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What changed in Massimo Group's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Massimo Group's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+250 added−267 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-26)

Top changes in Massimo Group's 2025 10-K

250 paragraphs added · 267 removed · 132 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAdditionally, we are now also producing fully electric Pontoon Boats. On December 2, 2024, the Company entered into partnership with Vision Marine Technologies Inc (“Vision Marine”), a pioneer in electric marine propulsion. As part of the agreement, Massimo Marine will supply pontoon boats to be equipped with Vision Marine’s E-Motion™ 180E Powertrain System, a complete turnkey electric powertrain solution.
Biggest change(“Vision Marine”), under which certain of our pontoon boats are equipped with Vision Marine’s E-Motion™ 180E Powertrain System, a turnkey electric propulsion solution. Massimo Marine Pontoon Boat Massimo Marine Tritoon Boat 10 For the 2026 model year, we are introducing product enhancements across our marine lineup.
We currently have ongoing supply agreements in place with approximately 30 suppliers, two of which are located in the United States, one in Taiwan, and the majority in China. In 2017, we entered into a partnership for engines with Linhai Yamaha Motor Co. which enabled us to increase the performance of our vehicles and offer new products.
We currently have ongoing supply agreements in place with approximately 30 suppliers, two of which are located in the United States, one in Taiwan, one in Vietnam, and the majority in China. In 2017, we entered into a partnership for engines with Linhai Yamaha Motor Co. which enabled us to increase the performance of our vehicles and offer new products.
On June 11, 2024, we entered into a strategic partnership agreement with Armlogi Holding Corp (“Armlogi”), a U.S.-based warehousing and logistics service provider, to gain access to Armlogi’s warehousing facilities and tailored logistics services for fast order fulfillment of UTVS, ATVs, Go-Karts and Golf Carts.
On June 11, 2024, we entered into a strategic partnership agreement with Armlogi Holding Corp (“Armlogi”), a U.S.-based warehousing and logistics service provider, to gain access to Armlogi’s warehousing facilities and tailored logistics services for fast order fulfillment of our UTVS, ATVs, Go-Karts and Golf Carts.
For example, in 2016, we allowed our Illinois license to expire and then in 2019, we reapplied for our Illinois license once we were confident that we would continue to generate revenue in the state to mitigate the costs. 17 Safety Regulation Our products are subject to extensive laws, rules and regulations relating to product safety promulgated by the federal and state governments or regulatory authorities of the United States and the federal and provincial provinces in Canada.
For example, in 2016, we allowed our Illinois license to expire and then in 2019, we reapplied for our Illinois license once we were confident that we would continue to generate revenue in the state to mitigate the costs. 18 Safety Regulation Our products are subject to extensive laws, rules and regulations relating to product safety promulgated by the federal and state governments or regulatory authorities of the United States and the federal and provincial provinces in Canada.
We believe our current coverage is adequate for our existing business and will continue to evaluate the coverages in the future in line with our expanding sales and product breadth. 16 Insurance We carry various insurance coverage policies to protect against certain risks consistent with the exposures associated with the nature of our operations.
We believe our current coverage is adequate for our existing business and will continue to evaluate the coverages in the future in line with our expanding sales and product breadth. 17 Insurance We carry various insurance coverage policies to protect against certain risks consistent with the exposures associated with the nature of our operations.
None of our employees are represented by a union, and our relationship with our employees is satisfactory. Competition ATV and UTV Markets The major players in the market include Polaris, Bombardier Recreational Products (BRP), Honda and Yamaha.
None of our employees are represented by a union, and we believe our relationship with our employees is satisfactory. Competition ATV and UTV Markets The major players in the market include Polaris, Bombardier Recreational Products (BRP), Honda and Yamaha.
Co., Ltd. and Linhai Co., Ltd., all of which are located in China and supplied us with approximately 79% and 68% (by cost) of our products in the fiscal years ended December 31, 2024 and 2023, respectively.
Co., Ltd. and Linhai Co., Ltd., all of which are located in China and supplied us with approximately 79% and 8% (by cost) of our products in the fiscal years ended December 31, 2024 and 2025, respectively.
More than 60% of the value of our boats are USA sourced, thus limiting our risk for overseas interruption. Substantially all products other than our boats, in particular our ATVs and UTVs, are sourced from select global manufacturers with which we have ongoing relationships.
If any supplier was unable to fulfill our needs, alternate sources are available. More than 60% of the value of our boats are USA sourced, thus limiting our risk for overseas interruption. Substantially all products other than our boats, in particular our ATVs and UTVs, are sourced from select global manufacturers with which we have ongoing relationships.
See “ Risk Factors-Risks Relating to Our Business, Strategy, and Industry-We have not made use of confidentiality agreements in the past and, although we intend to rely on such agreements in future dealings with suppliers, employees, consultants, and other parties, the prior lack or the breach of such agreements could adversely affect our business and results of operations .” 15 Employees As of March 24, 2025, we had approximately 100 employees, of which approximately 10 were in management and administration, 18 were sales and service personnel, 62 were in manufacturing, 5 were in quality control and 5 were in R&D.
See “ Risk Factors-Risks Relating to Our Business, Strategy, and Industry-We have not made use of confidentiality agreements in the past and, although we intend to rely on such agreements in future dealings with suppliers, employees, consultants, and other parties, the prior lack or the breach of such agreements could adversely affect our business and results of operations .” 16 Employees As of March 25, 2026, we had approximately 100 employees, including personnel in management and administration, sales and service, manufacturing, quality control, and research and development functions.
We plan to offer All-Weather options for all UTVs in the future. We have also been developing new product lines, such as electric vehicle (“EV”) chargers and electric Pontoon Boats, all of which are currently available for sale.
We have also been developing new product lines, such as electric vehicle (“EV”) chargers and electric Pontoon Boats, all of which are currently available for sale.
Our products are sold directly by us in the e-commerce marketplace and through a network of dealerships, distributors, and chain stores. We have a significant in-store UTV retail partnership with Tractor Supply Co. We manufacture and assemble our products in our Dallas facility and rely upon an international network of strategic global partnerships to supply us with parts and components.
Our products are sold directly by us in the e-commerce marketplace and through a network of dealerships, distributors, and chain stores. We have a significant in-store UTV retail partnership with Tractor Supply Co.
As part of our ongoing efforts to prevent infringements on our intellectual property rights and to keep abreast of critical technology developments by our competitors, we closely monitor patent applications in the United States and China. The following is a summary of our patent portfolio: No. Name of Patents Patent No.
Each of our patents has a term of 14 years with the exception of one, which has 15 years. As part of our ongoing efforts to prevent infringements on our intellectual property rights and to keep abreast of critical technology developments by our competitors, we closely monitor patent applications in the United States and China.
With the exception of our products designed for industry usage, our products are designed to serve and market towards recreational users. We constantly monitor the consumer market and consult with suppliers to determine what new products we can offer customers.
With the exception of our products designed for industry usage, our products are designed to serve both recreational and utility-focused applications, with increasing emphasis on commercial, agricultural and fleet use cases. We constantly monitor the consumer market and consult with suppliers to determine what new products we can offer customers.
The warranty is non-transferable for the period of coverage if the vehicle is resold. Our limited warranty is void if the vehicle is used as a rental, racing or any modifications are made to the product. Although we employ quality control procedures, a product is sometimes distributed which needs repair or replacement.
Our limited warranty is void if the vehicle is used as a rental, racing or any modifications are made to the product. Although we employ quality control procedures, a product is sometimes distributed which needs repair or replacement. Historically, product recalls have not had a material effect on our business.
Massimo Go Kart, Mini 125 and Motorcycles 11 We offer a wide range of accessories for all of our vehicles including replacement parts and supplies, along with seasonal equipment such as snowplows and enclosures specially designed for our UTVs. Our outdoor accessories include EV chargers, portable solar panels, electric coolers and power stations.
Massimo MB200S Mini Bike Massimo Mini 125 Go Kart 11 Massimo GKD200S Go Kart Massimo MB200 Mini Bike 12 We offer a wide range of accessories for all of our vehicles including replacement parts and supplies, along with seasonal equipment such as snowplows and enclosures specially designed for our UTVs.
We have not been affected by export restrictions or sanctions. Nevertheless, we are focusing on broadening our base of suppliers to reduce our dependence on a limited number of suppliers for the majority of our products, to minimize the risk of relying upon Chinese manufacturers, including the risk of fluctuations in the exchange rate between the U.S.
Nevertheless, we are focusing on broadening our base of suppliers to reduce our dependence on a limited number of suppliers for the majority of our products, to minimize the risk of relying upon Chinese manufacturers, including the risk of fluctuations in the exchange rate between the U.S. Dollar and the legal currency of China (“Chinese RMB”) and impact of tariffs.
The majority of our products are imported directly from our manufacturer network to our facility in Dallas where they are assembled, accessorized and inspected before shipment to a distributor or direct to the customer, with the exception of our Pontoon Boats, which are wholly manufactured at our Dallas facility.
Our product strategy is centered on delivering practical, durable, and feature-rich vehicles designed for both work and recreational use across rural, agricultural, and commercial applications. 5 The majority of our products are imported directly from our manufacturer network to our facility in Dallas where they are assembled, accessorized and inspected before shipment to a distributor or direct to the customer, with the exception of our Pontoon Boats, which are wholly manufactured at our Dallas facility.
Our facility is adjacent to seven acres for boat storage in Dallas, Texas, which houses a design center, two manual assembly lines. including an automated vehicle assembly robot line, our parts department, a test track, dyno and over 30 loading docks.
Our Dallas, Texas, facility sits next to seven acres of boat storage and includes a design center, two manual assembly lines, an automated robotic vehicle-assembly line, a parts department, a test track, a dynamometer, and more than 30 loading docks.
We are headquartered in a 376,000 sq. ft. facility of which 280,000 sq. ft. is dedicated to Massimo Motor Sports LLC (“Massimo Motor Sports”) and 96,000 sq. ft. to Massimo Marine LLC (“Massimo Marine”).
We believe our distribution and service infrastructure is a key competitive advantage, enabling broad national coverage, efficient fulfillment, and strong dealer and customer support. We are headquartered in a 376,000 sq. ft. facility, of which 280,000 sq. ft. is dedicated to Massimo Motor Sports LLC (“Massimo Motor Sports”) and 96,000 sq. ft. to Massimo Marine LLC (“Massimo Marine”).
Historically, product recalls have not had a material effect on our business. We have entered into an exclusive arrangement with Mercury Marine, a division of Brunswick corporation (“Mercury Marine” or “Mercury”), so all of our Pontoon Boats come equipped with a Mercury outboard engine and parts.
We have entered into an exclusive arrangement with Mercury Marine, a division of Brunswick corporation (“Mercury Marine” or “Mercury”), so all of our Pontoon Boats come equipped with a Mercury outboard engine and parts. Our Mercury warranty and service program gives our customers access to 5,500 approved service centers in the United States.
In 2017, we began a partnership with Linhai Yamaha Motor Co., located in Shanghai, China which allowed us to rapidly expand our product line and increase the performance of our vehicles. Further, we partnered with Kubota, Japan to enter the diesel UTV market in 2019.
We manufacture and assemble our products in our Dallas facility and rely on an international network of strategic global partnerships to supply us with parts and components. In 2017, we began a partnership with Linhai Yamaha Motor Co., located in Shanghai, China, which allowed us to rapidly expand our product line and increase the performance of our vehicles.
Apart from the brand name items we offer to our customers, such as the outboard motor, depth finder, radio and stereo system, the materials and components used in our pontoons are generally available from multiple suppliers. If any supplier was unable to fulfill our needs, alternate sources are available.
We have entered into an exclusive arrangement with Mercury, so all of our Pontoon Boats come equipped with a Mercury outboard engine and parts. Apart from the brand name items we offer to our customers, such as the outboard motor, depth finder, radio and stereo system, the materials and components used in our pontoons are generally available from multiple suppliers.
We also sell select models direct which are paid in full prior to pick up or shipment. Manufacturing and Sourcing We manufacture our Pontoon Boats in our 376,000 sq. ft. facility of which 280,000 sq. ft. is dedicated to Massimo Motor Sports and 96,000 sq. ft. to Massimo Marine.
Manufacturing and Sourcing We manufacture our Pontoon Boats in our 376,000 sq. ft. facility of which 280,000 sq. ft. is dedicated to Massimo Motor Sports and 96,000 sq. ft. to Massimo Marine. Our facility is adjacent to a seven-acre storage area for boats in Dallas, Texas.
We believe our supply chain can respond to expected consumer demand and we will be able to continue to supply products to our customers at reasonable prices. We have not experienced, and do not currently expect to experience, surges or declines in consumer demand for which we are unable to adjust our supply.
We believe our supply chain can respond to expected consumer demand and we will be able to continue to supply products to our customers at reasonable prices. While we have not experienced material supply disruptions to date, we continue to monitor supply chain conditions and maintain flexibility in our sourcing strategy.
For further details please see “ Risk Factors - There is no assurance there will not be disruptions to trade between China and the United States. ” 14 Research and Development In addition to our own internal research and development (“R&D”), we work closely with our suppliers to design innovative, high-performance products to build strong customer loyalty and sustain our reputation as a leading-edge manufacturer.
