Massimo Group
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
MAMO$0.96-0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023439
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001493152-26-037802
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 125 current paragraphs.
27 unchanged; 22 reworded; 71 added; 35 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (71)
Current report
Risk of intense competition in the industry:The Powersports Vehicles and Boat Industry is highly competitive. Competition in such markets is based upon a number of factors, including price, quality, reliability, styling, product features and warranties. At the dealer level, competition is based on a number of factors including sales and marketing support programs (such as financing joint advertising programs and cooperative advertising). 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. 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. Such pricing pressure may limit our ability to maintain prices or to increase prices for our products in response to raw material, component and other cost increases and so negatively affect our profit margins.
Current report
** Risk of economic and policy changes within China**: We import our products from various Chinese suppliers. The Chinese government continues to play a significant role in regulating industries within China by imposing industrial policies, providing subsidies and heavily regulating or prohibiting unwanted activities. There is no assurance the Chinese government will not interfere with the operations of our various suppliers. In addition, the Chinese government has implemented certain measures, including interest rate adjustments, to control the pace of economic growth in China. These measures, along with other economic, political and/or social developments in China may affect our China-based suppliers, which may adversely affect our business and operating results. We also import products from Taiwan. The Taiwan issue is a longstanding point of contention between China and the United States. The U.S. maintains unofficial relations with Taiwan, while also recognizing the One China policy, which acknowledges Beijing as the legitimate government of Taiwan. Both China and the U.S. have engaged in military posturing around the Taiwan Strait. 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. Additionally, both U.S. and Chinese governments have imposed tariffs on certain products and taken other actions that have had an adverse impact on trade between the two countries.
Current report
**Risk of unavailability of additional capital:**We will require significant expenditures to fund future growth. We have funded our growth to date out of the proceeds of the IPO and internal sources of liquidity or through additional financing from external sources. Our ability to obtain external financing in the future at a reasonable cost is subject to a variety of uncertainties, including our future financial condition, results of operations and cash flows and the condition of the global and domestic financial markets. If we require additional funds and cannot obtain them on acceptable terms when required or at all, we may be unable to fulfill our working capital needs, upgrade our existing facilities or expand our business and may have to reduce the level of our operations. These factors may also prevent us from entering into transactions that would otherwise benefit our business or implementing our future strategies. Any debt financing that we undertake may be expensive and might impose covenants that restrict our operations and strategic initiatives, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our capital stock, make investments and engage in mergers, consolidations and asset sale transactions. Equity financings may be on terms that are dilutive or potentially dilutive to our shareholders, and the prices at which new investors would be willing to purchase our equity securities may be lower than the trading prices of such equities. If new sources of financing are required, but are unattractive, insufficient or unavailable, then we could be required to modify our business plans or growth strategy which could have a material adverse effect on our business, results of operations or financial condition.
Current report
Risk related to overseas freights fluctuation:The inflation rate and supply chain crisis experienced in 2021 and 2022 led to a significant increase in overseas freight costs. 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.
Current report
** Risk of uncertainty in the cost and production level of raw materials**: We depend on third party suppliers to manufacture many of the products we sell, in particular, ATVs and UTVs, as opposed to our Pontoon Boats which we manufacture in our Dallas facility. For the period ended June 30, 2026, we purchased approximately 72% of our products from two of these suppliers. Competition for the output of these suppliers is intense. 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. Although we are looking to broaden our supplier base and to reduce our dependence upon a limited number of suppliers, there is no assurance we will be able to do so and increasing the number of suppliers from which we purchase products may increase our costs.****
Current report
** Risk related to inflation:**In recent years, our China-based suppliers have increased the cost of their products due to inflation. We may not be able to pass along price increases in raw materials, parts, or components to our customers. 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.
Current report
Risk of fluctuations in the sale of Pontoon Boats: A portion of our sales revenue generated from Massimo Marine has a seasonal sales pattern. For the period ended June 30, 2026 and 2025, our revenue generated from Massimo Marine was approximately 5.9% and 2.3% of our total revenue, respectively.
Current report
The following tables summarize our condensed consolidated results for the three and six months ended June 30, 2026 and 2025. Amounts are presented in U.S. dollars unless otherwise indicated.
Current report
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Current report
Revenues
Current report
Revenues decreased by $4.0 million, or 21.1%, from $18.9 million for the three months ended June 30, 2025 to $14.9 million for the three months ended June 30, 2026. The decrease primarily reflected lower sales of UTVs, ATVs and electric bikes.
Current report
Tariff and trade-policy uncertainty continued to affect customers’ inventory planning and order timing, while challenging dealer floorplan-financing conditions constrained wholesale purchasing capacity. Inflationary pressure and elevated interest rates also continued to weigh on discretionary consumer spending. Consistent with our disciplined operating approach, we avoided pushing inventory into financially constrained distribution channels while continuing to evaluate higher-margin and more controllable sales channels, including our Direct-to-Consumer approach.
