HTCO High Trend International Group

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

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended October 31, 2024

OR

☐ TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report ________

For the transition period from __________ to __________

Commission file number 001-41573

High-Trend International Group

(formerly Caravelle International Group)

(Exact Name of registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

Cayman Islands
(Jurisdiction of incorporation or organization)

60 Paya Lebar Road

#06-17 Paya Lebar Square

Singapore 409051

(65) 8304 8372
(Address of principal executive offices)

Shixuan He, Chief Executive Officer
60 Paya Lebar Road

#06-17 Paya Lebar Square

Singapore 409051

(65) 8304 8372
Email: brucehe@htcoint.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: as of October 31, 2024, 117,885,481 Class A Ordinary Shares were issued and outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. **Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. **Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). **Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. **Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Table of Contents

INTRODUCTION

We are an exempted company that was incorporated under the laws of the Cayman Islands on February 28, 2022, as a holding company. On January 31, 2025, our name change from Caravelle International Group to High-Trend International Group became effective on the Nasdaq Capital Market and our Class A Ordinary Shares began to trade as our Class A Ordinary Shares. We are headquartered in Singapore and currently derives substantially all of our revenues from shipping services for customers in Asia, mostly in Singapore, Dubai, Korea, Japan, and India.

We previously planned to launch the CO-Tech business, which was expected to enable wood desiccation during the maritime shipping process, with full utilization of the shipping time, space, and the waste heat of exhaust gas from the shipping vessels. Despite its initial promise, the CO-Tech business faced significant delays due to a lack of funding and our inability to confirm that the business would be successful.  In 2024, our new management team decided to withdraw from this business. Our new management team has engaged a consulting team to conduct research as to the feasibility of our entry into the business of providing carbon neutrality solutions for the shipping industry in light of the growing regulatory trends regarding carbon emissions. Based on the consulting team’s findings, we believe that there is significant potential in the provision of marine carbon neutrality technologies, particularly in onboard carbon capture (“OCC”). To capitalize on this opportunity, we are in the process of establishing a specialized team and developing strategic partnerships with leading technology suppliers. Our goal is to become a key provider of onboard carbon capture solutions, which will include designing and installing carbon capture equipment, transporting captured CO2, and participating in carbon credit trading. This initiative aligns with our commitment to support the shipping industry’s transition towards more environmentally friendly practices and sustainability.

Our website is www.htcointl.com. The information on our website is not incorporated by reference into this annual report. As used in this annual report, the terms “we,” “us,” “our,” “High-Trend,” and “the Company” refer to High-Trend International Group and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify the forward-looking statements. The risk factors and cautionary language in this Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements, including among other things, the items identified in “Item 3.D. — Risk Factors” section of this Report.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements contained in this Report, or the documents to which we refer readers in this Report, to reflect any change in our expectations with respect to such statements or any change in events, conditions or circumstances upon which any statement is based.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A. Directors and Senior Management

Not applicable.

B. Advisors

Not applicable.

C. Auditors

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

Not applicable .

B. Capitalization and indebtedness

Not applicable.

C. Reasons for the offer and use of proceeds

Not applicable.

D. Risk factors

Investing in our securities involves a high degree of risk. In addition to the other information contained in this Report, including the matters addressed under the headings “Cautionary Note Regarding Forward-Looking Statements,” “Item 5. Operating and Financial Review and Prospects”, and the consolidated financial statements and related notes contained herein, you should carefully consider the following risk factors presented in this Report. The risks associated with our company are discussed below, and many of these risks may have various ramifications. Therefore, the information below should be viewed as a starting point for understanding the significant risks relating to our company, and not as a limitation on the potential impact of the matters discussed. Our business, results of operations, financial condition and prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, results of operations, financial condition and prospects could be materially and adversely affected. Unless otherwise indicated, references to business being harmed in these risk factors include harm to our business, reputation, brand, financial condition, results of operations and future prospects.

Summary of Risk Factors

The following summary description sets forth an overview of the material risks we are exposed to in the normal course of our business activities. The summary does not purport to be complete and is qualified in its entirety by reference to the full risk factor discussion immediately following this summary description. We encourage you to read the full risk factor discussion carefully. The occurrence of one or more of the events or circumstances described in this section, alone or in combination with other events or circumstances, may have a material adverse effect on our business, cash flows, financial condition and results of operations.

Risks Related to Our International Shipping Business

Risks Relating to Our Company

Risks Related to Our Class A Ordinary Shares

Risks Related to Our Company

Our success depends on our new management team and uncertainty has been introduced by the new management team’s strategic reassessment of our overall business.

In 2024, we experienced significant changes in our executive management and board of directors, with the resignation of the prior management team. The newly appointed management team, led by Jinyu Chang, Chairman of the Board, Shixuan He, Chief Executive Officer, Zi Xia, Chief Financial Officer, along with our new independent directors Xuanhua Xi, Christopher Renn, and Jing Sang, has limited experience working together as a cohesive unit. In addition, in 2024, Mr. Dong Zhang, our former Chief Shipping Officer and director resigned his positions with our company.

We depend to a large extent on the abilities of our current management team, with our continued reliance on Mr. Dong Zhang, who continues as a member of the team management and as a shareholder of Topsheen Shipping Limited, from whom we charter most of our vessels. Mr. Zhang’s deep experience and extensive relationships in the shipping industry continues to add value to our management team. The loss of services of our new management team or of Mr. Zhang for any reason may have a material adverse effect on our business and prospects. Additionally, potential conflicts of interest may arise due to the prior affiliations of Mr. Zhang with our company, which could further complicate these commercial relationships and impact our strategic objectives. 

Our new management may make further adjustments to the team and reassess our short and long-term business portfolio and development strategies. These potential changes could lead to shifts in our company’s strategic direction, which may impact our operations, financial condition, and overall business performance. While these adjustments may introduce uncertainty that could affect our ability to achieve our business objectives.

We have incurred losses in each of the last two years and we may not be able to achieve or maintain profitability in the future.

For the years ended October 31, 2024 and 2023, we incurred net losses of $21,214,850 and $15,777,704, respectively and as of October 31, 2024, we had an accumulated deficit $26,677,404. To the date, we have financed our operations primarily with proceeds from equity and debt offerings, borrowings, and loans from related parties. We cannot predict when we will return to profitable operations, if at all. If we are unable to generate sufficient revenue from our business and control our costs and expenses to achieve and maintain profitability, the value of your investment in us could be negatively affected.

Our plans to enter into the carbon neutrality solutions business may not be realized. If realized, no assurance can be given that we will be successful.

We are currently investigating entering carbon neutral /carbon trading business. No assurance can be given that we will enter this business or that if we enter into this business that we will be successful. In the future, we may seek to acquire or make strategic investments in complementary businesses, technologies, services or products, or enter into strategic partnerships or alliances with third parties in order to expand our business. Failure to manage and successfully integrate such acquisitions could materially harm our business and operating results. If we acquire other businesses, we may face difficulties, including:

The ability of our subsidiaries and consolidated affiliated entities in Singapore and Samoa to distribute dividends may be subject to restrictions under Singapore and Samoa laws.

We are a holding company, and our principal subsidiaries are located in Singapore and Samoa. All or substantially all of our primary internal sources of funds to meet our cash needs is from dividends, if any, paid by our subsidiaries and consolidated affiliated entities. The distribution of dividends to us from the subsidiaries and consolidated affiliated entities in these markets as well as other markets where we operate is subject to restrictions imposed by the applicable laws and regulations in these markets, which may include foreign exchange controls.

For example, under Singapore law, dividends, whether in cash or in specie, can only be paid out of such Singapore subsidiary’s profits available for distribution. The availability of distributable profits is assessed on the basis of each Singapore subsidiary’s standalone unconsolidated accounts, which are based upon IFRS. There is no assurance that the Singapore subsidiaries will not incur losses, that they will become profitable, or that they will have sufficient distributable income that might be distributed to us as a dividend or other distribution in the foreseeable future. Therefore, the Singapore subsidiaries will be unable to pay dividends to us unless and until they have generated sufficient distributable reserves. Accordingly, it may not be legally permissible for the Singapore subsidiaries to pay dividends to us.

Notwithstanding that sufficient profits may be available for distribution, there are other conditions which may limit the Singapore subsidiaries’ ability to pay dividends. Any determination to pay dividends will be at the discretion of the Singapore subsidiary’s board of directors, which may exercise its discretion to retain such subsidiary’s future earnings for use in the development of such subsidiary’s business, in reducing its indebtedness or for general corporate purposes.

We may be classified as a Singapore tax resident, which could result in our being taxed.

We and our subsidiaries may be subject to tax in the jurisdictions in which we and they are organized or operate, reducing the amount of cash available for distribution. In computing our tax obligation in these jurisdictions, it is required to take various tax accounting and reporting positions on matters that are not entirely free from doubt and for which we have not received rulings from the governing authorities. We cannot be certain that upon review of these positions the applicable authorities will agree with our positions. A successful challenge by a tax authority could result in additional tax imposed on us or our subsidiaries, further reducing the cash available for distribution. In addition, changes in our operations or ownership could result in additional tax being imposed on us or our subsidiaries in jurisdictions in which we conduct operations

Risks Related to Our International Shipping Business

We primarily charter vessels from Topsheen Shipping Limited, a company controlled by Mr. Dong Zhang, our former principal shareholder, Chief Shipping Officer and director.

We charter vessels primarily from Topsheen Shipping Limited (‘Topsheen Ltd.”), a company controlled by Mr. Dong Zhang, our former principal shareholder, Chief Shipping Officer and director. If Topsheen Ltd. terminates its business relationship with us, we may be unable to secure adequate vessel replacements in a timely manner or may be required to pay a higher charter rate for comparable vessel replacements, which could have a material adverse effect on our business, financial condition and results of operations.

More generally, since Mr. Zhang was a related party of our company, the agreements previously negotiated between our company and the entities he controls may not have been negotiated at arm’s length. It is possible the agreements are more favorable to Mr. Zhang’s controlled entities than is industry standard, due to the possible conflicts of interest described above. On the other hand, it is also possible that the agreements are more favorable to us than is industry standard, in which event we may be unable to enter into agreements on similarly favorable terms with other vessel suppliers if Topsheen Ltd. terminates its relationship with our company or changes the agreement terms.

The cyclical nature of the shipping industry could have an adverse effect on our business.

Historically, the financial performance of the shipping industry has been cyclical, with volatility in profitability and asset values resulting from changes in the supply of, and demand for, international maritime shipping services. The level of shipping capacity is a function of the number and size of vessels in the world fleet, their deployment, the delivery of new vessels and the scrapping of older vessels. The demand for international maritime shipping services is influenced by, among other factors, global and regional economic conditions, currency exchange rates, the globalization of manufacturing, fluctuation in the levels of global and regional international trade, regulatory developments and changes in seaborne and other transportation patterns. Changes in the demand for international maritime shipping services are difficult to predict. Decreases in such demand and/or increases in international maritime shipping capacity could lead to significantly lower freight rates, reduced volume, or a combination of the two, which would have a material adverse effect on our business, financial condition and results of operations.

Our future profitability and growth depend on the demand for shipping vessels and global economic conditions, and the impact of consumer confidence and consumer spending on shipping volume and charter rates. Charter hire rates may experience volatility or increase, which would, in turn, adversely affect our profitability.

The ocean-going shipping industry is both cyclical and volatile in terms of charter hire rates and profitability. Charter rates are impacted by various factors, including supplies of vessels, the level of global trade, exports from one part of the world to the other parts, demand for the seaborne transportation cargoes, and shipping capacity. High demand for shipping capacity and lower supply of shipping capacity could result in higher charter rates, which may adversely affect our profitability. The factors affecting the supply and demand for shipping vessels are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. The Baltic Dry Index, or the BDI, an index of the daily average of charter rates for key routes published by the Baltic Exchange Limited, which has long been viewed as the main benchmark to monitor the movements of the vessel charter market and the performance of the entire shipping market, declined approximately 97.5% from its high of 11,793 in May 2008 to 290 on February 10, 2016, and has remained volatile since then. During the fiscal year ended October 31, 2024, the BDI continued to fluctuate, starting at approximately 1,401 in November 2023, after peaking at 3,346 on December 4, 2023, reaching a low of 1,308 in January 17, 2024, and finally closing at 1,388 on October 31, 2024.