For further details please see “ Risk Factors - There is no assurance there will not be disruptions to trade between China and the United States. ” 15 Research and Development We invest in research and development (“R&D”) to support the design, enhancement, and expansion of our product portfolio, with a focus on improving performance, functionality, and user experience across our vehicle platforms.
Dollar and the legal currency of China (“Chinese RMB”) and impact of tariffs. Our ability to meet customer demand is significantly impacted by tariffs on imported components. As of March 4, 2025, a 20% tariff applies to our Chinese imports, which we expect to directly affect our cost structure.
Our ability to meet customer demand is significantly impacted by tariffs on imported components. The evolving tariff landscape, including tariffs applicable to Chinese imports, has introduced uncertainty and may directly affect our cost structure.
Intellectual Property We currently hold eight issued patents in the United States that protect certain aspects of our products, design and technologies. Each of our patents has a term of 14 years with the exception of one, which has 15 years.
As we continue to grow, we expect to further invest in our technology systems to enhance scalability, improve data visibility and support ongoing operational efficiency. Intellectual Property We currently hold eight issued patents in the United States that protect certain aspects of our products, design and technologies.
We provide extensive parts diagrams and service manuals and our trained technicians are available to both distributors and individual customers to assist with diagnosing and solving any problem that may come up. Product Warranties We provide limited warranty coverage for defects in materials and workmanship in our ATVs, UTVs, golf carts, Go-Karts and motorcycles for a period of one year.
We provide limited warranty coverage for defects in materials and workmanship in our ATVs, UTVs, golf carts, Go-Karts and motorcycles for a period of one year. The warranty is non-transferable for the period of coverage if the vehicle is resold.
Our facility is adjacent to a seven-acre storage area for boats in Dallas, Texas. This space houses a design center, two assembly lines, training rooms, an approximately 40,000 square foot parts department, and over thirty loading docks.
This space houses a design center, two assembly lines, training rooms, an approximately 40,000 square foot parts department, and over thirty loading docks. Structural components and other materials are sourced locally from a variety of suppliers and electrical components and engines are obtained through an exclusive arrangement with Mercury.
Our warranty, along with the Mercury are transferable during the original warranty period and are in line with top level original equipment manufacturers. 13 Financing Arrangements We have arrangements with Northpoint Commercial Finance and Automotive Finance Corporation to provide floor plan financing for our dealers and distributors.
Our warranty, along with the Mercury are transferable during the original warranty period and are in line with top level original equipment manufacturers. 14 Financing Arrangements We support our dealer network and end customers through a range of financing solutions designed to facilitate product accessibility and drive sales growth.
We have a dedicated staff of full-time employees including trained technicians to provide online and telephone support to our customers and dealers. We carry full line of parts, accessories and maintenance items across all models in our approximately 40,000 sq. ft. parts facility and strive to fill all parts orders within 48 hours.
We operate an approximately 40,000 sq. ft. parts facility that stocks a full line of parts, accessories, and maintenance items, enabling us to fulfill most parts orders within 48 hours. We also provide detailed parts diagrams and service manuals to support efficient maintenance and repair.
We entered the Pontoon Boats market in 2020 when we successfully launched our first series of Pontoon Boats. From inception, we have manufactured our Pontoon Boats in our Dallas facility. In terms of our product offerings, we currently offer both gas-powered and electric-powered boats and maintain a complete line of replacement parts and a broad range of accessories.
We entered the pontoon boat market in 2020 and have since developed a portfolio of both gas-powered and electric-powered models, supported by a full line of replacement parts and accessories.
To reach our target customer, we have established multiple distribution channels for our products, including our own on-line sites, multiple popular e-commerce sites, an extensive network of independent dealers and distributors and relationships with some of the largest retailers in the United States including Tractor Supply Co., Lowes, Walmart, Sam’s Club, and more.
Multiple Distribution Channels We sell our products through a diversified, omnichannel distribution platform that includes independent dealers, national retail partners, and e-commerce channels. We have established a broad dealer network with approximately 2,800 locations across the United States, including relationships with major retailers such as Tractor Supply Co., Lowe’s, Walmart, and others.
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Item 1. Business. Overview We believe we are a leading company in the Mid-Tier Band of the powersports vehicles and boats industry in the United States, which includes the All-Terrain Vehicle (“ATV”), Utility-Terrain Vehicle (“UTV”), and pontoon and tritoon boats (“Pontoon Boats”) subsectors (the “Powersports Vehicles and Boats Industry”).
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Item 1. Business. Overview Massimo Group is a U.S.-based provider of utility-focused powersports and recreational vehicles, serving rural, agricultural, and commercial customers through a nationwide distribution and service network that enables broad market coverage, efficient product delivery, and ongoing dealer and customer support. Our product portfolio includes utility terrain vehicles (“UTVs”), all-terrain vehicles (“ATVs”), golf carts, scooters, and pontoon boats.
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“Mid-Tier Band” means the mid-tier band of the Powersports Vehicles and Boats Industry, which our management considers to be those manufacturers that produce a wide range of products that cater to customer needs but do not yet have the international operations and market share of the Top-Tier Band (as defined below) of the Powersports Vehicles and Boats Industry.
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We are focused on transitioning the traditional powersports category toward utility-driven, all-weather mobility solutions designed for year-round use across agricultural, commercial and recreational applications. We position our business as a provider of practical, utility-driven mobility solutions rather than a provider of purely recreational products.
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“Top-Tier Band” means the top-tier band of the Powersports Vehicles and Boats Industry, which our management considers to include companies such as Polaris, Bombardier Recreational Products (BRP), Honda, and Yamaha with international operations and large market shares.
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Our vehicles are designed for real-world applications, including farming, land management, property maintenance, security, and light industrial use. A significant portion of our customer base operates in rural and agricultural markets. This aligns our business with essential-use demand rather than purely discretionary consumer spending.
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We manufacture, import and distribute a diversified portfolio of products divided into two main lines: (1) UTVs, ATVs, motorcycles, scooters, golf carts and a juvenile line from go karts to balance bikes and tractors among other products; and (2) recreational Pontoon Boats. In 2024, we released an all-new line of All-Weather UTVs with enclosures, heaters, and AC units.
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We manufacture, import and distribute a diversified portfolio of utility and recreational vehicles across multiple product categories. We plan to offer All-Weather options for all UTVs in the future.
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Listing Our common stock began trading on April 2, 2024 on The Nasdaq Capital Market (“Nasdaq”) under the symbol “MAMO.” Competitive Strengths The following strengths have enabled us to achieve our growth to date, and we believe will contribute to our ongoing growth: Diversified and Comprehensive Product Portfolio We have a robust portfolio of products, including UTVs and ATVs, golf carts, motorcycles, scooters, Pontoon Boats, tractors, snow equipment and a line of accessories for the outdoor enthusiast including electric coolers, power stations and portable solar panels.
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We are advancing the UTV category through fully enclosed, HVAC-equipped vehicles designed for year-round operation across diverse climates and working environments, including models such as the Sentinel 570 and Sentinel 770, with additional models planned.
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Our products provide enthusiasts with a variety of exhilarating, stylish and powerful vehicles for year-round use on a variety of terrains. The diversity of our products reduces our exposure to changes in consumer behavior in any single category and provides us with multiple avenues for continued growth.
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In March 2025, we expanded our distribution capabilities through an e-commerce platform in partnership with Ekho Dealer, enabling customers to browse, configure, and purchase vehicles online while integrating directly with our dealer network for fulfillment and service. This capability enhances our omnichannel distribution strategy.
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Furthermore, certain product lines are sold in offsetting seasons, reducing the overall seasonality of our sales and lowering cash flow influx risk. In addition to its appeal to consumers, our broad product portfolio provides a compelling value proposition to our dealers and distributors and allows dealers to reduce seasonality, increase operational efficiency and facilitate inventory management.
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Strategic Positioning We are evolving from a traditional powersports company into a utility mobility platform supported by a nationwide distribution and service infrastructure. Our strategy is centered on expanding all-weather vehicle capabilities, strengthening our dealer and service network, and enhancing our ability to serve both retail and commercial customers.
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Multiple Distribution Channels We have established multiple distribution channels for our products, including our own e-commerce platforms, leading marketplace accounts, an extensive network of independent dealers and distributors, and relationships with some of the largest retailers in the United States, including Tractor Supply Co., Lowes, Walmart, Costco, Sam’s Club, Home Depot, Fleet Farm, Rural King, and more.
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AI Technology Expansion In December 2025, the Company established Massimo AI Technology, Inc., a wholly-owned subsidiary focused on exploring the integration of advanced technologies into our operations and product ecosystem. These efforts are currently in the early research and development stage and include evaluating applications in industrial automation, logistics, and intelligent systems.
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Our multiple channels for distribution and large dealer network provide multiple avenues through which we can engage and communicate with consumers. Strategic Partnerships with Leading Suppliers of High-Quality Products We benefit from cordial relationships with leading suppliers throughout the world.
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We are developing capabilities in areas such as machine vision, sensor integration, and control systems; however, these initiatives are in development and may not result in commercially viable products or services.
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We have ongoing relationships with leading manufacturers which enable us to offer our customers reliable leading-edge high-quality products at prices which represent great value. For example, since 2017 we have partnered with Linhai Yamaha Motor Co., a supplier located in Shanghai, China, which has allowed us to increase our vehicles performance and expand our product lines.
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In February 2026, the Company entered into a non-binding letter of intent to acquire 100% of FST Development Company Limited, a technology firm specializing in intelligent hardware and AI-driven solutions, to accelerate our integration of AI and health-robotics technology across our product lines.
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These relationships also enable us to cut costs while maintaining quality standards and plan shipments to control our inventory levels.
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However, as the letter of intent is non-binding, there can be no assurance that a definitive agreement will be executed or that the transaction will be completed; furthermore, even if completed, the acquisition may not achieve the expected strategic benefits or synergies.
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Many of our manufacturing partners’ facilities are located in China, which has historically enabled them to offer lower cost manufacturing and rapid lead-times for end-market distribution in the United States. 4 Dedicated Customer Support Team We have over 600 third-party motor sports service providers across the United States, more than 5,500 third-party marine boat service centers to service our Pontoon Boats and a dedicated staff of full-time employees including trained technicians to provide online and telephone support to our customers and dealers.
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Listing Our common stock began trading on April 2, 2024, on The Nasdaq Capital Market (“Nasdaq”) under the symbol “MAMO.” Competitive Strengths We believe the following strengths position us to continue to grow our business and expand our market presence: All-Weather Product Innovation and Differentiation We are focused on advancing the utility vehicle category through the introduction of fully enclosed, HVAC-equipped vehicles designed for year-round use.
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This is a value-added service we provide, albeit we have not historically generated revenue from providing maintenance services. We carry full lines of parts, accessories and maintenance items across all models in our approximately 40,000 sq. ft. parts department and strive to fill all orders for parts and accessories within 48 hours.
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These all-weather platforms, including our Sentinel series, enable operation across a wide range of climates and applications, expanding the traditional use cases of UTVs beyond seasonal recreation into daily utility and commercial use. We believe this differentiation enhances our competitive positioning and increases our addressable market.
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State of the Art Facility We are headquartered in a 376,000 sq. ft. facility of which 280,000 sq. ft. is dedicated to Massimo Motor Sports and 96,000 sq. ft. to Massimo Marine.
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Scaled Distribution and Service Network We have developed a broad distribution and service infrastructure across the United States, including a large network of independent dealers, national retail partners, and third-party service providers. This network enables us to reach customers across rural, agricultural, and commercial markets while providing ongoing service and support.
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Our facility is adjacent to seven acres for boat storage in Dallas, Texas, which houses a design center, two assembly lines, our parts department, a test track, dyno, and over 30 loading docks.
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Our parts and service capabilities, including rapid fulfillment and nationwide technician support, contribute to customer satisfaction and long-term relationships with dealers and end users. Omnichannel Sales and Dealer Integration We utilize a multi-channel distribution strategy that includes dealers, national retail partners, and e-commerce platforms.
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In addition to serving as the manufacturing facility for our Pontoon Boats, the facility is equipped to quickly palletize and shrink wrap ATVs and UTVs so that most orders can be shipped to stores or distributors within three days.
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In 2025, we enhanced our digital capabilities through an e-commerce platform integrated with our dealer network, enabling customers to browse, configure, and purchase vehicles online while supporting dealer fulfillment and service. This omnichannel approach allows us to meet evolving customer purchasing preferences while strengthening dealer relationships.
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We have also partnered with Armlogi to gain access to its warehousing facilities and tailored logistics services for fast order fulfillment of UTVS, ATVs, Go-Karts and Golf Carts.
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Diversified Product Platform We offer a diversified portfolio of products across multiple categories, including UTVs, ATVs, golf carts and electric utility carts, motorcycles, youth products and pontoon boats. This breadth allows us to serve a wide range of customer needs and reduces our reliance on any single product category.
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Highly Experienced Management Team Our experienced management team has demonstrated its ability to identify, create and implement new product opportunities, increase revenues, improve financial performance, and maintain a corporate culture dedicated to serving our customers and providing them with premium quality products at great value with unparalleled service.
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In addition, our product lineup includes both recreational and utility-focused vehicles, as well as entry-level and higher-value offerings, supporting customer acquisition and long-term brand engagement. Utility-Focused Customer Base A significant portion of our customers are engaged in agriculture, land management, and other utility-driven applications.
