142,606 Income tax (recovery) - deferred (84,897 ) (12,101 ) (297,244 ) (12,101 ) Income tax provision $ 813,852 $ 106,426 $ 1,714,193 $ 130,505 |
SCHEDULE OF RECONCILIATION OF INCOME TAXES | The following table reconciles the statutory tax rate to the Company’s effective tax: SCHEDULE OF RECONCILIATION OF INCOME TAXES 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income before income taxes $ 3,629,882 $ 2,180,710 $ 7,711,505 $ 2,752,954 Income tax at the federal statutory rate 21 % 21 % 21 % 21 % Statutory U.S. federal income tax 762,275 457,949 1,619,416 578,120 S Corporation benefits - (371,679 ) - (491,850 ) State margin tax 43,000 20,156 83,738 44,235 Non-deductible expense 8,577 - 11,039 - Other - - - - Total $ 813,852 $ 106,426 $ 1,714,193 $ 130,505 |
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 June 30, 2024 December 31, 2023 Deferred tax assets: Allowance for credit loss $ 16,480 $ 117,046 Property and equipment 169,709 16,480 Lease liability – operating 745,976 310,426 Lease liability – financing 20,593 24,920 Other temporary difference 35,768 - Warranty liabilities 153,839 - Return liabilities 42,477 - Total deferred tax assets 1,184,842 468,872 Deferred tax liabilities: Right of use assets – operating (733,511 ) (310,426 ) Right of use assets – financing (19,486 ) (23,845 ) Total deferred tax liabilities (752,997 ) (334,271 ) Deferred tax assets (liabilities), net $ 431,845 $ 134,601 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF EARNINGS PER SHARE | The following table presents a reconciliation of basic and diluted net income per share: SCHEDULE OF EARNINGS PER SHARE Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income attributable to the Company $ 2,816,030 $ 2,074,284 $ 5,997,312 $ 2,622,449 Weighted average number of common shares outstanding – basic 41,259,614 40,000,000 40,629,807 40,000,000 Dilutive securities – unvested RSU 127,228 - 63,614 - Weighted average number of common shares outstanding – diluted 41,386,842 40,000,000 40,693,421 40,000,000 Earnings per share – basic $ 0.07 $ 0.05 $ 0.15 $ 0.07 Earnings per share – diluted $ 0.07 $ 0.05 $ 0.15 $ 0.07 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY | The following table summarized the Company’s RSU activity: SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY Number of RSUs Weighted Average Grant Date Fair Value Outstanding December 31, 2023 - - Granted 300,556 3.84 Cancelled (500 ) 3.88 Exercised - - Outstanding June 30, 2024 300,056 $ 3.84 Exercisable, June 30, 2024 - $ - |
SCHEDULE OF SHARE OPTION ACTIVITY | The following table summarized the Company’s share option activity: SCHEDULE OF SHARE OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life in Years Outstanding December 31, 2023 - $ - - Granted 350,000 4.04 9.23 Cancelled - - - Exercised - - - Outstanding June 30, 2024 350,000 $ 4.04 9.23 Exercisable, June 30, 2024 - $ - - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS | As of June 30, 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 $ 4,091,074 $ 1,140,595 $ 1,657,678 $ 1,193,801 $ 99,000 Bank loan 2,668,762 2,668,762 – – – Total $ 6,759,836 $ 3,809,357 $ 1,657,678 $ 1,193,801 $ 99,000 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SALES BY PRODUCT CATEGORIES | The following table presents sales by product categories for the three and six months ended June 30, 2024 and 2023, respectively: SCHEDULE OF SALES BY PRODUCT CATEGORIES 2024 2023 2024 2023 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 UTVs, ATVs and e-bikes $ 34,233,277 $ 22,330,840 $ 62,926,418 $ 38,811,997 Pontoon Boats 1,169,376 4,404,859 2,627,912 6,764,117 Total $ 35,402,653 $ 26,735,699 $ 65,554,330 $ 45,576,114 |
SCHEDULE OF SUBSIDIARIES (Detai
SCHEDULE OF SUBSIDIARIES (Details) | 6 Months Ended |
Jun. 30, 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 ($) | 6 Months Ended | |||
Apr. 04, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 01, 2023 | |
Proceeds from issuance initial public offering | $ 4,458,667 | |||
Massimo Group [Member] | ||||
Equity interest ownership percentage | 100% | |||
Massimo Group [Member] | ATIFUS [Member] | ||||
Equity interest ownership percentage | 15% | |||
