UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2024
Commission File Number: 001-42182
PS International Group Ltd.
Unit 1002, 10/F
Join-in Hang Sing Centre
No.2-16 Kwai Fung Crescent, Kwai Chung
New Territories, Hong Kong
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
INFORMATION CONTAINED IN THIS REPORT ON FORM
6-K
On December 12, 2024, PS International Group
Ltd. (the “Company”) issued a press release announcing its unaudited financial results for the six months ended June 30, 2024.
A copy of the press release is furnished as Exhibit 99.2 to this report on Form 6-K. Attached as Exhibit 99.1 to this report is the Unaudited
Interim Condensed Consolidated Financial Statements as of December 31, 2023 and June 30, 2024 and for the six months ended June 30, 2023
and 2024
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 12, 2024 |
PS International Group Ltd. |
|
|
|
|
By: |
/s/ Hok Wai Alex Ko |
|
Name: |
Hok Wai Alex Ko |
|
Title: |
Chief Executive Officer and Director |
Exhibit Index
2
Exhibit 99.1
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
December 31, 2023 and June 30, 2024
INDEX
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
AS OF DECEMBER 31, 2023 AND JUNE 30, 2024
(IN U.S. DOLLARS)
| |
December 31, | | |
June 30, | |
| |
2023 | | |
2024 | |
ASSETS | |
| | |
| |
Current assets | |
| | |
| |
Cash and cash equivalents | |
$ | 10,769,662 | | |
$ | 8,592,785 | |
Restricted cash | |
| 2,931,357 | | |
| 2,896,967 | |
Accounts receivable, net | |
| 20,136,692 | | |
| 13,765,182 | |
Accounts receivable – related parties | |
| 11,885 | | |
| 206,193 | |
Contract assets, net | |
| 984,135 | | |
| 1,100,568 | |
Amount due from a related party, net | |
| 117,327 | | |
| 567,886 | |
Prepayments and other current assets, net | |
| 91,749 | | |
| 77,697 | |
Total current assets | |
$ | 35,042,807 | | |
$ | 27,207,278 | |
| |
| | | |
| | |
Non-current assets | |
| | | |
| | |
Property, plant, and equipment, net | |
| 184,903 | | |
| 153,187 | |
Right-of-use assets | |
| 59,245 | | |
| 180,264 | |
Total non-current assets | |
$ | 244,148 | | |
$ | 333,451 | |
TOTAL ASSETS | |
$ | 35,286,955 | | |
$ | 27,540,729 | |
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS (Continued)
AS OF DECEMBER 31, 2023 AND JUNE 30, 2024
(IN U.S. DOLLARS)
| |
December 31, | | |
June 30, | |
| |
2023 | | |
2024 | |
Current Liabilities | |
| | |
| |
Accounts payable | |
$ | 18,171,694 | | |
$ | 11,245,350 | |
Accounts payable – related parties | |
| 474,161 | | |
| 823,690 | |
Contract liabilities | |
| 4,015 | | |
| 354 | |
Other payables and accrued liabilities | |
| 851,012 | | |
| 233,081 | |
Provisions for compensation and penalty | |
| 1,574,240 | | |
| 1,574,240 | |
Tax payables | |
| 737,196 | | |
| 737,196 | |
Lease liabilities – current | |
| 47,689 | | |
| 102,496 | |
Amounts due to related parties | |
| 469,534 | | |
| 223,750 | |
Dividend payables | |
| 28,154 | | |
| 54,821 | |
Total current liabilities | |
$ | 22,357,695 | | |
$ | 14,994,978 | |
| |
| | | |
| | |
Non-current liabilities | |
| | | |
| | |
Lease liabilities – non-current | |
| 17,227 | | |
| 79,342 | |
Total non-current liabilities | |
$ | 17,227 | | |
$ | 79,342 | |
TOTAL LIABILITIES | |
$ | 22,374,922 | | |
$ | 15,074,320 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| |
| | | |
| | |
EQUITY | |
| | | |
| | |
| |
| | | |
| | |
Ordinary shares, par value US$0.0001 per share, 200,000,000 shares authorized; 200,000 issued and outstanding as of December 31, 2023 and June 30, 2024, respectively | |
| 20 | | |
| 20 | |
Additional paid-in capital | |
| 7,877,520 | | |
| 7,877,520 | |
Retained earnings | |
| 4,960,116 | | |
| 4,517,408 | |
Accumulated other comprehensive loss | |
| (41,439 | ) | |
| (41,439 | ) |
Total shareholders’ equity | |
$ | 12,796,217 | | |
$ | 12,353,509 | |
Non-controlling interest | |
| 115,816 | | |
| 112,900 | |
TOTAL EQUITY | |
$ | 12,912,033 | | |
$ | 12,466,409 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
$ | 35,286,955 | | |
$ | 27,540,729 | |
See accompanying notes to the unaudited interim
condensed consolidated financial statements.