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Strategy Our goal is to enter the Top-Tier Band of the Powersports Vehicles and Boats Industry and increase our market share through the following initiatives: ● Open New Distribution Centers.
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This positions our business within essential-use demand segments, which we believe are more resilient than purely discretionary recreational markets. Scalable and Flexible Supply Chain We maintain relationships with a global network of manufacturing partners, enabling us to offer competitively priced products while maintaining quality standards.
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As of the date of this report we have opened five new distribution centers in California, Georgia, New Jersey, Texas, and Illinois through our partnership with Armlogi This expansion has enhanced our ability to efficiently deliver products, replacement parts, and accessories to customers, distributors, and retailers across the western and eastern United States.
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At the same time, we are actively working to diversify our supply chain by expanding sourcing across multiple regions and evaluating assembly and manufacturing opportunities outside of China. These initiatives are intended to improve resilience, reduce risk, and enhance operational flexibility.
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As a result, we have reduced delivery times and associated costs, improved operational efficiency, and enhanced customer satisfaction while strengthening our margins. 5 ● Invest in our Infrastructure . We believe our success greatly depends on our ability to maintain our operating efficiencies. To support this initiative, we implemented an automated robotic assembly line, increasing production efficiency.
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Integrated Operations and Distribution Infrastructure We operate from a 376,000 sq. ft. facility in Dallas, Texas, which serves as a central hub for assembly, product development, parts distribution and logistics. The facility includes design and testing capabilities, assembly lines, parts operations, and logistics infrastructure with more than 30 loading docks, supporting efficient product handling and shipment.
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Additionally, we upgraded key components of our information technology (IT) systems, integrating our online sales platform with our enterprise resource planning (ERP) system. We remain committed to further investments in our infrastructure to enhance operational efficiency. ● Expand Our Existing Product Lines .
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This centralized infrastructure allows us to assemble, accessorize, and prepare vehicles for shipment efficiently, enabling timely delivery to dealers, retailers, and customers. In addition, we have expanded our logistics capabilities through a partnership with Armlogi, providing access to strategically located warehousing facilities and enhanced inventory management and distribution services across key regions in the United States.
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We have expanded our product lines by introducing new models of UTVs, ATVs and recreational vehicles to meet diverse customer needs and preferences. In 2024, we launched new all-weather UTV models equipped with enclosures and air conditioning, delivering both comfort and performance. We plan to extend these features to all UTV models in the near future.
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We believe our integrated operations and distribution capabilities support scalability, improve fulfillment speed, and enhance our ability to serve our dealer network and retail customers. Experienced Management and Operational Leadership Our management team has extensive experience in product development, sourcing, distribution, and retail execution within the powersports and outdoor industries.
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Additionally, we introduced new electric golf carts in 2024. We will continue to follow consumer trends and consult with our suppliers and distributors to identify new products and product upgrades we will offer to customers and distributors.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeItem 1A. Risk Factors. Any investment in our securities involves a high degree of risk. You should carefully consider the risks described below, which we believe represent certain of the material risks to our business, together with the information contained elsewhere in this Report, before you decide to invest in our shares of common stock.
Biggest changeItem 1A. Risk Factors. An investment in our securities involves a high degree of risk. You should carefully consider the following risks , together with all other information contained in this Annual Report, before making an investment decision. The occurrence of any of the following risks could materially adversely affect our business, financial condition , results of operations and prospects.
To the extent that such a breach results in a loss or damage to our data, or an inappropriate disclosure of confidential or personal information, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against us and ultimately materially adversely affect our business, results of operations or financial condition.
To the extent that such a breach results in a loss or damage to our data, or an inappropriate disclosure of confidential or personal information, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against us and ultimately materially and adversely affect our business, results of operations or financial condition.
Our independent registered public accounting firm is not be required to attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company and are an accelerated or large accelerated filer.
Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company and are an accelerated or large accelerated filer.
In addition, we may identify material weaknesses in our internal control over financial reporting that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. 42 If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by Nasdaq on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
In addition, we may identify material weaknesses in our internal control over financial reporting that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. 43 If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by Nasdaq on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
For as long as we remain an “emerging growth company,” we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to: ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; ● taking advantage of an extension of time to comply with new or revised financial accounting standards; 40 ● reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For as long as we remain an “emerging growth company,” we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to: ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; ● taking advantage of an extension of time to comply with new or revised financial accounting standards; 41 ● reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Any disruption of these manufacturers to supply us with appropriately priced products on a timely basis could have a material adverse effect on our business. ● Our management team has no experience operating a company with publicly traded shares. ● Economic conditions that impact consumer spending may have a material adverse effect on our business, and our partners’ business. ● We currently maintain all our cash and cash equivalents with three financial institutions. ● We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources. ● Any decline in the social acceptability of our products or any increased restrictions on the access or the use of the Company’s products in certain locations could materially adversely affect our business, results operations, or financial condition. ● Our future expansion plans are subject to uncertainties and risks, and distribution centers we intend to open may not result in increased sales or efficiencies. ● Our limited investment in R&D of new products may adversely affect our ability to enhance existing products and develop and market new products. ● The inability of our dealers and distributors to secure adequate access to capital could materially adversely affect our business. ● We depend upon the successful management of inventory levels, both ours and that of our dealers ● There is no assurance there will not be disruptions to trade between China and the United States. ● We may not be able to successfully maintain our strategy of relying upon offshore manufacturers. ● Supply problems, termination or interruption of supply arrangements or increases in the cost of products could have a material adverse effect on our business. ● The high cost of delivering our Pontoon Boats may limit the geographic market for these products. ● Higher fuel costs can materially adversely affect our business. ● Changes in the credit markets could decrease the ability of consumers to purchase our products and have a material adverse effect on our business. ● We may require additional capital which may not be available. ● Our business depends on the continued contributions made by Mr.
Any disruption of these manufacturers to supply us with appropriately priced products on a timely basis could have a material adverse effect on our business. ● Our management team has limited experience operating a company with publicly traded shares. ● Economic conditions that impact consumer spending may have a material adverse effect on our business, and our partners’ business. ● We currently maintain all our cash and cash equivalents with three financial institutions. ● We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources. ● Any decline in the social acceptability of our products or any increased restrictions on the access or the use of the Company’s products in certain locations could materially and adversely affect our business, operation results, or financial condition. ● Our future expansion plans are subject to uncertainties and risks, and distribution centers we intend to open may not result in increased sales or efficiencies. ● Our limited investment in R&D of new products may adversely affect our ability to enhance existing products and develop and market new products. ● The inability of our dealers and distributors to secure adequate access to capital could materially and adversely affect our business. ● We depend upon the successful management of inventory levels, both ours and that of our dealers. ● There is no assurance there will not be disruptions to trade between China and the United States. ● We may not be able to successfully maintain our business strategy that relies upon offshore manufacturers. ● Supply chain problems, termination or interruption of supply arrangements or increases in the cost of products could have a material adverse effect on our business. ● The high cost of delivering our Pontoon Boats may limit the geographic market for these products. ● Higher fuel costs can materially and adversely affect our business. ● Changes in the credit markets could decrease the ability of consumers to purchase our products and have a material adverse effect on our business. ● We may require additional capital which may not be available. ● Our business depends on the continued contributions made by Mr.
The USDA’s program, The Food Safety Certification for Specialty Crops program provides up to $200 million in assistance for specialty crop producers who incur eligible on-farm food safety program expenses to obtain or renew a food safety certification in calendar years 2023 or 2024.
The USDA’s program, The Food Safety Certification for Specialty Crops program provides up to $200 million in assistance for specialty crop producers who incur eligible on-farm food safety program expenses to obtain or renew a food safety certification in calendar years 2023, 2024 or 2025.
His interests may not be aligned with the interests of our other shareholders, and he could prevent or cause a change of control or other transactions. Mr. David Shan owns 77% of our outstanding shares. Accordingly, Mr.
His interests may not be aligned with the interests of our other shareholders, and he could prevent or cause a change of control or other transactions. Mr. David Shan owns approximately 77% of our outstanding shares. Accordingly, Mr.
Notwithstanding these efforts, the failure of one or more of the financial institutions in which our cash and cash equivalents are held, the resulting inability for us to obtain the return of our funds from any of those financial institutions, or any other adverse condition suffered by any of those financial institutions, could impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance. 21 We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources.
Notwithstanding these efforts, the failure of one or more of the financial institutions in which our cash and cash equivalents are held, the resulting inability for us to obtain the return of our funds from any of those financial institutions, or any other adverse condition suffered by any of those financial institutions, could impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance. 22 We face intense competition in all product lines, including from some competitors that have greater financial and marketing resources.
If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline. 41 Anti-takeover provisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline. 42 Anti-takeover provisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
We may not be able to justify the cost of compliance in a particular state or locality thus necessitating that we allow our license to expire. ● We have not made use of confidentiality agreements in the past and, although we intend to rely on such agreements in future dealings with suppliers, employees, consultants, and other parties, the prior lack or the breach of such agreements could adversely affect our business and results of operations. ● Our business could be materially harmed by epidemics, pandemics, or other public health emergencies, boycotts, and geo-political events. ● Our ability, or lack thereof, to attract, recruit, and maintain talented sales representatives may adversely affect our business and our plans to expand our market. ● Our ability, or lack thereof, to establish strategic partnerships and expand our distribution channels may adversely affect our business and our plans. ● Policies of the United States granting farmers incentives may cease. ● There is no existing market for our securities, and we do not know if one will develop. ● The market price of our common stock is likely to be highly volatile, and you could lose all or part of your investment. ● We have no current plans to pay cash dividends on our common stock for the foreseeable future. ● Our founder and principal shareholder have substantial influence over our Company. ● We will incur significant increased costs as a result of operating as a public company and will be required to devote substantial time to compliance initiatives. ● Changes to estimates related to our property, fixtures and equipment or operating results that are lower than our current estimates may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations. ● As an “emerging growth company” under applicable law, we are subject to lessened disclosure requirements, which could leave our stockholders with less information or fewer rights available to stockholders of more mature companies. ● If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline. ● Anti-takeover provisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay, or prevent a change in control of our company and may affect the trading price of our common stock. ● Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price. ● Our Bylaws provide that the Second Judicial District Court of Washoe County of the State of Nevada is the sole and exclusive forum for certain stockholder litigation matters. 20 Risks Relating to Our Business, Strategy, and Industry We have a limited operating history on which to judge our performance and assess our prospects for future success.
We may not be able to justify the cost of compliance in a particular state or locality thus necessitating that we allow our license to expire. ● We have not made use of confidentiality agreements in the past and, although we intend to rely on such agreements in future dealings with suppliers, employees, consultants, and other parties, the prior lack or the breach of such agreements could adversely affect our business and results of operations. ● Our business could be materially harmed by epidemics, pandemics, or other public health emergencies, boycotts, and geo-political events. ● Our ability, or lack thereof, to attract, recruit, and maintain talented sales representatives may adversely affect our business and our plans to expand our market. ● Our ability, or lack thereof, to establish strategic partnerships and expand our distribution channels may adversely affect our business and our plans. ● U.S. government policies that provide incentives to farmers may be discontinued. ● There is no existing market for our securities, and we do not know if one will develop. ● The market price of our common stock is likely to be highly volatile, and you could lose all or part of your investment. ● We have no current plans to pay cash dividends on our common stock for the foreseeable future. ● Our founder and principal shareholder have substantial influence over our Company. ● We will incur significant increased costs as a result of operating as a public company and will be required to devote substantial time to compliance initiatives. ● Changes to estimates related to our property, fixtures and equipment or operating results that are lower than our current estimates may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations. ● As an “emerging growth company” under applicable law, we are subject to lessened disclosure requirements, which could leave our stockholders with less information or fewer rights available to stockholders of more mature companies. ● If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline. ● Anti-takeover provisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay, or prevent a change in control of our company and may affect the trading price of our common stock. ● Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price. ● Our Bylaws provide that the Second Judicial District Court of Washoe County of the State of Nevada is the sole and exclusive forum for certain stockholder litigation matters. 21 Risks Relating to Our Business, Strategy, and Industry We have a limited operating history on which to judge our performance and assess our prospects for future success.
These measures, or other economic, political, or social developments in China may affect our China-based suppliers, which may adversely affect our business and operating results. 26 There is no assurance there will not be disruptions to trade between China and the United States The U.S.-China trade relationship has become increasingly strained, leading to substantial tariff increases and other trade-related actions that further impact our business.
These measures, or other economic, political, or social developments in China may affect our China-based suppliers, which may adversely affect our business and operating results. 27 There is no assurance there will not be disruptions to trade between China and the United States The U.S.-China trade relationship has become increasingly strained, leading to substantial tariff increases and other trade-related actions that further impact our business.
However, there is no assurance that opening these facilities will increase our sales and will not have an adverse impact on our business, financial condition, or results of operations. 22 Our limited investment in R&D of new products may adversely affect our ability to enhance existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance.
However, there is no assurance that opening these facilities will increase our sales and will not have an adverse impact on our business, financial condition, or results of operations. 23 Our limited investment in R&D of new products may adversely affect our ability to enhance existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance.
Also, higher fuel costs, whether petroleum based or electric, increase the cost of owning and operating many of our products, which can reduce demand for them and so materially adversely affect our business, results of operations or financial condition. 27 We may require additional capital which may not be available. We will require significant expenditures to fund future growth.