Factors that influence the supply of shipping capacity include:

 An increase in trade protectionism globally, including the imposition of tariffs, could have a material adverse impact on our business and, in turn, could cause a material adverse impact on our business, financial condition and results of operation.

Our operations are exposed to the risk that increased trade protectionism globally, including the imposition of tariffs, could adversely affect our business. Governments may turn to tariffs and other trade barriers to protect or revive their domestic industries in the face of foreign imports, thereby depressing the demand for shipping. Restrictions on imports, including in the form of tariffs, could have a major impact on global trade and demand for shipping. Trade protectionism in the markets that we serve may cause an increase in the cost of exported goods, the length of time required to deliver goods and the risks associated with exporting goods and, as a result, a decline in the volume of exported goods and demand for shipping. The new President of the United States has repeatedly stated that he intends to impose tariffs on exports to the United States. The eventuality, timing and rates of potential tariffs are difficult to predict at this time. However, the economic impact of tariffs on goods that ship could negatively impact the volume of shipments which would have a material adverse effect on our business, operating results and financial condition.

We obtain revenues from the shipment of goods from Asia to various overseas export markets. Any reduction in or hindrance to the output of Asia-based exporters could have a material adverse effect on the growth rate of Asian-based exports and on our business.

If global economic conditions weaken, particularly in the Asia Pacific region, it could have a material adverse effect on our business, financial condition and results of operations.

Global economic conditions impact worldwide demand for various goods and, thus, the demand for shipping services. In particular, we anticipate a significant number of the port calls made by its vessels will continue to involve the loading or unloading of cargos in ports in the Asia Pacific region. As a result, negative changes in economic conditions in any Asia Pacific country can have a significant impact on the demand for international maritime shipping. However, if the pace of growth in the Asia Pacific declines in the future, this may have a negative impact on international maritime shipping demand and for our services.

Outbreaks of epidemic and pandemic diseases, such as the COVID-19 pandemic, and governmental responses thereto, could adversely affect our business.

Outbreaks of epidemic and pandemic diseases, along with governmental responses to such events, could adversely affect our business. While the COVID-19 pandemic has receded as an immediate threat due to widespread vaccination and easing of restrictions, it has had a lasting impact on the global economy, trade patterns, and the operational environment in which we operate. These changes could continue to materially affect our business, financial condition, cash flows, and results of operations.

Although most governments have lifted lockdowns and eased travel restrictions, the risk of new variants, localized outbreaks, or other public health crises remains. Such events could prompt renewed restrictions, disrupting global supply chains, trade routes, and our operations. Even as businesses return to normal, the global economy still faces challenges, including labor shortages, supply chain disruptions, and shifts in consumer behavior, all of which could impact the demand for our services.

We have adapted to operating in this new environment, but the potential for future public health emergencies could introduce new operational and financial risks. These include increased costs, logistical challenges, and potential interruptions in service due to health and safety measures. Moreover, the ongoing economic impact of the pandemic and potential future crises may continue to affect the financial stability of our customers and suppliers, further complicating operations.

The extent of any future public health crisis’s impact on our operations and financial performance will depend on various factors, including the severity of the outbreak, the effectiveness of governmental responses, the availability of medical interventions, and the resilience of the global economy. While we are taking steps to mitigate these risks, the potential for significant adverse effects on our company’s operations and financial condition remains. 

We operate in a highly competitive international shipping industry and if we do not compete successfully with new entrants or established companies with greater resources, our shipping business and results of operations may be adversely affected.

The worldwide international maritime shipping business is highly competitive. Barriers to entry are relatively low for existing shipping companies wishing to enter, or expand their presence in, a new market or new trade lane. Carriers compete based on price, frequency of service, transit time, port coverage, service reliability, vessel availability, inland operations, quality of customer service, value added services and other customer requirements. There is strong competition in the international markets and trade lanes that we currently operate in and we expect that current competitive pressures within the international maritime shipping industry will continue.

Increases in marine fuel prices could increase our operating costs and adversely affect our business.

Since February 2022, crude oil prices have experienced significant volatility. The Russia-Ukraine conflict initially caused prices to surge, reaching a peak of over $120 per barrel by mid-2022 due to concerns over supply disruptions and sanctions imposed on Russia, one of the world’s largest oil exporters. These sanctions and trade restrictions have introduced significant uncertainty in global energy markets. However, oil prices have since fluctuated, experiencing periods of decline due to factors such as increased production from other sources, shifts in global demand, and concerns over a potential economic slowdown.

The cost of marine fuel is influenced by a variety of economic and political factors beyond our control, making it unpredictable and subject to fluctuation. These factors include geopolitical developments, the global supply of and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing nations, as well as regional production patterns and environmental regulations. In the years 2024, 2023 and 2022, the cost of marine fuel accounted for approximately 28.4%, 28.5% and 21.9% of our total operating costs, respectively.  In 2024, the average price of crude oil was approximately $80 per barrel, which was a slight increase compared to 2023.

A significant increase in fuel prices could materially affect our profitability, cash flows, and ability to pay dividends, as higher fuel costs would directly increase operational expenses. We must continue to monitor these market conditions closely and consider potential strategies to mitigate the impact of fuel price volatility on our operations and financial performance.

Increases in port fees and stevedoring expenses could increase our operating costs and adversely affect our business.

Pursuant to the terminal port agreements we entered into with stevedoring companies, we are charged for the use of their labor and the stevedoring facilities. Any increase in such fees and expenses could adversely affect our business, results of operations and financial condition in the event that we are unable to increase freight rates or otherwise recover such increased fees and expenses from our customers.

World events, including terrorist attacks and regional conflict, could have a material adverse effect on our business, financial condition and results of operations.

Past terrorist attacks, as well as the threat of future terrorist attacks around the world, continue to cause uncertainty in the world’s financial markets and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in Ukraine, Russia, Azerbaijan, North Korea, Myanmar, the Middle East, North Africa and the Gulf of Guinea, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. Recently, government leaders have declared that their countries may turn to trade barriers to protect or revive their domestic industries in the face of foreign imports. Conflicts in a country in which a material supplier or customer of ours is located could impact that supply to us or our ability to earn revenue from that customer. In the past, l conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping. Restrictions on imports, including in the form of tariffs, have had and could have a major impact on global trade and demand for shipping. Any of these occurrences could have a material adverse effect on our business, financial condition and results of operations.

Acts of piracy on ocean-going vessels could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia and, in particular, the Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in recent years. Sea piracy incidents continue to occur, increasingly in the Sulu Sea and the Gulf of Guinea. In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping particularly in the Arabian Gulf region and most recently in the Black Sea in connection with the ongoing Ukraine-Russia conflict and in the Red Sea in connection with Israeli-Hamas conflict. Commercial vessels have been attacked in international waters in the southern Red Sea, according to statements by the U.S. military, with Yemen’s Houthi claiming drone and missile attacks on two Israeli vessels in the area, in response to the ongoing conflict in the region. The perception that our vessels are a potential piracy or terrorist target could have a material adverse impact on our business, financial condition and results of operations.

Further, if these piracy attacks occur in regions in which our vessels are deployed that insurers characterize as “war risk” zones or by the Joint War Committee (consisting of underwriting representatives from both the Lloyd’s and International Underwriting Association company markets, representing the interests of those who write marine hull business in the London market) as “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain, if available at all. In addition, crew costs, including costs that may be incurred to the extent on-board security guards are employed, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, cash flows and financial condition, and this may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.

Increased inspection procedures and tighter import and export controls could increase our costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures may result in the seizure of contents being shipped in our vessels, delays in the loading, offloading, trans-shipment or delivery and the levying of customs duties, fines or other penalties against us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments could have a material adverse effect on our business, financial condition and results of operations.  

Our vessels may call on ports located in countries that are subject to restrictions imposed by the United States, United Kingdom, United Nations or other governments.

Although we do not expect that our vessels will call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and other authorities or countries identified by the U.S. government or other authorities as state sponsors of terrorism, from time to time on charterers’ instructions, our vessels may call on ports located in such countries in the future. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intends to maintain such compliance, there can be no assurance that it will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in a severe adverse impact on our ability to access U.S. capital markets.

Labor interruptions could disrupt our business.

We could be subject to labor stoppages at ports or other labor unrest that could prevent or hinder our operations from being carried out normally. If not resolved in a timely and cost-effective manner, such business interruptions could have a material adverse effect on its business, financial condition and results of operations. We have not encountered any labor issues to date.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We operate in a number of countries throughout the world, including countries known to have a reputation for corruption. Although we are committed to doing business in accordance with applicable anti-corruption laws, we. are subject to the risk that persons and entities employed or engaged by us or their agents may take actions that are determined to be in violation of such anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977, or the “FCPA.” Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

Our vessels may call on ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent contraband is found in our vessels, whether with or without the knowledge of any of our crews, we may face reputational damage and governmental or other regulatory claims which could have a material adverse effect on our business, financial condition and results of operations.

We need to maintain our relationships with local shipping agents, and port and terminal operators.

Our shipping business is dependent upon our relationships with local shipping agents, and port and terminal operators operating in the ports where our customers ship and unload their products. We believe that these relationships will remain critical to our success in the future and the loss of one or more of which could materially and negatively impact our ability to retain and service our customers. We cannot be certain that we will be able to maintain and expand our existing relationships with local shipping agents and port and terminal operators, or enter into new relationships, or that new or renewed relationships will be available on commercially reasonable terms. If we are unable to maintain and expand our existing relationships, or enter into new relationships, we may lose customers or encounter delays in the ports in which we operate, which could have a material adverse effect on our business, financial condition and results of operations.

Our employees may engage in misconduct or other improper activities, either during or before their service for us, including noncompliance with regulatory standards and requirements, which could expose us to potentially significant legal liabilities, reputational harm and have a material adverse effect on our business, results of operations or financial condition.

We are exposed to the risk that our employees, business partners, suppliers or other parties we collaborate with may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and regulations, including production standards, fraud, abuse, data privacy and security laws, other similar laws or laws that require the true, complete and accurate reporting of financial information or data. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us and it is not successful in defending itself or asserting its rights, those actions could have a material adverse effect on our business, results of operations or financial condition, including, without limitation, by way of imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, imprisonment and other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations.

We might not obtain and maintain sufficient insurance coverage, which could expose us to significant costs and business disruption.

Currently, we purchase Freight, Demurrage, and Defense Insurance for each shipment based on the estimated value of such shipment. This coverage is designed to provide compensation in the event that goods are lost or damaged during transit. However, there are also other risks which might not be covered by such insurance. Although we believe that we have the necessary insurance coverage, such insurance may not cover all potential legal expenses and compensation liabilities. For example, certain insurance policies may exclude losses caused by war, strikes, nuclear contamination, or intentional acts. As the shipping business faces increasing new risks (such as cybersecurity threats, stricter environmental regulations, and extreme weather events), insurance premiums may rise significantly. In addition, if a major accident or natural disaster occurs, leading to port closures or the inability of vessels to operate, business interruptions may occur for which we have no insurance, which in turn can affect our revenue and increase our expenses.

We may be subject to litigation that could have a material adverse effect on our business, financial condition and results of operations.

Although there is no pending litigation against us as of the date of this report, there can be no assurance that we will not be subject to any litigation, including, among other things, contract disputes, personal injury claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of its business. In the event that any litigation arises in the future, unfavorable outcomes of such litigation or the costs and time to resolve them could have a material adverse effect on our business, financial condition and results of operations.

The requirements of being a public company may strain our resources and divert management’s attention. 