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2024
(IN U.S. DOLLARS)
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
REVENUES | |
$ | 66,925,132 | | |
$ | 39,291,001 | |
REVENUES – RELATED PARTIES | |
| 144,320 | | |
| 75,208 | |
TOTAL REVENUE | |
| 67,069,452 | | |
| 39,366,209 | |
| |
| | | |
| | |
COST OF REVENUE | |
| 56,569,809 | | |
| 36,617,952 | |
COST OF REVENUE – RELATED PARTIES | |
| 2,902,985 | | |
| 1,522,111 | |
TOTAL COST OF REVENUE | |
| 59,472,794 | | |
| 38,140,063 | |
| |
| | | |
| | |
GROSS PROFIT | |
| 7,596,658 | | |
| 1,226,146 | |
| |
| | | |
| | |
General and administrative expenses | |
| 2,277,814 | | |
| 1,717,555 | |
Total operating expenses | |
$ | 2,277,814 | | |
$ | 1,717,555 | |
| |
| | | |
| | |
INCOME (LOSS) FROM OPERATIONS | |
$ | 5,318,844 | | |
$ | (491,409 | ) |
| |
| | | |
| | |
OTHER (EXPENSE) INCOME: | |
| | | |
| | |
Bank interest income | |
| 44,900 | | |
| 39,076 | |
Interest expense | |
| (1,291 | ) | |
| - | |
Other income | |
| 122,365 | | |
| 6,374 | |
Exchange (loss) gain | |
| (271,736 | ) | |
| 335 | |
Total other (expense) income | |
| (105,762 | ) | |
| 45,785 | |
| |
| | | |
| | |
INCOME (LOSS) BEFORE INCOME TAX | |
$ | 5,213,082 | | |
$ | (445,624 | ) |
INCOME TAX | |
| 816,518 | | |
| - | |
NET INCOME (LOSS) | |
$ | 4,396,564 | | |
$ | (445,624 | ) |
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | |
| 33,948 | | |
| (2,916 | ) |
NET INCOME (LOSS) AND TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PSI GROUP HOLDINGS LTD | |
$ | 4,362,616 | | |
$ | (442,708 | ) |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | |
| | | |
| | |
Basic and diluted | |
| 200,000 | | |
| 200,000 | |
NET INCOME (LOSS) PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY: | |
| | | |
| | |
Basic and diluted | |
$ | 21.81 | | |
$ | (2.21 | ) |
See accompanying notes to the unaudited interim
condensed consolidated financial statements.
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2024
(IN U.S. DOLLARS)
| |
Number of Shares | | |
Ordinary Shares | | |
Additional Paid-in Capital | | |
Retained Earnings | | |
Accumulated Other Comprehensive Loss | | |
Total Shareholders’ Equity | | |
Non- Controlling Interest | | |
Total Equity | |
Balance as of December 31, 2022 | |
| 200,000 | | |
$ | 20 | | |
$ | 7,877,520 | | |
| 4,346,922 | | |
| (41,439 | ) | |
| 12,183,023 | | |
| 83,698 | | |
| 12,266,721 | |
Net income | |
| - | | |
| - | | |
| - | | |
| 4,362,616 | | |
| - | | |
| 4,362,616 | | |
| 33,948 | | |
| 4,396,564 | |
Balance as of June 30, 2023 | |
| 200,000 | | |
| 20 | | |
| 7,877,520 | | |
| 8,709,538 | | |
| (41,439 | ) | |
| 16,545,639 | | |
| 117,646 | | |
| 16,663,285 | |
| |
Number of Shares | | |
Ordinary Shares | | |
Additional Paid-in Capital | | |
Retained Earnings | | |
Accumulated Other Comprehensive Loss | | |
Total Shareholders’ Equity | | |
Non- Controlling Interest | | |
Total Equity | |
Balance as of December 31, 2023 | |
| 200,000 | | |
$ | 20 | | |
$ | 7,877,520 | | |
| 4,960,116 | | |
| (41,439 | ) | |
| 12,796,217 | | |
| 115,816 | | |
| 12,912,033 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (442,708 | ) | |
| - | | |
| (442,708 | ) | |
| (2,916 | ) | |
| (445,624 | ) |
Balance as of June 30, 2024 | |
| 200,000 | | |
| 20 | | |
| 7,877,520 | | |
| 4,517,408 | | |
| (41,439 | ) | |
| 12,353,509 | | |
| 112,900 | | |
| 12,466,409 | |
See accompanying notes to the unaudited interim
condensed consolidated financial statements.
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2024
(IN U.S. DOLLARS)
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
Net income (loss) | |
$ | 4,396,564 | | |
$ | (445,624 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |
| | | |
| | |
Depreciation of property, plant and equipment | |
| 90,492 | | |
| 31,716 | |
Depreciation of right-of-use assets | |
| 59,769 | | |
| 47,659 | |
Allowance (Reversal) for expected credit loss, net | |
| 9,253 | | |
| (26,974 | ) |
Write-off of accounts receivable | |
| - | | |
| 6,266 | |
Bad debt recovery | |
| - | | |
| (68,400 | ) |
| |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
(Increase) Decrease in: | |
| | | |
| | |
Accounts receivable | |
| (4,957,778 | ) | |
| 6,463,945 | |
Accounts receivable – related party | |
| 18,403 | | |
| (194,308 | ) |
Contract asset, net | |
| (1,424,586 | ) | |
| (116,764 | ) |
Amount due from a related party | |
| (199,324 | ) | |
| (453,867 | ) |
Other current assets | |
| 69,016 | | |
| 14,364 | |
Increase (Decrease) in: | |
| | | |
| | |
Accounts payable | |
| 7,273,670 | | |
| (6,926,344 | ) |
Accounts payable – related party | |
| 202,074 | | |
| 349,529 | |
Amounts due to related parties | |
| (183,468 | ) | |
| (245,784 | ) |
Taxes recoverable | |
| 816,518 | | |
| - | |
Other payables and accrued liabilities | |
| (11,681 | ) | |
| (617,931 | ) |
Contract liabilities | |
| (4,430 | ) | |
| (3,661 | ) |
Lease liabilities | |
| (64,069 | ) | |
| (51,756 | ) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | |
$ | 6,090,423 | | |
$ | (2,237,934 | ) |
See accompanying notes to the unaudited interim
condensed consolidated financial statements.