Current report
Revenue from Pontoon Boats remained relatively stable, decreasing by approximately $55,640, or 4.3%, from $1.31 million for the three months ended June 30, 2025 to $1.25 million for the three months ended June 30, 2026. The decrease primarily reflected lower sales of Pontoon Boats.
Current report
Gross profit
Current report
Gross profit increased by $0.4 million, or 6.1%, from $6.9 million in the second quarter of 2025 to $7.3 million in the second quarter of 2026. Gross margin increased to 48.8% from 36.3%. The margin expansion was primarily attributable to a more favorable mix of higher-margin products, improved component sourcing and cost controls, and continued discipline over freight, duty and other landed costs. The second quarter of 2026 also benefited from lower tariff rates on certain imported products and refunds or credits for tariffs previously paid, which reduced cost of revenue and helped offset the impact of lower sales volume.
Current report
Cost of revenue for UTVs, ATVs and electric bikes decreased by $4.2 million, or 38.6%, from $10.9 million to $6.7 million, while gross profit increased by $0.3 million, or 3.8%, from $6.7 million to $7.0 million. Gross margin increased to 51.2% from 38.2%. The margin expansion was primarily driven by a favorable shift toward higher-margin models, improved component sourcing and cost controls, and lower freight and landed costs. In addition, lower tariff rates on certain imported products and refunds or credits for tariffs previously paid reduced freight and duty costs during the second quarter of 2026. These benefits more than offset the effect of lower wholesale shipment volume.
Current report
Cost of revenue for Pontoon Boats decreased by approximately $0.2 million, or 18.1%, from $1.2 million to $1.0 million, while gross profit increased by approximately $0.2 million, or 118.6%, from $0.1 million to $0.3 million. Gross margin increased to 23.2% from 10.1%, primarily reflecting a more favorable product mix, enhanced material-cost controls and improved management of inbound shipping and other landed costs.
Current report
The decrease was primarily attributable to lower shipping and handling expenses associated with reduced wholesale shipment volumes to major big-box retail customers. It was also supported by lower warranty-related costs resulting from enhanced quality-control measures and the continued use of our traveling technician team. In addition, the second quarter of 2026 included the reversal and reclassification of certain advertising costs to sales discounts, which further reduced selling expenses.
Current report
Salaries and benefits decreased by approximately $0.7 million, or 33.0%, from $2.0 million for the three months ended June 30, 2025 to $1.3 million for the three months ended June 30, 2026, representing 45.1% and 36.8% of general and administrative expenses, respectively.
Current report
Professional fees decreased by approximately $0.1 million, or 32.9%, from $0.4 million for the three months ended June 30, 2025 to $0.3 million for the three months ended June 30, 2026, representing 8.4% and 6.9% of general and administrative expenses, respectively. The decrease primarily reflected the timing of legal and other professional services.
Current report
Insurance expense decreased by approximately $0.3 million, or 53.7%, from $0.5 million for the three months ended June 30, 2025 to $0.2 million for the three months ended June 30, 2026, representing 11.9% and 6.7% of general and administrative expenses, respectively. The decrease was primarily attributable to the Company’s cost-control initiatives, including a review and optimization of its insurance coverage to better align with its operating needs.
Current report
Other general and administrative expenses, consisting principally of office and general expenses, travel, supplies, depreciation, bad-debt expense, bank charges and equipment costs, increased in the aggregate by approximately $0.1 million, or 10.2%, from $0.9 million for the three months ended June 30, 2025 to $1.0 million for the three months ended June 30, 2026.
Current report
Research and development expenses increased by approximately $0.2 million, or 200.0%, from $0.1 million for the three months ended June 30, 2025 to $0.3 million for the three months ended June 30, 2026. As a percentage of revenue, research and development expenses increased from 0.8% to 1.9%. The increase primarily reflected the timing and scope of selected vehicle-model development and product-enhancement activities during the second quarter of 2026.
Current report
Income from operations
Current report
Income from operations increased by approximately $1.5 million, from $0.1 million for the three months ended June 30, 2025 to $1.7 million for the three months ended June 30, 2026. The increase was attributable to the $0.4 million increase in gross profit and the $1.1 million decrease in total operating expenses discussed above.
Current report
Interest expenses
Current report
Interest expense decreased by approximately $55,200, or 86.6%, from $63,700 to $8,500, primarily because the Company had no outstanding bank borrowings during the second quarter of 2026.
Current report
Other income, net increased by approximately $106,000, or 398.5%, from $26,600 for the three months ended June 30, 2025 to $132,600 for the three months ended June 30, 2026. The increase was primarily attributable to interest income earned on cash balances, partially offset by losses on the disposal of property and equipment and other miscellaneous non-operating items.
