Exhibit 99.1
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of April 30, 2024 | As of October 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepayments and other current assets | ||||||||
| Due from related parties | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Prepayment and other non-current assets | ||||||||
| Operating lease right of use asset, net | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Current maturity of long-term bank loan | $ | $ | ||||||
| Accounts payable | ||||||||
| Advance from customers | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Operating lease liability-current | ||||||||
| Convertible notes | ||||||||
| Taxes payable | ||||||||
| Due to related parties | ||||||||
| Total Current Liabilities | ||||||||
| Long-term bank loans | ||||||||
| Operating lease liability-noncurrent | ||||||||
| Deferred tax liability | ||||||||
| Total Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Total Deficit: | ||||||||
| Ordinary shares, $ | ||||||||
| Additional paid-in capital | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Six Months Ended | ||||||||
| April 30, 2024 | April 30, 2023 | |||||||
| (Restated) | ||||||||
| Revenue | ||||||||
| Ocean freight revenue | $ | $ | ||||||
| Vessel service revenue | ||||||||
| Total revenue | ||||||||
| Cost of revenues | ||||||||
| Gross profit (loss) | ( | ) | ||||||
| Operating expenses: | ||||||||
| General and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Income (loss) from operations | ( | ) | ||||||
| Other income (expense) | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Change in fair value of convertible notes | ( | ) | ||||||
| Other expense, net | ( | ) | ( | ) | ||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Less: Net income (loss) attributable to non-controlling interests | ( | ) | ||||||
| Net loss attributable to the Company | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Less: Comprehensive income (loss)attributable to non-controlling interests | ( | ) | ||||||
| Comprehensive loss attributable to the Company | $ | ( | ) | $ | ( | ) | ||
| Loss per share attributable to the Company - Basic and diluted* | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Shares Outstanding - Basic and diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED APRIL 30, 2024 AND 2023
| Ordinary Shares | Additional Paid in | Retained Earnings (Accumulated | Non-controlling | |||||||||||||||||||||
| Shares* | Amount* | Capital | Deficits) | interest | Total | |||||||||||||||||||
| Balance at November 1, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||
| Effect of reverse merger | ( | ) | ( | ) | ||||||||||||||||||||
| Conversion of promissory note settlement upon the reverse merger | ||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||
| Dividends to shareholders | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance as of April 30, 2023 (Restated) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||
| Balance at November 1, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||||||
| Issuance of shares for services | ||||||||||||||||||||||||
| Ordinary shares issued for convertible notes | ||||||||||||||||||||||||
| Net income(loss) for the period | - | - | - | ( | ) | ( | ) | |||||||||||||||||
| Balance as of April 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended | ||||||||
| April 30, 2024 | April 30, 2023 | |||||||
| (Restated) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Deferred tax benefit | ( | ) | ( | ) | ||||
| Amortization of operating lease right-of-use assets | ||||||||
| Share-based compensation | ||||||||
| Change in fair value of convertible notes | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepayments and other assets | ( | ) | ||||||
| Payable to related parties | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Advance from customers | ( | ) | ( | ) | ||||
| Accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Taxes payable | ( | ) | ||||||
| Operating leases liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net cash acquired in the reverse recapitalization | ||||||||
| Repayment to related parties | ( | ) | ( | ) | ||||
| Loans from related parties | ||||||||
| Repayment of long-term bank loans | ( | ) | ( | ) | ||||
| Proceeds from convertible notes | ||||||||
| Repayment of convertible notes | ( | ) | ||||||
| Dividends to shareholders | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosure information: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES | ||||||||
| Issuance of shares for prepayments and other non-current assets | $ | $ | ||||||
| Ordinary shares issued for convertible notes | $ | $ | ||||||
| Right-of-assets obtained in exchange for operating lease obligations | $ | $ | ||||||
| Conversion of rights to ordinary shares upon the reverse merger recapitalization | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — ORGANIZATION AND BUSINESS DESCRIPTION
Caravelle International Group (the “Company”) and its subsidiaries (together the “Group”) is an international operator of ocean transportation service. It is engaged in the seaborne transportation service under voyage contracts as well as vessels service for and on behalf of ship owners. The Company, a Cayman Islands exempted company, was formed on February 28, 2022 to serve as a holding company.