PSI GROUP HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2024
(Continued)
(IN U.S. DOLLARS)
| |
For the six months ended June 30 | |
| |
2023 | | |
2024 | |
CASH FLOWS FROM AN INVESTING ACTIVITY: | |
| | |
| |
Decrease in restricted cash with maturity of more than three months when acquired | |
$ | 2,251,466 | | |
$ | 9,095 | |
NET CASH PROVIDED BY AN INVESTING ACTIVITY | |
$ | 2,251,466 | | |
$ | 9,095 | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Repayments of bank loans | |
$ | (130,927 | ) | |
$ | - | |
Expiry of unpresented check for dividend paid to a shareholder in prior years | |
| - | | |
| 26,667 | |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | |
$ | (130,927 | ) | |
$ | 26,667 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
$ | 8,210,962 | | |
$ | (2,202,172 | ) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | |
| 7,514,369 | | |
| 12,982,191 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | |
$ | 15,725,331 | | |
$ | 10,780,019 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
| 13,573,862 | | |
| 8,592,785 | |
Restricted cash at end of period | |
| 2,849,438 | | |
| 2,896,967 | |
Restricted cash with maturity of three months or more when acquired at end of period | |
| (697,969 | ) | |
| (709,733 | ) |
Total cash and cash equivalents and restricted cash shown in the statements of cash flows | |
$ | 15,725,331 | | |
$ | 10,780,019 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information | |
| | | |
| | |
Interest received | |
| 44,900 | | |
| 39,076 | |
Interest paid | |
| (1,291 | ) | |
| - | |
See accompanying notes to the unaudited interim
condensed consolidated financial statements.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
PSI Group Holdings Ltd (“PSI”, or
the “Company”) was incorporated under the laws of the Cayman Islands on March 7, 2022. PSI is a company formed for the purposes
of consolidating a group of operating business in the freight and logistics industry under one parent to maximize operational and financial
synergies.
On March 11, 2022, PSI (BVI) Ltd and BGG (BVI)
Ltd were incorporated under the laws of the British Virgin Islands. PSI (BVI) Ltd and BGG (BVI) Ltd are both wholly owned subsidiaries
of the Company. Both of these entities were incorporated for the purposes of acting as intermediary holding companies of the Company’s
operating entities.
Profit Sail Int’l Express (H.K.) Limited
(“PSIHK”), was incorporated under laws of Hong Kong and commenced its operations on May 27, 1993. PSIHK is engaged in the
provision of logistics and freight handling services. After the restructuring transaction
in March 2022, the Company became the 99.2% equity interest owner in PSIHK. The 0.8% interest
held by two independent parties was not included in the transaction; accordingly, the Company accounts for that interest in PSIHK as a
non-controlling interest.
On March
16, 2022, the Company, through its subsidiary, BGG (BVI) Ltd entered into a Share Exchange Agreement with Mr. Kwong Kin Yin to
acquire the entire equity interest of Business Great Global Supply Chain Limited (“BGG”), which was incorporated as a limited
company on November 11, 2016. After the share exchange, BGG became an indirectly wholly owned subsidiary
of the Company. BGG is engaging in logistics and freight business.
The Company is a freight forwarding service provider
with networks across the globe. The Company conduct its operations through PSIHK and BGG (collectively the “Operating Subsidiaries”)
in Hong Kong.
The Operating Subsidiaries provide air and ocean
export and import freight forwarding services with optional ancillary logistics related services (such as cargo pick up, cargo handling
at ports and local transportation) and warehousing related services (such as repackaging, labelling, palletization, preparation of shipping
documentation, arrangement of customs clearance and warehousing) to meet the requirement of the customers.