Massimo Group [Member] | Controlling Shareholder [Member] | ||||
Equity interest ownership percentage | 77.60% | |||
Massimo Motor Sports, LLC [Member] | ||||
Equity interest ownership percentage | 100% | |||
Massimo Motor Sports, LLC [Member] | ATIFUS [Member] | ||||
Investments | $ 1,000,000 | |||
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 | $ 1,000,000 | |||
Massimo Marine, LLC [Member] | Shareholder [Member] | ||||
Equity interest ownership percentage | 100% | |||
Massimo Motor Sports and Massimo Marine [Member] | ||||
Equity interest ownership percentage | 100% | |||
Massimo Motor Marine [Member] | ATIFUS [Member] | ||||
Equity interest ownership percentage | 15% | |||
IPO [Member] | ||||
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 | $ 5,850,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE (Details) | Jun. 30, 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] | Useful Life, Lease Term [Member] |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2024 USD ($) Segment shares | Jun. 30, 2023 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Product Information [Line Items] | ||||||
Inventory provision | $ 439,900 | $ 439,900 | ||||
Impairment provision of inventories | ||||||
Impairment loss | 742,897 | 742,897 | ||||
Impairment charge of long-lived assets | 0 | 0 | 0 | 0 | ||
Sales return liabilities | 202,273 | 202,273 | 283,276 | $ 556,538 | ||
Sales return | 398,058 | 425,906 | 823,763 | 1,105,428 | ||
Products warranty | 732,565 | 732,565 | 619,113 | |||
Warranty expenses | 459,366 | $ 583,047 | 846,325 | 931,199 | ||
Advance from customers | $ 1,205,431 | 1,205,431 | $ 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% | 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 | $ 250,000 | ||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | One Supplier [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 10% | 10% | ||||
Massimo Motor Sports, LLC [Member] | ||||||
Product Information [Line Items] | ||||||
Cash uninsured amount | $ 433,931 | $ 433,931 | $ 330,357 | |||
Unvested Restricted Stock Units RSU [Member] | ||||||
Product Information [Line Items] | ||||||
Weighted average number of common shares, unvested restricted stock | shares | 127,228 | 63,614 | ||||
Maximum [Member] | ||||||
Product Information [Line Items] | ||||||
Maximum contributions percent | 4% | |||||
Selling Expense [Member] | ||||||
Product Information [Line Items] | ||||||
Cost of revenue | $ 1,954,821 | $ 1,340,766 | $ 3,061,868 | $ 2,435,562 | ||
Advertising costs | 175,290 | 270,877 | 403,766 | 462,663 | ||
Cost of Sales [Member] | ||||||
Product Information [Line Items] | ||||||
Cost of revenue | $ 3,488,294 | $ 2,480,954 | $ 6,175,941 | $ 5,159,250 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total accounts receivable, gross | $ 12,274,989 | $ 10,123,805 | |
Less: allowance for credit loss | (808,140) | (557,360) | $ (354,059) |
Accounts receivable, net | 11,466,849 | 9,566,445 | |
Nonrelated Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total accounts receivable, gross | 12,274,989 | 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 ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Receivables [Abstract] | |||
Balance as of beginning | $ 557,360 | $ 354,059 | $ 354,059 |
Additional of provision | 250,780 | $ 56,087 | 203,301 |
Ending balance | $ 808,140 | $ 557,360 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Receivables [Abstract] | ||||
Allowance for credit loss | $ 16,482 | $ 372,423 | $ 250,780 | $ 56,628 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Products | $ 20,030,666 | $ 16,777,928 |
Parts and accessories | 1,470,693 | 899,188 |
Inventories in transit | 6,328,476 | 5,399,964 |
Freight and duty | 3,441,613 | 3,163,732 |
Inventory, gross | 31,271,448 | 26,240,812 |
Less: inventory allowance | (439,900) | (439,900) |
Inventories, net | $ 30,831,548 | $ 25,800,912 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 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 | $ 24,365,138 | $ 24,365,138 | $ 19,961,227 |
SCHEDULE OF ADVANCE TO SUPPLIER
SCHEDULE OF ADVANCE TO SUPPLIERS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Advance To Suppliers | ||