Current report
Income before income taxes
Current report
Income before income taxes increased by $1.6 million from $0.1 million for the three months ended June 30, 2025 to $1.7 million for the three months ended June 30, 2026. The increase was primarily attributable to higher gross profit and lower operating expenses, as discussed above, partially offset by the unrealized loss on crypto assets.
Current report
Net income
Current report
Net income increased by approximately $1.4 million, from $0.1 million for the three months ended June 30, 2025 to $1.5 million for the three months ended June 30, 2026. The increase was primarily attributable to higher gross profit and lower operating expenses for the reasons discussed above, partially offset by higher income tax expense and the unrealized loss on crypto assets.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Revenue by Type
Current report
Revenue from UTVs, ATVs and electric bikes decreased by $7.0 million, or 21.3%, from $33.0 million for the six months ended June 30, 2025 to $26.0 million for the six months ended June 30, 2026. The decrease was primarily attributable to a continued strategic reduction in wholesale shipment volumes to major big-box retail partners as we aligned shipment cadence with retail sell-through and customer inventory levels.
Current report
Throughout the first half of 2026, tariff and trade-policy uncertainty affected customers’ inventory planning and order timing, while challenging dealer floorplan-financing conditions limited wholesale purchasing capacity. Certain large customers therefore maintained a conservative approach to inventory replenishment.
Current report
Reported revenue from Pontoon Boats increased by approximately $0.8 million, or 106.5%, from $0.8 million for the six months ended June 30, 2025 to $1.6 million for the six months ended June 30, 2026. The increase principally reflected the absence in 2026 of the approximately $1.0 million reduction to revenue recorded in the first quarter of 2025 in connection with the repurchase of goods under a litigation settlement, partially offset by lower underlying Pontoon Boat sales under our disciplined wholesale shipment strategy.
Current report
Gross profit
Current report
Cost of revenue for UTVs, ATVs and electric bikes decreased by $7.8 million, or 35.7%, from $21.9 million to $14.1 million, while gross profit increased by $0.8 million, or 7.0%, from $11.2 million to $12.0 million. Gross margin increased to 46.0% from 33.8%. The margin expansion was primarily driven by a favorable shift toward higher-margin models, improved component sourcing and cost controls, and lower freight and landed costs. The first half of 2026 also benefited from lower tariff rates on certain imported products and refunds or credits for tariffs previously paid, which reduced cost of revenue and more than offset the effect of lower wholesale shipment volume.
Current report
Cost of revenue for Pontoon Boats decreased by $0.4 million, or 26.3%, from $1.7 million to $1.2 million, while gross profit increased from a loss of $0.9 million to a profit of $0.4 million. The improvement primarily reflected the absence of the prior-year litigation-related repurchase adjustment and improved product economics.
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Removed paragraphs (35)
Previous report
The following table summarizes the results of condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2026 and 2025 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such year.
Previous report
Consistent with the trends experienced during fiscal year 2025, uncertainty surrounding tariffs, trade restrictions and potential trade barriers continued to make it difficult for major retail customers to predict costs and plan inventory purchases effectively. In addition, ongoing inflationary pressures and the prolonged impact of elevated interest rates continued to weigh on consumer demand for discretionary, higher-priced recreational vehicles.
Previous report
As a result, certain big-box retail customers continued to adopt a conservative inventory procurement strategy during the first quarter of 2026. Rather than forcing excess inventory into the wholesale channel through aggressive discounting, we continued to align our shipment cadence with actual retail sell-through rates and support a disciplined channel inventory management approach. While this strategy reduced recognized wholesale revenue during the period, we believe it helped preserve our brand pricing, reduce channel inventory risk and position our distribution network for the rollout of our higher-margin, next-generation vehicle lineup.
Previous report
Revenue from sales of Pontoon Boats decreased by $0.1 million, or 28.2%, from $0.5 million during the three months ended March 31, 2025 to $0.4 million for the three months ended March 31, 2026. The decrease primarily reflected the continued softness in the recreational marine sector, which remained affected by elevated interest rates, inflationary pressures and tighter consumer and dealer financing conditions.
Previous report
Cost of revenue and gross profit
Previous report
Total cost of revenue decreased by $3.0 million, or 28.4%, from $10.7 million for the three months ended March 31, 2025 to $7.6 million for the three months ended March 31, 2026. This decrease was primarily attributable to lower overall sales volume, particularly within our core UTVs, ATVs and e-bikes segment, as we continued to execute our disciplined wholesale shipment strategy and align production and inventory levels with actual retail demand.