Reverse Recapitalization
On April 5, 2022, Pacifico Acquisition Corp. (“Pacifico”) entered into that certain Agreement and Plan of Merger which was amended by the Amended and Restated Agreement and Plan of Merger (the “SPAC Transaction”) dated August 15, 2022 (the “Merger Agreement”), by and among Caravelle Group Co., Ltd (“Caravelle Group”), Pacifico International Group, a Cayman Islands exempted company and a direct wholly-owned subsidiary of the Company (“Merger Sub 1”), Pacifico Merger Sub 2 Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub 2” and, together with the Company and Merger Sub 1, each, individually, an “Acquisition Entity” and, collectively, the “Acquisition Entities”), and Caravelle Group.
On December 16, 2022, the SPAC Transaction was completed and the Company became a publicly traded holding company listed on the Nasdaq Capital Market and Caravelle Group became a wholly owned subsidiary of the Company. The SPAC Transaction was completed through a two-step process as follows:
(Step 1) Merger Sub 1 merged with and into Caravelle Group (the “Initial Merger”), and Caravelle Group was the surviving corporation of the Initial Merger and a direct wholly owned subsidiary of the Company, and
(Step 2) following confirmation of the effectiveness of the Initial Merger, Merger Sub 2 merged with and into Pacifico (the “SPAC Merger” and together with the Initial Merger, the “Merger”), and Pacifico was the surviving corporation of the SPAC Merger and a direct wholly owned subsidiary of the Company (collectively, the “SPAC Transaction” or “reverse merger”).
As a result of the SPAC Transaction, among other
things, (i) all outstanding ordinary shares of Caravelle Group was cancelled in exchange for
The Company was determined to be the accounting acquirer given that the original shareholders of Caravelle Group effectively controlled the combined entity after the Transaction. Pacifico is treated as the acquired company for financial reporting purposes. This determination is primarily based on the fact that subsequent to the SPAC Transaction, the Company’s shareholders have a majority of the voting power of the combined company, the Company comprised all of the ongoing operations of the combined entity, the Company comprised a majority of the governing body of the combined company, and the Company’s senior management comprised all of the senior management of the combined company. Accordingly, for accounting purposes, the SPAC Transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by the Company for the net assets of Pacifico, accompanied by a recapitalization. The Company is determined as the predecessor, and the historical financial statements of Caravelle became the Company’s historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. The share and per share data is retrospectively restated to give effect to the reverse recapitalization. Net assets of Pacifico were stated at historical costs. No goodwill or other intangible assets were recorded. Operations prior to the SPAC Transaction were those of the Caravelle Group.
F-6
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — ORGANIZATION AND BUSINESS DESCRIPTION (continued)
| Subsidiaries | Date of Acquisition | Jurisdiction of Formation | Percentage of direct/indirect Economic Ownership | Principal Activities | ||||||
| Caravelle Group Co., Ltd (“Caravelle Group”) | ||||||||||
| SGEX Group Co., Ltd (“SGEX”) | ||||||||||
| Pacifico Acquisition Corp.* | ||||||||||
| Topsheen Shipping Group Corporation (“Topsheen Samoa”) | ||||||||||
| Topsheen Shipping Singapore Pte. Ltd (“Topsheen Shipping”) | ||||||||||
| Topsheen Bulk Singapore Pte. Ltd (“Topsheen Bulk”) | ||||||||||
| Singapore Garden Technology Pte. Ltd. (“Garden Technology”) | ||||||||||
| * |
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended April 30, 2024 and 2023 are not necessarily indicative of the results that may be expected for the full year. The information included in this interim report should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Group’s annual financial statements for the fiscal year ended October 31, 2023 filed with the SEC on September 9, 2024.
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
Non-controlling interests
Non-controlling interest represents the portion of the net assets of subsidiaries attributable to interests that are not owned or controlled by the Company. The non-controlling interest is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Group. Non-controlling interest’s operating results are presented on the face of the consolidated statements of operations and comprehensive income (loss) as an allocation of the total income for the year between non-controlling shareholders and the shareholders of the Group. As of April 30, 2024 and October 31, 2023, non-controlling interests represent non-controlling shareholders’ proportionate share of equity interests in Topsheen Samoa and Topsheen Shipping.
