UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2024

 

Commission File Number 001-41573

 

CARAVELLE INTERNATIONAL GROUP
(Translation of registrant’s name into English)

 

Office Unit 1125,
11/F, Lee Garden One,
33 Hysan Ave,
Causeway Bay, Hong Kong
+852 38481700

 

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F ☒       Form 40-F

 

 

 

 

 

Non-Reliance on Previously Issued Financial Statements

 

On October 30, 2024, Caravelle International Group’s (the “Company’s”) management and the audit committee of the Board of Directors (the “Audit Committee”) concluded that the Company’s (i) previously issued unaudited and unreviewed condensed consolidated Balance Sheets as of April 30, 2023 and Statement of Operations and Comprehensive Income (Loss) for the six months ended April 30, 2023 (the “Non-Reliance Periods”) included in the Company’s Report on Form 6- K filed on February 29, 2024 should be restated and accordingly, should no longer be relied upon.

 

Similarly, any previously furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing the Company’s financial results as of and for the Non-Reliance Periods should no longer be relied upon.

 

Background

 

During the interim review of the Company’s financial results for the six months ended April 30, 2024 and 2023, the Audit Committee and management concluded there were errors identified in the previously disclosed the balance sheet as of April 30, 2023 and the operating results for the six months ended April 30, 2023 due to inappropriate consolidation and lack of appropriate cutoff procedures on revenue, costs and expenses during the period end close. The impacts of these restatements are as follow:

 

Restated Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Six Months Ended April 30, 2023.

 

   For the Six Months Ended April 30, 2023 
   Previously reported   Effect of restatement   Restated 
Revenue            
Ocean freight revenue  $45,093,336   $4,236,957   $49,330,293 
Vessel service revenue   8,800    206,318    215,118 
Total revenue   45,102,136    4,443,275    49,545,411 
                
Cost of revenues   41,713,652    12,526,618    54,240,270 
Gross profit (loss)   3,388,484    (8,083,343)   (4,694,859)
                
Operating expenses:               
General and administrative expenses   2,023,855    79,464    2,103,319 
Total operating expenses   2,023,855    79,464    2,103,319 
                
Income (loss) from operations   1,364,629    (8,162,807)   (6,798,178)
                
Other Income (Expense)               
Interest income   942    12    954 
Interest expense   (51,992)   (5,046)   (57,038)
Other income (expense), net   36,124    (230,353)   (194,229)
Total other expense, net   (14,926)   (235,387)   (250,313)
                
Income (loss) before income taxes   1,349,703    (8,398,194)   (7,048,491)
                
Provision for income taxes   -    2,542    2,542 
                
Net income (loss)   1,349,703    (8,400,736)   (7,051,033)
Less: Net income (loss) attributable to non-controlling interests   611,750    (3,343,984)   (2,732,234)
Net income (loss) attributable to the Company  $737,953   $(5,056,752)  $(4,318,799)
                
Comprehensive income(loss)   1,349,703    (8,400,736)   (7,051,033)
Less: Comprehensive income (loss) attributable to non-controlling interests   611,750    (3,343,984)   (2,732,234)
Comprehensive income (loss) attributable to the Company  $737,953   $(5,056,752)  $(4,318,799)
                
Earnings (loss) per share attributable to the Company - Basic and diluted*  $0.01   $(0.09)  $(0.08)
Weighted Average Number of Shares Outstanding - Basic and diluted*   50,000,000    2,068,190    52,068,190 

 

1

 

Unaudited Condensed Consolidated Balance Sheets as of April 30, 2023.