As a public company, we have incurred additional legal, accounting, insurance and other expenses. We are now subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and applicable securities rules and regulations. These laws and regulations increase the scope, complexity and cost of corporate governance, reporting and disclosure practices over those of non-public or non-reporting companies. In order to maintain, appropriately document and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet the standards required by the Sarbanes-Oxley Act, additional resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Additionally, any failure by us to file our periodic reports with the SEC in a timely manner could harm our reputation and cause our investors and potential investors to lose confidence in us, and restrict trading in, and reduce the market price of, our common stock, and potentially our ability to access the capital markets

Because we generate most of our revenues in United States dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations could hurt the results of our operations.

We generate most of our revenues in United States dollars, but incur some of our expenses in currencies other than United States dollars, mainly Euros and Singapore Dollars. This difference could lead to fluctuations in net income due to changes in the value of the United States dollar relative to the other currencies, in particular the Euro and Singapore Dollar. Expenses incurred in foreign currencies against which the United States dollar falls in value could increase, thereby decreasing our net income. We have not hedged our currency exposure.

Global inflationary pressures could negatively impact our results of operations and financial condition.

Over the last few years, worldwide economies have experienced inflationary pressures. Global inflationary pressures have also increased due to trading pattern disruptions attributable to the armed conflict in Ukraine. Supply chain and transportation problems, as well as added volatility and rising energy, food and commodity prices, are accelerating global price growth. In the event that inflation becomes a significant factor in the global economy generally and in the shipping industry more specifically, inflationary pressures would result in increased operating, voyage and administrative costs which could in turn negatively impact our operating results, and in particular, our financial condition. Although historically the ocean shipping industry has been able to largely offset the inflationary pressure by passing the costs of inflation onto its customers, the industry as a whole and we in particular may not be able to offset such costs sufficiently, in which case our results and financial condition would be negatively impacted.

Specifically, we face two types of possible inflationary pressures: general pressure from inflation-related economic slowdown and a specific pressure from inflation of the prices of fuel, port and stevedoring services. First, inflation could slow down the global economy and thus disrupt global trade and ocean shipping, and thus negatively impact our ocean shipping business. In particular, since different countries face different rates of inflation, the country facing relatively higher inflation rates, such as the United States, would likely reduce its imports which may not be completely offset by the increase in its exports, thus resulting in a net reduction of global trade. Second, the 2022 inflation episode that was triggered by the conflict in Ukraine and the resulting increase in fossil fuel prices, has significantly impacted the ocean shipping industry which relies on fossil fuel to power its ships. Although historically the ocean shipping industry has been able to largely offset the inflationary pressure by passing the costs of inflation onto its customers, the industry as a whole and our company in particular may not be able to offset such costs sufficiently, in which case our results and financial condition would be negatively impacted.

Security breaches and disruptions to our information technology infrastructure could interfere with our operations and expose us to liability, which could have a material adverse effect on our business, financial condition and results of operations.

In the ordinary course of business, we rely heavily on information technology networks and systems to process, transmit, and store information electronically, and to manage and support a variety of business processes and activities. Additionally, we collect and store certain data, including proprietary business information and customer and employee data, and may have access to other confidential information in the ordinary course of our business. Despite our cybersecurity measures (including monitoring of networks and systems, and maintenance of backup and protective systems) which are continuously reviewed and upgraded, our information technology networks and infrastructure may still be vulnerable to damage, disruptions, or shutdowns due to attacks by hackers or breaches, employee error or malfeasance, data leakage, power outages, computer viruses and malware, telecommunication or utility failures, systems failures, natural disasters, or other catastrophic events. Further, the risk of potential cyberattacks by state actors or others have been heightened in connection with the ongoing conflict between Russia and Ukraine and it is uncertain how this new risk landscape will impact our operations. When geopolitical conflicts develop, government systems as well as critical infrastructures such as financial services and utilities may be targeted by state-sponsored cyberattacks even if they are not directly involved in the conflict.

We have not experienced and defended against threats to our systems and security (such as phishing attempts) to date. However, we could incur significant costs in order to investigate and respond to future attacks, to respond to evolving regulatory oversight requirements, to upgrade our cybersecurity systems and controls, and to remediate security compromise or damage. In response to past threats and attacks, we have implemented further controls and planned for other preventative actions to further strengthen our systems against future attacks. We cannot assure that such measures will provide absolute security, that we will be able to react in a timely manner, or that our remediation efforts following past or future attacks will be successful. Consequently, our financial performance and results of operations would be materially adversely affected.

In the event of a breach resulting in loss of data, such as personally identifiable information or other such data protected by data privacy or other laws, we may be liable for damages, fines and penalties for such losses under applicable regulatory frameworks despite not handling the data. Furthermore, if a high-profile security breach or cyber-attack occurs with respect to another provider of mission-critical data center facilities, our customers and potential customers may lose trust in the security of these business models generally, which could harm our reputation and brand image as well as our ability to retain existing customers or attract new ones. We could incur significant costs in order to investigate and respond to future attacks, to respond to evolving regulatory oversight requirements, to upgrade our cybersecurity systems and controls, and to remediate security compromise or damage. In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law. We cannot assure that we will be able to react in a timely manner in the future, or that our remediation efforts will be successful. Consequently, our financial performance and results of operations would be materially adversely affected. We may not be able to limit our liability or damages in the event of such a loss.

Risks Related to our Class A Ordinary Shares

Our share price may be volatile, and purchasers of our Class A Ordinary Shares could incur substantial losses.

Our share price has been extremely volatile in the past and may continue to be so in the future. Since our IPO of SPAC, our Class A Ordinary Shares has traded at prices ranging from $0.28 and $10.27.The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their Class A Ordinary Shares at or above the price paid for such shares. The market price for our Class A Ordinary Shares may be influenced by many factors, including, but not limited to:

In addition, the stock markets have experienced significant price and trading volume fluctuations from time to time, and the market prices of the equity securities of retailers have been extremely volatile and are sometimes subject to sharp price and trading volume changes. These broad market fluctuations may materially and adversely affect the market price of our Class A Ordinary Shares and could lead to class action law suits against our company.

The Nasdaq Capital Market imposes listing standards on our Class A Ordinary Shares that we may not be able to fulfill in the future, thereby leading to a possible delisting of our Class A Ordinary Shares.

As a listed Nasdaq Capital Market company, we are subject to various listing standards.  There can be no assurance that we will be able to meet all of the criteria necessary for Nasdaq to allow our Class A Ordinary Shares to remain listed. On May 10, 2023, we received a notice from Nasdaq indicating that, due to not having timely filed our Annual Report on Form 20-F for the fiscal year ended October 31, 2022 (the “2022 Form 20-F”), we were not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires the timely filing of all required periodic financial reports with the SEC. Pursuant to the Nasdaq Listing Rules, we had 60 calendar days from the date of the Nasdaq notice to submit a plan of compliance to Nasdaq. We timely submitted a plan of compliance and on July 17, 2023, we received a notice from Nasdaq granting us an exception to enable us to regain compliance with the Rule by filing the 2022 Form 20-F on or before August 28, 2023. We filed the 2022 Form 20-F on August 28, 2023 and regained compliance with Nasdaq Listing Rule 5250(c)(1)

On June 7, 2023, we received a notice from Nasdaq indicating the failure of our Class A Ordinary Shares to maintain a minimum bid price of $1.00 for over the previous 30 consecutive business days as required by Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”) and granted us 180 calendar days to regain compliance with the Minimum Bid Requirement by October 22, 2023. On December 19, 2023, Nasdaq notified us that we had been granted an additional 180 calendar day period until June 3, 2024, to regain compliance with the Minimum Bid Requirement. On June 10, 2024, we received a determination letter from Nasdaq notifying us that for the 17 consecutive business days, from May 15, 2024, to June 7, 2024, the closing bid price of our Class A Ordinary Shares had been at $1.00 per share or greater and that we had regained compliance with the Minimum Bid Requirement.

On July 26, 2024, we received a deficiency letter from Nasdaq notifying us that, for the last 33 consecutive business days, the closing bid price for our Class A Ordinary Shares had been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Minimum Bid Requirement. We were provided a compliance period of 180 calendar days, until January 22, 2025, to regain compliance. On November l4, 2024, Nasdaq provided confirmation that for the last 19 consecutive business days, from October 18, 2024 to November 13, 2024, the closing bid price of our Class A Ordinary Shares had been $1.00 per share or greater, and that we had regained compliance with Listing Rule 5550(a)(2).

On November 14, 2023, we received a notice from Nasdaq indicating that we failed to file our interim financial statements for the six-month period ended April 30, 2023, and that we no longer complied with Nasdaq’s Listing Rule 5250(c)(1) for continued listing. Pursuant to the Nasdaq Listing Rules, we had until January 16, 2024, to submit a plan to Nasdaq to regain compliance. We provided a plan to Nasdaq and on February 29, 2024, we issued a press release announcing our unaudited and unreviewed financial results for the six months ended April 30, 2023. On May 2, 2024, Nasdaq notified us that we had regained compliance.

On March 25, 2024, Nasdaq notified us of our failure to file our Annual Report on Form 20-F for the fiscal year ended October 31, 2023, and that we no longer complied with Nasdaq’s Listing Rule 5250(c)(1) for continued listing. Pursuant to the Nasdaq Listing Rules, We had 60 calendar days from the date of the Nasdaq notice to submit a plan of compliance to Nasdaq. We submitted a plan of compliance to Nasdaq on May 25, 2024 and Nasdaq subsequently determined to grant use an exception to file our Annual Report on Form 20-F for the fiscal year ended October 31, 2023, by September 10, 2024 (the “2023 Exception”), to enable us to regain compliance with Nasdaq Listing Rule 5250(c)(1). We filed Annual Report on Form 20-F for the fiscal year ended October 31, 2024 on September 9, 2024, On September 10, 2024, we received a formal notification from The Nasdaq Stock Market LLC confirming that, following the Company’s filing of its Form 20-F for the year ended October 31, 2023 on September 9, 2024, the Company had regained compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the Securities and Exchange Commission.

If our Class A Ordinary Shares are ultimately delisted from the Nasdaq Capital Market the Class A Ordinary Shares would likely then trade only in the over-the-counter market and the market liquidity of the Class A Ordinary Shares would be adversely affected and their market price could decrease. If the Class A Ordinary Shares were to trade on the over-the-counter market, selling the Class A Ordinary Shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our Class A Ordinary Shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a reduced amount of news and analyst coverage for our company; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask prices for the Class A Ordinary Shares and would substantially impair our ability to raise additional funds and could result in a loss of investor interest and fewer development opportunities for us.

The future sales of our Class A Ordinary Shares by our principal shareholders may adversely affect the market price of our Ordinary Shares.

Sales of a substantial number of our Class A Ordinary Shares in the public market by our principal shareholders, including shares issuable upon exercise of warrants to purchase 24,045,181 of our Ordinary Shares at an exercise price of $0.166 per share could occur at any time. If our principal shareholders sell, or the market perceives that they intend to sell, substantial amounts of our Class A Ordinary Shares in the public market, the market price of our Class A Ordinary Shares would likely decline.

We may issue additional Class A Ordinary Shares or other equity or convertible debt securities without approval of our shareholders which would dilute existing ownership interests and may depress the market price of our Class A Ordinary Shares.

We may issue additional Class A Ordinary Shares or other equity or convertible debt securities of equal or senior rank in the future without approval of our shareholders. Our issuance of additional Class A Ordinary Shares or other equity or convertible debt securities of equal or senior rank would have the following effects: (1) our existing shareholders’ proportionate ownership interest may decrease; (2) the amount of cash available per share, including for payment of dividends in the future, may decrease; (3) the relative voting power of each previously outstanding Class A Ordinary Share may be diminished; and (4) the market price of our Class A Ordinary Shares may decline.

We may be classified as a passive foreign investment company, or PFIC, which would subject our U.S. investors to adverse tax rules.