F-7
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Uses of estimates
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, but are not limited to revenue recognition, the allowance for credit losses of accounts receivable, useful lives and assessment for impairment of long-lived assets, fair value of the convertible notes and warrants well as share-based compensation. Actual results could differ from those estimates.
Accounts Receivable
Accounts receivable is recognized and carried at original invoiced amount less an estimated allowance for credit losses. Most accounts receivable is collected within one month. On November 1, 2022, the Group adopted ASU 2016-13, “Financial Instruments — Credit Losses (Accounting Standards Codification (“ASC” Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. The adoption of this guidance did not have a material impact on the Group’s consolidated financial statements. The Group’s estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. The Group evaluates its accounts receivable for expected credit losses on a regular basis. The Group maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. The Group considers factors in assessing the collectability of its receivables, such as the age of the amounts due, the customer’s payment history, credit-worthiness and other specific circumstances related to the accounts. The Group adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and actual bad debts. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. No allowance was recorded as of April 30, 2024 and October 31, 2023, respectively.
F-8
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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. |
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, prepayments and other current assets, accounts payables, balances with related parties, and other current liabilities, approximate their fair values because of the short-term maturity of these instruments. The carrying amounts of long-term loans approximate fair values as the related interest rates currently offered by financial institutions for similar debt instruments of comparable maturities.
Assets and Liabilities Measured or Disclosed at Fair Value on a recurring basis
| As of April 30, 2024 | ||||||||||||||||
| Fair Value Measurement at the Reporting Date using | ||||||||||||||||
| Quoted price in active markets for identical assets Level 1 | Significant other observable inputs Level 2 | Significant unobservable inputs Level 3 | Total | |||||||||||||
| Financial liabilities: | ||||||||||||||||
| Contingent consideration – earn-out liability(i) | $ | $ | $ | $ | ||||||||||||
| Convertible notes (ii) | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
F-9
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| As of October 31, 2023 | ||||||||||||||||
| Fair Value Measurement at the Reporting Date using | ||||||||||||||||
| Quoted price in active markets for identical assets Level 1 | Significant other observable inputs Level 2 | Significant unobservable inputs Level 3 | Total | |||||||||||||
| Financial liabilities: | ||||||||||||||||
| Contingent consideration – earn-out liability (i) | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
(i) Contingent consideration – earn-out liability
Pursuant to the Merger Agreement, eligible shareholders
of Caravelle may receive up to
(ii) Convertible notes
The Group elected the fair value option to account for its convertible notes (excluding freestanding warrants if applicable, refers to Note 8 for detail information). The Group engaged an independent valuation firm to perform the valuation. The fair value of the convertible notes is calculated using the binomial tree model. The convertible notes are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Group’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion.
As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.
| April 30, | ||||
| 2024 | ||||
| Opening balance | $ | |||
| Issuance of convertible notes | ||||
| Change in fair value of convertible notes | ||||
| Cash repaid | ( | ) | ||
| Ordinary shares issued for convertible notes | ( | ) | ||
| Total | $ | |||
F-10
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
The Group is an international operator of comprehensive ocean transportation service. On November 1, 2019, the Group has adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 using the modified retrospective approach. 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 Group 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 Group primarily derives its freight revenue from voyage contracts and provides vessel service.
In accordance with ASC 606, the Group evaluates whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Based on the evaluation of the control model, the Group determined that the Group is the principal to the transaction for voyage contracts and the related revenue from voyage contracts is recognized on a gross basis based on the transfer of control to the customer. The Group’s vessel service contracts engage in certain transactions wherein the Group act as an agent of ship owners. Revenue from these transactions is recorded on a net basis. Net revenue includes billings to customers less third-party charges, including transportation or handling costs, fees, commissions and taxes and duties.