Generally, the Company’s services are divided
into air freight forwarding services and ocean freight forwarding service.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL
ACTIVITIES (CONTINUED)
| (c) | Business Combination Agreement |
On December 27, 2023, AIB Acquisition Corporation
(“AIB”) entered into a Business Combination Agreement with AIB LLC, a Delaware limited liability company, in the capacity
as the representative of AIB and the shareholders of AIB immediately prior to the Second Merger (as defined below) (the “AIB Representative”),
PS International Group Ltd., an exempted company incorporated with limited liability in the Cayman Islands (the “Pubco”),
PSI Merger Sub I Limited, an exempted company incorporated with limited liability in the Cayman Islands and a wholly-owned subsidiary
of Pubco (“PSI Merger Sub I”), PSI Merger Sub II Limited, an exempted company incorporated with limited liability in the Cayman
Islands and a wholly-owned subsidiary of Pubco (“PSI Merger Sub II”), and the Company (as it may be amended or supplemented
from time to time, the “Business Combination Agreement”). Pursuant to the Business Combination Agreement, subject to the terms
and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”),
(a) the PSI Merger Sub I will merge with and into the Company (the “First Merger”), with the Company surviving the First Merger
as a wholly-owned subsidiary of Pubco and the outstanding shares of the Company being converted into the right to receive ordinary shares
of Pubco (“Pubco Ordinary Shares”); and (b) one business day following the First Merger, the PSI Merger Sub II will merge
with and into AIB (the “Second Merger,” and together with the First Merger, the “Mergers”), with AIB surviving
the Second Merger as a wholly-owned subsidiary of Pubco and the outstanding securities of AIB being converted into the right to receive
substantially equivalent securities of Pubco (the Mergers together with the other transactions contemplated by the Business Combination
Agreement and other ancillary documents, the “Business Combination”). On July 18, 2024, the Business Combination was completed,
and the ordinary shares of PS International Group Ltd. commenced trading on Nasdaq Stock Market on July 19, 2024.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation and principles of consolidation
The accompanying unaudited interim condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”), and include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries. All significant inter-company
transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
The unaudited interim condensed consolidated financial
statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information
and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed
or omitted consistent with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim condensed
consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments,
in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of June 30, 2024, and results
of operations and cash flows for the six months ended June 30, 2023 and 2024. The unaudited interim condensed consolidated balance sheet
as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all the information and
footnotes required by the U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full
fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial
statements as of and for the years ended December 31, 2022 and 2023, and related notes included in the Company’s audited consolidated
financial statements.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Use of estimates
The preparation of the unaudited interim condensed
consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated
financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates
using the best information available at the time the estimates are made. Actual results could differ from those estimates. Significant
estimates for the period ended June 30, 2023 and 2024, include allowance for expected credit loss, fair value measurements, useful life
of property, plant and equipment, assumptions used in assessing impairment of long-lived assets.
Foreign currency translation
The accompanying unaudited interim condensed consolidated
financial statements are presented in United States dollars (“US$” or “$”). The functional currency of the Company
is Hong Kong Dollar (“HKD”). Transactions in foreign currencies are initially recorded at the functional currency rate
ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain
or loss on foreign currency transaction in the unaudited interim condensed consolidated statements of operations.
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Period end HKD: US$ exchange rate | |
| 7.8000 | | |
| 7.8000 | |
Period average HKD: US$ exchange rate | |
| 7.8000 | | |
| 7.8000 | |
Cash and cash equivalents
For financial reporting purposes, the Company
considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. The Company maintains
no bank account in the United States of America. The Company maintains its bank accounts in Hong Kong Special Administrative Region (“Hong
Kong”). Cash balances in bank accounts in Hong Kong are insured under the Deposit Protection Scheme introduced by the Hong Kong
government for a maximum amount of $64,103 (HKD500,000).
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Restricted cash
Restricted cash represents amounts held by banks
as security for banking facilities and therefore is not available for the Company’s use until such time as banking facilities have
been fulfilled or expired. None of the banking facilities were utilized as of December 31, 2023 and June 30, 2024.
Fair value of financial instruments
The Company applies the provisions of ASC 820,
Fair Value Measurements and Disclosures, to the financial instruments that are required to be carried at fair value. Fair value
is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier
fair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop its assumptions
regarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy.
| ● | Level
1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level
2—defined as inputs other than quoted prices in active markets, that are either directly or indirectly observable; and |
| ● | Level
3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
The Company’s financial instruments primarily
consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, contract assets, accounts payable, other
payables and accrued liabilities, dividend payables and amounts due from/to related parties.
The carrying value of cash and cash equivalents,
restricted cash, accounts receivable, other current assets, contract assets, accounts payable, other payables and accrued liabilities,
dividend payables and amounts due from/to related parties approximate fair value because of the short-term nature of these items. The
estimated fair values of short-term bank loans were not materially different from their carrying value as presented due to the short maturities
and that the interest rates on the borrowing approximate those that would have been available for loans of similar remaining maturity
and risk profile. As the carrying amounts are reasonable estimates of the fair value, these financial instruments are classified within
Level 1 of the fair value hierarchy.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Accounts receivable, net
Accounts receivables are carried at net realizable
value. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as
to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers
many factors, including the age of the balance, customer’s historical payment history, its current creditworthiness and current
or future economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established
customers who are deemed to be financially responsible. Credit periods to customers are normally within 45 days after customers received
services provided by the Company. If accounts receivables are to be provided for, or written off, they would be recognized in the unaudited
interim condensed consolidated statements of operations within operating expenses. Balance of allowance for expected credit loss was $107,758
and $77,457 as of December 31, 2023 and June 30, 2024, respectively.
Property, plant, and equipment, net
Property, plant, and equipment are stated at cost
less accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets. Expenditures
for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred, whereas significant renewals
and betterments are capitalized.
Depreciation is provided over their estimated
useful lives, using the straight-line method. Estimated useful lives are as follows:
Leasehold improvements |
|
life of lease |
Machinery and equipment |
|
4 to 5 years |
Motor vehicles |
|
3.3 to 10 years |
Furniture and fixtures |
|
5 years |
When assets are sold or retired, their costs and
accumulated depreciation are eliminated from the unaudited interim condensed consolidated financial statements and any gain or loss resulting
from their disposal is recognized in the period of disposition as an element of other income.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Impairment of long-lived assets
Long-lived assets are evaluated for impairment
periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable in accordance
with ASC 360, “Property, Plant and Equipment”.