Previous report
Cost of revenue for our core UTVs, ATVs and e-bikes segment decreased by $3.6 million, or 32.8%, from $11.0 million for the three months ended March 31, 2025 to $7.4 million for the three months ended March 31, 2026. This reduction was broadly consistent with our strategically recalibrated wholesale shipment volumes to major big-box retail partners. In addition, the decrease in cost of revenue outpaced the 20.0% decline in segment revenue, reflecting management’s continued efforts to optimize inbound component sourcing, improve manufacturing efficiency and control landed costs, including freight and duty-related costs, despite continued tariff uncertainty and inflationary pressure.
Previous report
Cost of revenue for our Pontoon Boats segment decreased by $0.2 million, or 46.3%, from $0.5 million for the three months ended March 31, 2025 to $0.3 million for the three months ended March 31, 2026. This decrease was primarily driven by lower sales volume in the recreational marine business as we continued to manage wholesale shipments cautiously in response to weak industry demand, elevated interest rates and tighter dealer floorplan financing conditions. Consistent with our fiscal year 2025 operating approach, we avoided pushing inventory into a financially constrained wholesale channel and continued to focus on protecting per unit economics and brand pricing.
Previous report
For our UTVs, ATVs and e-bikes segment, gross profit increased by $0.5 million, from $4.4 million for the three months ended March 31, 2025 to $5.0 million for the three months ended March 31, 2026, and gross margin improved from 28.8% to 40.8%. This margin expansion was primarily driven by a favorable shift in product mix toward higher-margin models, improved component sourcing and continued discipline in managing freight, duty and other landed costs. These measures helped offset the impact of lower wholesale shipment volumes and ongoing macroeconomic cost pressures.
Previous report
For our Pontoon Boats segment, gross profit increased by $0.1 million, from $35,619 for the three months ended March 31, 2025 to $112,089 for the three months ended March 31, 2026, and gross margin improved from 6.9% to 30.4%. This improvement reflected our continued pivot away from lower-margin wholesale clearing activities and toward a more disciplined sales approach, including higher-margin and more controllable sales channels. The improvement also benefited from enhanced material cost controls and more efficient management of inbound shipping and landed costs within our marine product line.
Previous report
Repurchase of goods and cost of inventory recovered from litigation settlement
Previous report
On February 19, 2025, we entered into a settlement agreement with a dealer to repurchase certain ATVs and pontoon boats at an agreed percentage of the original invoices amount. In connection with this settlement, we recorded a sales reduction of $1.0 million and recognized $0.8 million as the cost of repurchased inventory in the first quarter of fiscal 2025. As a result, our gross profit was reduced by $0.2 million.
Previous report
The decrease was primarily attributable to lower shipping and handling expenses associated with the reduction in wholesale shipment volumes to our major big-box retail customers. Historically, higher sales volumes of UTVs and ATVs to these customers resulted in elevated outbound freight costs, as we generally cover shipping costs for these accounts. During the first quarter of 2026, as we continued to execute a disciplined wholesale shipment strategy and align shipment cadence with actual retail sell-through rates, our outbound freight and related selling costs decreased accordingly.
Previous report
The decrease was also supported by continued efficiencies in warranty-related expenses. We continued to benefit from enhanced quality control measures and our traveling technician team, which allowed us to manage repair costs and respond to customer service requests more efficiently. As a result, the decline in selling expenses outpaced the decrease in total revenue during the period, contributing to the improvement in operating efficiency for the three months ended March 31, 2026.
Previous report
Our salaries and benefits increased by $0.4 million, or 30.8%, from $1.3 million for the three months ended March 31, 2025 to $1.8 million for the three months ended March 31, 2026, representing 41.6% and 31.8% of our total general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to a slight increase in headcount during the first quarter of fiscal 2026 compared with the same period in the prior year.
Previous report
Our professional fees decreased by $34,404, or 6.0%, from $572,267 for the three months ended March 31, 2025 to $537,863 for the three months ended March 31, 2026, representing 12.7% and 13.6% of our total general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively.
Previous report
Our insurance expenses decreased by $0.2 million, or 47.2%, from $426,707 for the three months ended March 31, 2025 to $225,267 for the three months ended March 31, 2026, representing 5.3% and 10.1% of our total general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively.
Previous report
Overall, the increase in salaries and benefits and rent expenses was offset by decreases in professional fees, insurance expenses and other general administrative expenses, resulting in general and administrative expenses remaining relatively stable for the three months ended March 31, 2026 compared with the same period in 2025.
Previous report
Our research and development expenses decreased by $0.2 million, or 25.3%, from $0.8 million for the three months ended March 31, 2025 to $0.6 million for the three months ended March 31, 2026. As a percentage of total revenue, research and development expenses decreased from 5.6% for the three months ended March 31, 2025 to 4.9% for the three months ended March 31, 2026.
Previous report
The decrease was primarily attributable to the timing and scope of product development activities during the first quarter of 2026. Following the completion of certain development initiatives in prior periods, we continued to focus our research and development efforts on selected higher-margin vehicle models and product enhancements rather than broad-based development spending. We expect to continue investing in research and development activities to support our next-generation product lineup, while maintaining discipline over the timing and scale of such spending.