Revenue from voyage contracts
Under a voyage contract, the Group is engaged to provide the transportation of cargo between specific ports in return for ocean freight payment of an agreed upon freight per ton of cargo. The Group’s voyage contracts generally do not contain cancelable provisions. A voyage was deemed to commence when a vessel was available for loading and was deemed to end upon the completion of the discharge of the current cargo. For the voyage contracts, the customer simultaneously receives and consumes the benefits provided by the Group performance over the voyage period because of the continuous service to the customer. Customers receive the benefit of our services as the goods are transported from one location to another. If the Group was unable to complete delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers over time, the Group recognizes revenue ratably from port of loading to when the charterer’s cargo is discharged based on the relative transit time completed in each reporting period. For the unfinished voyages, the Group estimates the percentage of completion based on voyage days completed and total estimated voyage days. Estimated losses on voyages are provided for in full at the time such losses become evident. Voyage expense and other ocean transportation operating costs are charged to operating costs as incurred.
F-11
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition (continued)
Revenue from vessel services
The Group contracts with various customers to carry out vessel services for vessels as agents for and on behalf of ship owners. These services include lease of vessels on behalf of the ship owners and commercial management. As the operator of the vessels, the Group undertakes to use its best endeavors to provide the agreed vessel services as agents for and on behalf of the ship owners and to protect and promote the interest of the ship owners in all matters relating to the provision of services. Most of the vessel service agreements span within one year and are typically billed on a monthly basis. The Vessel service revenue is recorded on a net basis. Net revenue includes billings to customers, net of voyage operating expenses incurred. The Group transfers control of the service to the customer and satisfies its performance obligation over the term of the contract, and therefore recognized revenue over the term of the contract.
Contract balances
Timing of revenue recognition may differ from
the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the
Group has satisfied the Group’s performance obligation and has the unconditional rights to payment. The balances of accounts receivable
were $
| For the Six Months Ended | ||||||||
| April 30, 2024 | April 30, 2023 | |||||||
| (Restated) | ||||||||
| Ocean freight revenue | $ | $ | ||||||
| Vessel service revenue | ||||||||
| Total | $ | $ | ||||||
F-12
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Government Subsidies
The Group received government subsidies according
to related policy from local government. The Group receives government subsidies that the Singaporean government has not specified its
purpose for and are not tied to future trends or performance of the Group. Receipt of such subsidy income is not contingent upon any further
actions or performance of the Group and the amounts do not have to be refunded under any circumstances. The unspecific purpose subsidies
are recognized as other income (expenses), net upon receipt as further performance by the Group is not required. For the six months ended
April 30, 2024 and 2023, the government subsidies amounted to $
Income taxes
The Group accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
An uncertain tax position is recognized as a benefit
only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized
is the largest amount of tax benefit that is greater than
Loss per Share
Loss per ordinary share is calculated in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per ordinary share is computed by dividing the net income (loss) attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares include ordinary shares issuable upon the exercise of outstanding share options and vesting of restricted share units by using the treasury stock method and ordinary shares issuable upon the conversion of convertible instruments using the if-converted method. Potential ordinary shares are not included in the denominator of the diluted net (loss)/earnings per share calculation when inclusion of such shares would be anti-dilutive. For the six months ended April 30, 2024 and 2023, there were no dilutive shares.
Concentrations of risks
| a. | Significant customers |
For the six months ended April 30, 2024, no customer
accounted for more than 10% of the Group’s total revenues. For the six months ended April 30, 2023, one customer accounted for or
approximately
F-13
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Concentrations of risks (continued)
| b. | Significant suppliers |
For the six months ended April 30, 2024, one related-party
supplier accounted for approximately
| c. | Cash and cash equivalents |
The Group maintains cash and cash equivalents
with various financial institutions in Singapore and management believes these financial institutions are high credit quality. As of April
30, 2024 and October 31, 2023, the aggregate amount of cash and cash equivalents of $
Recent Accounting Pronouncements
The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Group beginning November 1, 2024, and are applied prospectively to business combinations that occur after the effective date. The Group does not expect the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 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, 2024, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is also permitted. This ASU will result in additional required disclosures when adopted, where applicable.
In December 2023, the FASB issued ASU 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 taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2025. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. Once adopted, this ASU will result in additional disclosures.
In March 2024, the FASB issued ASU 2024-01, “Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Group is currently evaluating the potential impact of adopting this guidance on its financial statements.
The Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Group’s consolidated balance sheets, statements of operations and comprehensive income (loss) and statements of cash flows.
F-14
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — LIQUIDITY AND GOING CONCERN
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Group be unable to continue as a going concern.