Also, higher fuel costs, whether petroleum based or electric, increase the cost of owning and operating many of our products, which can reduce demand for them and so materially adversely affect our business, results of operations or financial condition. 28 We may require additional capital which may not be available. We will require significant expenditures to fund future growth.
If such past or future inquiries were to become publicized, it could negatively affect consumers’ perception of our brand and may lead to a significant decrease in sales. 33 Any failure to adhere to the regulations and laws of federal, state and local institutions may result in costly fines, loss of license to do business in a particular jurisdiction and other severe penalties.
If such past or future inquiries were to become publicized, it could negatively affect consumers’ perception of our brand and may lead to a significant decrease in sales. 34 Any failure to adhere to the regulations and laws of federal, state and local institutions may result in costly fines, loss of license to do business in a particular jurisdiction and other severe penalties.
Although we are looking to broaden our supplier base outside of China to reduce our dependence upon Chinese based suppliers in general, there is no assurance we will be able to broaden our supplier base outside of China. 25 The Chinese government may intervene or influence the operations of any business located in China or the industry in which a business operates at any time, which could result in a material change to the operations of any or all our suppliers based in China.
Although we are looking to broaden our supplier base outside of China to reduce our dependence upon Chinese based suppliers in general, there is no assurance we will be able to broaden our supplier base outside of China. 26 The Chinese government may intervene or influence the operations of any business located in China or the industry in which a business operates at any time, which could result in a material change to the operations of any or all our suppliers based in China.
These proceedings may negatively affect our reputation, hurt the perception of our products being safe and subject us to damages. From 2017 to 2024, we have been subject to two material pending litigation proceedings relating to: accidental fires, defective steering mechanisms, faulty batteries and braking systems, bad engines and other issues of product design and/or manufacturing defect.
These proceedings may negatively affect our reputation, hurt the perception of our products being safe and subject us to damages. From 2017 to 2025, we have been subject to two material pending litigation proceedings relating to: accidental fires, defective steering mechanisms, faulty batteries and braking systems, bad engines and other issues of product design and/or manufacturing defect.
In addition, a labor dispute involving some or all our or that of our suppliers, distributors, retailers or employees may harm our reputation, disrupt our operations and reduce our revenues, and resolution of disputes could increase our costs. 34 Our business could be materially harmed by epidemics, pandemics, or any other outbreaks and public health emergencies, boycotts, and geo-political events.
In addition, a labor dispute involving some or all our or that of our suppliers, distributors, retailers or employees may harm our reputation, disrupt our operations and reduce our revenues, and resolution of disputes could increase our costs. 35 Our business could be materially harmed by epidemics, pandemics, or any other outbreaks and public health emergencies, boycotts, and geo-political events.
We may be forced to cover the costs of certain realized risks which may have a material adverse effect on our business, results of operations or financial condition. 32 We have been in the past and may be in the future subject to several litigation proceedings relating to defective products that have caused property damage, physical injury and death.
We may be forced to cover the costs of certain realized risks which may have a material adverse effect on our business, results of operations or financial condition. 33 We have been in the past and may be in the future subject to several litigation proceedings relating to defective products that have caused property damage, physical injury and death.
Even if we establish new strategic partnerships, there is no guarantee that we can maintain successful relationships with the new dealers and distributors or that our partners will yield additional revenue and profits based on sales. 35 U.S. policies granting farmers incentives may cease and farmers represent a large percentage of our revenue.
Even if we establish new strategic partnerships, there is no guarantee that we can maintain successful relationships with the new dealers and distributors or that our partners will yield additional revenue and profits based on sales. 36 U.S. policies granting farmers incentives may cease and farmers represent a large percentage of our revenue.
If we fail to prevent substantial unauthorized use of our intellectual property, we risk the loss of certain competitive advantages, which could have a material adverse effect on our business, results of operations or financial condition. 29 Some of our competitors have significantly more resources to direct toward developing and patenting new technologies.
If we fail to prevent substantial unauthorized use of our intellectual property, we risk the loss of certain competitive advantages, which could have a material adverse effect on our business, results of operations or financial condition. 30 Some of our competitors have significantly more resources to direct toward developing and patenting new technologies.
Additionally, if we are unable to optimize or expand our dealer network in North America, part of our growth strategy will be negatively impacted, which could have a material adverse effect on our business, results of operations or financial condition. 23 We sell a majority of our products through distribution and dealer agreements.
Additionally, if we are unable to optimize or expand our dealer network in North America, part of our growth strategy will be negatively impacted, which could have a material adverse effect on our business, results of operations or financial condition. 24 We sell a majority of our products through distribution and dealer agreements.
This increases the risk of accidental clashes or misunderstandings that could escalate into conflict, which will affect both our China-mainland-based and Taiwan-based suppliers. Our major supplier is a state-owned entity in China . During 2023 and 2024, we purchased a majority of our products from Linhai Powersports, which is a state-owned entity (“SOE”) in China.
This increases the risk of accidental clashes or misunderstandings that could escalate into conflict, which will affect both our China-mainland-based and Taiwan-based suppliers. Our major supplier is a state-owned entity in China. During 2025 and 2024, we purchased a majority of our products from Linhai Powersports, which is a state-owned entity (“SOE”) in China.
Any failure by us to maintain appropriate inventory levels could have a material adverse effect on our business, results of operations or financial condition. 24 Additionally, we must work with our dealers and distributors to ensure that they maintain appropriate inventory levels. If our dealers and distributors maintain insufficient inventory, it could result in lost sales.
Any failure by us to maintain appropriate inventory levels could have a material adverse effect on our business, results of operations or financial condition. 25 Additionally, we must work with our dealers and distributors to ensure that they maintain appropriate inventory levels. If our dealers and distributors maintain insufficient inventory, it could result in lost sales.
Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase our costs. 39 Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.
Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase our costs. 40 Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.
Furthermore, if we were no longer listed on Nasdaq, our common stock would not be covered securities and we would be subject to regulation in each state in which we offer our securities. 37 If our shares are delisted from Nasdaq and become subject to the penny stock rules, it would become more difficult to trade our shares.
Furthermore, if we were no longer listed on Nasdaq, our common stock would not be covered securities and we would be subject to regulation in each state in which we offer our securities. 38 If our shares are delisted from Nasdaq and become subject to the penny stock rules, it would become more difficult to trade our shares.
As of the date of this Report, we have not experienced a material cyber security incident. 30 Retail sales of our new products may be materially adversely affected by declining prices for used versions of our products or the supply of new products by competitors in excess of demand.
As of the date of this Report, we have not experienced a material cyber security incident. 31 Retail sales of our new products may be materially adversely affected by declining prices for used versions of our products or the supply of new products by competitors in excess of demand.
You should not invest in our Company with the expectation that we will be able to sell the business in order to provide liquidity or a profit for our investors. 38 Our founder and principal shareholder has substantial influence over our Company.
You should not invest in our Company with the expectation that we will be able to sell the business in order to provide liquidity or a profit for our investors. 39 Our founder and principal shareholder has substantial influence over our Company.
We do not maintain “Key Employee” insurance on any members of our management team. 28 In addition, our success depends to a large extent upon our ability to retain skilled employees at rates which enable us to maintain our margins.
We do not maintain “Key Employee” insurance on any members of our management team. 29 In addition, our success depends to a large extent upon our ability to retain skilled employees at rates which enable us to maintain our margins.
Our stock price could be subject to wide fluctuations in response to a variety of factors, which include: ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission (“SEC”); 36 ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; ● speculation in the press or investment community; ● changes in accounting principles; ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; and ● changes in general market and economic conditions.
Our stock price could be subject to wide fluctuations in response to a variety of factors, which include: ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the SEC; 37 ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; ● speculation in the press or investment community; ● changes in accounting principles; ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; and ● changes in general market and economic conditions.
Prior to the commencement of trading of our common stock on Apr 1, 2024, no public market for our common stock existed. Although our common stock is listed on Nasdaq, an active trading market for our common stock may not develop, or if developed, be sustained.
Prior to the commencement of trading of our common stock on April 1, 2024, no public market for our common stock existed. Although our common stock is listed on Nasdaq, an active trading market for our common stock may not develop, or if developed, be sustained.
Additional costs and investments might be required in the future if new regulations or restrictions are put in place. 31 Climate change is receiving increasing attention worldwide.
Additional costs and investments might be required in the future if new regulations or restrictions are put in place. 32 Climate change is receiving increasing attention worldwide.
In fiscal year ended December 31, 2024 and 2023, approximately 60% and 40% of our consumers were farmers, respectively. As a supplier to farmers, we are aware that farmers rely on U.S. governmental programs to fund the purchase of supplies from us and operate their business. For example, the U.S.
In fiscal year ended December 31, 2024 and 2025, approximately 60% and 65% of our consumers were farmers, respectively. As a supplier to farmers, we are aware that farmers rely on U.S. governmental programs to fund the purchase of supplies from us and operate their business. For example, the U.S.
Our results of operations experience substantial fluctuations from quarter to quarter and year to year. A portion of our sales revenue generated from Massimo Marine has seasonable sales pattern. For the fiscal years ended December 31, 2024 and 2023, our revenue generated from the Massimo Marine made up approximately 3.4% and 10.2% of our total revenue, respectively.
Our results of operations experience substantial fluctuations from quarter to quarter and year to year. A portion of our sales revenue generated from Massimo Marine has seasonable sales pattern. For the fiscal years ended December 31, 2024 and 2025, our revenue generated from the Massimo Marine made up approximately 3.4% and 2.0% of our total revenue, respectively.
Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board of Directors may deem relevant.
Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors (the “Board of Directors” or “Board”) and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board of Directors may deem relevant.
Shan, our founder, Chairman and Chief Executive Officer. ● Our business depends on the efforts of our management, and our business may be severely disrupted if we lose their services. ● If we fail to develop and protect our brand names and reputation, we may not attract and retain new distributors and dealers, or customers. ● We may be unable to protect our intellectual property or may incur substantial costs as a result of litigation or other proceedings relating to our intellectual property. ● Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our business. 19 ● The failure of our IT systems or a security breach involving consumer or employee personal data could have a materially adverse effect on our business. ● Retail sales of our new products may be materially adversely affected by declining prices for used versions of our products or the supply of new products by competitors in excess of demand. ● We are subject to laws, rules and regulations regarding product safety, health, environmental and noise pollution, and other issues. ● If product liability lawsuits are brought against us, we may incur substantial liabilities. ● Our insurance may not be sufficient. ● We have been in the past, and may be, in the future subject to several litigation proceedings relating to defective products that have caused property damage, physical injury, and death. ● Our business requires us to pay licensing fees for each state that we operate in.
Shan, our founder, Chairman and Chief Executive Officer. ● Our business depends on the efforts of our management, and our business may be severely disrupted if we lose their services. ● If we fail to develop and protect our brand names and reputation, we may not attract and retain new distributors and dealers, or customers. ● We may be unable to protect our intellectual property or may incur substantial costs as a result of litigation or other proceedings relating to our intellectual property. ● Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our business. 20 ● The failure of our IT systems or a security breach involving consumer or employee personal data could have a materially adverse effect on our business. ● Retail sales of our new products may be materially and adversely affected by declining prices for used versions of our products or by competitors supplying new products in excess of market demand. ● We are subject to laws, rules and regulations regarding product safety, health, environmental and noise pollution, and other issues. ● If product liability lawsuits are filed against us, we may be exposed to significant financial liabilities. ● Our insurance may not be sufficient. ● We have been in the past, and may be, in the future subject to litigations arising from defective products that resulted in property damage, physical injury, and death. ● Our business requires us to pay licensing fees for each state that we operate in.
Our common stock is freely tradable without restriction or further registration under the Securities Act of 1933, as amended (“Securities Act”), and shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 under the Securities Act and the applicable lock-up agreements.
Our common stock is freely tradable without restriction or further registration under the Securities Act, and shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 under the Securities Act and the applicable lock-up agreements.
Approximately, 67% of our purchases in the fiscal year ended December 31, 2023 and 74% of our purchases in the fiscal year ended December 31, 2024 were made from two suppliers, and, as of both December 31, 2023 and December 31, 2024, our largest supplier accounted for 41% and 33% of the Company’s total accounts payable respectively.
Approximately, 74% of our purchases in the fiscal year ended December 31, 2024 and 78% of our purchases in the fiscal year ended December 31, 2025 were made from two suppliers, and, as of both December 31, 2024 and December 31, 2025, our largest supplier accounted for 33% and 21% of the Company’s total accounts payable respectively.
We have supply agreements with approximately 15 suppliers, 2 of which are based in the U.S., 1 of which are based in Taiwan, and 12 of which are based in China.
We have supply agreements with approximately 15 suppliers, two of which are based in the U.S., one of which are based in Taiwan, and 12 of which are based in China.
Approximately 79% of the products we purchased in the fiscal year ended December 31, 2024, based on cost, were purchased from three suppliers in China of which 54% was purchased from a single supplier located in Shanghai, China.
Approximately 85% of the products we purchased in the fiscal year ended December 31, 2025, based on cost, were purchased from three suppliers in China of which 52% was purchased from a single supplier located in Jiangsu, China.
Approximately 79% of the products we purchased in the fiscal year ended December 31, 2024, based on cost, were purchased from three suppliers in China of which 54% was purchased from a single supplier located in Shanghai, China.