Previous report
Loss from operations
Previous report
Loss from operations decreased by $1.7 million, or 61.6%, from $2.7 million for the three months ended March 31, 2025 to $1.0 million for the three months ended March 31, 2026. The improvement was primarily attributable to an increase in gross profit of $0.9 million and a decrease in total operating expenses of $0.8 million.
Previous report
The increase in gross profit was driven by improved gross margin in both our UTVs, ATVs and e-bikes segment and our Pontoon Boats segment, as discussed above. The decrease in operating expenses was mainly due to lower selling expenses resulting from reduced wholesale shipment volumes and related outbound freight costs, as well as lower research and development expenses during the period.
Previous report
Other income, net decreased by $75,917, or 96.5%, from $78,698 for the three months ended March 31, 2025 to $2,781 for the three months ended March 31, 2026. The decrease was primarily attributable to the absence of certain miscellaneous or non-recurring income items that benefited the first quarter of fiscal 2025. Other income, net for the three months ended March 31, 2026 represented a normalized level of incidental income without the impact of significant one-time settlement or other non-operating income items.
Previous report
Loss before income taxes decreased by $1.5 million, or 55.2%, from $2.6 million for the three months ended March 31, 2025 to $1.2 million for the three months ended March 31, 2026. The improvement was primarily attributable to an increase in gross profit and a decrease in total operating expenses, partially offset by the decrease in total other income, net, as discussed above.
Previous report
Net (loss) income
Previous report
Net loss decreased by $1.1 million, or 51.8%, from $2.1 million for the three months ended March 31, 2025 to $1.0 million for the three months ended March 31, 2026. The improvement was primarily attributable to increased gross profit and lower operating expenses, partially offset by the unrealized loss on crypto assets and lower income tax recovery during the first quarter of 2026.
Previous report
Net cash used in operating activities was $1.4 million for the three months ended March 31, 2026. The difference between our net cash used in operating activities and our net loss of $1.0 million for the three months ended March 31, 2026 was primarily due to the combined effect of non-cash adjustments and changes in working capital. Non-cash adjustments primarily included non-cash operating lease expense of $0.4 million, fair value loss on crypto assets of $0.1 million, depreciation of $39,062, provision of allowance for expected credit loss of $25,995, loss on disposal of fixed assets of $24,346 and amortization of finance lease right-of-use assets of $10,380, partially offset by deferred income tax recovery of $0.2 million and amortization of share-based compensation related to options granted of $29,395. Changes in operating assets and liabilities mainly resulted from: (i) an increase in accounts receivable of $1.3 million; (ii) a decrease in inventories of $2.1 million; (iii) a decrease in prepaid and other current assets of $2.0 million; (iv) a decrease in accounts payable of $5.4 million; (v) a decrease in other payable, accrued expense and other current liabilities of $57,383; (vi) a decrease in operating lease liabilities of $0.6 million; and (vii) a decrease in contract liabilities of $90,030.
Previous report
Net cash used in operating activities was $3.3 million for the three months ended March 31, 2025. The difference between our net cash used in operating activities and our net loss of $2.1 million for the three months ended March 31, 2025 was primarily due to the combined effect of non-cash adjustments and changes in working capital. Non-cash adjustments primarily included non-cash operating lease expense of $0.5 million, provision of allowance for expected credit loss of $50,009, depreciation of $33,502, amortization of share-based compensation related to RSU granted of $195,940, amortization of share-based compensation related to options granted of $90,480 and amortization of finance lease right-of-use assets of $10,149, partially offset by deferred income tax recovery of $0.5 million. Changes in operating assets and liabilities mainly resulted from: (i) an increase in accounts receivable of $0.8 million; (ii) a decrease in inventories of $2.9 million; (iii) an increase in advances to suppliers of $94,328; (iv) a decrease in prepaid and other current assets of $0.2 million; (v) a decrease in accounts payable of $3.8 million; (vi) an increase in other payable, accrued expense and other current liabilities of $0.8 million; (vii) a decrease in warranty liabilities of $116,755; (viii) a decrease in return liabilities of $161,983; and (ix) a decrease in operating lease liabilities of $0.5 million.
Previous report
Net cash used in investing activities was $3.0 million for the three months ended March 31, 2025, primarily due to purchase of short-term investment of $3.0 million.
Previous report
Net cash used in financing activities was $11,582 for the three months ended March 31, 2026, primarily due to repayment of finance lease liabilities.
Previous report
Net cash used in financing activities was $3.0 million for the three months ended March 31, 2025, primarily due to repayment of loan from a related party of $3.0 million and repayment of finance lease liabilities of $10,686.