For the six months ended April 30, 2024, the Group
incurred a continuous net loss of $
Management monitors and analyzes the Group’s
cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments.
The Group has historically funded its working capital needs primarily from operations, bank loans, and advances from shareholders and
intends to continue doing so in the near future to ensure sufficient working capital. As of April 30, 2024, the Group had cash and cash
equivalents of $
Note 4 — ACCOUNTS RECEIVABLE
| April 30, 2024 | October 31, 2023 | |||||||
| Accounts receivable | $ | $ | ||||||
Approximately $
Note 5 — PREPAYMENTS AND OTHER ASSETS
| April 30, 2024 | October 31, 2023 | |||||||
| Prepayment for fuel and other costs | $ | $ | ||||||
| Prepayment for keyman insurance | ||||||||
| Prepaid consulting service fee | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| Including: | ||||||||
| Prepayments and other current assets | $ | $ | ||||||
| Prepayments and other non-current assets | $ | $ | ||||||
F-15
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6 — ACCRUED EXPENSES AND OTHER LIABILITIES
| April 30, 2024 | October 31, 2023 | |||||||
| Accrued expenses (1) | $ | $ | ||||||
| Board compensation payable | ||||||||
| Other payable | ||||||||
| Accrued expenses and other liabilities | $ | $ | ||||||
| (1) |
F-16
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 7 — BANK LOANS
| April 30, 2024 | October 31, 2023 | |||||||
| Loan from DBS Bank (due on May 13, 2025) (1) | $ | $ | ||||||
| Revolving credit for keyman insurance (2) | ||||||||
| Total | ||||||||
| Less: current maturity of long-term bank loan | ||||||||
| Long term of bank loans | $ | $ | ||||||
| (1) |
| (2) |
Interest expense for the above-mentioned loans
amount to $
| Twelve months ending April 30, | Repayment | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 8 — CONVERTIBLE NOTES
| April 30, 2024 | October 31, 2023 | |||||||
| Convertible notes | $ | $ | ||||||
F-17
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — CONVERTIBLE NOTES (continued)
2023 Convertible Note
On November 24, 2023, the Company entered into
a securities purchase agreement with an investor, pursuant to which the Company issued the Investor a convertible promissory note on November
24, 2023 in the principal amount of $
The Company has elected to recognize the 2023
Note at fair value and therefore there was no further evaluation of embedded conversion option features for bifurcation. Based on the
valuation report performed by an independent valuation firm, the fair value of the 2023 Note was determined to be of $
| November 24, 2023 | February 6, 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life | ||||||||
| Discount rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | - | % | - | % | ||||
| Fair value | $ | $ | ||||||
| April 30, | ||||
| 2024 | ||||
| Opening balance | $ | |||
| Issuance of convertible notes | ||||
| Change in fair value of convertible notes | ||||
| Cash repaid | ( | ) | ||
| Ordinary shares issued for convertible notes | ( | ) | ||
| Total | $ | |||
As of April 30, 2024, the balance of 2023 Convertible Note was .
Jan 2024 Convertible Notes
In January 2024, the Company closed a first tranche
of the senior secured convertible note financing with certain investors for the principal amount of $
F-18
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — CONVERTIBLE NOTES (continued)
The Company assessed that the freestanding warrants issued in connection with the Jan 2024 Notes are legally detachable from the Jan 2024 Notes and separately exercisable as such meets the definition of a freestanding derivative instrument pursuant to ASC 815. However, the scope exception in accordance with ASC 815-10-15-74 applies to warrants and it meets the requirements of ASC 815 that would be classified in stockholders’ equity. Therefore, the warrants issued in connection with the Jan 2024 Notes were accounted for within stockholders’ equity.
The Company has elected to recognize the Jan 2024
Note at fair value and therefore there was no further evaluation of embedded conversion option features for bifurcation. The proceeds
from Jan 2024 Notes were first allocated to the Jan 2024 Notes based on its fair value with the residual being allocated to the warrants.