Approximately 85% of the products we purchased in the fiscal year ended December 31, 2025, based on cost, were purchased from three]suppliers in China of which 52% was purchased from a single supplier located in Jiangsu, China.
In that event, the trading price of our securities could decline and you could lose all or part of your investment. 18 Summary of Significant Risks Affecting Our Company Our significant risks may be summarized as follows: ● We have a limited operating history on which to judge our performance and assess our prospects for future success. ● We rely on independent dealers and distributors to manage the retail distribution of many of our products. ● We rely on third parties to manufacture many of the products we sell. ● The majority of the products we purchase are manufactured by in China and their operations are subject to risks associated with business operations in China.
Additional risks not currently known to us or that we currently consider immaterial may also impair our business. 19 Summary of Significant Risks Affecting Our Company Our significant risks may be summarized as follows: ● We have a limited operating history on which to judge our performance and assess our prospects for future success. ● We rely on independent dealers and distributors to manage the retail distribution of many of our products. ● We rely on third parties to manufacture many of the products we sell. ● The majority of the products we purchase are manufactured in China and their operations are subject to risks associated with business operations in China.
You should not consider our historical growth and expansion of our business as indicative of our ability to grow in the future. Economic conditions that impact consumer spending may have a material adverse effect on our business, results of operations or financial condition.
You should not consider our historical growth and expansion of our business as indicative of our ability to grow in the future.
These actions may limit the availability of certain products from China, further restricting our ability to acquire necessary components at competitive prices. There is no assurance that the U.S. or Chinese governments will not impose additional tariffs or other restrictive measures in the future.
Given the rapidly evolving regulatory and trade environment, there can be no assurance as to the ultimate tariff rates that will be applicable to our imported products. There is no assurance that the U.S. or Chinese governments will not impose additional tariffs or other restrictive measures in the future.
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Please note that the risks highlighted here are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations.
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In such case , the trading price of our common stock could decline , and you may lose all or part of your investment. The risks described below are not the only risks we face.
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If any of the following events occur or any additional risks presently unknown to us actually occur, our business, financial condition and operating results may be materially adversely affected.
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We have entered into a non-binding letter of intent to acquire FST Development Company Limited, and we may not be able to complete this acquisition or, should we acquire it, we may not be able to successfully integrate it, which could adversely affect our business and stock price.
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As of December 31, 2024, we have identified no material weaknesses related to the Company’s internal control over financial reporting. Over the past year, we have implemented measures to address previously identified material weaknesses in our internal control and have made significant progress in remediating these issues.
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In February 2026, we entered into a non-binding Letter of Intent (“LOI”) to acquire 100% of the equity interests of FST Development Company Limited (“FST”). The consummation of this acquisition is subject to numerous conditions, including the negotiation and execution of a definitive purchase agreement, the completion of satisfactory due diligence, and receipt of required board and regulatory approvals.
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To strengthen our financial reporting function, we have hired additional staff and engaged external accounting consultants with expertise in U.S. GAAP and SEC reporting. Additionally, we have integrated and automated our financial reporting system with our ERP system to minimize manual errors.
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There can be no assurance that we will be able to reach a definitive agreement with FST on favorable terms, or at all. Because the LOI is non-binding, either party may terminate negotiations at any time. If we fail to complete the acquisition, we may have incurred significant legal, accounting and managerial costs without realizing any of the anticipated benefits.
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We have also implemented a series of training programs across departments and enhanced supervision and controls over our comprehensive accounting policies and procedures manual in accordance with U.S. GAAP.
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Furthermore, even if the acquisition is completed, we may face significant challenges in integrating FST’s AI and health-robotics technologies into our existing powersports and marine product lines.
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These challenges include, but are not limited to: ● Difficulties in consolidating technology platforms and manufacturing processes; ● The potential loss of key technical personnel from FST; ● Unanticipated costs or liabilities associated with FST’s business; and ● Failure to achieve the expected strategic synergies or market expansion in the AI-driven robotics sector.
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If we are unable to successfully manage these risks, our business, financial condition, and results of operations could be materially and adversely affected. Economic conditions that impact consumer spending may have a material adverse effect on our business, results of operations or financial condition.
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These actions may limit the availability of certain products from China, further restricting our ability to acquire necessary components at competitive prices. On February 20, 2026, the U.S. Supreme Court ruled 6-3 that the tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority and are therefore invalid.
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In response, the administration announced a new 10% global tariff, later changed to a 15% tariff, under a separate trade law. The Company is closely monitoring these developments and their potential impact on our business operations and supply chain.
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As of December 31, 2025, we have identified material weakness existing in the Company’s internal control over financial reporting related to ineffective controls over information and communication and period end financial disclosure and reporting processes, including not effectively communicating internally between the sales department and the accounting department and externally with the client and lack of effectiveness of controls over accurate accounting and financial reporting and reviewing the underlying financial statement elements.
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We are working to remediate the material weaknesses as further discussed in Item 9A of this Report.
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If we cannot successfully remediate identified control deficiencies, including any current or future material weaknesses in our internal control over financial reporting: the accuracy and timing of our financial reporting may be adversely affected; our liquidity, access to capital markets and perceptions of our creditworthiness may be adversely affected; we could face difficulty forecasting our financial results accurately, impacting decision-making by investors and analysts; we may be unable to maintain compliance with securities laws, stock exchange listing requirements and debt instruments’ covenants regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; investors may lose confidence in our financial reporting; and our common stock price may decline.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information about these risks, please see “Risk Factors - Risks Relation to our Business, Strategy, and Industry” in Report.
Biggest changeFor more information about these risks, please see “ Risk Factors - Risks Relating to our Business, Strategy, and Industry ” in this Report.
Our cybersecurity team engages third-party security experts to assist with our processes for assessing, identifying, and managing risks from cybersecurity threat, including, for example, assessment of the maturity of our cybersecurity risk management program, penetration testing, employee awareness testing, phish testing, and incident monitoring and response, including conducting tabletop exercises. 43 Our cybersecurity risk management program is under the direction of IT manager, who has a master’s degree in IT management.
Our cybersecurity team engages third-party security experts to assist with our processes for assessing, identifying, and managing risks from cybersecurity threat, including, for example, assessment of the maturity of our cybersecurity risk management program, penetration testing, employee awareness testing, phish testing, and incident monitoring and response, including conducting tabletop exercises. 44 Our cybersecurity risk management program is under the direction of IT manager, who has a master’s degree in IT management.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition . However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our executive offices are located at 3101 W Miller Road, Garland, Texas 75041., and our telephone number is (877) 881-6376. The cost for our use of this space is $230,250 per month plus property tax and insurance. We consider our current office space adequate for our current operations.
Biggest changeItem 2. Properties. Our executive offices are located at 3101 W Miller Road, Garland, Texas 75041, and our telephone number is 866-403-5272. The cost for our lease of this space is $230,250 per month plus property tax and insurance. This lease will expire on July 31, 2029. We consider our current office space adequate for our current operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNebula’s has until April 2, 2025 to file its appellee’s brief. Massimo intends to continue vigorously defending the lawsuit and pursuing its appeal. While Massimo is not opposed to an out-of-court settlement, to date Nebula’s attorneys have had limited interest in discussing settlement. 44 Zhejiang Qunying Vehicle Co., Ltd. v.
Biggest changeWhile Massimo is not opposed to an out-of-court settlement, to date Nebula’s attorneys have had limited interest in discussing settlement. As of the date of this Report, there are no further updates regarding this legal proceeding. See Note 18 - Commitments and Contingencies. Zhejiang Qunying Vehicle Co., Ltd. v.
Ltd. (“Nebula”) filed suit against us in the Dallas County District of Texas. Nebula has alleged that we owe them $2,343,868.60 for products that it shipped to us from 2017 to 2019. Nebula also seeks undefined damages they claim were caused by our failure to hit certain sales targets pursuant to the Distribution Agreement signed by both parties.
(“Nebula”) filed suit against us in the Dallas County District of Texas. Nebula has alleged that we owe them $2,343,868.60 for products that it shipped to us from 2017 to 2019. Nebula also seeks undefined damages they claim were caused by our failure to hit certain sales targets pursuant to the distribution agreement signed by both parties.
These cases also include an inquiry by the Missouri Office of the Attorney General and the Pennsylvania State Board of Vehicle Manufacturers, Dealers and Salespersons. We do not believe that these past cases will have a material adverse effect on our business, operating results, financial condition, or cash flows.
These cases also include an inquiry by the Missouri Office of the Attorney General and the Pennsylvania State Board of Vehicle Manufacturers, Dealers and Salespersons. We do not believe that these past cases will have or have had a material adverse effect on our business, operating results, financial condition, or cash flows.
In the past, we have also been subject to over fifty (50) legal proceedings encompassing: employment disputes, personal injury and wrongful death lawsuits, property damage lawsuits, product liability and manufacturing defect lawsuits and contractual disputes with our suppliers, distributors, customers, an on-site security provider, a freight shipping company and a previous law firm.
In the past, we have also been subject to more than 50 legal proceedings encompassing: employment disputes, personal injury and wrongful death lawsuits, property damage lawsuits, product liability and manufacturing defect lawsuits and contractual disputes with our suppliers, distributors, customers, an on-site security provider, a freight shipping company and a previous law firm.
Item 3. Legal Proceedings. From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. As of March 20, 2025, we are party to two (2) material pending legal proceedings. Taizhou Nebula Power Co. Ltd. v. Massimo Motor Sports, LLC In September 2020, Taizhou Nebula Power Co.
Item 3. Legal Proceedings. From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. As of March 31, 2026, we are party to two material pending legal proceedings. Taizhou Nebula Power Co. Ltd. v. Massimo Motor Sports, LLC In September 2020, Taizhou Nebula Power Co. Ltd.
A bench trial was conducted in May 2024. On June 6, 2024, the trial court entered its Findings of Fact and Conclusions of Law, which generally found for Nebula on its breach of contract claims and denied Massimo’s counterclaims. After post-trial fees briefing, the trial court entered its Final Judgment on July 8, 2024 (see first audit response letter).
A bench trial was conducted in May 2024. On June 6, 2024, the trial court entered its Findings of Fact and Conclusions of Law, which generally found for Nebula on its breach of contract claims and denied Massimo’s counterclaims. After post-trial fees briefing, the trial court entered its Final Judgment on July 8, 2024.
Cho International, Inc On September 5, 2023, Zhejiang Qunyinh Vehicle Co., Ltd. (“Zhejiang”) filed suit against us and ten other corporate entities in the Superior Court of the State of California for Orange County. Zhejiang alleges claims of approximately $6,000,000 in damages for products that were allegedly shipped to the United States but not paid for.
Cho International, Inc On September 5, 2023, Zhejiang Qunying Vehicle Co., Ltd. (“Zhejiang Qunying”) filed suit against us and 10 other corporate entities in the Superior Court of the State of California in Orange County. Zhejiang Qunying alleges claims of approximately $6,000,000 in damages for products that were allegedly shipped to the United States but not paid for.
Despite us being one of the ten entities that plaintiff has sued, we have had minimal interactions with Zhejiang. We have not purchased any products from Zheijang. In February 2024, Zhejiang filed a Second Amended Complaint. Massimo filed a demurrer seeking to dismiss the Second Amended Complaint due to Zhejiang’s failure to state a valid claim in March 2024.
Despite us being one of the 10 entities that plaintiff has sued, we have had minimal interactions with Zhejiang Qunying. Further, we have not purchased any products from Zheijang Qunying. In February 2024, Zhejiang Qunying filed a second amended complaint.
In August 2024, the Court denied in part and granted in part Massimo’s demurrer. As a result, Zhejiang still has valid claims against Massimo. The trial is scheduled for March 2026. Massimo intends to vigorously defend the lawsuit.
In March 2024, Massimo filed a demurrer seeking to dismiss the second amended complaint as against Massimo due to Zhejiang Qunying’s failure to state a valid claim. In August 2024, the court denied in part and granted in part Massimo’s demurrer. As a result, Zhejiang Qunying still has valid claims against Massimo. The trial is scheduled for March 2026.
On August 7, 2024, Massimo timely filed a notice of appeal of the Final Judgment. Our Firm was not involved in the trial of this case. Instead, we were retained as appellate counsel after Massimo received the Findings of Fact and Conclusions of Law. Massimo filed its appellant’s brief on January 31, 2025.
On August 7, 2024, Massimo timely filed a notice of appeal of the Final Judgment. Massimo filed its appellant’s brief on January 31, 2025. Nebula filed its appellee’s brief on May 1, 2025. Massimo intends to continue vigorously defending the lawsuit and pursuing its appeal.
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Massimo intends to vigorously defend against the lawsuit. As of the date of this Report, there are no further updates regarding this legal proceeding. See Note 18 - Commitments and Contingencies.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 45 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 46 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 47 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 57 Item 8.
Biggest changeItem 4. Mine Safety Disclosures. 45 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 46 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 47 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 55 Item 8.
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Financial Statements and Supplementary Data. 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 55 Item 9A. Controls and Procedures. 55 Item 9B. Other Information. 56

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) Holders On March 24, 2025, there were 27 holders of record of our shares of common stock. (c) Dividends As of the date of this Report, we have not paid any cash dividends to stockholders.
Biggest changeBecause many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. (c) Dividends As of the date of this Report, we have not paid any cash dividends to stockholders.