U.S. holders of our Class A Ordinary Shares may face income tax risks. Based on the composition of our income, assets (including the value of our goodwill, going-concern value or any other unbooked intangibles, which may be determined based on the price of the Class A Ordinary Shares, and operations, we believe we will not be classified as a “passive foreign investment company”, or PFIC, for the 2024 taxable year. However, because PFIC status is based on our income, assets and activities for the entire taxable year, it is not possible to determine whether we will be characterized as a PFIC for our current taxable year or future taxable years until after the close of the applicable taxable year. Moreover, we must determine our PFIC status annually based on tests that are factual in nature, and our status in the current year and future years will depend on our income, assets and activities in each of those years and, as a result, cannot be predicted with certainty as of the date hereof. Furthermore, fluctuations in the market price of our Common Shares may cause our classification as a PFIC for the current or future taxable years to change because the aggregate value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, generally will be determined by reference to the market price of our shares from time to time (which may be volatile). The IRS or a court may disagree with our determinations, including the manner in which we determine the value of our assets and the percentage of our assets that are passive assets under the PFIC rules. Therefore, there can be no assurance that we will not be a PFIC for the current taxable year or for any future taxable year. Our treatment as a PFIC could result in a reduction in the after-tax return to U.S. Holders (as defined below under Item 10E. “Additional Information – Taxation”) of our Class A Ordinary Shares and would likely cause a reduction in the value of such shares. A foreign corporation will be treated as a PFIC for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income,” or (2) at least 50% of the average value of the corporation’s gross assets produce, or are held for the production of, such “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property, rents and royalties other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. If we are treated as a PFIC, U.S. Holders of our Class A Ordinary Shares would be subject to a special adverse U.S. federal income tax regime with respect to the income derived by us, the distributions they receive from us, and the gain, if any, they derive from the sale or other disposition of their Class A Ordinary Shares. U.S. Holders should carefully read Item 10E. “Additional Information – Taxation” for a more complete discussion of the U.S. federal income tax risks related to owning and disposing of our Class A Ordinary Shares. 

Our  dual-class structure may adversely affect the trading market for our Class A Ordinary Shares.

Certain shareholder advisory firms have announced changes to their eligibility criteria for inclusion of the securities of public companies on certain indices, including the S&P 500, that would exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of the total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, our dual-class structure may prevent the inclusion of our Class A Ordinary Shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from stock indices could result in a less active trading market for our Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A Ordinary Shares.

We do not expect to pay dividends in the foreseeable future.

We expect to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, it is not expected that we will pay any cash dividends in the foreseeable future. 

Our board of directors will have discretion as to whether to distribute dividends. Even if the board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on the future results of operations and cash flow, capital requirements and surplus, the amount of distributions, if any, received from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by the board of directors. You should not rely on an investment in our company if you require dividend income from your investment.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such it is exempt from certain provisions applicable to domestic public companies in the United States.

As a foreign private issuer, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: (1) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; (2) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (3) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (4) the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. Accordingly, you may receive less or different information about us than you would receive about a U.S. domestic public company.

We could lose our status as a foreign private issuer under current SEC rules and regulations if more than 50% of our outstanding voting securities become directly or indirectly held of record by U.S. holders and any one of the following is true: (1) the majority of our directors or executive officers are U.S. citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States. If we lose our status as a foreign private issuer in the future, we will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if we were a company incorporated in the United States. If this were to happen, we would likely incur substantial costs in fulfilling these additional regulatory requirements and members of our management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled.

As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.

As a company incorporated in the Cayman Islands, Nasdaq market rules permit us to follow the corporate governance practices of our home country. Certain corporate governance practices in the Cayman Islands may differ significantly from Nasdaq corporate governance listing standards applicable to domestic U.S. companies. Among other things, we are not required to have: (1) a majority of independent board members; (2) a compensation committee consisting of independent directors; (3) a nominating committee consisting of independent directors; or (4) regularly scheduled executive sessions with only independent directors each year. If we rely on any of these exemptions, you may not be provided with the benefits of certain corporate governance requirements of The Nasdaq Capital Market. We may also follow the home country practice for certain other corporate governance practices which may differ from the requirements of The Nasdaq Capital Market. If we choose to follow the home country practice, our shareholders may be afforded fewer protection than they would otherwise enjoy under the Nasdaq Stock Market Rules applicable to U.S. domestic issuers.

As a public reporting company, we are subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.

We are a public reporting company subject to the rules and regulations established from time to time by the SEC and Nasdaq. These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company may place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel. In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited because we are an exempted company incorporated under the laws of the Cayman Islands and conduct substantially all of our operations outside of the United States and a majority of our directors and executive officers reside outside of the United States.

We are an exempted company incorporated under the law of the Cayman Islands that conducts substantially all of its operations outside the United States and a majority of our directors and executive officers reside outside of the United States. While our Chairman, Jinyu Chang, and independent director Christopher Renn are U.S. citizens, our CEO and director, Shixuan He, CFO and director, Zi Xia, and independent director Jing Sang reside in mainland China and our independent director Xuanhua Xi resides in Hong Kong. Due to the lack of reciprocity and treaties between the United States and some of these foreign jurisdictions, and cost and time constraints, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Our corporate affairs are governed by our memorandum and articles of association, the Cayman Islands Companies Act (As Revised) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by noncontrolling shareholders and the fiduciary responsibilities of our directors to our company under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States and provides significantly less protection to investors. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands.

Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction; (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; (c) is final; (d) is not in respect of taxes, a fine or a penalty; and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. It may be difficult or impossible for you to bring an action against us or against these individuals in the Cayman Islands in the event that you believe that your rights have been infringed under the applicable securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

Shareholders of Cayman Islands exempted companies such as our company have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders of these companies. Our directors have discretion under articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company. Therefore, you may not be able to effectively enjoy the protection offered by the U.S. laws and regulations that intend to protect public investors.

Cayman Islands companies may not have standing to initiate a derivative action in a federal court of the United States. As a result, your ability to protect your interests if you are harmed in a manner that would otherwise enable you to sue in a United States federal court may be limited to direct shareholder lawsuits.

Anti-takeover provisions contained in our memorandum and articles of association, as well as provisions of Cayman law, could impair a takeover attempt. 

Our memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one or more classes or series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Ordinary Shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares or Class B Ordinary Shares, the price of our Class A Ordinary Shares may fall and the voting and other rights of our shareholders may be materially and adversely affected.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. Therefore, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies. As a result, if we elect not to comply with such reporting and other requirements, in particular the auditor attestation requirements, our investors may not have access to certain information they may deem important.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

We are an exempted company incorporated under the laws of the Cayman Islands on February 28, 2022, as a holding company for the Caravelle Group Co. Ltd. (the “Caravelle Group”) and Pacifico Acquisition Corp (“Pacifico”) following the consummation of our SPAC transaction. We changed our name to High-Trend International Group in January 2025.

On April 5, 2022, Pacifico entered into that certain Agreement and Plan of Merger which was amended by the Amended and Restated Agreement and Plan of Merger dated August 15, 2022, by and among our company, Merger Sub 1, Merger Sub 2 and the Caravelle Group, pursuant to which (a) Merger Sub 1 merged with and into Caravelle Group, with the Caravelle Group as the surviving corporation and a direct wholly owned subsidiary of our company, and (b) following confirmation of the effectiveness of such merger, Merger Sub 2 merged with and into Pacifico, with Pacifico as the surviving corporation of the SPAC merger and a direct wholly owned subsidiary of our company. On December 16, 2022, we consummated the business combination with Pacifico and the Caravelle Group became a wholly owned subsidiary of our company.

As a result of the business combination, among other things, (i) all outstanding ordinary shares of Caravelle Group were cancelled in exchange for 50,000,000 Class A Ordinary Shares of our company, (ii) each outstanding Pacifico Unit was automatically detached, (iii) each unredeemed outstanding share of Pacifico Common Stock was cancelled in exchange for the right to receive one (1) Class A Ordinary Share of our company, (iv) every ten (10) outstanding Pacifico rights were contributed in exchange for one (1) Class A Ordinary Share of our company, and were cancelled and ceased to exist, and (v) each Pacifico unit purchase option was automatically cancelled in exchange for one (1) unit purchase option of our company.

We were determined to be the accounting acquirer given that the original shareholders of Caravelle Group effectively controlled the combined entity after the business combination. Pacifico was treated as the acquired company for financial reporting purposes. This determination was primarily based on the fact that subsequent to the business combination, Caravelle Group’s shareholders had a majority of the voting power of our company, the Caravelle Group comprised all of the ongoing operations of our company, its directors comprised a majority of the governing body of the combined company, and its senior management comprised all of the senior management of the combined company. Accordingly, for accounting purposes, the business combination was accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by the Caravelle Group for the net assets of Pacifico, accompanied by a recapitalization. Caravelle Group was determined as the predecessor, and the historical financial statements of Caravelle Group became our historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. The share and per share data is retrospectively restated to give effect to the reverse recapitalization. The net assets of Pacifico were stated at historical costs. No goodwill or other intangible assets were recorded. Operations prior to the business combination were those of the Caravelle Group.

For the purpose of listing on the Nasdaq Capital market, a reorganization of our legal structure was completed on October 8, 2021. The reorganization involved the incorporation of the Caravelle Group’s wholly-owned subsidiary — SGEX and SGEX’s wholly-owned subsidiary — Singapore Garden Technology Pte. Ltd. (“Garden Technology”); and the transfer of all the shareholders’ equity interest in Topsheen Shipping Group Corporation (“Topsheen Samoa”) to SGEX on October 8, 2021.

On April 19, 2021, the Caravelle Group formed a wholly owned subsidiary SGEX Group Co., Ltd (“SGEX”) in the British Virgin Islands. On October 8, 2021, SGEX acquired a 90% interest in Topsheen Shipping Group Corporation (“TSGC”), a company incorporated in Samoa in 2012. In 2016, TSGC acquired a 51% ownership interest in Topsheen Shipping Singapore Pte. Ltd., a Singapore company that had been operating in the international shipping business since 2015 (“TSS”), and further increased its ownership interest to 61% in 2019. In March 2019, Topsheen Bulk Singapore Pte. Ltd, a Singapore company (“TBS,” and together with TSGC and TSS, the “Topsheen Companies”) was formed. In June 2019, TSS obtained 60% of TBS’s shares, and subsequently, in October 2021 purchased the remaining 40% interest from Keen Best Shipping Co., Limited, a company controlled by Mr. Dong Zhang, formerly a director and Chief Shipping Officer of our company.

While establishing a strong foothold in the international shipping services business, we intended to launch a planned new carbon-neutral ocean technology (“CO-Tech”) business. As part of this plan, on June 12, 2020, Singapore Garden Technology Pte. Ltd. (“Singapore Garden”) was formed to operate the proposed CO-Tech business. On August 3, 2021, SGEX became 100% owner of Singapore Garden. In 2024, our new management team decided to withdraw from this business.

Since the Caravelle Group’s businesses were effectively controlled by the same group of shareholders before and after the reorganization, they were considered to be under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Caravelle Group and its subsidiaries was accounted for at historical cost.

On December 16, 2022, we became the ultimate corporate parent of the Caravelle Group, and our Ordinary Shares were listed on the Nasdaq Capital Market under the symbol “CACO.” Upon the name change of our company, our Class A Ordinary Shares began to trade under the symbol “HTCO.”

Developments in 2024

On January 10, 2024, we closed a private placement financing involving the issuance of senior secured convertible promissory notes and accompanying warrants to the note holders. The notes and warrants were issued pursuant to a series of transaction documents. These agreements were executed on January 5, 2024, and provided for our sale of $1.5 million of securities as an advance payment for the initial tranche of $3.3 million in a private placement of up to $6.8 million. The remaining $1.8 million of the initial tranche was to be paid upon satisfaction of certain post-closing conditions.

The Note had an 18-month maturity and was convertible into our Ordinary Shares at an initial conversion price of $1.00 per share, subject to adjustment. The Note was repayable in cash upon maturity, but the Investors had the option to convert the Note into Ordinary Shares. The Note also includes certain prepayment options and participation rights. Additionally, the investors were granted five-year warrants equal to 50% of the funded amount at an initial exercise price of $1.00 per share, subject to adjustment.

On August 6, 2024, we and the investors mutually agreed to terminate all the terms and provisions of the January placement. We agreed to buy back $1.5 million of the Notes and warrants in consideration of $1.375 million and the issuance of 300,000 our Ordinary Shares. The buy-back closed on September 9, 2024.