Advance to suppliers | $ 1,645,131 | $ 1,589,328 |
Less: impairment loss allowance due to irrecoverable prepayment | (742,897) | |
Advance to suppliers, net | $ 902,234 | $ 1,589,328 |
ADVANCE TO SUPPLIERS (Details N
ADVANCE TO SUPPLIERS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Advance To Suppliers | |||||
Impairment loss on supplier deposit due to lawsuit | $ 742,897 | $ 742,897 | |||
Settlement claim | $ 342,000 | 342,000 | 342,000 | ||
Prepayment | 1,100,000 | ||||
Wrote off | 742,000,000,000 | ||||
Prepayment | 1,100,000 | ||||
Prepayment | $ 342,000 | $ 342,000 | $ 342,000 |
SCHEDULE OF OTHER CURRENT ASSET
SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepayment | $ 331,972 | $ 598,481 |
Note receivable | 342,000 | |
Other receivables | 88,703 | 39,028 |
Deposit | 49,500 | |
Total | 812,175 | 637,509 |
Less: Other non-current assets | (49,500) | |
Other current assets | $ 762,675 | $ 637,509 |
OTHER NON-CURRENT AND CURRENT_3
OTHER NON-CURRENT AND CURRENT ASSETS (Details Narrative) | Jun. 30, 2024 USD ($) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement claim | $ 342,000 |
Prepayment | $ 342,000 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 1,040,763 | $ 1,012,465 |
Less: accumulated depreciation and amortization | (491,914) | (612,484) |
Property and equipment, net | 548,849 | 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 | 326,843 | 89,418 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 461,666 | 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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 30,473 | $ 34,992 | $ 66,984 | $ 70,292 |
Acquisition of property and equipment | 237,425 | 24,661 | 341,852 | 24,661 |
Disposal of property and equipment | 42,655 | 126,000 | ||
Gain on disposal of fixed asset | (8,654) | 36,001 | ||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE INFORMATION (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Operating lease liabilities - current | $ 908,584 | $ 847,368 |
Operating lease liabilities - non-current | 2,643,681 | 630,853 |
Total | 3,552,265 | 1,478,221 |
Finance lease liabilities - current | 42,524 | 41,647 |
Finance lease liabilities - non-current | 55,540 | 77,024 |
Total | $ 98,064 | $ 118,671 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW AND NON-CASH INFORMATION (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Leases [Abstract] | |||
Operating cash flows used in operating leases | $ 657,388 | $ 1,104,769 | |
Financing cash flows used in finance leases | 23,162 | $ 23,886 | 47,051 |
Finance lease liabilities | 60,805 | 60,805 | |
Operating lease liabilities | $ 2,654,318 | $ 1,113,140 | $ 1,113,140 |
SCHEDULE OF WEIGHTED AVERAGE RE
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES (Details) | Jun. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Finance lease, Weighted-average remaining lease term (years) | 2 years 4 months 20 days | 2 years 10 months 6 days |
Operating leases, Weighted-average remaining lease term (years) | 4 years 3 months 21 days | 1 year 9 months 25 days |
Finance leases, Weighted average discount rate | 4.61% | 4.61% |
Operating leases, Weighted average discount rate | 8.98% | 8.61% |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING AND FINANCE LEASE LIABILITIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Operating leases | ||
2025 | $ 1,094,270 | |
2026 | 1,010,993 | |
2027 | 594,000 | |
2028 | 594,000 | |
2029 | 594,000 | |
2030 and after | 99,000 | |
Total future minimum lease payments | 3,986,263 | |
Less: imputed interest | (433,998) | |
Present value of operating lease liabilities | 3,552,265 | $ 1,478,221 |
Finance leases | ||
2025 | 46,325 | |
2026 | 41,649 | |
2027 | 11,036 | |
2028 | 5,801 | |
Total future minimum lease payments | 104,811 | |
Less: imputed interest | (6,747) | |
Present value of finance lease liabilities | $ 98,064 | $ 118,671 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 3 Months Ended | 6 Months Ended | ||||||
May 01, 2024 USD ($) ft² | Apr. 29, 2023 USD ($) ft² | Aug. 01, 2021 USD ($) | Aug. 01, 2018 USD ($) ft² | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Payments for monthly rent | $ 379,360 | $ 250,000 | $ 664,360 | $ 430,000 | ||||