Plan category: Number of Securities to be issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) Weighted Average Exercise Price of Outstanding Options (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column (a)) (c) Equity compensation plans approved by stockholders Incentive Plan - Stock option 350,000 $ 4.04 1,650,000 - Restricted Stock Units 101,000 - 1,549,000 (e) Recent Sales of Unregistered Securities None .
Plan category: Number of Securities to be issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) Weighted Average Exercise Price of Outstanding Options (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column (a)) (c) Equity compensation plans approved by stockholders Incentive Plan - Stock option 350,000 $ 4.04 1,650,000 - Restricted Stock Units - - 1,549,000 (e) Recent Sales of Unregistered Securities None.
The following table provides information as of December 31, 2024, regarding our common stock that may be issued under the Company’s 2024 Equity Incentive Plan (the “Incentive Plan”).
The following table provides information as of December 31, 2025, regarding our common stock that may be issued under the Company’s 2024 Equity Incentive Plan, as amended to date (the “Incentive Plan”).
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(b) Holders On March 23, 2026, there were 15 holders of record of our shares of common stock including Cede & Co., a nominee for The Depository Trust Company, or DTC, which holds our common shares on behalf of an indeterminate number of beneficial owners.
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All of the common shares held by brokerage firms, banks, and other financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC, and are considered to be held of record by Cede & Co. as one shareholder.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNon-cash items of approximately $6.3 million in fiscal 2024, compared to non-cash items of approximately $2.3 million during fiscal 2023. ● Account payable decreased by approximately $0.8 million in fiscal 2024, compared to an increase of approximately $1.4 million in fiscal 2023, primarily because we paid off undue account payable in the form of Letter of Credit payments from the old bank in order to release the UCC to the new bank in fiscal 2024. ● Contract liabilities decreased by approximately $1.4 million in fiscal 2024, compared to an increase of $1.1 million in fiscal 2023, primarily because we made refund to customers and wrote off long outstanding balance during the year. ● Tax payable decreased by approximately $0.6 million in fiscal 2024, compared to an increase of approximately $2.1 million in fiscal 2023, primarily because we had a lower tax assessable income, we made a $0.5 million prepayment of federal income tax and settled all income tax payable for the year ended December 31, 2023. ● Increase in payment of operating lease of $1.5 million in fiscal 2024, compared to $1.0 million in fiscal 2023, primary due to leasing additional warehouse space and rent increment upon the renewal of lease agreement. ● The balance was partly offset by decrease in account receivable by approximately $3.0 million in fiscal 2024, compared to an increase of approximately $3.5 million in fiscal 2023, and ● Increase in inventories by approximately $1.5 million, compared to an increase of $2.5 million in fiscal 2023.
Biggest changeNon-cash items of approximately $1.0 million in fiscal 2025, compared to non-cash items of approximately $6.2 million during fiscal 2024. ● Account payable decreased by approximately $1.8 million in fiscal 2025, compared to a decrease of approximately $0.8 million in fiscal 2024. ● Prepaid and other current assets increased by approximately $1.3 million in fiscal 2025, compared to an increase of $0.6 million in fiscal 2024 ● Tax payable increased by approximately $2.5 million in fiscal 2025, compared to a decrease of approximately $1.0 million in fiscal 2024. ● Increase in payment of operating lease of $2.1 million in fiscal 2025, compared to $1.5 million in fiscal 2024, primary due to leasing additional warehouse space and rent increment upon the renewal of lease agreement. ● Decrease in inventories by approximately $1.3 million, compared to an increase of $1.5 million in fiscal 2024.
If these independent suppliers were unwilling or unable to supply us with products at prices which enable us to maintain our gross margins, it would materially adversely affect our business, results of operations or financial condition.
If these independent suppliers were unwilling or unable to supply us with products at prices which enable us to maintain our gross margins, it would materially and adversely affect our business, results of operations or financial condition.
However, by December 31, 2024, there was a notable easing in both inflation and freight costs, reflecting an improvement in economic conditions and a stabilization in the supply chain. ● Risk related to inflation - In recent years, our China-based suppliers have increased the cost of their products due to inflation.
However, by December 31, 2025, there was a notable easing in both inflation and freight costs, reflecting an improvement in economic conditions and a stabilization in the supply chain. ● Risk related to inflation - In recent years, our China-based suppliers have increased the cost of their products due to inflation.
Mr. David Shan, the Chairman of the Board and Chief Executive Officer, is the controlling shareholder (the “Controlling Shareholder”) of the Company. A Reorganization of the legal structure was completed on June 1, 2023. the Controlling Shareholder transferred his 100% equity interest in Massimo Motor and 100% equity interest in Massimo Marine to Massimo.
Mr. David Shan, the Chairman of the Board and Chief Executive Officer, is the controlling shareholder (the “Controlling Shareholder”) of the Company. A Reorganization of the legal structure was completed on June 1, 2023. The Controlling Shareholder transferred his 85% equity interest in Massimo Motor and 85% equity interest in Massimo Marine to Massimo.
As a result, an increase in the cost of the raw materials, parts, and components our suppliers use in the manufacture of our products could reduce our profitability and have a material adverse effect on our business, results of operations or financial condition. ● Risk of seasonable sale of Pontoon Boats - A portion of our sales revenue generated from Massimo Marine has a seasonable sales pattern.
As a result, an increase in the cost of the raw materials, parts, and components our suppliers use in the manufacture of our products could reduce our profitability and have a material adverse effect on our business, results of operations or financial condition. ● Risk of seasonal sales of Pontoon Boats - A portion of our sales revenue generated from Massimo Marine has a seasonal sales pattern.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this 2025 Annual Report.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, particularly in “Risk Factors.” All amounts included herein with respect to the fiscal years ended December 31, 2024 and 2023 are derived from our audited consolidated financial statements included elsewhere in this Report.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this 2025 Annual Report, particularly in “Risk Factors.” All amounts included herein with respect to the fiscal years ended December 31, 2025 and 2024 are derived from our audited consolidated financial statements included elsewhere in this Report.
After this reorganization, Massimo ultimately owns 100% equity interests of Massimo Motor and Massimo Marine. Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same Controlling Shareholder, and therefore, the Reorganization is considered as a recapitalization of entities under common control in accordance with ASC 805-50-25.
Together with 15% non-controlling interests, after the reorganization, Massimo ultimately owns 100% equity interests of Massimo Motor and Massimo Marine. Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same Controlling Shareholder, and therefore, the Reorganization is considered as a recapitalization of entities under common control in accordance with ASC 805-50-25.
Certain of our competitors are more diversified and have financial and marketing resources which are substantially greater than ours, which allow these competitors to invest more heavily in intellectual property, product development, and sales and marketing support.
Certain competitors are more diversified and have financial and marketing resources which are substantially greater than ours, which allow these competitors to invest more heavily in intellectual property, product development, and sales and marketing support.
For the years ended December 31, 2024 and 2023, our revenue generated from Massimo Marine was approximately 3.4% and 10.2% of our total revenue, respectively. 48 Results of Operations For the years ended December 31, 2024 and 2023 The following table summarizes the results of consolidated statements of operations and comprehensive income for the for the years ended December 31, 2024 and 2023 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such year.
For the years ended December 31, 2024 and 2025, our revenue generated from Massimo Marine was approximately 3.4% and 2.0% of our total revenue, respectively. 48 Results of Operations For the years ended December 31, 2024 and 2025 The following table summarizes the results of consolidated statements of operations and comprehensive income for the years ended December 31, 2024 and 2025 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such year.
If we are not able to compete with new products, product features or models comparable or superior to those of our competitors, or attract new dealers, our business, results of operations or financial condition could be materially adversely affected. We are subject to competitive pricing.
If we are not able to compete with new products, customer services, product features or models comparable or superior to those of our competitors, or attract new dealers, our business, results of operations or financial condition could be materially and adversely affected. We are subject to competitive pricing.
For the year ended December 31, 2024, we purchased approximately 82% of our products from two of these suppliers. Competition for the output of these suppliers is intense.
For the year ended December 31, 2025, we purchased approximately 78% of our products from two of these suppliers. Competition for the output of these suppliers is intense.
Our current assets were approximately $45.4 million, including approximately $6.6 million accounts receivable, approximately $27.3 million inventory, approximately $0.1 million advance to suppliers and approximately $1.2 million prepayment deposit and other receivables, and our current liabilities were approximately $26.1 million, including $9.6 million accounts payable to suppliers, $6.0 million accrued payment on a legal judgment, $0.4 million contract liabilities, $1.5 million income tax payable, $5.5 million loan from a related party and $2.2 million liabilities from obligations under operating and financing leases, which resulted in a positive working capital of $19.2 million.
Our current assets were approximately $39.8 million, including approximately $5.3 million accounts receivable, approximately $26.0 million inventory, approximately $0.2 million advance to suppliers and approximately $2.5 million prepayment deposit and other receivables, and our current liabilities were approximately $22.3 million, including $7.7 million accounts payable to suppliers, $6.0 million accrued payment on a legal judgment, $0.6 million contract liabilities, $3.5 million income tax payable, $2.0 million loan from a related party and $2.0 million liabilities from obligations under operating and financing leases, which resulted in a positive working capital of $17.6 million.
We currently generate most of our revenues from the sales of UTVs and ATVs, which represented 96.6% and 89.8% of total revenue for the years ended December 31, 2024 and 2023, respectively We also generate revenue from the sales of Pontoon Boats, which represented 3.4% and 10.2% of our revenue for the years ended December 31, 2024 and 2023, respectively.
We currently generate most of our revenues from the sales of UTVs and ATVs, which represented 96.6% and 98.0% of total revenue for the years ended December 31, 2024 and 2025, respectively We also generate revenue from the sales of Pontoon Boats, which represented 3.4% and 2.0% of our revenue for the years ended December 31, 2024 and 2025, respectively.
In June 2024, we reached a tentative agreement regarding general settlement terms with one suppler who would pay approximately $0.3 million to resolve the claim. Our advance to suppliers amounting to $1.1 million would be considered irrecoverable. Therefore, we wrote off the advance to suppliers amounting to approximately $0.7 million during the year ended December 31, 2024.
During the year ended December 31, 2024, we recorded a one-time impairment of advance to suppliers amounting to approximately $0.8 million. In June 2024, we reached a tentative agreement regarding general settlement terms with one suppler who would pay approximately $0.3 million to resolve the claim. Our advance to suppliers amounting to $1.1 million would be considered irrecoverable.
We are not subject to any externally imposed capital requirements. 53 Working Capital As of December 31, 2024, we had cash and cash equivalents of approximately $10.2 million.
We are not subject to any externally imposed capital requirements. 53 Working Capital As of December 31, 2025, we had cash and cash equivalents of approximately $5.7 million.
The decrease is primarily due to the following: ● Net income decreased by $7.3 million in fiscal 2024 compared with fiscal 2023. ● Our net income was adjusted for non-cash items, including non-cash operating lease expense, gain (loss) on disposal of fixed asset, impairment of advance to suppliers, amortization of stock-based compensation related to options and RSUs granted, amortization and depreciation, loss on litigation, deferred tax expense (recovery), inventories reserve, write-off of accounts receivable and provision (reversal of allowance) for expected credit loss.
The decrease is primarily due to the following: ● Net income decreased by $0.3 million in fiscal 2025 compared with fiscal 2024. ● Our net income was adjusted for non-cash items, including non-cash operating lease expense, loss on crypto assets, amortization of stock-based compensation related to options and RSUs granted, amortization and depreciation, loss on litigation, deferred tax expense (recovery) and provision (reversal of allowance) for expected credit loss.
Contractual Commitments As of December 31, 2024, the Company’s contractual obligations consisted of the following: Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease commitment $ 11,549,277 $ 2,904,205 $ 4,884,371 $ 3,760,701 $ – Off-balance Sheet Commitments and Arrangements There were no off-balance sheet arrangements for the years ended December 31, 2024 and 2023, that have, or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
Contractual Commitments As of December 31, 2025, the Company’s contractual obligations consisted of the following: Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease commitment $ 8,645,072 $ 2,532,671 $ 4,696,151 $ 1,416,250 $ - Off-balance Sheet Commitments and Arrangements There were no off-balance sheet arrangements for the years ended December 31, 2025 and 2024, that have, or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations. 54
Financing Activities Net cash provided by financing activities was approximately $3.0 million in fiscal 2024, compared to net cash used in financing activities of approximately $11.0 million in fiscal 2023.
Financing Activities Net cash used in financing activities was approximately $3.6 million in fiscal 2025, compared to net cash generated from financing activities of approximately $3.0 million in fiscal 2024.
The Final Judgment on July 8, 2024 awarded Nebula $3.3 million in damages, $1.4 million in attorneys’ fees and other court cost and $1.2 million in interest on balances since September 15, 2020. We have recorded an additional accrual of $3.6 million as of December 31, 2024, bringing the total accrual related to this lawsuit to approximately $6.0 million.
During the year ended December 31, 2024, we recorded a one-time loss of approximate $3.6 million on legal judgment related to a lawsuit with Nebula. The Final Judgment on July 8, 2024 awarded Nebula $3.3 million in damages, $1.4 million in attorneys’ fees and other court cost and $1.2 million in interest on balances since September 15, 2020.
General and administrative expenses Our general and administrative expenses primarily include salaries and benefits, professional fee, office expenses, travel expenses, insurance expenses, and depreciation expenses. General and administrative expenses increased by $3.4 million, or 25.6%, from $13.2 million in fiscal 2023 to $16.6 million in fiscal 2024.