On September 16, 2024, we closed a private placement financing of a senior unsecured original issue 25% discounted convertible promissory note (the “September 2024 Note”) with one of our shareholders, High-Trend Holdings USA LLC (“High-Trend”), and issued a five-year warrant to High Trend to purchase 24,045,181 of our Class A Ordinary Shares (equal to 150% of the funded amount of the September 2024 Note) at an initial exercise price equal to $0.166 per share (the “September 2024 Warrant”). The September 2024 Note had a principal amount of $3,548,000 with an original issuance discount of $887,000 and zero annual interest. The September 2024 Note, which had a 12-month maturity, was convertible into our Class A Ordinary Shares at a conversion price equal to $0.10 per share, subject to adjustment. We did not have an obligation to register any of the securities issued in the placement or that were issuable pursuant to the September 2024 Note and September 2024 Warrant. The proceeds from this financing were used for general working capital purposes. The September 2024 Note was fully converted into 35,480,000 Class A Ordinary Shares on September 23, 2024.

On October 18, 2024, we closed a private placement financing of senior unsecured original issue 25% discounted convertible promissory notes (the “October 2024 Notes”) with four investors pursuant to a securities purchase agreement. The October 2024 Notes had an aggregate principal amount of $1,752,000 with an aggregate original issuance discount of $438,000 and zero annual interest. The October 2024 Notes, which had a term of 12 months, were convertible into our Class A Ordinary Shares at an initial conversion price equal to $0.10 per share, subject to adjustment. The October 2024 Notes were fully converted into 17,520,000 Class A Ordinary Shares on October 21, 2024. The Company does not have an obligation to register any of the securities issued to the investors.

Change of Management

Prior to July 11, 2024, Dr. Guohua Zhang, our founder and then Chairman of the Board, and Chief Executive Officer and interim Chief Financial Officer, was the beneficial owner of 67.14% of our Class A Ordinary Shares. As such, Dr. Zhang was the ultimate controlling shareholder of our company. On July 11, 2024, Dr. Zhang transferred 20,000,000 Class A Ordinary Shares to High-Trend pursuant to a series of agreements between him, his affiliates and High-Trend. As a result, Dr. Zhang’s beneficial ownership interest was reduced to 31.29% and his beneficial interest is currently 11.55%. Dr. Zhang resigned as our Chief Executive Officer and Interim Chief Financial Officer effective July 8, 2024.

During July 2024, the prior executive management team of our company, including our then Chief Executive Officer, Interim Chief Financial Officer, Chief Shipping Officer, Chief Strategic Officer and all the directors of our company (except for Guohua Zhang) resigned and were replaced by a new executive management team and directors, including Hanxi Chang as the Chief Executive Officer, Zi Xia as the Chief Financial Officer and a director, Xuanhua Xi as an independent director and the chairman of the Audit Committee, and Christopher Renn, and Jing Sang as independent directors. During October 2024, Xuanhua Xi resigned as an independent director and the chairman of the Audit Committee, Jinyu Chang was elected as a director and Chairman of the Board, and Xin He was elected as an independent director and the chairman of our Audit Committee. Mr. Xin He resigned as an independent director and the chairman of our Audit Committee effective January 1, 2025, and effective January 15, 2025, Mr. Hanxi Chang resigned as our Chief Executive Officer. On January 4 ,2025, Mr. Shixuan He was elected as a director and as the Chief Executive Officer of our company effective January 15, 2025 and Ms. Xuanhua Xi was elected as a director and the chairman of our Audit Committee effective January 10, 2025.

Developments in 2025

Annual General Meeting of Shareholders

At our Annual General Meeting of Shareholders held on January 3, 2025, our shareholders approved: (i) the proposal to change our company’s name from "Caravelle International Group" to "High-Trend International Group"; (ii) the re-designation and re-classification of our company's 497,500,000 Ordinary Shares as Class A Ordinary Shares, and 2,500,000 unissued Ordinary Shares be re-designated and reclassified as Class B Ordinary Shares; (iii) the amendment and restatement of our company's existing memorandum and articles of association to reflect the approval of the aforementioned two proposals; and (iv) the immediate removal of Mr. Guohua Zhang as a director of our company.  

Effective January 31, 2025, Our Ordinary Shares began to trade on the Nasdaq Capital Market as the Class A Ordinary Shares of High-Trend International Group.

B. Business Overview  

We are an international shipping company which has accounted for all our revenues to date. We previously planned to launch the CO-Tech business, which was expected to enable wood desiccation during the maritime shipping process. Despite its initial promise, the CO-Tech business faced significant delays due to a lack of funding and in 2024 our new management team decided to withdraw from this business.

We are currently examining the viability of entering into the business of providing solutions for marine decarbonization and digital carbon assets management for the shipping industry. We believe that several newly developed technologies and products will help separate and capture carbon dioxide (CO2) from the exhaust gases or fuels of ships and permanently sequester the CO2, especially on-board carbon capture (“OCC”), which may achieve permanent CO2 emission reductions from ships. We are exploring the possibility of designing a full - life - cycle turnkey service for OCC.

We are headquartered in Singapore and derive the majority of our revenue from providing shipping services for customers in Asia, principally in Singapore, Dubai, Korea, Japan, and India. In the fiscal years 2024 and 2023, we derived 74% and 68% of our revenues, respectively, from customers outside of China, and all of the cash transfer payments between our company and our customers were between banks based outside China, Hong Kong and Macau.

Industry Analysis:

The global shipping industry has shown characteristics of "slowing growth and structural differentiation" in 2023 and 2024. According to the United Nations Conference on Trade and Development (UNCTAD) "Review of Maritime Transport 2023," global maritime trade volume reached 1.24 billion tons in 2023, a year-on-year increase of 2.1%. However, due to geopolitical conflicts and economic weakness, the growth rate is expected to evidence a slow down to 1.8% in 2024 when made available.

Our International Shipping Business

We currently derive substantially all of our revenue from our global international shipping and logistics support services, which generated revenues of $108,176,683 in the year ended October 31, 2024, an increase of 13.6% compared with our revenues of $95,257,538 in the year ended October 31, 2023. Our operations are conducted through our two majority owned subsidiaries, Topsheen Shipping Singapore Pte. Ltd. and Topsheen Bulk Singapore Pte. Ltd.

Vessel Chartering

Through the Topsheen Companies, we charter vessels from various shipping companies and ship owners, including from Topsheen Ltd, which provides the flexibility required by our diverse services. The long-term relationships between the Topsheen Companies and the shipping companies and ship owners provide the certainty of vessel availability while reducing the risks and costs of charter rate fluctuations. We lease around 40 bulk vessels yearly from Topsheen Ltd to operate our shipping business. Payments for these vessels are based on a variety of factors such as use time, route or a specific term.

By chartering more than 50 vessels each year, we currently have an annual shipping capacity of approximately 3 million deadweight tons (DWT). Our regular routes cover over 50 countries and 100 ports in Africa, Asia and the Americas, including a route from East Asia to South America, covering the east coast of Central and South America, including most of Brazil’s major ports. We also handle bulk cargo shipping of iron ore, manganese ore and grain from both sides of the Atlantic to East Asia.

Types of Shipping Services

Our international shipping revenue derives mainly from transportation services under voyage contracts and vessels services for and on behalf of ship owners.

Under a voyage contract, we are engaged to provide the transportation of cargo between specific ports for payment of an agreed-upon charge per ton of cargo. Our voyage contracts generally do not permit cancellation. A voyage generally commences when a vessel is available for loading the cargo and ends upon the completion of the discharge of the cargo. The customers of voyage contracts receive and consume the benefits provided by our performance over the voyage period, when the cargo is transported from one location to another. We have a flexible freight shipping model, under which we may ship freight from one single large customer, or aggregate freight from multiple smaller customers during a voyage.

Additionally, we, through the Topsheen Companies, contract with various customers to carry out vessel services as agents for and on behalf of ship owners. These services include lease of vessels on behalf of the ship owners, and commercial management. As the operator of the vessels, we are committed to using our best efforts to provide the agreed upon vessel services as agents for and on behalf of the ship owners and to protect and promote the interest of the shipowners in all matters relating to the provision of the services. Most of the vessel service agreements span one year or less and are typically billed on a monthly basis.

Topsheen Ltd. as the broker, finds various vessels in the market and supplies most of the vessels we lease to operate our shipping business. We also maintain long-term cordial relationships with other ship owners. We typically enter into contracts through brokers on a twelve-month term to reduce the risk of charter rate fluctuations. Occasionally, we charter vessels in the spot market.

Competitive Advantages

We believe the following competitive strengths have contributed and will continue to contribute to our success:

Business Strategies

Our primary objective is to profitably grow our business and to maintain and enhance our position as a successful operator of shipping vessels. The key elements of our strategy are:

 Management of Operations

Daily Operation Management

Daily operating decisions relating to the conduct of our shipping business, including managing our shipping voyages, are made by officers and employees of the Topsheen Companies under guidance and authority from our Board of Directors in accordance with its governance framework.

We rely on the shipowners and the vessel crews engaged by the shipowners to operate the chartered vessels, including technical support in fuel procurement, crewing, maintenance, repairs, dry dockings, maintaining required vetting approvals, and ensuring compliance with certifications from the classification societies and all other applicable regulatory requirements.

Customers

Our customer base is mainly located in Asia but diversified across different Asian countries, such as Singapore, Dubai, Korea, Japan, and India. In the fiscal years 2024, 2023 and 2022, we derived 74%, 68% and 49% of our revenues, respectively, from customers in Asia, not including China. For the year ended October 31, 2024, no customer accounted for more than 10% of our total revenues. For the years ended October 31, 2023, one customer accounted for approximately 15% of our total revenues. For the year ended October 31, 2022, no customer accounted for more than 10% of our total revenues. As of October 31, 2024, two customers accounted for approximately 23% and 11% of our accounts receivable. As of October 31, 2023, three customers accounted for approximately 23%, 17% and 10% of our accounts receivable. As of October 31, 2022, two customers accounted for approximately 30% and 25% of our accounts receivable.

Suppliers

Our key suppliers, such as Topsheen Ltd as our broker, finds various vessels in the market and supplies most of the vessels that we use.. Although Topsheen Ltd. supplies most of the ships for our shipping business, we also maintain long-term cordial relationships with other ship owners, such as Max Bright Marine Service Co., Ltd. and Top Moral Shipping Limited.  

For the year ended October 31, 2024, 2023 and 2022, Topsheen Ltd. accounted for approximately 32%, 24% and 42.5% of our total purchases cost. As of October 31, 2024, two suppliers accounted for approximately 69% and 24% of our total accounts payable. As of October 31, 2023, two suppliers accounted for approximately 50% and 46% of our total accounts payable. As of October 31, 2022, one supplier accounted for approximately 92% of the our total accounts payable.

Marketing

Our marketing team is focused on serving participants in the Asian regional trade chain, including small and medium-sized importers and exporters, manufacturing enterprises (such as electronics and automotive parts manufacturers), bulk commodity traders (minerals, agricultural products), and overseas infrastructure project contractors. In terms of customer acquisition strategy, we attract customers through our regional route network optimization (such as dense coverage of China-Southeast Asia-West Africa routes), digital service platforms (online booking and real-time tracking), and customized logistics solutions (such as special cargo transportation, multimodal transport). At the same time, we rely on localized partner ecosystems (port agents, freight forwarding alliances) to penetrate niche markets. By offering cost effective services and rapid response capabilities, we believe that we occupy a differentiated position in the competitive Asian shipping market.

Competition

We compete with a large number of global and regional shipping companies to provide transport and vessel services to customers worldwide. In each of our key trade routes, we compete primarily with global shipping companies. The market is significantly concentrated with the top global carriers. In addition to the large global carriers, regional carriers typically offer services to a wider range of ports within a particular market as compared to global carriers. The shipping industry is highly competitive and competition may intensify even further, which could negatively affect our market position and financial performance.