In evaluating long-lived assets for recoverability,
the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance
with ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted
cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying
value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through
sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell.
There was no impairment loss recognized for the
six months ended June 30, 2023 and 2024.
Lease
ASC 842 supersedes the lease requirements in ASC
840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use
(“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of
cash flows arising from leasing arrangements. Leases that transfer substantially all of the benefits and risks incidental to the ownership
of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception
of the lease. All other leases are accounted for as operating leases.
The Company determines if an arrangement is a
lease at inception. Operating leases are included in operating lease ROU assets, current liabilities and long-term operating lease liabilities
in the consolidated balance sheets.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
ROU assets represent the Company’s right
to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising
from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease
payments over the lease term. For leases that do not provide an implicit rate, the Company use its incremental borrowing rate based on
the information available at commencement date in determining the present value of lease payments. The Company use the implicit rate when
readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Significant judgment may be required when determining
whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and
non-lease components, and the determination of the discount rate included in the Company’s office lease. The Company review the
underlying objective of each contract, the terms of the contract, and consider its current and future business conditions when making
these judgments.
Adoption of new accounting standard
In June 2022, FASB issued ASU 2022-03,
Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments
in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual
sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years
beginning after December 15, 2023. The Company adopted ASU 2022-03 during the six months ended June 30, 2024 and the adoption had
no material impact to the Company’s unaudited interim condensed consolidated financial statements.
In November 2023, FASB issued ASU 2023-07, Segment
Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which provides amendments to improve reportable segment disclosures
requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted.
The Company adopted ASU 2023-07 during the six months ended June 30, 2024 and the adoption had no material impact to the Company’s related
disclosures.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Revenue recognition
The Company recognizes revenues in accordance
with ASC Topic 606, “Revenue from Contracts with Customers”.
The Company derives revenues primarily from the
provision of air and ocean freight forwarding services by purchasing transportation services from direct (asset-based) carriers or other
freight forwarders and reselling those services to its customers. The contracts with customers generally contain a single performance
obligation as the distinct services provided remain substantially the same over time and possess the same pattern of transfer. The performance
obligation is satisfied over the transit period when the customers simultaneously receive and consume the benefits of the delivery services.
Accordingly, revenue is recognized over the transit period based on the progress towards the completion of the performance obligation.
The transit period can vary based upon the method
of transport. Determining the transit period and how much of it has been completed as of the reporting date may require management to
make judgments that affect the timing of revenue recognized. For air freight forwarding services, the Company uses the cost-to-cost measure
of progress because it best depicts the transfer of control to the customer which occurs as the Company incur costs on its contracts.
Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred
to date to the total estimated costs at completion of the performance obligation. Revenue is recorded proportionally as costs are incurred.
The typical amount of time spent rendering air freight forwarding services is three to five days. For ocean freight forwarding services,
the Company uses an output method of progress based on time-in-transit to measure the progress as the timing of costs incurred does not
best depict the transfer of control to the customer. The typical amount of time spent rendering ocean freight forwarding services is approximately
three to four weeks. The Company believes that the transpiring of time provides the best measurement of the rendering of services to the
customer. The Company’s primary output is the provision of transport products over a physical distance. Distance equals speed multiplied
by time; because speed may vary over the course of the journey, measuring the rendering of service using units of time is more linearly
quantifiable than speed; accordingly, the Company recognizes revenue over time. The Company believes that the methodology employed is
comparable to other global logistics companies and offers faithful depiction of the transport of goods as service rendered to customers.
Pricing for the Company’s services is generally
a fixed amount. The Company does not have significant variable consideration in its contracts. Payments are received within 45 to 90 days
upon completion of performance obligation but can vary based on the nature of the service provided and certain other factors.
The Company recognizes revenue on a gross basis
as the Company controls the services. The Company is primarily responsible for fulfilling the promise, assumes risk of loss, has discretion
in setting the prices for the services to its customers, and has the ability to direct the use of the services provided by third parties.
Contract assets include billed and unbilled amounts
resulting from in-transit shipments, as the Company has an unconditional right to payment only once all performance obligations have been
completed (e.g., shipments have been delivered). Contract assets are generally classified as current, and the full balance is converted
each reporting period based on the short-term nature of the transactions. Gross contract assets related to in-transit shipments totaled
$987,084 and $1,103,848 at December 31, 2023 and June 30, 2024, respectively. Contract assets are included within current assets in the
accompanying unaudited interim condensed consolidated balance sheets.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Contract liabilities are recognized when the Company
receives prepayments from customers. Contract liabilities will be recognized as revenue when promised services are provided. Contract
liabilities were $4,015 and $354 at December 31, 2023 and June 30, 2024, respectively.
The Company also provide certain value-added logistics
services, such as packaging, warehousing services, small parcel, and local transportation services. The performance obligation is generally
satisfied over the service period as the Company perform the obligations. Pricing for the Company’s services is established in the
customer contract and is dependent upon the specific needs of the customer but may be agreed upon at a fixed fee per transaction, labor
hour, or service period.
Cost of revenue
Cost of revenue consists primarily of cargo space
charged by airlines, shipping liners or other freight forwarders and ancillary logistics services fee including costs of security, local
handling and x-ray screening and warehouse services.