Operating lease expense | 405,552 | 276,192 | 716,745 | 482,384 | ||||
Amortization of operating lease right of use assets | 358,839 | 241,440 | 639,629 | 425,756 | ||||
Accretion of lease liabilities | 1,224 | 2,285 | 2,555 | 4,069 | ||||
Amortization of finance lease right of use assets | $ 10,379 | $ 12,010 | $ 20,759 | $ 21,353 | ||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Area of land | ft² | 66,000 | 220,000 | ||||||
Payments for 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 | |||||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | Two Lease Agreements [Member] | Warehouse [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Area of land | ft² | 60,000 | |||||||
Payments for monthly rent | $ 33,000 | |||||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | Two Lease Agreements [Member] | Office Space [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Area of land | ft² | 30,000 | |||||||
Payments for monthly rent | $ 16,500 |
SCHEDULE OF ACCRUED RETURN LIAB
SCHEDULE OF ACCRUED RETURN LIABILITIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Payables and Accruals [Abstract] | ||
Balance as of beginning | $ 283,276 | $ 556,538 |
Actual recognized products return | (904,766) | (3,355,112) |
Accruals for product return liabilities | 823,763 | 3,081,850 |
Ending balance | $ 202,273 | $ 283,276 |
SCHEDULE OF ACCRUED WARRANTIES
SCHEDULE OF ACCRUED WARRANTIES AND RELATED COSTS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Guarantees and Product Warranties [Abstract] | ||
Balance as of beginning | $ 619,113 | $ 260,531 |
Cost of warranty claims | (732,651) | (1,924,203) |
Accruals for product warranty | 846,103 | 2,282,785 |
Ending balance | $ 732,565 | $ 619,113 |
SCHEDULE OF OTHER PAYABLE ACCRU
SCHEDULE OF OTHER PAYABLE ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Credit card liabilities | $ 7,732 | |
Sales Tax payable | 22,745 | 13,204 |
Other current liabilities | 47,856 | 77,161 |
Total | $ 70,601 | $ 98,097 |
SCHEDULE OF LOAN BALANCE (Detai
SCHEDULE OF LOAN BALANCE (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total | $ 2,668,762 | $ 303,583 | |
Cathay Bank [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | [1] | 2,668,762 | |
Northpoint Commercial Finance LLC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | [2] | 205,440 | |
Brunswick Acceptance Company LLC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total | [3] | $ 98,143 | |
[1]On May 13, 2024, the Company’s subsidiary Massimo Motor Sports obtained a line of credit from Cathay Bank, pursuant to which the Company has the availability to borrow a maximum $[2]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) - USD ($) | May 13, 2024 | Jan. 03, 2024 | Jan. 15, 2021 | Jun. 30, 2024 | May 12, 2024 | Dec. 31, 2023 | Apr. 19, 2022 | Apr. 18, 2022 | Feb. 18, 2022 |
MidFirst Bank [Member] | |||||||||
Line of credit facility, total increase company access | $ 24,365,138 | $ 19,961,227 | |||||||
Massimo Motor Sports, LLC [Member] | Cathay Bank [Member] | |||||||||
Line of credit facility, total increase company access | $ 15,000,000 | ||||||||
Line of credit facility, expiration period | 1 year | ||||||||
Line of credit facility, prime rate | 0.75% | ||||||||
Line of credit outstanding | 2,700,000 | ||||||||
Massimo Motor Sports, LLC [Member] | MidFirst Bank [Member] | |||||||||
Line of credit facility, total increase company access | $ 4,000,000 | $ 10,000,000 | $ 10,000,000 | ||||||
Line of credit facility, expiration period | 2 years | ||||||||
Line of credit facility, prime rate | 0.25% | ||||||||
Line of credit facility, maturity date | Jan. 03, 2026 | ||||||||
Massimo Marine, LLC [Member] | Northpoint Commercial Finance LLC [Member] | |||||||||
Line of credit facility, total increase company access | $ 2,000,000 | ||||||||
Line of credit outstanding | 205,440 | ||||||||
Massimo Marine, LLC [Member] | Brunswick Acceptance Company LLC [Member] | |||||||||
Line of credit facility, total increase company access | $ 1,750,000 | ||||||||
Line of credit outstanding | $ 98,143 |
SCHEDULE OF RELATIONSHIP OF REL