Environmental and other regulations in the shipping industry

Government regulations and laws significantly affect the operation of our vessels. Our leased vessels are subject to international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered relating to the protection of the environment. Such requirements are subject to ongoing developments and amendments and relate to, among other things, the storage, handling, emission, transportation and discharge of hazardous and non-hazardous substances, such as sulfur oxides, nitrogen oxides and the use of low-sulfur fuel or shore power voltage, and the remediation of contamination and liability for damages to natural resources. These laws and regulations include OPA 90, CERCLA, the CWA, the U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (CAA), and regulations adopted by the International Maritime Organization (IMO), including the International Convention for Prevention of Pollution from Ships (MARPOL), and the International Convention for Safety of Life at Sea (the SOLAS Convention), as well as regulations enacted by the European Union and other international, national and local regulatory bodies. Compliance with such requirements, where applicable, entails significant expense, including vessel modifications and implementation of certain operating procedures. If such costs are not covered by our vessel owners’ insurance policies, we could be exposed to high costs in respect of environmental liability damages, administrative and civil penalties, criminal charges or sanctions, and could suffer substantive harm to our operations and goodwill to the extent that environmental damages are caused by the operation of our leased vessels.. We believe that our vessels operate in accordance with procedures that are intended to ensure compliance with such requirements. We also insure our activities, where effective for us to do so, in order to insure our environmental risks.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements for all vessels and may accelerate designating older vessels for sale throughout the cargo shipping industry. Increasing environmental concerns have created a demand for vessels that conform to the strictest environmental standards.

Finally, we are subject to laws, directives, decisions and orders in various countries around the world that prohibit or restrict trade with certain countries, individuals and entities.

Insurance

Currently, we purchase Freight, Demurrage, and Defense Insurance for each shipment based on the estimated value of such shipment. This coverage is designed to provide compensation in the event that goods are lost or damaged during transit. However there are also other risks which might not be covered by such insurance. Although we believe that we have the necessary insurance coverage, such insurance may not cover all potential legal expenses and compensation liabilities. For example, certain insurance policies may exclude losses caused by war, strikes, nuclear contamination, or intentional acts. As the shipping business faces increasing new risks (such as cybersecurity threats, stricter environmental regulations, and extreme weather events), insurance premiums may rise significantly. In addition, if a major accident or natural disaster occurs, leading to port closures or the inability of vessels to operate, business interruptions may occur, for which we have no insurance, which in turn can affect our revenue and increase our expenses.

OCC Business

We are currently examining the viability of entering into the marine decarbonization and digital carbon assets management areas. The newly- developed technologies and products will help separate and capture carbon dioxide (CO2) from the exhaust gases or fuels of ships and permanently sequester the CO2, thereby achieving permanent CO2 emission reductions from ships. We are exploring the possibility of designing a full - life - cycle turnkey service for OCC.

Legal Proceedings

Although we are not currently involved in any legal proceeding, we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, and such litigation and claims could have a material effect on our business, financial position and results of operations. From time to time, we may face claims that fall outside the scope of our insurance coverage. In respect of such claims, we purchase Freight, Demurrage, and Defense Insurance (FD&D), which is discretionary coverage for the costs of defending or prosecuting such claims (for example, claims of a purely contractual nature, or collection of freight and demurrage). Those claims, even if covered by insurance and/or lacking merit, could result in the expenditure of significant financial and managerial resources.

C. Organizational structure

The following diagram depicts our current organizational structure. Unless otherwise indicated, equity interests depicted in this diagram are held at 100%.

 D. Property, Plants and Equipment

We lease our principal executive office, which is located on 60 Paya Lebar Road, #06-17 Paya Lebar Square, Singapore 409051, (65) 8304 8372, consisting of approximately 1,356 square feet. We recently renewed our lease which expires on March 15, 2027, pursuant to which the monthly rent is $5,896 (SGD7,800). We believe that our existing facilities are suitable and adequate to meet our current needs. If we need to add new facilities or expand existing facilities as we add employees, we believe that suitable additional space will be available to accommodate any such expansion of our operations.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this Report.

A. Operating Results

Overview 

We are an international provider of ocean transportation services. We are engaged in seaborne transportation services under voyage contracts as well as vessel services for and on behalf of ship owners. We conduct this business through the Topsheen Companies. For the years ended October 31, 2024, 2023 and 2022, our revenues were approximately $108.2 million, $95.3 million and $185.3 million, respectively. For the years ended October 31, 2024, 2023 and 2022, we had net losses of a $21.2 million and $15.8 million and net income of $23.6 million, respectively.

In 2024, we decided to not move forward with the launch of the CO-Tech business, which was expected to enable wood desiccation during the maritime shipping process. We are currently examining the viability of entering into the provision of solutions for marine decarbonization and digital carbon assets management for the shipping industry.

Recent Developments

Prior to July 11, 2024, Dr. Guohua Zhang, our founder, and the then Chief Executive Officer, and interim Chief Financial Officer, was the beneficial owner of 67.14% of our Class A Ordinary Shares. As such, Dr. Zhang was the ultimate controlling shareholder of our company. On July 11, 2024, Dr. Zhang transferred 20,000,000 Class A Ordinary Shares to High-Trend pursuant to a series of agreements between him, his affiliates and High-Trend. As a result, Dr. Zhang’s beneficial ownership of our outstanding Class A Ordinary Shares was reduced to 31.29% and his beneficial interest is currently11.55 %. Dr. Zhang resigned as our Chief Executive Officer and Interim Chief Financial Officer effective July 8, 2024. Mr. Jinyu Chang, as the sole shareholder of High-Trend, became the ultimate controlling shareholders of our company after his transaction with Dr. Zhang.

During July 2024, the prior executive management team of our company, including our then Chief Executive Officer, Interim Chief Financial Officer, Chief Shipping Officer, Chief Strategic Officer and all directors of the Company (except for Guohua Zhang) resigned and were replaced by a new executive management team and directors, including Hanxi Chang as the Chief Executive Officer, Zi Xia as the Chief Financial Officer and a director, Xuanhua Xi as an independent director and the chairman of the Audit Committee, and Christopher Renn, and Jing Sang as independent directors. During October 2024, Xuanhua Xi resigned as an independent director and the chairman of the Audit Committee, Jinyu Chang was elected as a director and Chairman of the Board, and Xin He was elected as an independent director and the chairman of our Audit Committee. Effective January 1, 2025, Mr. Xin He resigned as an independent director and the chairman of our Audit Committee and effective January 15, 2025, Mr. Hanxi Chang resigned as our Chief Executive Officer. On January 4, 2025, Mr. Shixuan He was elected as a director and the Chief Executive Officer of our company effective January 15, 2025 and Ms. Xuanhua Xi was elected as an independent director and the chairman of our Audit Committee effective January 10, 2025.

Key Factors that Affect Operating Results

We primarily derive freight revenue from voyage contracts and provide vessel services. We intend to enhance our freight services and acquire new customers by increasing our market penetration with deeper market coverage and a broader geographical reach. Our ability to maintain and expand our customer base affects our operating results.

Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in foreign exchange rates and interest rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.

Foreign Exchange Rate Risk 

We generate all of our revenues in U.S. dollars, but currently incur some of our costs and operating expenses (around 5%, 5% and 4% for the years ended October 31, 2024, 2023 and 2022 respectively) in currencies other than the U.S. dollar, primarily the Euro and Singapore Dollar. For accounting purposes, expenses incurred in Euros and Singapore Dollars are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. The amount and frequency of some of these expenses, such as vessel repairs, supplies and stores, may fluctuate from period to period. Depreciation in the value of the dollar relative to other currencies increases the dollar cost to us of paying such expenses. The portion of our expenses incurred in other currencies could increase in the future, which could expand our exposure to losses arising from currency fluctuations. Currently, we do not consider the risk from exchange rate fluctuations to be material for our results of operations and therefore, we are not engaged in derivative instruments to hedge part of those expenses.

Inflation risk

Our operations expose us to the effects of inflation. Although our operation has not been impacted by inflation, in the event that inflation becomes a significant factor in the world economy, inflationary pressures could result in increased operating and financing costs. Although historically the ocean shipping industry has been able to largely offset the inflationary pressure by passing the costs of inflation onto its customers, the industry as a whole and we in particular may not be able to offset such costs sufficiently, in which case our cash flows and results would be negatively impacted.

Results of Operations

For the years ended October 31, 2024 and 2023

The following table summarizes the results of our operations for the years ended October 31, 2024 and 2023, and provides information regarding the dollar and percentage changes during such periods.

Revenues

For the year ended October 31, 2024, our total revenue was approximately $108.2 million, compared to approximately $95.3 million for the year ended October 31, 2023. This represents a revenue increase of approximately $12.9 million, or 13.6%.

Revenue from ocean freight increased by approximately $10.9 million or 11.5%, from approximately $94.5 million in the year ended October 31, 2023 to approximately $105.4 million in the year ended October 31, 2024. This increase was primarily attributable to an increase in ocean freight prices during the year ended October 31, 2024. The total number of voyage days was 3,496 days for the year ended October 31, 2024, an increase of 44 days from 3,452 days for the year ended October 31, 2023, which was due to increased new customers during the year ended October 31, 2024. The average charge per day was approximately $30,144 per day for the year ended October 31, 2024, an increase of approximately $2,800 from $27,344 per day for the year ended October 31, 2023, which was due to increased market price during the year ended October 31, 2024.

Revenue from vessel services increased by approximately $2.1 million or 280.0% from approximately $0.7 million in the year ended October 31, 2023, to approximately $2.8 million in the year ended October 31, 2024. The total number of voyage days was 759 days for the year ended October 31, 2024, a decrease of 307 days from 1,066 days for the year ended October 31, 2023. The average charge per day was $3,675 per day for the year ended October 31, 2024, compare to the average charge per day was $688 for the year ended October 31, 2023.

Cost of Revenues

Our cost of revenues mainly consists of ship lease expenses, oil expenses, port fees and other related costs. Our costs amounted to approximately $100.1 million for the year ended October 31, 2024, representing a decrease of approximately $7.1 million, or 6.6%, compared to approximately $107.1 million for the year ended October 31, 2023, because the average Asian market prices for ship leases, oil and port charges all decreased in the year ended October 31, 2024 as compared to the year ended October 31, 2023. As a result, our ship lease expenses were approximately $44.7 million for the year ended October 31, 2024, representing a decrease of approximately $1.1 million compared to approximately $45.8 million for the year ended October 31, 2023. Oil expenses were approximately $28.4 million for the year ended October 31, 2024, representing a decrease of approximately $2.1 million compared to approximately $30.5 million for the year ended October 31, 2023. Port fees were approximately $24.1 million for the year ended October 31, 2024, representing a decrease of approximately $2.2 million compared to approximately $26.3 million for the year ended October 31, 2023.

Gross profit (loss)

Our gross profit amounted to approximately $8.1 million for the year ended October 31, 2024 compared to a gross loss of approximately $11.9 million for the year ended October 31, 2023. The gross margin as a percentage of overall revenue for the year ended October 31, 2024 and 2023, was 7.5% and negative 12.5%, respectively. The increase in gross margin was primarily due to the significant increase in revenue and decrease in costs due to the market-wide decrease in vessel lease costs as a result of the BDI point decrease (which impacts vessel lease costs), as well as the decline in oil prices and port charges.

Operating Expenses

Our operating expenses consist of general and administrative expenses. General and administrative expenses primarily consisted of salary and compensation expenses related to our accounting, human resources and executive office personnel, and included rental, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately $2.1 million or 54.9% from approximately $3.7 million for the year ended October 31, 2023 to approximately $5.8 million for the year ended October 31, 2024, mainly due to an increase of approximately $1.3 million in consulting and professional service fees, including $1.2 million of share-based compensation expenses. The service periods for the third-party consultants range from one to three years. The increase in our general and administrative expense also consisted of an increase of approximately $0.5 million in brokerage fees and an increase of approximately $0.5 million in salary expenses due to an increase in the salaries paid to employees, offset by a decrease of approximately $0.4 million in insurance expenses for directors.