General and administrative expenses
General and administrative expenses include management
and office salaries and employee benefits, depreciation for office facility and office equipment, travel and entertainment, legal and
accounting, consulting fees and other office expenses.
Advertising
All advertising costs
are expensed as incurred.
Income tax
The Company accounts for income taxes following
the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax
assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets
will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment
date.
The Company also follows FASB ASC 740, which addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood
of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2023 and June 30, 2024, the Company has no
material unrecognized tax benefits and does not expect any material changes to the unrecognized tax benefits within twelve months of the
reporting date. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other
expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain open for examination by
the local authorities until the statute of limitations has passed.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Comprehensive loss
Comprehensive loss is defined as the change in
equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions
to owners, and is not included in the computation of income tax expense or benefit. Accumulated comprehensive loss consists of foreign
currency translation. The Company presents comprehensive loss in accordance with ASC Topic 220, “Income Statement — Reporting
Comprehensive Income”.
Earnings per share
The Company calculates earnings per share in accordance
with ASC Topic 260 “Earnings per Share.” Basic earnings per share is computed by dividing the net income/loss by the weighted
average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share
except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential
ordinary shares equivalents had been issued and if the additional common shares were dilutive. During the six months ended June 30, 2023
and 2024, there were no dilution impact.
Commitments and contingencies
In the normal course of business, the Company
is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that
relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies
based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider
many factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company’s
management has evaluated all such proceedings and claims that existed as of December 31, 2023 and June 30, 2024.
Provision for compensation
The Company recognizes a provision for staff injury
compensation in accordance with the requirements of ASC Topic 450. This provision is established to account for potential liabilities
arising from work-related injuries or illnesses incurred by the Company’s employees. The provision is calculated based on estimated
maximum future cash outflows to settle the staff injury claim in accordance with Hong Kong Employees’ Compensation Ordinance and
ASC Topic 450. The claim considers the assessment of loss of earning capacity including the necessary period of absence from duty and
the percentage of loss of earning capacity permanently caused to the employee as a result of the work injury.
Management believes that the provision for staff
injury compensation adequately reflects the Company’s potential liabilities arising from staff injuries. However, actual outcomes
may differ from the estimates due to uncertainties inherent in the assessment of future claims and changes in applicable laws or regulations.
The provision is reviewed and adjusted on a regular basis to reflect any changes in the estimates of future cash outflows (i.e. court
decisions may require adjustments to provision.) Any adjustments will increase/decrease in the provision in the period in which the change
occurs.
The Company is in procession of insurance policy
to cover its liability under Hong Kong Employees’ Compensation Ordinance and Hong Kong Common Law for the work injuries for its
employees.
The provision for staff injury compensation of
$328,615 was recognized as expenses in prior years and classified as a current liability in the financial statements as of December 31,
2023 and June 30, 2024. No further provision was recognized for the six months ended June 30, 2023 and 2024.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Provision for penalty
The Company recognizes a provision for penalty
claim in accordance with the requirements of ASC Topic 450. The Company is currently involved in a dispute with one of its suppliers
regarding a penalty claim. The dispute arose due to the Company’s underutilization of the cargo aircraft’s capacity, leading
to a suboptimal load weight on the aircraft. Consequently, the supplier levied charges on the Company for the freight rate, fuel surcharge,
and security charges, amounting to a total of $1,245,625. The management of the Company is actively discussing, following up and resolving
the matter with the supplier. As of the date of these financial statements, the best estimate of the amount is $1,245,625.
Management believes that the provision for penalty
adequately reflects the Company’s potential liabilities. However, actual outcomes may differ from the estimates due to uncertainties
inherent in the assessment of future claims and changes in applicable laws or regulations. The provision is reviewed and adjusted on a
regular basis to reflect any changes in the estimates of future cash outflows. Any adjustments will increase/decrease in the provision
in the period in which the change occurs.
The provision for penalty claim of $1,245,625
was recognized as expenses for the year ended December 31, 2023 and classified as a current liability in the unaudited interim condensed
consolidated financial statements as of December 31, 2023 and June 30, 2024. No further provision was recognized for the six months
ended June 30, 2024.
Non-controlling interest
Non-controlling interest are recognized to reflect
the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. For the Company’s
consolidated subsidiaries, non-controlling interests represent a minority shareholder’s 0.8% ownership interest in PSIHK.
Non-controlling interest are presented as a separate
line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s
unaudited interim condensed consolidated statements of operations and comprehensive income to distinguish the interests from that of the
Company.
Segment reporting
ASC 280, “Segment Reporting”, establishes
standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s
business segments.
The Company’s chief operating decision maker
is the Chief Executive Officer, who reviews the financial information of each separate operating segment when making decisions about allocating
resources and assessing the performance of the segment. The Company has determined that it has a single operating segment for purposes
of allocating resources and evaluating financial performance; accordingly, the Company does not provide additional segment reporting in
these accompanying notes.
Government assistance programs
Government incentives are recorded and presented
in the unaudited interim condensed consolidated financial statements on a gross basis as other income. The benefit is generally recorded
when all conditions attached to the incentive have been met or are expected to be met and there is reasonable assurance of their receipt.
