SHAREHOLDERS’ EQUITY |
3 Months Ended |
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Mar. 31, 2026 | |
| Equity [Abstract] | |
| SHAREHOLDERS’ EQUITY | NOTE 14 — SHAREHOLDERS’ EQUITY
Common Shares
Based on the Company’s Articles of Incorporation, the authorized number of common stock was shares of common stock with par value of $, of which common shares were issued on June 1, 2023. The authorized number of preferred stock was shares of preferred stock with par value of $, and preferred shares were issued. All share information included in these condensed consolidated financial statements have been retroactively adjusted for the Reorganization as if par value and common shares issuance occurred on the first day of the first period presented.
As of March 31, 2026 and December 31, 2025, and common shares were issued and outstanding, respectively.
MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 14 — SHAREHOLDERS’ EQUITY (continued)
Initial Public Offering
On April 4, 2024, the Company closed its IPO of shares of its common stock at an IPO price of $ per share for aggregate gross proceeds of approximately $5.85 million. The total net proceeds to the Company from the IPO, after deducting discounts, expense allowance, and expenses, were approximately $5.0 million. Pursuant to the terms and conditions of the underwriting agreement, dated as of April 1, 2024, by and between Craft Capital Management LLC (the “Representative”) and the Company (the “Underwriting Agreement”), the underwriters had an overallotment option, exercisable for 45 days or until May 19, 2024, to purchase up to an additional shares from the Company at the offering price less of $ the underwriting discount and commissions to cover over-allotments. As of the reporting date, all representative options have expired without exercise.
Common Shares Issued for Service
On June 18, 2024, the Company signed a consulting agreement (the “Consulting Agreement”) with TJCM Asset Management LLC (“TJCM”) to provide strategic consulting and financial advisory services to the Company for twelve months commencing on June 18, 2024. As partial consideration for the services, TJCM is entitled to receive shares of the Company’s common stock equivalent to a value of $160,000 calculated by the valuation price defined as average closing price of the Company’s shares of common stock for the five consecutive trading days immediately preceding the effective date of the Consulting Agreement. On June 21, 2024, the Company issued shares of common stock to TJCM as the prepayment of $80,000 on the services to be provided. On November 29, 2024, the agreement was terminated under mutual agreement, and the Company cancelled shares out of the shares of common stock previously issued to TJCM. The Company recorded expenses of and in connection with service for the three months ended March 31, 2026 and 2025, respectively.
Representative’s Warrants
Pursuant to the Underwriting Agreement, the Company issued to the Representative and its designee warrants (the “Representative’s Warrants”) to purchase 87,100 shares of common stock. The Representative’s Warrants are exercisable at a per share exercise price equal to $5.63 and are exercisable at any time and from time to time, in whole or in part, during the period commencing on October 4, 2024 and terminating on April 4, 2029. Neither the Representative’s Warrants nor any of the shares issued upon exercise of the Representative’s Warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of six months immediately following the commencement of sales of the offering.
Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to their own shares and meet the requirements for equity classification. The warrants were recorded at fair value on the date of grant as a component of shareholders’ equity. The fair value of these warrants was $220,000, which was considered a direct cost of IPO and included in additional paid-in capital. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $, risk free rate of 4.3%, expected term of five years; exercise price of the warrants of $, volatility of 89%; and expected future dividends of .
As of March 31, 2026, 87,100 warrants in connection with IPO funding was outstanding, with an exercise price of $5.63 and remaining life of 3.51 years.
MASSIMO GROUP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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