During the year ended October 31, 2024, we issued 11,500,000 Class A Ordinary Shares to third party consultants for market development, assistance in entering the onboard carbon capture business and market branding and development. On March 10, 2024, we entered into a two-year consulting agreement with a third party for capital market financing and business development services. Pursuant to the agreement, we issued 1,500,000 Class A Ordinary Shares to the third party. The fair value of the 1,500,000 Class A Ordinary Shares was $800,100, based on our share price at date of grant. On April 24, 2024, we entered into a one-year consulting agreement with a third party for branding and marketing services. Pursuant to the agreement, we issued 1,500,000 Class A Ordinary Shares to the third party. The fair value of the 1,500,000 Class A Ordinary Shares was $1,537,500, based on our share price at the date of grant. On October 15, 2024, we entered into a one-year consulting agreement with a third party for business development services for our entry into the onboard carbon capture business. Pursuant to the agreement, we agreed to issue 1,500,000 Class A Ordinary Shares to the third party. The shares had a fair value of $799,500, e based on our share price at the date of grant. On October 15, 2024, we entered into a three-year consulting agreement with a third party for business development services for our new onboard carbon capture business. Pursuant to the agreement, we agreed to issue 2,600,000 Class A Ordinary Shares to the third party. The shares had a fair value of $1,385,800, based on our share price at the date of grant. On October 15, 2024 we entered into a one-year consulting agreement with a third party for business development services in the PRC. Pursuant to the agreement, we paid a cash fee of $30,000 and issued 400,000 Class A Ordinary Shares to the third party. The fair value of the 400,000 Class A Ordinary Shares was $213,200, based on our share price at the date of grant. On October 21, 2024, we entered into a three-year consulting agreement with a third party for investor relations advisory services. Pursuant to the agreement, we agreed to issue 4,000,000 Class A Ordinary Shares to the third party. The shares had a fair value of $2,132,000, based on our share price at the date of grant.

Other Expenses, net

Other expense, net primarily consists of interest expense, change in fair value of convertible notes, loss on settlement of convertible notes and other items. Other expense, net was approximately $23.5 million for the year ended October 31, 2024, representing an increase of approximately $23.4 million compared to $0.1 million for the year ended October 31, 2023. The increase was primarily attributable to a loss of $23.2 million from change in fair value of convertible notes and $0.3 million from loss on settlement of convertible notes during the year ended October 31, 2024. The Company elected the fair value option to account for its convertible notes (excluding freestanding warrants if applicable, refer to Note 8 for detailed information). The fair value of the convertible notes is re-measured at each reporting period, and the change in fair value is recognized as either income or expense.

Provision for Income Taxes

Our provision for income taxes was $4,139 and $2,542 for the years ended October 31, 2024 and 2023, respectively. The Topsheen Companies are eligible for and participate under the Maritime Sector Incentive-Approved International Shipping Enterprise (MSI-AIS) award program in Singapore. We expect that our participation will be renewed for an additional 10 years in 2025. All qualified shipping income derived from the shipping activity of Topsheen Companies is exempt from taxation for the duration of our subsidiaries MSI-AIS participation in this program.

Net Loss

As a result of the foregoing, our net loss amounted to approximately $21.2 million for the year ended October 31, 2024, compared to a net loss of approximately $15.8 million for the year ended October 31, 2023.

For the years ended October 31, 2023 and 2022

The following table summarizes the results of our operations for the years ended October 31, 2023 and 2022, and provides information regarding the dollar and percentage changes during such periods.

Revenues

For the year ended October 31, 2023, our total revenue was approximately $95.3 million compared to approximately $185.3 million for the year ended October 31, 2022. This represents a revenue decrease of approximately $90.1 million, or 48.6%.

Revenue from ocean freight decreased by approximately $83.6 million or 46.9%, from approximately $178.1 million in the year ended October 31, 2022 to approximately $94.5 million in the year ended October 31, 2023. This decline was primarily attributable to a decrease in ocean freight prices during the year ended October 31, 2023. For the year ended October 31, 2022, the vessel hire rates were at a high level due to the impact of COVID-19. Ocean freight prices returned to normal levels during the year ended October 31, 2023. Strong global growth and increased infrastructure spending led to a rise in demand for commodities, which, combined with a historically low order book and port delays and congestion, resulted in an increase in our financial performance for the years ended October 31, 2022 and 2021, before moderating and declining significantly in fiscal 2023 as demand in Asia weakened. The total number of voyage days was 3,452 days for the year ended October 31, 2023, a decrease of 5 days from 3,457 days for the year ended October 31, 2022. The average charge per day was approximately $27,344 per day for the year ended October 31, 2023, a decrease of approximately $24,182 from $51,526 per day for the year ended October 31, 2022.

Revenue from vessel services decreased by approximately $6.5 million or 89.8% from approximately $7.2 million in the year ended October 31, 2022, to approximately $0.7 million in the year ended October 31, 2023. The total number of voyage days was 1,066 days for the year ended October 31, 2023, an increase of 95 days from 971 days for the year ended October 31, 2022. The average charge per day was $688 per day for the year ended October 31, 2023, compare to the average charge per day was $7,435 for the year ended October 31, 2022.

Cost of Revenues

Our cost of revenues mainly consists of ship lease expenses, oil expenses, port fees and other related costs. Our costs amounted to approximately $107.1 million for the year ended October 31, 2023, representing a decrease of approximately $51.4 million, or 32.4%, compared to approximately $158.5 million for the year ended October 31, 2022. Ship lease expenses were approximately $45.8 million for the year ended October 31, 2023, representing a decrease of approximately $46.3 million compared to approximately $92.1 million for the year ended October 31, 2022. Oil expenses were approximately $30.5 million for the year ended October 31, 2023, representing a decrease of approximately $4.2 million compared to approximately $34.8 million for the year ended October 31, 2022. Port fees were approximately $26.3 million for the year ended October 31, 2023, representing a decrease of approximately $2.7 million compared to approximately $29.0 million for the year ended October 31, 2022.

Gross (loss) profit

Our gross loss amounted to approximately $11.9 million for the year ended October 31, 2023 compared to a gross profit of approximately $26.8 million for the year ended October 31, 2022. The gross margin as a percentage of overall revenue for the years ended October 31, 2023 and 2022, was negative 12.5% and positive 14.5%, respectively. The decrease in gross margin was primarily due to the significant decrease in revenue.

Operating Expenses

Our operating expenses consist of selling expenses and general and administrative expenses. Operating expenses increased by approximately $0.5 million, or 14.6%, from approximately $3.3 million for the year ended October 31, 2022 to approximately $3.7 million for the year ended October 31, 2023. The increase in our operating expenses was primarily due to an increase of approximately $0.5 million in general and administrative expenses, offset by a decrease of approximately $0.02 million in selling expenses.

Selling expenses primarily consisted of salary and compensation related to our sales personnel. Sales expenses amounted to $nil and $16,342 for the year ended October 31, 2023 and 2022, respectively. Selling expenses was attributable to our newly incorporated subsidiary Singapore Garden Technology Pte. Ltd for the year ended October 31, 2022.

General and administrative expenses primarily consisted of salary and compensation expenses related to the our accounting, human resources and executive office personnel, and included rental, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately $0.5 million or 15.2% from approximately $3.3 million for the year ended October 31, 2022 to approximately $3.7 million for the year ended October 31, 2023 mainly due to an increase of approximately $0.6 million in insurance expenses for directors and an increase of approximately $0.2 million in other professional service fees, offset by a decrease of approximately $0.3 million in salary expenses.

Other (Expenses) Income, net

Other (expense) income, net primarily consists of interest expense and other items. Other expense, net was $147,231 for the year ended October 31, 2023, compared to other income, net of approximately $27,239 for the year ended October 31, 2022 due to the following reasons: (1) interest expense increased by $10,145 to $112,022 for the year ended October 31, 2023 from approximately $101,877 for the year ended October 31, 2022 and (2) other expense, net amounted to $42,947 for the year ended October 31, 2023, compared to other income, net of $129,098 for the year ended October 31, 2022 as a result of higher foreign exchange losses in 2023.

Provision for Income Taxes

Our provision for income taxes was $2,542 and $11,243 for the years ended October 31, 2023 and 2022, respectively. All qualified shipping income derived from the shipping activity of the Topsheen Companies is exempt from taxation in Singapore for the duration of MSI-AIS approval.

Net (Loss) Income

As a result of the foregoing, our net loss amounted to approximately $15.8 million for the year ended October 31, 2023 compared to net income of approximately $23.6 million for the year ended October 31, 2022.

B. Liquidity and Capital Resources

We are a holding company with no material operations of our own. We conduct our operations primarily through our subsidiaries in Singapore. Our ability to pay dividends depends upon dividends paid by our subsidiaries in Singapore. These subsidiaries are permitted to pay dividends to only out of their retained earnings, if any, as determined in accordance with Singapore accounting standards and regulations. We would need to accrue and pay withholding taxes if we were to distribute funds from our subsidiaries in Singapore to us.

During the year ended October 31, 2022, Caravelle Group Co., Ltd , which was at that time was owned by multiple shareholders, together with its 61%-owned subsidiary, Topsheen Shipping, and its 90%-owned subsidiary, Topsheen Samoa, declared and paid an aggregate of $16,952,502 in dividends, of which Mr. Dong Zhang, who was a non-controlling shareholder of Topsheen Shipping and Topsheen Samoa, received an aggregate of $8,662,600 in dividends, while other shareholders of Caravelle Group Co., Ltd received an aggregate of $8,289,902 in dividends. On December 30, 2022, our 61% owned subsidiary, Topsheen Shipping, declared a dividend of $2,000,000, of which Topsheen Samoa received $1,220,000 and Mr. Zhang, received $780,000. On January 31, 2023, Topsheen Samoa declared a dividend of $1,220,000, of which Mr. Zhang received $122,000. As a result, our majority owned subsidiaries declared and paid a total of $902,000 in dividends to non-controlling interest shareholders in the year ended October 31, 2023.

In assessing our liquidity, we monitor and analyze our cash on hand, ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. We have historically funded our working capital needs primarily from operations, bank loans, and advances from shareholders and intends to continue doing so in the near future to ensure sufficient working capital. As of October 31, 2024, we had cash of $6.9 million. Advances from customers included in current liabilities amounted to $5.8 million mainly representing the advances from customers that will be recognized as revenue in the next fiscal year when the services are provided. We intend to finance our future working capital requirements and capital expenditures from financing activities.

On November 24, 2023, we entered into a securities purchase agreement with an investor, pursuant to which we issued the investor a convertible promissory in the principal amount of $63,333 with an original issue discount (“OID”) of 10% for a term of nine (9) months. The note was convertible at the option of noteholder into our Class A Ordinary Shares at an initial conversion price of $0.65 per share subject to adjustment. The proceeds from the note issuance was $50,000 (after deducting OID and $7,000 for investors’ fees, costs and other transaction expenses incurred in connection with the purchase and sale of the note). We had the right to prepay all or a portion of the note at any time by paying 120% of the outstanding balance or portion thereof. By February 6, 2024, we fully settled the note with the cash repayment of $70,015 and the issuance of 15,000 Class A Ordinary Shares having a fair value of $8,468.

On January 10, 2024, we closed a first tranche of the senior secured convertible note financing with certain investors for the principal amount of $1.5 million (the “Jan 2024 Notes”) with an origin issue discount (“OID”) of 15% for a term of 18 months. The net proceed from the Jan 2024 Notes was approximately $1.0 million (the principal deduced by OID and other issuance costs). The Jan 2024 Notes can be converted at the option of noteholder into Class A ordinary shares of the Company at an initial conversion price of $1.0 per share subject to adjustment specified in the agreement. The Jan 2024 Notes shall be repayable in cash upon maturity. Prior to maturity, the Investors can convert the Jan 2024 Notes into ordinary shares at conditions specified in the agreement. The Jan 2024 Notes contain certain prepayment options and participation rights and is subject to customary closing conditions specified in the agreements. As part of the investment, the Investors are also granted five-year warrants equal to 50% of the funded amount at an initial exercise price equal to $1.00 per share, subject to adjustment. After deducting the placement agent’s commission and other offering expenses payable by the Company, the net proceeds to the Company were approximately $1 million. By September 9, 2024, we fully settled the note with the cash repayment of $1,375,000 and the issuance of 300,000 Class A Ordinary Shares having a fair value of $140,985.