 

   As of April 30, 2023 
   Previously reported   Effect of restatement   Restated 
ASSETS            
Current Assets:            
Cash and cash equivalents  $9,618,961   $(14,303)  $9,604,658 
Accounts receivable   1,120,891    (461,104)   659,787 
Prepayments and other current assets   20,247,842    (18,413,811)   1,834,031 
Total Current Assets   30,987,694    (18,889,218)   12,098,476 
                
Property and equipment, net   593,781    (10,753)   583,028 
Prepayment and other non-current assets   1,513,809    (667,101)   846,708 
Operating lease right of use asset, net   -    189,039    189,039 
Total Assets  $33,095,284   $(19,378,033)  $13,717,251 
                
LIABILITIES AND EQUITY (DEFICIT)               
                
Current Liabilities:               
Current maturity of long-term bank loan  $290,835   $1,081,202   $1,372,037 
Accounts payable   467,040    (84,107)   382,933 
Advance from customers   14,646,609    (10,537,701)   4,108,908 
Accrued expenses and other liabilities   2,695,541    (1,077,135)   1,618,406 
Operating lease liability-current   -    124,500    124,500 
Taxes payable   3,549    52,612    56,161 
Due to related parties   3,126,270    (230,718)   2,895,552 
Total Current Liabilities   21,229,844    (10,671,347)   10,558,497 
                
Long-term bank loans   2,491,167    (859,033)   1,632,134 
Operating lease liability-noncurrent   -    64,538    64,538 
Deferred tax liability   217    -    217 
Total Liabilities   23,721,228    (11,465,842)   12,255,386 
                
COMMITMENTS AND CONTINGENCIES               
                
Total Equity (deficit):               
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 52,774,579 and 50,000,000 shares issued and outstanding at April 30, 2023   5,000    278    5,278 
Additional paid-in capital   152,550    (609,733)   (457,183)
Retained earnings   3,114,651    (3,056,752)   57,899 
Total Shareholders’ Equity (Deficit)   3,272,201    (3,666,207)   (394,006)
Non-controlling interest   6,101,855    (4,245,984)   1,855,871 
Total Equity (Deficit)   9,374,056    (7,912,191)   1,461,865 
Total Liabilities and Equity (Deficit)  $33,095,284   $(19,378,033)  $13,717,251 

 

2

 

As part of its consideration of the accounting issues, the Company has and will continue to assess the underlying internal control deficiencies that enabled the errors to occur and not be prevented or detected on a timely basis. The Company takes financial reporting matters seriously and is committed to upholding high standards of corporate governance and internal controls. Accordingly, the Company has instituted remediation measures and is considering and will continue to consider additional measures, as appropriate. The remediation measures have included, the following:

 

(i)To ensure that our executive officers, operational personnel and accounting group fully understand the Company’s commitment to establishing an effective control environment, the Company has undertaken communications that establish our expectations regarding internal controls and applicable accounting standards and financial reporting requirements.  In connection with this, the Company has conducted a number of training sessions for the entire accounting group and our senior management personnel regarding the importance of the Company establishing and maintaining an effective control environment and financial reporting responsibilities.  Management intends to include these principles as an ongoing component of our new hire training and other employee training courses.

 

(ii)Management plans to increase the size, qualifications and organization of our accounting personnel.  The Company has established or strengthened several accounting functions focused on key areas of our business, including but not limited to proper periodic cutoff procedures on revenue, cost and expenses during the periodic accounting close process. In addition, the Company will incorporate controls designed to improve the coordination between the business department and accounting personnel to ensure the completeness of the financial information for the periodic financial reporting.

 

(iii)In our efforts toward remediation of our material weaknesses around consolidation, management have developed policies, procedures and controls over the timely preparation of consolidation, reconciliations of accounts and the related documentation during each period end accounting close and financial reporting process.  In connection with the implementation of these policies, procedures and controls, we have improved our training regarding our consolidation and account reconciliation processes and have adopted review procedures.

 

Management is improving its processes of reviewing financial statements, increasing communications with independent accounting professionals and implementing additional procedures to ensure that the review of the Company’s financial statements is supported by sufficient documentation to determine accuracy.