Based on the valuation report performed by an independent valuation firm, the fair value of the 2024 Note upon issuance was determined
to be of $
| January 10, 2024 | April 30, 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life | ||||||||
| Discount rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | - | % | - | % | ||||
| Fair value | $ | $ | ||||||
On August 6, 2024, the Jan 2024 Notes noteholders
and the Company reached into a termination agreement, pursuant to which, the Company fully settled the Jan 2024 Note with warrants by
issuance of
The following is a reconciliation of the beginning and ending balances for Jan 2024 Notes measured at fair value for the six months ended April 30, 2024:
| April 30, | ||||
| 2024 | ||||
| Opening balance | $ | |||
| Issuance of convertible notes | ||||
| Change in fair value of convertible notes | ||||
| Total | $ | |||
F-19
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9 — LEASE
The Group has several operating leases for shipping and offices. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Total lease
expense for the six months ended April 30, 2024 and 2023 amounted to $
| April 30, 2024 | October 31, 2023 | |||||||
| Right-of-use assets, net | $ | $ | ||||||
| Operating lease liabilities - current | $ | $ | ||||||
| Operating lease liabilities - non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Remaining lease term and discount rate: | ||||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % | |||
| Twelve months ending April 30, | Amount | |||
| 2025 | $ | |||
| 2026 | ||||
| Total future minimum lease payments | ||||
| Less: imputed interest | ||||
| Present value of lease liabilities | $ | |||
F-20
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10 — RELATED PARTY TRANSACTIONS
The Group records transactions with various related parties. These related party balances as of April 30, 2024 and October 31, 2023 and transactions for the six months ended April 30, 2024 and 2023 are identified as follows:
| Name of Related Party | Relationship to the Group | |
| Dr. Guohua Zhang(1) | ||
| Shanghai Weisheng International Logistics Co., Ltd | ||
| Topsheen Shipping Limited | ||
| Nanjing Derun Shipping Co., Ltd. | ||
| Top Wisdom Shipping Management Co. Limited | ||
| Beijing Hanpu Technology Co., Ltd. | ||
| Max Bright Marine Service Co. Ltd. | ||
| Top Legend Shipping Co. Limited | ||
| Top Creation International (HK) Limited | ||
| Top Moral Shipping Limited | ||
| New Galion Group (HK) Co. Ltd (“New Galion”) |
| (1) |
(a) Due from related parties
| April 30, 2024 | October 31, 2023 | |||||||
| Topsheen Shipping Limited(1) | $ | $ | ||||||
| Top Wisdom Shipping Management Co. Limited(2) | ||||||||
| Total | $ | $ | ||||||
| (1) |
| (2) |
(b) Due to related parties
| April 30, 2024 | October 31, 2023 | |||||||
| Topsheen Shipping Limited (1) | $ | $ | ||||||
| Shanghai Weisheng International Logistics Co., Ltd. | ||||||||
| Beijing Hanpu Technology Co., Ltd.(2) | ||||||||
| Dr. Guohua Zhang(3) | ||||||||
| New Galion | ||||||||
| Total | $ | $ | ||||||
| (1) |
| (2) |
F-21
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10 — RELATED PARTY TRANSACTIONS (continued)
| (3) |
(c)
| For the six months ended April 30, | For the six months ended April 30, | |||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| Topsheen Shipping Limited | $ | $ | ||||||
| Max Bright Marine Service Co. Ltd | ||||||||
| Top Wisdom Shipping Management Co. Limited | ||||||||
| Top Creation International (HK) Limited | ||||||||
| Top Moral Shipping Limited | ||||||||
| Top Legend Shipping Co. Limited | ||||||||
| Total | $ | $ | ||||||
| * |
(d)
| For the six months ended April 30, |
For the six months ended April 30, |
|||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| Shanghai Weisheng International Logistics Co., Ltd | $ | $ | ||||||
| Nanjing Derun Shipping Co., Ltd | ||||||||
| Topsheen Shipping Limited | ||||||||
| Total | $ | $ | ||||||
| ** |
(e) Loan secure provided by a related party
One related party provided guarantee for the repayment of the Group’s long-term loan. (See Note 7)
(f) Strategic purchase contract with a related party
On April 20, 2022, Caravelle entered into
a strategic purchase contract with New Galion Group (HK) CO LTD (“New Galion”), a related party. Pursuant to the contract,
Caravelle shall purchase four sets of Maritime Carbon Neutral Intelligent Control Platform systems (the “Systems”) from New
Galion for total consideration of approximately $
F-22
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — TAXES
(a) Corporate Income Taxes (“CIT”)
Cayman
Caravelle is incorporated in the Cayman as an offshore holding company and is not subject to tax on income or capital gain under the laws of Cayman.