On September 16, 2024, we closed a private placement financing of a senior unsecured original issue 25% discounted convertible promissory note (the “September 2024 Note”) with High-Trend and issued a five-year warrant to High Trend to purchase 24,045,181 Class A Ordinary Shares of our company (equal to 150% of the funded amount of the September 2024 Note) at an initial exercise price equal to $0.166 per share (the “September 2024 Warrant”). The September 2024 Note had a principal amount of $3,548,000 with an original issuance discount of $887,000 and zero annual interest. The September 2024 Note, which had a 12-month maturity, was convertible into our Class A Ordinary Shares at a conversion price equal to $0.10 per share, subject to adjustment. We did not have an obligation to register any of the securities issued in the placement or that were issuable pursuant to the September 2024 Note and September 2024 Warrant. The proceeds from this financing were used for general working capital purposes. The September 2024 Note was fully converted into 35,480,000 Class A Ordinary Shares on September 23, 2024.

On October 18, 2024, we closed a private placement financing of senior unsecured original issue 25% discounted convertible promissory notes (the “October 2024 Notes”) with four investors pursuant to a securities purchase agreement. The October 2024 Notes had an aggregate principal amount of $1,752,000 with an aggregate original issuance discount of $438,000 and zero annual interest. The October 2024 Notes, which had a term of 12 months, were convertible into our Ordinary Shares at an initial conversion price equal to $0.10 per share, subject to adjustment. The October 2024 Notes were fully converted into 17,520,000 Ordinary Shares on October 21, 2024. The Company does not have an obligation to register any of the securities issued to the investors.

The following summarizes the key components of our cash flows for the years ended October 31, 2024, 2023 and 2022.

Operating Activities

Net cash used in operating activities was approximately $3.3 million for the year ended October 31, 2024. Cash used in operating activities for the year ended October 31, 2024 mainly consisted of net loss of approximately $21.2 million, adjusted for certain non-cash items primarily consisting of fair value loss of approximately $23.2 million in the change in fair value of convertible notes, issuance of shares for service of approximately $1.2 million and loss on settlement of convertible notes of approximately $0.3 million, and changes in certain working capital accounts that primarily consisting of cash used in accounts receivable of approximately $6.6 million due to increased revenue, cash used in prepayment and other assets of approximately $4.5 million due to more prepayments for fuel, and other costs, offset by cash provided by advances from customers of approximately $2.3 million due to more advance collected from customers, cash provided by accrued expenses and other liabilities of approximately $1.7 million due to longer credit terms with service providers and cash provided by accounts payable of approximately $0.3 million.

Net cash used in operating activities was approximately $17.8 million for the year ended October 31, 2023. Cash used in operating activities for the year ended October 31, 2023 mainly consisted of a net loss of approximately $15.8 million, and changes in certain working capital accounts that primarily consisted of cash used in advances from customers of approximately $6.6 million due to the additional revenue realized, cash used in accrued expenses and other liabilities of approximately $3.1 million due to increased payment settlements with service providers and cash used in accounts payable of approximately $0.5 million, offset by cash provided by accounts receivable of approximately $3.0 million due to faster collection, cash provided by prepayments and other assets of approximately $4.1 million asset less prepayments paid for fuel due to less revenue and cash provided by related parties of approximately $1.1 million.

Net cash provided by operating activities was approximately $33.1 million for the year ended October 31, 2022. Cash provided by operating activities for the year ended October 31, 2022 mainly consisted of net income of approximately $23.6 million, and changes in certain working capital accounts that primarily consisted of cash provided by accounts receivable of approximately $3.9 million due to increased revenue, cash provided by prepayments and other assets of approximately $0.4 million, cash provided by advances from customers of approximately $3.9 million in line with our increased revenue, and cash provided by accrued expenses and other liabilities of approximately $2.0 million due to less payment settlements with service providers.

Investing Activities

Cash used by investing activities was $nil for the years ended October 31, 2024, 2023 and 2022.

Financing Activities

Net cash provided by financing activities was approximately $8.0 million for the year ended October 31, 2024, mainly consisting of loans from related parties of approximately $10.7 million, proceeds from convertible notes of approximately $5.3 million, capital contributed by non-controlling shareholders of approximately $2.8 million, offset by repayment of related-party loans of approximately $8.5 million, repayment of convertible notes of approximately $1.4 million and repayment of long-term bank loans of approximately $0.9 million.

Net cash used in financing activities was approximately $1.6 million for the year ended October 31, 2023, mainly consisting of repayment of related parties’ loans of approximately $13.2 million, dividends paid to shareholders of our subsidiaries of approximately $0.9 million, and repayment of a long-term bank loan of approximately $0.8 million, offset by loan proceeds from related parties of approximately $13.4 million.

Net cash used in financing activities was approximately $21.9 million for the year ended October 31, 2022, mainly consisting of loan proceeds from related parties of approximately $2.5 million, repayment of related parties’ loans of approximately $6.5 million, dividends to shareholders of approximately $17.0 million, and repayment of a long-term bank loan of approximately $1.0 million.

Capital Expenditures

We did not make any material capital expenditures in the three years ended October 31,2024, 2023 and 2022.

Contractual Obligations

We had an outstanding bank loan of approximately $1,496,999 as of October 31, 2024. We have also entered into non-cancellable operating lease agreements to rent our office space in Singapore. The lease agreement, which will expire on March 14, 2025, has been renewed for an additional two years.

The following table sets forth our contractual obligations and commercial commitments as of October 31, 2024:

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements for the years ended October 31, 2024, 2023 and 2022 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.

C. Research and Development, Patents and Licenses, etc.

Not applicable

D. Trend Information

Other than as described elsewhere in this Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information to not necessarily be indicative of future operating results or financial condition.

E. Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this report.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include revenue recognition. We believe the following accounting estimates involve the most significant judgments used in the preparation of our consolidated financial statements.

Accounting estimates used in revenue recognition

Under a voyage contract, we are engaged to provide the transportation of cargo between specific ports in return for an ocean freight payment of an agreed upon freight per ton of cargo. Our voyage contracts generally do not contain cancelable provisions. A voyage is deemed to commence when a vessel was available for loading and is deemed to end upon the completion of the discharge of the current cargo. For voyage contracts, the customer simultaneously receives and consumes the benefits provided by our performance over the voyage period because of the continuous service to the customer. Customers receive the benefit of our services as the goods are transported from one location to another. If we were unable to complete delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers over time, we recognize revenue ratably from the port of loading to when the charterer’s cargo is discharged based on the relative transit time completed in each reporting period. For unfinished voyages, the related revenue is recognized based on the estimated transit time-based portion completed of each voyage at the reporting date. Estimated losses on voyages are provided for in full at the time such losses become evident. Voyage expenses and other ocean transportation operating costs are charged to operating costs as incurred.

Recent Accounting Pronouncements 

A list of recent relevant accounting pronouncements is included in Note 2 “Summary of Significant Accounting Policies” of our Consolidated Financial Statements.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Executive Officers

Our directors and executive officers are currently as follows:

Shixuan He joined our company on January 4, 2025. Mr. He has served as the CEO of High-Trend Technology Co., Ltd., a company focusing on intelligent city system development, since April 2014. From January 2010 to March 2014, Mr. He served as the CEO of Tianjin Meijiang International Convention and Exhibition Center, a company focused on exhibition management and commercial venue operation. Mr. He obtained his bachelor’s degree in Automation from Dalian University of Technology in 1997.

Jinyu Chang joined our company on October 16, 2024. He is a Co-Founder of High Trend International, a holding company focused on the investment and development of projects involving municipal smart cities and smart street light points and has been managing the company since January 1, 2018. From January 1, 2011 to December 31, 2017, Mr. Chang served as the Chairman of the Board of High Trend Technology Co., Ltd., a company focused on the investment and development of smart city projects. Mr. Chang has a bachelor’s degree in Administrative Management from Tianjin University of Finance and Economics.

Zi Xia has served as the Chief Financial Officer and a director of our company since July 8, 2024. Ms. Xia is the Founder of Aiken International Technology Co., Ltd., an international low-carbon industry accelerator, a position she has held since 2019. Prior to that, Ms. Xia co-founded Yike Talks, a podcast platform, in 2018, where she led the marketing and product development teams from February 2018 to February 2021. From February 2009 to February 2018, Ms. Xia worked at Willis Towers Watson, a global consulting and advisory company, where she served as a Partner in charge of the marketing business for the Greater China area. Ms. Xia obtained a Bachelor of Arts degree in Communications from the University of Colorado and a Master of Arts degree in Mass Communications from the University of Leicester.

Xuanhua Xi joined our company on January 10, 2025. Ms. Xi has served as the Chief Risk officer of DigiFT Technology Group, a Singapore-based on-chain capital market operation and service provider, since December 2024. She served as the Deputy Chief Executive Officer of Neutral Financial Holding Company Limited, a Hong Kong-based licensed financial service provider, from July 2024 to December 2024. Previously, she served as the Deputy Chief Executive Officer of BOCOM International Holdings Co., Ltd., a Hong Kong-based and listed financial service provider, from July 2017 to December 2023. She was also the General Manager of BOCOM International (Shanghai) Equity Investment Management Co., Ltd., an investment management company, from November 2020 to January 2022. From March 2015 to July 2017, she served as the General Manager of BOCOM International Securities Ltd., a company providing securities brokerage services. Ms. Xi obtained her Bachelor’s degree in Economics from Fudan University, China, and her Executive Master of Business Administration degree from Shanghai Jiao Tong University, China.

Christopher Renn has served as an independent director of our company since July 8, 2024. Mr. Renn has also been a director of Professional Diversity Network, Inc. (Nasdaq: IPDN), a global developer and operator of online and in-person networks providing networking, training, educational, and employment opportunities, since June 2022. Between May 2021 and June 2022, he was a director and senior vice president of the alternative assets division at Bluestone Capital, focusing on alternative assets including technology, infrastructure, energy, and real estate. From June 2018 to May 2021, Mr. Renn was a managing director at SIG, an international infrastructure finance company active in emerging markets infrastructure development through transportation, technology, renewable energy, and healthcare projects. From April 2017 to May 2018, he worked as a senior vice president at Great Bay, an energy-focused hedge fund. From June 2011 to March 2017, he was a senior vice president and investment manager at Urban Retail Properties, the commercial property arm of a NYSE-listed REIT. Mr. Renn obtained a Master’s degree in Architecture from the Illinois Institute of Technology. He also graduated from the Advanced Management Program at Harvard University. 

Jing Sang has served as an independent director of our company since July 8, 2024. Ms. Sang is the Founder and Executive Director of China Council for an Energy Efficient Economy (CCEEE), an integrated platform to promote multilateral collaboration and communication in energy efficiency and low carbon policy, technology and financing. Prior to founding CCEEE in 2018 and since February 2017, Ms. Sang worked as a project manager in the Energy Foundation China (EFC) from February 2008 to February 2017 in industry energy efficiency. She also serves as Deputy Chairperson and Deputy Secretary-General of Energy Economy Committee, China Energy Research Society (CERS); Secretary-General of Green Industrial Parks Committee, China Association of Circular Economy (CECA); Secretary-General of Green & Low carbon Industrial Parks Committee, Chinese Society for Environmental Sciences (CSES). Ms. Sang holds a Master’s Degree in Law (LLM) from China Foreign Affairs University and she is an Innovation Leading Engineering PhD candidate in Tsinghua University (China). She was a visiting scholar in Lawrence Berkeley National Laboratory (LBNL). 

The address of our directors and executive officers is 60 Paya Lebar Road, #06-17 Paya Lebar Square, Singapore 409051, (65) 8304 8372.

There are no family relations among any of our officers or directors. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

 B. Compensation

For the year ended October 31 2024, our executive officers, who did not receive any cash compensation, received share compensation having the estimated fair value of $96,242.

For the year ended October 31, 2024, two of our directors received aggregate share compensation having an estimated fair value of $192,484.