Previous report
As of March 31, 2026, we had cash and cash equivalents of approximately $4.1 million. Our current assets were approximately $32.9 million, including approximately $4.1 million of cash and cash equivalents, approximately $4.1 million of accounts receivable, approximately $23.9 million of inventory, approximately $0.2 million of advances to suppliers and approximately $0.5 million of prepaid and other current assets. Our current liabilities were approximately $16.6 million, including approximately $2.3 million of accounts payable, approximately $6.2 million of other payable, accrued expenses and other current liabilities, approximately $0.5 million of contract liabilities, approximately $3.5 million of income tax payable, approximately $2.0 million of loan from a related party, approximately $1.9 million of current portion of obligations under operating leases and approximately $0.1 million of other current liabilities, including return liabilities, warranty liabilities and current portion of obligations under financing leases. As a result, we had positive working capital of approximately $16.3 million as of March 31, 2026.
Previous report
Capital Expenditure
Previous report
Our capital expenditure consists primarily of the purchase of fixed assets and equipment as a result of our business growth. Our capital expenditure amounted to approximately $262,425 and nil for the first quarter of fiscal 2026 and 2025, respectively.
Reworded paragraphs (22)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2025 (“fiscal 2025”), as filed with the Securities and Exchange Commission (the “SEC”). In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. See “Cautionary Note Regarding Forward-Looking Statements.”
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”), and with the audited financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“fiscal 2025”), filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. See “Cautionary Note Regarding Forward-Looking Statements.”
Previous wording
Massimo is a holding company established on October 10, 2022 under the laws of the State of Nevada. The Company, through its subsidiaries, is primarily engaged in the manufacturing and sales of a wide selection of farm and ranch tested UTVs, recreational ATVs, and Pontoon Boats. Mr. David Shan, the executive chairman of the Board and then Chief Executive Officer, is the controlling shareholder (the “Controlling Shareholder”) of the Company.
Current wording
Massimo Group is a holding company established on October 10, 2022 under the laws of the State of Nevada. The Company, through its subsidiaries, is primarily engaged in the manufacturing and sales of a wide selection of farm and ranch tested UTVs, recreational ATVs, and Pontoon Boats. Mr. David Shan, our Executive Chairman of the Board of Directors and former Chief Executive Officer, is the controlling shareholder (the “Controlling Shareholder”) of the Company.
Previous wording
In advance of its IPO, a Reorganization of the Company’s legal structure was completed on June 1, 2023. At that time, the Controlling Shareholder transferred his 85% equity interest in Massimo Motor and 85% equity interest in Massimo Marine to Massimo. Together with 15% non-controlling interests which was also transferred to the Company, after the reorganization, Massimo owned 100% equity interests of Massimo Motor and Massimo Marine.
Current wording
In advance of our initial public offering and listing on Nasdaq, we completed a reorganization of the Company’s legal structure on June 1, 2023 (the “Reorganization”). At that time, the Controlling Shareholder transferred his 85% equity interest in Massimo Motor and 85% equity interest in Massimo Marine to Massimo. Together with the 15% non-controlling interests which were also transferred to the Company, after the Reorganization, Massimo owned 100% equity interests of Massimo Motor and Massimo Marine.
Previous wording
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. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying condensed consolidated financial statements in accordance with ASC 805-50-45-5.
Current wording
Before and after the Reorganization, we, together with our subsidiaries, are 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. The consolidation of the Company and our subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5.
Previous wording
We currently generate most of our revenues from the sales of UTVs and ATVs, which represented 97.1% and 96.8% of total revenue for the period ended March 31, 2026 and 2025, respectively.
Current wording
We currently generate most of our revenues from sales of UTVs, ATVs and electric bikes, which represented 94.1% and 97.7% of total revenue for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
We also generate revenue from the sales of Pontoon Boats, which represented 2.9% and 3.2% of our revenue for the period ended March 31, 2026 and 2025, respectively.
Current wording
We also generate revenue from sales of Pontoon Boats, which represented 5.9% and 2.3% of total revenue for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
For the Three Months Ended March 31, 2026 and 2025
Current wording
For the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
Revenue from sales of UTVs, ATVs and e-bikes decreased by $3.1 million, or 20.0%, from $15.4 million for the three months ended March 31, 2025 to $12.3 million for the three months ended March 31, 2026. The decrease was primarily attributable to a continued strategic decline in wholesale shipment volumes to our major big-box retail partners, as we continued to navigate a volatile geopolitical and macroeconomic environment.
Current wording
Revenue from UTVs, ATVs and electric bikes decreased by $3.9 million, or 22.4%, from $17.6 million for the three months ended June 30, 2025 to $13.7 million for the three months ended June 30, 2026. The decrease was primarily attributable to a continued strategic reduction in wholesale shipments to our major big-box retail partners as we aligned shipment cadence with actual retail sell-through and customer inventory levels.