Pilot Subsidy Scheme for Third-party Logistics Service Providers
The Hong Kong government has launched the Pilot
Subsidy Scheme for Third-party Logistics Service Providers (the “Pilot Scheme”) to encourage the adoption of latest technology
and enterprise resource planning solution by the logistics sector for enhancing efficiency and productivity. All non-listed enterprises
registered in Hong Kong providing third-party logistics services and with substantive business operations in Hong Kong are eligible to
apply the Pilot Scheme. All conditions relating to these grants have been fulfilled. The grant of $28,703 was recognized as other income
in the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related party
In general, related parties exist when there is
a relationship that offers the potential for transactions at less than arm’s-length, favorable treatment, or the ability to influence
the outcome of events different from that which might result in the absence of that relationship. A related party may be any of the following:
a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control with another party;
b) a principle owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity; c) management, which
are persons having responsibility for achieving objectives of the entity and requisite authority to make decision; d) immediate family
of management or principal owners; e) a parent Company and its subsidiaries; and f) other parties that have ability to significant influence
the management or operating policies of the entity. The Company discloses all significant related party transactions.
The Company adopted ASC 850, Related Party Disclosures,
for the identification of related parties and disclosure of related party transactions. Per ASC 850-10-50-5: “Transactions
involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,
free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related
party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.”
Economic and political risks
The Company’s operations are conducted in
Hong Kong. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political,
economic and legal environment in Hong Kong, and by the general state of the Hong Kong economy.
The Company’s operations in Hong Kong are
subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These
include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s
results may be adversely affected by changes in the political and social conditions in Hong Kong, and by changes in governmental policies
with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation,
among other things.
Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of cash and accounts receivable. All of the Company’s cash is maintained
with banks in Hong Kong, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts.
A portion of the Company’s sales are credit sales which are primarily to customers whose abilities to pay are dependent upon the
industry economics prevailing in these areas; however, concentrations of credit risk with respect to accounts receivables is limited due
to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit
risk.
Exchange risk
The reporting currency of the Company is U.S.
Dollar. To date the majority of the revenues and costs are denominated in Hong Kong Dollar and a significant portion of the assets and
liabilities are denominated in Hong Kong Dollars. There was no significant exposure to foreign exchange rate fluctuations and the Company
has not maintained any hedging policy against foreign currency risk. The management will consider hedging significant currency exposure
should the need arise.
Recently issued accounting pronouncements
In December 2023, FASB issued ASU 2023-09, Income
Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures.
The main provisions in ASU 2023-09 enhance the disclosure requirements of rate reconciliations and income taxes paid. For public business
entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted
for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be
applied on a prospective basis, retrospective application is permitted. The Company is currently evaluating the amendments in this guidance
to determine the impact it will have on the Company’s unaudited interim condensed consolidated financial statements and related
disclosures.
The Company does not believe other recently issued
but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited interim
condensed consolidated balance sheets, statements of operations and comprehensive income and statements of cash flows.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 3 – CONCENTRATION OF REVENUES AND
COST OF REVENUE
Concentration of major customers and suppliers:
| |
For the six months ended June
30, | |
| |
2023 | | |
2024 | |
Major customers representing more than 10% of the Company’s revenues | |
| | |
| | |
| | |
| |
Customer A | |
$ | 55,096,093 | | |
| 82.15 | % | |
$ | 14,370,553 | | |
| 36.50 | % |
Total Revenues | |
$ | 55,096,093 | | |
| 82.15 | % | |
$ | 14,370,553 | | |
| 36.50 | % |
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Major customers of the Company’s accounts receivable | |
| | |
| | |
| | |
| |
Company A | |
$ | 10,924,906 | | |
| 54.22 | % | |
$ | 4,077,966 | | |
| 29.18 | % |
Total | |
$ | 10,924,906 | | |
| 54.22 | % | |
$ | 4,077,966 | | |
| 29.18 | % |
Accounts receivable from the Company’s major
customers accounted for 54.22% and 29.18% of total accounts receivable balances as of December 31, 2023 and June 30, 2024, respectively.
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Major suppliers representing more than 10% of the Company’s cost of revenue | |
| | |
| | |
| | |
| |
Supplier A | |
$ | 9,303,367 | | |
| 15.64 | % | |
$ | 3,931,179 | | |
| 10.31 | % |
Supplier B | |
| 2,522,439 | | |
| 4.24 | % | |
| 5,600,907 | | |
| 14.69 | % |
Supplier C | |
| 10,391,151 | | |
| 17.47 | % | |
| 3,298,717 | | |
| 8.65 | % |
Total Cost of Revenue | |
$ | 22,216,957 | | |
| 37.35 | % | |
$ | 12,830,803 | | |
| 33.65 | % |
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Major suppliers of the Company’s accounts payable | |
| | |
| | |
| | |
| |
Supplier A | |
$ | 2,509,747 | | |
| 13.46 | % | |
$ | 1,492,458 | | |
| 12.37 | % |
Supplier B | |
| 827,832 | | |
| 4.44 | % | |
| 1,092,538 | | |
| 9.05 | % |
Supplier C | |
| 1,017,198 | | |
| 5.46 | % | |
| 1,088,547 | | |
| 9.02 | % |
Total | |
$ | 4,354,777 | | |
| 23.36 | % | |
$ | 3,673,543 | | |
| 30.44 | % |
Accounts payable from the Company’s major
suppliers accounted for 23.36% and 30.44% of total accounts payable balances as of December 31, 2023 and June 30, 2024, respectively.