BVI
SGEX is incorporated in the British Virgin Islands (“BVI”) as an offshore holding company and is ot subject to tax on income or capital gain under the laws of BVI.
Samoa
Topsheen Shipping Group Corporation was incorporated
in Samoa. There is no income tax for income sourced or earned outside Samoa. Accordingly, the Group’s consolidated financial
statements do not present any income tax provisions related to Samoa tax as all income was earned outside of Samoa. If the
Group had any income sourced to Samoa, it would be taxed at
Singapore
Under Singapore tax laws, subsidiaries in Singapore
are subject to statutory income tax rate at
Topsheen Shipping is eligible and participate
under the Maritime Sector Incentive-Approved International Shipping Enterprise (MSI-AIS) award in Singapore. All qualified shipping
income derived from the shipping activity in Topsheen Shipping is exempt from taxation for the duration of MSI-AIS approval. The MSI-AIS
approval was in November 2015 for a period of ten years. The impact of the tax exemption noted above decreased taxes by $ for the six
months ended April 30, 2024 and 2023. As the Group’s revenue are
United States
Pursuant to the U.S. Internal Revenue Code (the “Code”), U.S.-source income from the international operation of ships is generally exempt from U.S. tax if the Group operating the ships meets certain requirements. Among other things, in order to qualify for this exemption, the Group operating the ships must be incorporated in a country which grants an equivalent exemption from income taxes to U.S. corporations.
| i) |
| For the six months ended April 30, | For the six months ended April 30, | |||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| Current | $ | $ | ||||||
| Deferred | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
F-23
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — TAXES (continued)
| ii) |
| As of April 30, 2024 | As of October 31, 2023 | |||||||
| Deferred tax liability: | ||||||||
| Depreciation for tangible assets | $ | $ | ||||||
| Total | $ | $ | ||||||
| For the six months ended April 30, | For the six months ended April 30, | |||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| Non-Singapore | $ | ( | ) | $ | ( | ) | ||
| Singapore | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | ||
| For the six months ended April 30, | For the six months ended April 30, | |||||||
| 2024 | 2023 | |||||||
| (Restated) | ||||||||
| Singapore Statutory income tax rate | % | % | ||||||
| Differential of local statutory tax rate | ( | )% | ( | )% | ||||
| Effect of preferential tax rate | % | ( | )% | |||||
| Non-taxable income | - | % | % | |||||
| Non-deductible items and others * | ( | )% | ( | )% | ||||
| Effective tax rate | ( | )% | ( | )% | ||||
| * |
(b) Taxes payable
| As of April 30, 2024 |
As of October 31, 2023 |
|||||||
| Income tax payable | $ | $ | ||||||
| Total taxes payable | $ | $ | ||||||
F-24
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12 —EQUITY
Ordinary Shares
The Company was incorporated on February 28, 2022
to serve as a holding company. The Company’s authorized share capital is
As of April 30, 2024 and October 31, 2023, the
Company had
Ordinary shares issued for convertible notes
In connection with the 2023 Note issuance, the Company issued
Shares issued for consulting services
On March 10, 2024, the Company entered into a
consulting agreement with a third party for a period of
On April 24, 2024, the Company entered into a
consulting agreement with a third party for a period of
For the six months ended April 30, 2024, the Company
recorded consulting expense of $
2022 Incentive Plan
The Company has adopted the 2022 Share Incentive
Plan (the “2022 Plan”), which provides for the issuance of up to an aggregate of
Dividends
During the year ended October 31, 2022, the Group’s
subsidiary - Topsheen Shipping declared and paid total dividends of $
On December 30, 2022, the Group’s subsidiary
- Topsheen Shipping declared dividends of $
For the year ended October 31, 2023, the Group
declared and paid in total of $
F-25
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — RESTATEMENT OF COMPARATIVE PERIOD FIGURES
The Group has restated its unaudited condensed consolidated financial statements for the six months ended April 30, 2023. During the interim review of the Group’s financial results for the six months ended April 30, 2024 and 2023, the Audit Committee and management concluded there were errors identified in the previously disclosed the balance sheet as of April 30, 2023 and the operating results for the six months ended April 30, 2023 due to inappropriate consolidation and lack of appropriate cutoff procedures on revenue, costs and expenses during the period end close.