SCHEDULE OF RELATIONSHIP OF RELATED PARTIES (Details) | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||||
Capital dividend declared | $ 2,200,000 | $ 2,200,000 | ||
Non-current | $ (4,316,525) | $ (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 | 10,984,344 | |
Withdraw | (3,603,616) | (5,264,203) | ||
Capital dividend declared | 2,200,000 | |||
Due to shareholder – David Shan, ending balance | 4,316,525 | 7,920,141 | ||
Non-current | (4,316,525) | (7,920,141) | ||
Current |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 3 Months Ended | 6 Months Ended | ||||||
May 01, 2024 USD ($) ft² | Apr. 29, 2023 USD ($) ft² | Aug. 01, 2021 USD ($) | Aug. 01, 2018 USD ($) ft² | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Related Party Transaction [Line Items] | ||||||||
Rent expense | $ 379,360 | $ 250,000 | $ 664,360 | $ 430,000 | ||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Area of land | 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 | |||||
Lease renewal term | 3 years | |||||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | Two Lease Agreements [Member] | Warehouse [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Area of land | ft² | 60,000 | |||||||
Rent expense | $ 33,000 | |||||||
Miller Creek Holding LLC [Member] | Mr David Shan [Member] | Two Lease Agreements [Member] | Office Space [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Area of land | ft² | 30,000 | |||||||
Rent expense | $ 16,500 |
SCHEDULE OF INCOME TAX PROVISIO
SCHEDULE OF INCOME TAX PROVISION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision – current | $ 898,749 | $ 118,527 | $ 2,011,437 | $ 142,606 |
Income tax (recovery) - deferred | (84,897) | (12,101) | (297,244) | (12,101) |
Income tax provision | $ 813,852 | $ 106,426 | $ 1,714,193 | $ 130,505 |
SCHEDULE OF RECONCILIATION OF I
SCHEDULE OF RECONCILIATION OF INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Net income before income taxes | $ 3,629,882 | $ 2,180,710 | $ 7,711,505 | $ 2,752,954 |
Income tax at the federal statutory rate | 21% | 21% | 21% | 21% |
Statutory U.S. federal income tax | $ 762,275 | $ 457,949 | $ 1,619,416 | $ 578,120 |
S Corporation benefits | (371,679) | (491,850) | ||
State margin tax | 43,000 | 20,156 | 83,738 | 44,235 |
Non-deductible expense | 8,577 | 11,039 | ||
Other | ||||
Income tax provision | $ 813,852 | $ 106,426 | $ 1,714,193 | $ 130,505 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred tax assets: | ||
Allowance for credit loss | $ 16,480 | $ 117,046 |
Property and equipment | 169,709 | 16,480 |
Lease liability – operating | 745,976 | 310,426 |
Lease liability – financing | 20,593 | 24,920 |
Other temporary difference | 35,768 | |
Warranty liabilities | 153,839 | |
Return liabilities | 42,477 | |
Total deferred tax assets | 1,184,842 | 468,872 |
Deferred tax liabilities: | ||
Right of use assets – operating | (733,511) | (310,426) |
Right of use assets – financing | (19,486) | (23,845) |
Total deferred tax liabilities | (752,997) | (334,271) |
Deferred tax assets (liabilities), net | $ 431,845 | $ 134,601 |
TAXES (Details Narrative)
TAXES (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate for federal income taxes | 21% | 21% | 21% | 21% |
Effective income tax rate | 23.40% | 5.40% | 25.40% | 5.20% |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 21, 2024 USD ($) shares | Jun. 18, 2024 shares | Apr. 04, 2024 USD ($) $ / shares shares | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Jun. 01, 2023 $ / shares shares | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares issued | 41,322,485 | 41,322,485 | 40,000,000 | 40,000,000 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||
Number of shares issued | 1,322,485 | 1,322,485 | ||||||
Common stock, shares outstanding | 41,322,485 | 41,322,485 | 40,000,000 | |||||
Adjustment in additional paid in capital | $ | $ 920,331 | |||||||
Subscription receivable | $ | $ 832,159 | |||||||
Proceeds from issuance initial public offering | $ | $ 4,458,667 | |||||||
Representatives Warrant [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 87,100 | |||||||
Exercise price of warrants | $ / shares | $ 5.63 | $ 5.63 | ||||||
Fair Value Adjustment of Warrants | $ | $ 143,000 | |||||||