Previous wording
Our selling expenses mainly include warranty expense, advertising and promotion expense, shipping and handling fees and merchant service fees. Selling expenses decreased by $0.6 million, or 32.4%, from $1.9 million for the three months ended March 31, 2025 to $1.3 million for the three months ended March 31, 2026. As a percentage of total revenue, selling expenses decreased from 12.5% for the three months ended March 31, 2025 to 9.9% for the three months ended March 31, 2026.
Current wording
Our selling expenses mainly include warranty expense, advertising and promotion expense, shipping and handling fees and merchant service fees. Selling expenses decreased by $0.5 million, or 20.9%, from $2.2 million for the three months ended June 30, 2025 to $1.7 million for the three months ended June 30, 2026, representing 11.4% of revenue in both periods.
Previous wording
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 remained relatively stable at $4.2 million for both the three months ended March 31, 2026 and 2025, with a slight increase of $1,239. Our general and administrative expenses represented 33.2% and 28.3% of our total revenue for the three months ended March 31, 2026 and 2025, respectively. The increase as a percentage of total revenue was mainly due to the decrease in revenue during the first quarter of fiscal 2026.
Current wording
Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, travel expenses, insurance expenses, rent and depreciation expenses. General and administrative expenses decreased by $0.8 million, or 18.0%, from $4.4 million for the three months ended June 30, 2025 to $3.6 million for the three months ended June 30, 2026. These expenses represented 24.3% and 23.4% of revenue, respectively. The decrease primarily reflected lower salaries and benefits, professional fees and insurance expenses, partially offset by higher rent and other general administrative expenses.
Previous wording
Our rent expenses increased by $0.1 million, or 12.8%, from $0.9 million for the three months ended March 31, 2025 to $1.0 million for the three months ended March 31, 2026, representing 24.1% and 21.4% of our total general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to higher renewal rent rates and the continued impact of lease arrangements entered into in prior periods.
Current wording
Rent expense increased by approximately $0.2 million, or 28.0%, from $0.6 million for the three months ended June 30, 2025 to $0.8 million for the three months ended June 30, 2026, representing 14.0% and 21.9% of general and administrative expenses, respectively. The increase primarily reflected higher renewal rental rates and the continued impact of lease arrangements entered into in prior periods.
Previous wording
We recorded an unrealized loss on crypto assets of $135,125 for the three months ended March 31, 2026. No such unrealized loss was recorded for the three months ended March 31, 2025. The unrealized loss was primarily attributable to changes in the fair value of crypto assets held by the Company during the period.
Current wording
We recorded an unrealized loss on crypto assets of approximately $52,900 for the three months ended June 30, 2026. No such unrealized loss was recorded for the three months ended June 30, 2025. The unrealized loss was attributable to changes in the fair value of crypto assets held by the Company during the period.
Previous wording
(Recovery of) Provision for income taxes
Current wording
Provision for income taxes
Previous wording
We recognized an income tax recovery of $0.2 million for the three months ended March 31, 2026, compared to an income tax recovery of $0.5 million for the three months ended March 31, 2025. The decrease in income tax recovery was primarily attributable to the lower loss before income taxes and changes in temporary differences recognized during the respective periods.
Current wording
Income tax expense increased by approximately $252,900, from $27,300 for the three months ended June 30, 2025 to $280,200 for the three months ended June 30, 2026. The increase was primarily attributable to the increase in income before income taxes and changes in temporary differences recognized during the respective periods. The effective tax rate was approximately 16.2% and 26.0%, respectively for the period ended June 30, 2025 and 2026.
Previous wording
Total revenue decreased by $2.2 million, or 14.7%, from $14.9 million for the three months ended March 31, 2025 to $12.7 million for the three months ended March 31, 2026. The decrease was primarily driven by lower revenue from sales of UTVs, ATVs and e-bikes, and, to a lesser extent, lower revenue from sales of Pontoon Boats. The decrease was partially offset by the absence in the first quarter of 2026 of the $1.0 million reduction to revenue recorded in the first quarter of 2025 in connection with the repurchase of goods under a litigation settlement.
Current wording
Revenues decreased by $6.2 million, or 18.3%, from $33.8 million for the six months ended June 30, 2025 to $27.6 million for the six months ended June 30, 2026. The decrease was primarily driven by lower revenue from UTVs, ATVs and electric bikes, partially offset by higher reported revenue from Pontoon Boats resulting principally from the absence in 2026 of the revenue reduction recorded in the first half of 2025 in connection with the repurchase of goods under a litigation settlement.