General and administrative expenses Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, travel expenses, insurance expenses and depreciation expenses. General and administrative expenses decreased by $1.0 million, or 6.2%, from $16.5 million in fiscal 2024 to $15.5 million in fiscal 2025.
Our rent expenses increased by $1.2 million or 106.4%, from $1.2 million in fiscal 2023, to $2.4 million in fiscal 2024, representing 14.2% and 8.6% of our total general and administrative expenses for the years ended December 31, 2024 and 2023, respectively.
Our rental expenses increased by $0.9 million, or 38.9%, from $2.4 million for the year ended December 31, 2024, to $3.3 million for the year ended December 31, 2025, representing 21.5% and 14.3% of our total general and administrative expenses in fiscal 2025 and 2024, respectively.
The increase was mainly due to higher shipping and handling fees, which rose from approximately $4.9 million in fiscal 2023 to $6.3 million in fiscal 2024.
The decrease was mainly due to lower shipping and handling fees, which rose from approximately $6.3 million in fiscal 2024 to $4.4 million in fiscal 2025. The decrease in selling expenses was primarily due to a significant reduction in shipping and handling fees.
Investing Activities Net cash used in investing activities was approximately $0.2 million in fiscal 2024, compared to net cash used in investing activities of $0.1 million in fiscal 2023.
Investing Activities Net cash used in investing activities was approximately $0.7 million in fiscal 2025, compared to net cash used in investing activities of $0.2 million in fiscal 2024. The increase in net cash used in investing activities was primarily attributable to the purchase of crypto assets of $0.7 million.
The increase was mainly due to increased salaries and benefit, insurance expense and rent expense. Our general and administrative expenses represented 14.9% and 11.5% of our total revenue in fiscal 2024 and fiscal 2023, respectively.
The decrease was mainly due to decreased salaries and benefit, insurance expense, professional fees and other general administrative expenses. Our general and administrative expenses represented 21.5% and 15.1% of our total revenue in fiscal 2025 and fiscal 2024, respectively.
The decrease was primarily due to decreased revenues and gross profit, offset by an increase in general and administrative expenses and a loss on litigation, as discussed above Cash Flows For the Years Ended December 31, 2024 and 2023 The following table sets forth summary of our cash flows for the periods indicated: Years ended December 31, 2024 2023 Net cash provided by operating activities $ 6,672,278 $ 10,905,544 Net cash used in investing activities (225,875 ) (121,162 ) Net cash provided by (used in) financing activities 2,997,867 (10,966,539 ) Net increase (decrease) in cash and cash equivalents 9,444,270 (182,157 ) Cash and cash equivalents, beginning of the year 765,814 947,971 Cash and cash equivalents, end of the year $ 10,210,084 $ 765,814 52 Operating Activities Net cash provided by operating activities was approximately $6.7 million in fiscal 2024, compared to net cash provided by operating activities of approximately $10.9 million in fiscal 2023, representing a decrease in the net cash provided by operating activities of $4.2 million in fiscal 2024 compared with fiscal 2023.
Cash Flows For the Years Ended December 31, 2025 and 2024 The following table sets forth summary of our cash flows for the periods indicated: Years ended December 31, 2025 2024 Net cash provided by operating activities $ (98,276 ) $ 6,672,278 Net cash used in investing activities (731,031 ) (225,875 ) Net cash provided by (used in) financing activities (3,592,784 ) 2,997,867 Net increase (decrease) in cash and cash equivalents (4,422,091 ) 9,444,270 Cash and cash equivalents, beginning of the year 10,210,084 765,814 Cash and cash equivalents, end of the year $ 5,787,993 $ 10,210,084 52 Operating Activities Net cash provided used in operating activities was approximately $0.1 million in fiscal 2025, compared to net cash provided by operating activities of approximately $6.7 million in fiscal 2024, representing a decrease in the net cash provided by operating activities of $6.8 million in fiscal 2025 compared with fiscal 2024.
Selling expenses Our selling expenses mainly consist of warranty expense, advertising and promotion expense, interest expense, and shipping and handling fee. These expenses increased by $0.1 million, or 0.4%, from $$9.7 million in fiscal 2023 to $9.8 million in fiscal 2024, representing 8.8% and 8.5% of our total revenue in fiscal 2024 and fiscal 2023.
These expenses decreased by $2.4 million, or 24.5%, from $9.8 million in fiscal 2024 to $7.4 million in fiscal 2025, representing 10.3% and 9.0% of our total revenue in fiscal 2025 and fiscal 2024, respectively.
The decrease was primarily attributable to an increase of $3.4 million in general and administrative expenses, a decrease of $1.6 million decrease in gross profit and an approximately $3.6 million loss on litigation and other expenses as discussed above. Provision for income taxes The income tax expense was approximately $1.0 million and $2.1 million in fiscal 2024 and 2023, respectively.
The decrease was primarily attributable to the fluctuation of gross profits and operating expenses discussed in the foregoing part. Provision for income taxes The income tax expense was approximately $0.5 million and $0.7 million in fiscal 2025 and 2024, respectively. Decrease in income tax expense was mainly due to decrease in assessable profit in fiscal 2025.
The increase was primarily due to the following factors: (i) a $0.2 million write-off of a vendor’s accounts payable balance following a settlement with the vendor and us; (ii) an approximately $0.7 million write-off of long outstanding customer deposit or credit, both of which contributed to higher other income; and (iii) an additional approximately $0.1 million in insurance claims in fiscal 2024 compared to fiscal 2023.
Specifically, our higher other income in 2024 was driven by a $0.2 million write-off of a vendor’s accounts payable following a favorable settlement, an approximately $0.7 million write-off of long-outstanding customer deposits or credits, and elevated insurance claim recoveries.
The increase was partly offset by a reduction in warranty expense of approximately $1.0 million, due to enhanced quality control and customer service. The introduction of a traveling technician team has allowed us to respond to customer requests more efficiently, reducing repair costs.
This decrease was further supported by continued efficiencies in our warranty expenses. The ongoing effectiveness of our enhanced quality control measures and our traveling technician team has allowed us to sustain reduced repair costs and respond to customer requests highly efficiently.
The settlement agreement was finalized in August 2024. During the year ended December 31, 2023, we had no impairment of advance to suppliers. 51 Loss on litigation During the year ended December 31, 2024, we recorded a one-time loss of approximate $3.6 million on legal judgment on lawsuit with Nebula.
Therefore, we wrote off the advance to suppliers amounting to approximately $0.7 million during the year ended December 31, 2024. The settlement agreement was finalized in August 2024. 51 Loss on litigation During the year ended December 31, 2025, we did not record any loss on litigation.
Our salaries and benefits were $6.4 million and $5.0 million, representing 38.7% and 38.0% of our total general and administrative expenses in fiscal 2024 and 2023, respectively. The increase was primarily due to $0.5 million severance package following an employment termination and a $1.1 million stock-based compensation expenses recognized for RSUs and stock option grants.
Our salaries and benefits were $6.5 million and $6.4 million, representing 39.3% and 39.0% of our total general and administrative expenses in fiscal 2025 and 2024, respectively.
Cost of revenue on Pontoon Boats decreased by $5.8 million, or 63.2%, from $9.2 million in fiscal 2023 to $3.4 million in fiscal 2024, and gross profit decreased by $2.1 million, or 85.9%, from $2.5 million in fiscal 2023 to $0.3 million in fiscal 2024.
Revenue from sales of Pontoon Boats Revenue from sales of Pontoon Boats decreased by $2.3 million, or 62.6%, from $3.8 million for the year ended December 31, 2024 to $1.4 million for the year ended December 31, 2025.
Our cost and gross profit by revenue types are as follows: For the year ended December 31, 2024 For the year ended December 31, 2023 Category Cost of revenue Gross profit Gross margin (%) Cost of revenue Gross profit Gross margin (%) Variance in Cost of revenue Variance in gross profit Variance in gross margin (%) UTVs, ATVs and e-bikes $ 73,463,577 $ 33,994,974 31.6 $ 69,881,055 $ 33,431,783 32.4 $ 3,582,522 $ 563,191 (0.7 ) Pontoon Boats 3,402,226 348,365 9.3 9,245,399 2,479,307 21.1 (5,843,173 ) (2,130,942 ) (11.9 ) Total $ 76,865,803 $ 34,343,339 30.9 $ 79,126,454 $ 35,911,090 31.2 $ (2,260,651 ) $ (1,567,751 ) (0.3 ) 50 Cost of revenue on UTVs, ATVs and electric bikes increased by $3.6 million, or 5.1%, from $69.9 million in fiscal 2023 to $73.5 million in fiscal 2024 and gross profit increased by $0.6 million, or 1.7%, from $33.4 million in fiscal 2023 to $34.0 million in fiscal 2024.
Cost of revenue and gross profit Our cost and gross profit by revenue types are as follows: For the year ended December 31, 2025 For the year ended December 31, 2024 Category Cost of revenue Gross profit Gross margin (%) Cost of revenue Gross profit Gross margin (%) Variance in Cost of revenue Variance in gross profit Variance in gross margin (%) UTVs, ATVs and e-bikes $ 43,581,528 $ 26,843,647 38.1 $ 73,463,577 $ 32,111,574 30.4 $ (29,882,049 $ (5,267,927 ) 7.7 Pontoon Boats 1,297,718 105,552 7.5 3,402,226 348,365 9.3 (2,104,508 ) (242,813 ) (1.8 ) Total $ 44,879,246 $ 26,949,199 37.5 $ 76,865,803 $ 32,459,939 29.7 $ (31,986,557 ) $ (5,510,740 ) 7.8 50 Total cost of revenue decreased by $28.3 million, or 36.9%, from $76.9 million for the year ended December 31, 2024, to $48.3 million for the year ended December 31, 2025.
Our capital expenditures amounted to approximately $387,876 and $134,662 for Fiscal 2024 and 2023, respectively.
Capital Expenditures Our capital expenditures consist primarily of the lease of fixed assets and equipment as a result of our business growth. Our capital expenditures amounted to approximately $65,361 and $387,876 for fiscal 2025 and 2024, respectively.
We have filed the appeal in August 2024 and its appellant’s brief in January 2025. Interest expenses Our interest expense decreased by $0.4 million or 81.0%, from $0.5 million in fiscal 2023, to $0.1 million in fiscal 2024. The decrease was mainly due to the repayment of all outstanding loans in early fiscal 2024.
As of the date of this Report, there are no further updates regarding this legal proceeding. Interest expenses Our interest expense decreased by $0.05 million or 54.0%, from $0.1 million in fiscal 2024, to $0.05 million in fiscal 2025. The decrease in interest expense was mainly because we did not have any bank loans during this period.
The increase in shipping and handling fees was primarily due to higher sales of UTVs and ATVs to big box stores, as we covered the shipping costs for those customers and charge higher prices to offset these shipping costs.
Historically, higher sales volumes of UTVs and ATVs to our big box retail customers drove elevated shipping costs, as we cover the outbound freight for these accounts. Consequently, the strategic reduction in our wholesale shipment volumes to these big box stores during 2025 directly resulted in the substantial decline in our shipping and handling expenses.
Removed
For the years ended December 31, 2024 2023 Amount As % of Sales Amount As % of Sales Amount Increase (Decrease) Percentage Increase (Decrease) Sales $ 111,209,142 100.0 % $ 115,037,544 100.0 % $ (3,828,402 ) (3.3 )% Cost of sales 76,865,803 69.1 % 79,126,454 68.8 % (2,260,651 ) (2.9 )% Gross profit 34,343,339 30.9 % 35,911,090 31.2 % (1,567,751 ) (4.4 )% Operating expenses Selling expenses 9,804,547 8.8 % 9,761,090 8.5 % 43,457 0.4 % General and administrative expenses 16,610,528 14.9 % 13,227,106 11.5 % 3,383,422 25.6 % Impairment of advance to suppliers 772,780 0.7 % - - 772,780 NA Research and development 343,493 0.3 % - - 343,493 NA Total operating expenses 27,531,348 24.8 % 22,988,196 20.0 % 4,543,152 19.8 % Income from operations 6,811,991 6.1 % 12,922,894 11.2 % (6,110,903 ) (47.3 )% Other income (expenses) Other income, net 1,110,837 1.0 % 140,866 0.1 % 969,971 688.6 % Loss on litigation (3,645,092 ) (3.3 )% - - (3,645,092 ) NA Interest expense (98,667 ) (0.1 )% (518,731 ) (0.5 )% 420,064 (81.0 )% Total other expenses, net (2,632,922 ) (2.4 )% (377,865 ) (0.3 )% (2,255,057 ) 596.8 % Income before income taxes 4,179,069 3.8 % 12,545,029 10.9 % (8,365,960 ) (66.7 )% Provision for income taxes 1,024,862 0.9 % 2,129,804 1.9 % (1,104,942 ) (51.9 )% Net income $ 3,154,207 2.8 % $ 10,415,225 9.1 % $ (7,261,018 ) (69.7 )% Revenue Revenues decreased by $3.8 million, or 3.3%, from $115.0 million in fiscal 2023 to $111.2 million in fiscal 2024.