Warrants measurement input | $ / shares | 4 | 4 | ||||||
Warrants term | 4 years 9 months 3 days | 4 years 9 months 3 days | ||||||
Warrants outstanding | 87,100 | 87,100 | ||||||
Representatives Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||
Warrants measurement input | 4.3 | 4.3 | ||||||
Representatives Warrant [Member] | Measurement Input, Expected Term [Member] | ||||||||
Warrants term | 5 years | 5 years | ||||||
Representatives Warrant [Member] | Measurement Input, Exercise Price [Member] | ||||||||
Warrants measurement input | $ / shares | 5.63 | 5.63 | ||||||
Representatives Warrant [Member] | Measurement Input, Option Volatility [Member] | ||||||||
Warrants measurement input | 56 | 56 | ||||||
Representatives Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||
Warrants measurement input | ||||||||
TJCM Asset Management LLC [Member] | ||||||||
Number of shares for service | 22,485 | 160,000 | ||||||
Number of shares for service, value | $ | $ 80,000 | |||||||
IPO [Member] | ||||||||
Sale of stock, number of shares issued in transaction | 1,300,000 | |||||||
Sale of stock, price per share | $ / shares | $ 4.50 | |||||||
Proceeds from issuance initial public offering | $ | $ 5,850,000 | |||||||
Total net proceeds | $ | $ 5,000,000 | |||||||
Over-Allotment Option [Member] | ||||||||
Sale of stock, price per share | $ / shares | $ 4.50 | |||||||
Over-Allotment Option [Member] | Representatives Warrant [Member] | ||||||||
Exercise price of warrants | $ / shares | $ 5.625 | |||||||
Warrants and Rights Outstanding, Maturity Date | Apr. 04, 2029 | |||||||
Over-Allotment Option [Member] | Underwriting Agreement [Member] | ||||||||
Number of shares issued | 195,000 |
SCHEDULE OF EARNINGS PER SHARE
SCHEDULE OF EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Net income and comprehensive income | $ 2,816,030 | $ 2,074,284 | $ 5,997,312 | $ 2,622,449 | |
Weighted average number of common shares outstanding - basic | [1] | 41,259,614 | 40,000,000 | 40,629,807 | 40,000,000 |
Weighted average number of common shares outstanding - diluted | [1] | 41,386,842 | 40,000,000 | 40,693,421 | 40,000,000 |
Earnings per share - basic | $ 0.07 | $ 0.05 | $ 0.15 | $ 0.07 | |
Earnings per share - diluted | $ 0.07 | $ 0.05 | $ 0.15 | $ 0.07 | |
Unvested Restricted Stock Units RSU [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Dilutive securities - unvested RSU | 127,228 | 63,614 | |||
[1]Retroactively restated for effect of reorganization |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Unvested Restricted Stock Units RSU [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Weighted average number of common shares, unvested restricted stock | 127,228 | 63,614 |
SUMMARY OF RESTRICTED STOCK UNI
SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY (Details) | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Retirement Benefits [Abstract] | |
Number of RSUs, Outstanding | shares | |
Weighted Average Grant Date Fair Value, Outstanding | $ / shares | |
Number of RSUs, Granted | shares | 300,556 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 3.84 |
Number of RSUs, Cancelled | shares | (500) |
Weighted Average Grant Date Fair Value, Cancelled | $ / shares | $ 3.88 |
Number of RSUs, Exercised | shares | |
Weighted Average Grant Date Fair Value, Exercised | $ / shares | |
Number of RSUs, Outstanding | shares | 300,056 |
Weighted Average Grant Date Fair Value, Outstanding | $ / shares | $ 3.84 |
Number of RSUs, Exerciseable | shares | |
Weighted Average Grant Date Fair Value, Exerciseable | $ / shares |
SCHEDULE OF SHARE OPTION ACTIVI
SCHEDULE OF SHARE OPTION ACTIVITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Number of Options, Outstanding | ||
Weighted Average Exercise Price Outstanding | ||
Number of Options, Granted | 350,000 | |
Weighted Average Exercise Price Outstanding Granted | $ 4.04 | |
Weighted Average Remaining Life in Years | 9 years 2 months 23 days | 9 years 2 months 23 days |
Number of Options, Cancelled | ||
Weighted Average Exercise Price Outstanding Exercised | ||
Number of Options, Exercised | ||
Number of Options, Outstanding | 350,000 | |