Previous wording
Consistent with our operating approach in fiscal year 2025, we continued to exercise discipline in managing wholesale shipments to dealers and avoided pushing inventory into a financially constrained distribution channel. Dealer floorplan financing conditions remained challenging, which continued to limit wholesale purchasing appetite across the industry. In response, we maintained a cautious shipment strategy while continuing to evaluate opportunities to expand higher-margin and more controllable sales channels, including our Direct-to-Consumer approach. Although this disciplined approach reduced recognized revenue from Pontoon Boats during the first quarter of 2026, we believe it helped mitigate inventory and credit risks within the marine business.
Current wording
Inflationary pressure and elevated interest rates also continued to constrain discretionary consumer spending. Consistent with our operating approach, we avoided pushing inventory into financially constrained distribution channels while continuing to evaluate opportunities to expand higher-margin and more controllable sales channels, including our Direct-to-Consumer approach.
Previous wording
Our gross profit increased by $0.9 million, or 20.1%, from $4.2 million for the three months ended March 31, 2025 to $5.1 million for the three months ended March 31, 2026. Our overall gross margin increased from 28.4% for the three months ended March 31, 2025 to 39.9% for the three months ended March 31, 2026. The improvement in gross margin was primarily attributable to a more favorable product mix, improved cost controls, enhanced sourcing efficiency and the absence in the first quarter of 2026 of the cost impact associated with the repurchase of inventory under a litigation settlement recorded in the first quarter of 2025.
Current wording
Gross profit increased by $1.3 million, or 11.4%, from $11.1 million for the six months ended June 30, 2025 to $12.4 million for the six months ended June 30, 2026. Gross margin increased to 44.7% from 32.8%. The improvement was primarily attributable to a more favorable product mix, improved sourcing and cost controls, disciplined management of freight, duty and other landed costs, lower tariff rates on certain imported products, and refunds or credits for tariffs previously paid. The comparison also benefited from the absence in 2026 of the cost impact associated with the repurchase of inventory under the litigation settlement recorded in the first half of 2025.
Previous wording
The following table sets forth summary of our cash flows for the periods indicated:
Current wording
The following table summarizes our cash flows for the periods indicated:
Previous wording
Net cash used in investing activities was $0.3 million for the three months ended March 31, 2026, primarily due to acquisition of property and equipment of $262,457, partially offset by proceeds from sales of property and equipment of $10,000.
Current wording
Net cash used in investing activities was approximately $1.1 million for the six months ended June 30, 2026, compared with nil for the same period in 2025. The 2026 amount consisted principally of approximately $0.7 million of purchases of property and equipment and approximately $0.4 million of purchases of intangible assets, partially offset by approximately $10,000 of proceeds from sales of property and equipment.
Previous wording
Our primary source of cash is currently generated from our business. In the coming years, we will be looking to other sources, such as raising additional capital by issuing shares of stock, to meet our cash needs. While facing uncertainties regarding the size and timing of any future capital raise, we are confident that we can continue to organically support our operational needs solely by utilizing cash flows generated from our operating activities for the next 12 months.
Current wording
Our primary source of cash is currently generated from our business and bank borrowings. In the coming years, we will be looking to other sources, such as raising additional capital by issuing shares of stock, to meet our cash needs, as needed. Although there are uncertainties regarding the size and timing of any future capital raise, we are confident that we can continue to meet operational needs solely by utilizing cash flow generated from our operating activities for the next 12 months from the date of the issuance of the financial statements contained in this Report.
Previous wording
As of March 31, 2026, the Company’s contractual obligations consisted of the following:
Current wording
As of June 30, 2026, the Company’s contractual obligations consisted principally of operating and finance lease commitments with aggregate undiscounted payments of approximately $7.3 million. Approximately $2.3 million was due within one year, $4.7 million was due within one to three years and $0.2 million was due within three to five years. No scheduled lease payments were due more than five years after June 30, 2026.
Previous wording
There was no off-balance sheet arrangements for the three months ended March 31, 2026 and 2025, 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.
Current wording
There was no off-balance sheet arrangements for the six months ended June 30, 2026 and 2025, 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.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Revenue from sales of UTVs, ATVs and e-bikes
Current report — wording carried from elsewhere
Revenue from sales of Pontoon Boats
Current report — wording carried from elsewhere
Our cost and gross profit by revenue types are as follows:
Current report — wording carried from elsewhere
Our selling expenses mainly include warranty expense, advertising and promotion expense, shipping and handling fees and merchant service fees. Selling expenses decreased by $1.1 million, or 26.2%, from $4.0 million for the six months ended June 30, 2025 to $3.0 million for the six months ended June 30, 2026, representing 11.9% and 10.7% of revenue, respectively.
Current report — wording carried from elsewhere
We recorded an unrealized loss on crypto assets of approximately $188,000 for the six months ended June 30, 2026. No such unrealized loss was recorded for the six months ended June 30, 2025. The unrealized loss was attributable to changes in the fair value of crypto assets held by the Company during the period.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the Three Months ended March 31, 2026 and 2025