 

Forward-Looking Statements

 

This Form 6-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements contained in this Form 6-K that do not relate to matters of historical fact should be considered forward-looking, including statements regarding the expected impact of the restatement of the Company’s financial statements, and the remediation of the Company’s material weakness in internal control over financial reporting. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this Form 6-K, include, but is not limited to, the Company’s ability to remediate its material weaknesses; and various factors relating to its business, operations and financial performance. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described under the caption “Risk Factors” in the Company’s Annual Report on Form 20-F for the fiscal year ended October 31, 2023, as such factors may be updated from time to time in its other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These filings identify and address other important risks and uncertainties that could cause the Company’s actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

 

3

 

CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES  

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

   As of
April 30,
2023
   As of
October 31,
2022
 
   (Restated)     
ASSETS        
Current Assets:        
Cash and cash equivalents  $9,604,658   $21,572,336 
Accounts receivable   659,787    3,955,311 
Prepayments and other current assets   1,834,031    6,949,397 
Due from related parties   -    951,655 
Total Current Assets   12,098,476    33,428,699 
           
Property and equipment, net   583,028    604,126 
Prepayment and other non-current assets   846,708    1,538,591 
Operating lease right of use asset, net   189,039    - 
Total Assets  $13,717,251   $35,571,416 
           
LIABILITIES AND DEFICIT          
           
Current Liabilities:          
Current maturity of long-term bank loan  $1,372,037   $880,631 
Accounts payable   382,933    750,471 
Advance from customers   4,108,908    10,067,278 
Accrued expenses and other liabilities   1,618,406    8,492,923 
Operating lease liability-current   124,500    - 
Taxes payable   56,161    10,939 
Due to related parties   2,895,552    2,976,902 
Total Current Liabilities   10,558,497    23,179,144 
           
Long-term bank loans   1,632,134    2,366,626 
Operating lease liability-noncurrent   64,538    - 
Deferred tax liability   217    1,293 
Total Liabilities   12,255,386    25,547,063 
           
COMMITMENTS AND CONTINGENCIES          
           
Total Equity:          
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 52,774,579 and 50,000,000 shares issued and outstanding as of April 30, 2023 and October 31, 2022, respectively   5,278    5,000 
Additional paid-in capital   (457,183)   152,550 
Accumulated deficit   57,899    4,376,698 
Total Shareholders’ Deficit   (394,006)   4,534,248 
Non-controlling interest   1,855,871    5,490,105 
Total Equity   1,461,865    10,024,353 
Total Liabilities and Deficit  $13,717,251   $35,571,416 

 

4

 

CARAVELLE INTERNATIONAL GROUP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE LOSS

 

   For the Six Months Ended 
   April 30,
2023
   April 30,
2022
 
   (Restated)     
Revenue        
Ocean freight revenue  $49,330,293   $88,960,921 
Vessel service revenue   215,118    7,711,755 
Total revenue   49,545,411    96,672,676 
           
Cost of revenues   54,240,270    74,882,496 
Gross profit (loss)   (4,694,859)   21,790,180 
           
Operating expenses:          
Selling expenses   -    16,341 
General and administrative expenses   2,103,319    1,639,146 
Total operating expenses   2,103,319    1,655,487 
           
Income (loss) from operations   (6,798,178)   20,134,693 
           
Other income  (Expense)          
Interest income   954    - 
Interest expense   (57,038)   (51,370)
Other income (expense), net   (194,229)   71,645 
Total other expense, net   (250,313)   20,275 
           
Income (loss) before income taxes   (7,048,491)   20,154,968 
           
Provision for income taxes   2,542    645 
           
Net income (loss)   (7,051,033)   20,154,323 
Less: Net income (loss) attributable to non-controlling interests   (2,732,234)   9,519,262 
Net income (loss)  attributable to the Company  $(4,318,799)  $10,635,061 
           
Comprehensive income (loss)   (7,051,033)   20,154,323 
Less: Comprehensive income (loss) attributable to non-controlling interests   (2,732,234)   9,519,262 
Comprehensive income (loss)  attributable to the Company  $(4,318,799)  $10,635,061 
           
(Loss) earnings per share attributable to the Company - Basic and diluted*  $(0.08)  $0.21 
Weighted Average Shares Outstanding - Basic and diluted*   52,068,190    50,000,000 

 

5

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: October 30, 2024 CARAVELLE INTERNATIONAL GROUP
   
  By: /s/ Hanxi Chang
    Hanxi Chang
    Chief Executive Officer
    (Principal Executive Officer)

 

6

 


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