Weighted Average Exercise Price Outstanding | $ 4.04 | |
Number of Options, Exerciseable | ||
Weighted Average Exercise Price Outstanding Exerciseable |
EMPLOYEE STOCK PLANS (Details N
EMPLOYEE STOCK PLANS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
May 22, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted and available for issuance | 300,556 | ||||
Share based compensation | $ 59,945 | $ 59,945 | |||
Shares granted | 350,000 | ||||
Shares granted exercise price | $ 4.04 | ||||
Incentive Stock Option Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares granted | 46,860 | ||||
Shares granted exercise price | $ 4.268 | ||||
Shares granted description | The options were granted on May 22, 2024, and the options vest at a rate of 23,430 per year for two years, effective on May 22, 2024 | ||||
Aggregate fair value | $ 91,196 | ||||
Share price | $ 3.88 | ||||
Risk-free interest rate | 4.30% | ||||
Expected term | 5 years | ||||
Exercise price | $ 4.3 | ||||
Volatility rate | 56% | ||||
Dividend rate | |||||
Expiration date | May 21, 2029 | ||||
Non Qualified Stock Option Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares granted | 103,140 | ||||
Shares granted exercise price | $ 4 | ||||
Shares granted description | The options were granted on May 22, 2024, and vest at a rate of 51,570 shares per year for two years, effective on May 22, 2024 | ||||
Aggregate fair value | $ 278,891 | ||||
Share price | $ 3.88 | ||||
Risk-free interest rate | 4.30% | ||||
Expected term | 10 years | ||||
Exercise price | $ 4 | ||||
Volatility rate | 56% | ||||
Dividend rate | |||||
Expiration date | May 21, 2034 | ||||
Incentive Stock Option And Non Qualified Stock Option Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares granted | 200,000 | ||||
Shares granted exercise price | $ 4 | ||||
Shares granted description | The options were granted on May 22, 2024, and vest at a rate of 100,000 shares per year for two years, effective on May 22, 2024 | ||||
Aggregate fair value | $ 540,931 | ||||
Share price | $ 3.88 | ||||
Risk-free interest rate | 4.30% | ||||
Expected term | 10 years | ||||
Exercise price | $ 4 | ||||
Volatility rate | 56% | ||||
Dividend rate | |||||
Expiration date | May 21, 2034 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted and available for issuance | 300,556 | ||||
Share based compensation | $ 170,321 | $ 170,321 |
SCHEDULE OF CONTRACTUAL OBLIGAT
SCHEDULE OF CONTRACTUAL OBLIGATIONS COMMITMENTS (Details) | Jun. 30, 2024 USD ($) |
Registration Payment Arrangement [Line Items] | |
Total | $ 6,759,836 |
Less than 1 year | 3,809,357 |
1-3 years | 1,657,678 |
3-5 years | 1,193,801 |
More than 5 years | 99,000 |
Lease Commitment [Member] | |
Registration Payment Arrangement [Line Items] | |
Total | 4,091,074 |
Less than 1 year | 1,140,595 |
1-3 years | 1,657,678 |
3-5 years | 1,193,801 |
More than 5 years | 99,000 |
Bank Loan [Member] | |
Registration Payment Arrangement [Line Items] | |
Total | 2,668,762 |
Less than 1 year | 2,668,762 |
1-3 years | |
3-5 years | |
More than 5 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | Jul. 08, 2024 | Jun. 30, 2024 |
Subsequent Event [Line Items] | ||
Accounts payable | $ 2.3 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Damages paid value | $ 3.3 |
SCHEDULE OF SALES BY PRODUCT CA
SCHEDULE OF SALES BY PRODUCT CATEGORIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue from External Customer [Line Items] | ||||
Total | $ 35,402,653 | $ 26,735,699 | $ 65,554,330 | $ 45,576,114 |
UTVs and ATVs, Electric Bikes [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 34,233,277 | 22,330,840 | 62,926,418 | 38,811,997 |
Pontoon Boats [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | $ 1,169,376 | $ 4,404,859 | $ 2,627,912 | $ 6,764,117 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 6 Months Ended |
Jun. 30, 2024 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 08, 2024 | Jun. 30, 2024 | Dec. 31, 2023 |
Subsequent Event [Line Items] | |||
Acccounts payable | $ 2,300,000 | ||
Short term debt | 2,668,762 | $ 303,583 | |
Bank loans | $ 2,700,000 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Loss Contingency, Damages Paid, Value | $ 3,300,000 |