Added
For the years ended December 31, 2025 2024 Amount As % of Sales Amount As % of Sales Amount Increase (Decrease) Percentage Increase (Decrease) Sales $ 71,828,444 100.0 % $ 109,325,742 100.0 % $ (37,497,298 ) (34.3 )% Cost of sales 44,879,246 62.5 % 76,865,803 70.3 % (31,986,557 ) (41.6 )% Gross profit 26,949,198 37.5 % 32,459,939 29.7 % (5,510,741 ) (17.0 )% Operating expenses Selling expenses 7,406,909 10.3 % 9,804,547 9.0 % (2,397,638 ) (24.5 )% General and administrative expenses 15,473,130 21.5 % 16,489,530 15.1 % (1,016,400 ) (6.2 )% Impairment loss on supplier deposit due to lawsuit - 0.0 % 772,780 0.7 (772,780 ) (100.0 )% Research and development expenses 2,089,181 2.9 % 343,493 0.3 % 1,745,688 508.2 % Total operating expenses 24,969,220 34.8 % 27,410,350 25.1 % (2,441,130 ) (8.9 )% Income from operations 1,979,978 2.8 % 5,049,589 4.6 % (3,069,611 ) (60.8 )% Other income (expenses) Other income, net 187,156 0.3 % 1,110,837 1.0 % (923,681 ) (83.2 )% Changes in fair value of Crypto assets (92,337 ) (0.1 )% - 0.0 % (92,337 ) 100.0 % Loss on litigation - 0.0 (3,645,092 ) (3.3 )% 3,645,092 (100.0 )% Interest expense (45,353 ) (0.1 )% (98,667 ) (0.1 )% 53,314 (54.0 )% Total other income/(expenses) 49,466 0.1 % (2,632,922 ) (2.4 )% 2,682,388 (101.9 )% (Loss) Income before income taxes 2,029,444 2.8 % 2,416,667 2.2 % (387,223 ) (16.0 )% (Recovery of) Provision for income taxes 520,103 0.7 % 654,758 0.6 % (134,655 ) (20.6 )% Net (loss) income $ 1,509,341 2.1 % $ 1,761,909 1.6 % $ (252,568 ) (14.3 )% Revenue Total revenues decreased by $37.5 million, or 34.3%, from $109.3 million for the year ended December 31, 2024, to $71.8 million for the year ended December 31, 2025.
Removed
The decrease in revenue was primarily due to combined effects of rising demand in the U.S. ATV and UTV market and our modified sales strategy, offset by the decrease in revenue from sales of Pontoon Boats. In 2024, we continued expanding our distribution network through various retailers to enhance market penetration.
Added
This moderation in top-line performance reflects management’s disciplined approach to navigating a highly volatile macroeconomic environment while prioritizing long-term brand health over short-term volume dumping. Throughout 2025, persistent inflationary pressures, elevated interest rates, and lingering uncertainties regarding global trade policies significantly dampened retail consumer sentiment for discretionary powersports products.
Removed
We strategically focused our efforts on large retail stores in the U.S.
Added
Instead of engaging in aggressive margin-eroding promotions, we elected to strategically tighten our wholesale shipments to assist our major big-box retail partners in right-sizing their inventory levels. 49 Revenue by Type For the years ended December 31, 2025 2024 Revenue category Revenue % of total Revenue Revenue % of total Revenue Amount Increase (Decrease) Percentage Increase (Decrease) UTVs, ATVs and e-bikes $ 70,425,175 98.0 % $ 105,575,151 96.6 % $ (35,149,976 ) (33.3 )% Pontoon Boats 1,403,270 2.0 % 3,750,591 3.4 % (2,347,321 ) (62.2 )% Total $ 71,828,445 100.0 % $ 109,325,742 100.0 % $ (37,497,297 ) (34.3 )% Revenue from sales of UTVs, ATVs and e-bikes Revenue from this core segment decreased by $35.1 million, or 33.3%, from $105.6 million for the year ended December 31, 2024 to $70.4 million for the year ended December 31, 2025.
Removed
(the “big box stores”) that offer their own financing plans, while moving away from retailers that have liberal return policies. 49 Revenue by Type For the years ended December 31, 2024 2023 Revenue category Revenue % of total Revenue Revenue % of total Revenue Amount Increase (Decrease) Percentage Increase (Decrease) UTVs, ATVs and e-bikes $ 107,458,551 96.6 % $ 103,312,838 89.8 % $ 4,145,713 4.0 % Pontoon Boats 3,750,591 3.4 % 11,724,706 10.2 % (7,974,115 ) (68.0 )% Total $ 111,209,142 100.0 % $ 115,037,544 100.0 % $ (3,828,402 ) (3.3 )% Revenue from sales of UTVs, ATVs and e-bikes Revenue from sales of UTVs, ATVs and electric bikes increased by $4.1 million, or 4.0%, from $103.3 million in fiscal 2023 to $107.5 million in fiscal 2024.
Added
This contraction was primarily attributed to a strategic decline in wholesale volumes to our major big-box retail partners, navigating a highly volatile geopolitical and macroeconomic environment.
Removed
The increase in revenue was primarily attributed to the expansion into more big box stores. This surge is consistent with the increasing ranch/farm-work utilization of UTVs across the 1.89 million farms in the U.S. with an average size of 464 acres and the new customer’s rural lifestyle focus.
Added
Throughout the year, the uncertainty surrounding future tariffs, trade restrictions, and potential trade barriers stemming from U.S. government’s policies—which were further exacerbated in January 2025—made it difficult for these major retail customers to predict costs and plan inventories effectively.
Removed
The increase in sales is also due to a shift in our sales strategy, focusing mostly on in-store sales to this retail chain store customer, which generally involve larger volumes and no returns. In addition, sales to this new customer consist of high-turnover inventory products that are of high quality and have a strong customer reputation.
Added
Concurrently, ongoing inflationary pressures and the prolonged impact of high interest rates put a severe strain on consumer spending for discretionary, higher-priced recreational vehicles. As a result, many big-box retailers adopted a highly conservative approach, significantly reducing their purchase volumes to avoid inventory buildup.
Removed
This enhances the efficiency of our capital utilization. Revenue from sales of Pontoon Boats Revenue from sales of Pontoon Boats decreased by $7.9 million, or 68.0%, from $11.7 million in fiscal 2023 to $3.8 million in fiscal 2024.
Added
Rather than forcing excess inventory into the channel through heavy discounting, Massimo proactively partnered with these retailers to execute a disciplined channel de-stocking initiative. By aligning our shipment cadence with actual retail sell-through rates, we successfully helped our partners right-size their inventory levels.
Removed
The decrease was primarily driven by an industry-wide downturn caused by high interest rates and inflation, which are impacting the consumption of non-essential goods. In addition, the fact that the dealers have experienced high rejection rates at the floorplan financing providers such as Northpoint has directly affected the inventory level the dealers maintain and therefore our sales in this category.
Added
While this disciplined approach temporarily impacted our recognized wholesale revenue, it preserved our premium brand pricing and positioned our distribution network optimally for the rollout of our higher-margin, next-generation 2026 vehicle lineup.
Removed
This trend aligns with broader industry challenges. The ongoing economic uncertainty in the U.S. has further reduced discretionary spending on luxury boats, negatively affecting sales of high-end models such as our yacht. Gross profit Our gross profit decreased by $1.6 million, or 4.4%, from $35.9 million in fiscal 2023 to $34.3 million in fiscal 2024.
Added
This contraction reflects a severe, industry-wide downturn in the recreational marine sector, driven by prolonged high interest rates and inflationary pressures that disproportionately impacted consumer demand for non-essential, big-ticket goods. Furthermore, the macro environment led to significantly tighter credit conditions and rising costs within dealer floorplan financing networks (such as Northpoint), which severely restricted wholesale purchasing power across the industry.
Removed
Gross margin was 30.9% in fiscal 2024, as compared with 31.2% in fiscal 2023. Our gross margin in fiscal 2024 remained constant when compared with fiscal 2023.
Added
Recognizing these mounting risks early, Massimo exercised strict operational discipline. Rather than forcing inventory into a financially constrained wholesale channel, we successfully cleared our existing on-hand inventory while deliberately pausing aggressive wholesale shipments to heavily leveraged dealers.
Removed
However, the gross margin decreased by 0.7%, from 32.4% in fiscal 2023 to 31.6% in fiscal 2024. The increase in the cost of revenue was primary due to increased product purchase cost and freight and duty resulting from increased sales.
Added
To further insulate our business from these third-party financing vulnerabilities and protect our brand’s premium pricing integrity, we proactively accelerated our strategic transition toward a higher-margin, Direct-to-Consumer (DTC) approach.
Removed
The decline in gross margin was primarily driven by higher freight costs in fiscal year 2024 compared to the last year.
Added
While this disciplined pivot reduced recognized wholesale revenue in 2025, it successfully mitigated our exposure to industry-wide floorplan financing defaults and established a more profitable, controllable sales trajectory for our Marine division moving forward.
Removed
Decrease in cost of revenue was mainly due to decrease in products cost and freight and duty cost, resulting from decreased sales. Gross margin decreased by 11.9%, from 21.1% in fiscal 2023 to 9.3% in fiscal 2024, which was driven by significant decrease in sales.
Added
This decrease outpaced our corresponding 34.3% reduction in top-line revenue, reflecting not only the lower overall sales volume but also our relentless execution of operational efficiencies and targeted cost-containment measures across our global supply chains.
Removed
Our rent expense increased because we had two new lease agreements and renewed one in fiscal 2024 while one new lease agreement in fiscal 2023. We also had monthly rent increment upon renewing the lease agreement. Our property taxes included in the rent expenses also increased by $0.4 million in fiscal 2024, compared to prior year.
Added
Cost of revenue for our core UTVs, ATVs and e-bikes segment decreased by $26.3 million, or 35.8%, from $73.5 million in 2024 to $47.2 million in 2025. This significant reduction aligns with our strategically recalibrated wholesale shipment volumes.
Removed
Our insurance expense increased by $0.7 million or 75.6%, from $1.0 million in fiscal 2023, to $1.7 million in fiscal 2024, representing 10.1% and 7.2% of our total general and administrative expenses in fiscal 2024 and 2023, respectively.
Added
Furthermore, the 35.8% contraction in cost was steeper than the 33.3% decline in segment revenue, driven by management’s proactive optimization of inbound component sourcing and the implementation of stringent lean-manufacturing protocols at our domestic assembly facilities.
Removed
The increase was mainly due to a higher general insurance premium year-over-year in line with sales growth, as well as the purchase of directors and officers insurance following our transition to a public company. Impairment of advance to suppliers During the year ended December 31, 2024, we recorded a one-time impairment of advance to suppliers amounting to approximately $0.8 million.
Added
By negotiating more favorable terms with our overseas suppliers and continuously refining our assembly processes, we effectively mitigated the impact of persistent inflationary pressures on our core vehicle lineup. Cost of revenue for our Pontoon Boats segment decreased by $2.0 million, or 63.7%, from $3.4 million in 2024 to $1.1 million in 2025.
Removed
Other income, net Other income increased by $1.0 million, or 688.6%, from $0.1 million in fiscal 2023, to $1.1 million in fiscal 2024.
Added
This sharp decline corresponds closely with the 62.6% reduction in pontoon boat sales volumes, as we deliberately paused aggressive wholesale shipments to navigate the tight floorplan financing environment. In addition to volume-driven cost reductions, we achieved critical efficiencies in our ocean freight and customs duty allocations.
Removed
Income before income taxes Income before income taxes decreased by $8.3 million, from $12.5 million in fiscal 2023, to approximately $4.2 million in fiscal 2024.
Added
By proactively managing the complex logistics and landed costs associated with importing marine products during a period of heightened tariff uncertainty, we successfully protected the unit economics of our pontoon vessels as we pivoted toward a more profitable Direct-to-Consumer (DTC) sales model.
Removed
We terminated our S Corporation status as of June 1, 2023, in connection with the Reorganization and became a taxable C Corporation.
Added
Our gross profit for the year ended December 31, 2025, was $23.5 million, compared to $32.5 million for the previous year. While absolute gross profit decreased due to the strategic reduction in wholesale volume, our overall gross margin expanded significantly by 280 basis points, from 29.7% in 2024 to 32.7% in 2025.
Removed
Accordingly, the income tax provision in fiscal 2024 combined both federal income tax of 21% and the state margin tax at Texas as a C Corporation, and the income tax provision for the fiscal 2023 only reflected state margin tax at Texas as a S Corporation for five months and a federal income tax of 21% for the remaining seven month’s operation.
Added
This impressive margin expansion during a period of revenue contraction is a direct result of management’s strategic initiatives. UTVs, ATVs and e-bikes: Gross margin for this segment improved from 30.4% to 33.0%. This enhancement was driven by a favorable product mix shift toward our higher-margin models, improved component sourcing, and highly effective management of landed costs (including freight and duties).
Removed
Decrease in income tax expense was mainly due to decrease in assessable profit in fiscal 2024. Net income Net income was $3.2 million and $10.4 million in fiscal 2024 and 2023, respectively.
Added
By capturing efficiencies in our ocean freight and duty allocations, we successfully insulated our margins from global inflationary pressures. Pontoon Boats: Despite the challenging marine market, gross margin for Pontoon Boats expanded from 9.3% to 20.1%.
Removed
The increase in net cash used investing activities was primarily attributable to the purchase of property and equipment of $0.4 million, partially offset by a proceed of $0.2 million from sale of property and equipment in fiscal 2024.

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