The impacts of these restatements are as follow:
| For the Six months ended April 30, 2023 | ||||||||||||
| Previous reported | Effect of restatement | Restated | ||||||||||
| Revenue | ||||||||||||
| Ocean freight revenue | $ | $ | $ | |||||||||
| Vessel service revenue | ||||||||||||
| Total revenue | ||||||||||||
| Cost of revenues | ||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative expenses | ||||||||||||
| Total operating expenses | ||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||||||
| Other (expense) income | ||||||||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense), net | ( | ) | ( | ) | ||||||||
| Total other expense, net | ( | ) | ( | ) | ( | ) | ||||||
| Income (loss) before income taxes | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||
| Less: Net income (loss) attributable to non-controlling interests | ( | ) | ( | ) | ||||||||
| Net income (loss) attributable to the Company | $ | $ | ( | ) | $ | ( | ) | |||||
| Comprehensive income(loss) | ( | ) | ( | ) | ||||||||
| Less: Comprehensive income (loss) attributable to non-controlling interests | ( | ) | ( | ) | ||||||||
| Comprehensive income (loss) attributable to the Company | $ | $ | ( | ) | $ | ( | ) | |||||
| Earnings (loss)per share attributable to the Company - Basic and diluted | $ | $ | ( | ) | $ | ( | ) | |||||
| Weighted Average Shares Outstanding - Basic and diluted | ||||||||||||
F-26
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13 -- RESTATEMENT OF COMPARATIVE PERIOD FIGURES (continued)
| As of April 30, 2023 | ||||||||||||
| Previous reported | Effect of restatement | Restated | ||||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | $ | $ | ( | ) | $ | |||||||
| Accounts receivable | ( | ) | ||||||||||
| Prepayments and other current assets | ( | ) | ||||||||||
| Total Current Assets | ( | ) | ||||||||||
| Property and equipment, net | ( | ) | ||||||||||
| Prepayment and other non-current assets | ( | ) | ||||||||||
| Operating lease right of use asset, net | ||||||||||||
| Total Assets | $ | $ | ( | ) | $ | |||||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||||||
| Current Liabilities: | ||||||||||||
| Current maturity of long-term bank loan | $ | $ | $ | |||||||||
| Accounts payable | ( | ) | ||||||||||
| Advance from customers | ( | ) | ||||||||||
| Accrued expenses and other liabilities | ( | ) | ||||||||||
| Operating lease liability-current | ||||||||||||
| Taxes payable | ||||||||||||
| Due to related parties | ( | ) | ||||||||||
| Total Current Liabilities | ( | ) | ||||||||||
| Long-term bank loans | ( | ) | ||||||||||
| Operating lease liability-noncurrent | ||||||||||||
| Deferred tax liability | ||||||||||||
| Total Liabilities | ( | ) | ||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| Total Equity (deficit): | ||||||||||||
| Ordinary shares, $ | ||||||||||||
| Additional paid-in capital | ( | ) | ( | ) | ||||||||
| Retained earnings | ( | ) | ||||||||||
| Total Shareholders’ Equity (Deficit) | ( | ) | ( | ) | ||||||||
| Non-controlling interest | ( | ) | ||||||||||
| Total Equity (Deficit) | ( | ) | ||||||||||
| Total Liabilities and Equity (Deficit) | $ | $ | ( | ) | $ | |||||||
F-27
CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 14 — COMMITMENTS AND CONTINGENCIES
Contingencies
The Group may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Group 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 Group can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Group, the Group 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 Group’s consolidated financial position or results of operations or liquidity.
Commitments
The Group had various outstanding bank loans (details refer to Note 7) and non-cancellable operating lease agreements (details refer to Note 9).
Note 15 — SUBSEQUENT EVENTS
Private Placement Financing
On September 16, 2024, the Company closed a private
placement financing of a senior unsecured original issue
On October 18, 2024, the Company closed a private
placement financing of senior unsecured original issue
The Company has assessed all events occurred from April 30, 2024, up through October 30, 2024, there are no other material subsequent events that require disclosure.
F-28