NOTE 4 – OTHER INCOME
| |
For the six months ended
June 30, | |
| |
2023 | | |
2024 | |
Government grant | |
$ | 28,703 | | |
$ | - | |
Management fee income | |
| 22,788 | | |
| 2,212 | |
Management fee income from a related party | |
| 12,981 | | |
| 3,316 | |
Insurance compensation | |
| 55,903 | | |
| - | |
Miscellaneous income | |
| 1,990 | | |
| 846 | |
Total | |
$ | 122,365 | | |
$ | 6,374 | |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 5 – PROVISIONS FOR
COMPENSATION AND PENALTY
| |
As of
December 31, | | |
As of
June 30, | |
| |
2023 | | |
2024 | |
Provision for compensation | |
$ | 328,615 | | |
$ | 328,615 | |
Provision for penalty | |
| 1,245,625 | | |
| 1,245,625 | |
Total | |
$ | 1,574,240 | | |
$ | 1,574,240 | |
The provision for staff injury
compensation represented the management’s estimated liability for work-related injuries incurred by its employee. The provision
was calculated based on estimated maximum future cash outflows to settle the staff injury claim. The claim considered the assessment loss
of earning capacity including the necessary period of absence from duty and the percentage of loss of earning capacity permanently caused
to the employee as a result of the work injury in accordance with Hong Kong Employees’ Compensation Ordinance and ASC Topic 450.
In accordance with ASC 450-20-30-1, $328,615 was the estimated amount within the range of loss appears at the time to be a better
estimate than any other amount within the range.
The provision for staff injury
compensation of $328,615 was recognized as expenses in prior years and classified as a current liability as of December 31, 2023
and June 30, 2024.
The Company is in procession
of insurance policy to cover its liability under Hong Kong Employees’ Compensation Ordinance and Hong Kong Common Law
for the work injuries for its employee.
The provision for penalty claim
represented the management’s estimated liability for a dispute with one of its suppliers regarding a penalty claim. The dispute
arose due to the Company’s underutilization of the cargo aircraft’s capacity, leading to a suboptimal load weight on the aircraft.
Consequently, the supplier levied charges on the Company for the freight rate, fuel surcharge, and security charges, amounting to a total
of $1,245,625. The management of the Company is actively discussing, following up and resolving the matter with the supplier. As of the
date of these financial statements, the best estimate of the amount is $1,245,625.
The provision for penalty claim of $1,245,625
was recognized as expenses for the year ended December 31, 2023 and classified as a current liability in the unaudited interim condensed
consolidated financial statements as of December 31, 2023 and June 30, 2024.
NOTE 6 – RESTRICTED CASH
As of December 31, 2023 and
June 30, 2024, the Company pledged its fixed deposits of $2,931,357 and $2,896,967 for banking facilities secured from Nanyang Commercial
Bank, Limited and DBS Bank (Hong Kong) Limited. None of the banking facilities
were utilized as of December 31, 2023 and June 30, 2024.
Restricted cash are summarized
as follows:
| |
As of
December 31, | | |
As of
June 30, | |
| |
2023 | | |
2024 | |
Restricted cash with maturity of less than three months when acquired at end of period | |
$ | 2,212,529 | | |
$ | 2,187,234 | |
Restricted cash with maturity of three months or more when acquired at end of period | |
| 718,828 | | |
| 709,733 | |
Total | |
$ | 2,931,357 | | |
$ | 2,896,967 | |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 7 – ACCOUNTS RECEIVABLE, NET
Accounts receivable is presented net of allowance for credit loss:
| |
As of
December 31, | | |
As of
June 30, | |
| |
2023 | | |
2024 | |
| |
| | |
| |
Accounts receivable | |
$ | 20,244,450 | | |
$ | 13,842,639 | |
Less: allowance for expected credit loss | |
| (107,758 | ) | |
| (77,457 | ) |
Total | |
$ | 20,136,692 | | |
$ | 13,765,182 | |
The movement of allowances for expected credit loss is as follow:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Balance at beginning of the year/period | |
$ | (52,948 | ) | |
$ | (107,758 | ) |
(Provision) Reversal | |
| (54,810 | ) | |
| 30,301 | |
Total | |
$ | (107,758 | ) | |
$ | (77,457 | ) |
NOTE 8 – CONTRACT ASSETS, NET AND CONTRACT LIABILITIES
Contract assets is presented net of allowance for expected credit loss.
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Contract assets | |
$ | 987,084 | | |
$ | 1,103,848 | |
Less: allowance for expected credit loss | |
| (2,949 | ) | |
| (3,280 | ) |
Total | |
$ | 984,135 | | |
$ | 1,100,568 | |
The movement of allowances for expected credit loss is as follow:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Balance at beginning of the year/period | |
$ | (2,895 | ) | |
$ | (2,949 | ) |
Provision | |
| (54 | ) | |
| (331 | ) |
Total | |
$ | (2,949 | ) | |
$ | (3,280 | ) |
Contract liabilities are recognized when the Company
received prepayments from customers. Contract liabilities will be recognized as revenue when promised services are provided. Contract
liabilities were $4,015 and $354 as of December 31, 2023 and June 30, 2024, respectively.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 9 – PREPAYMENTS AND OTHER
CURRENT ASSETS, NET
Prepayments and other current
assets is presented net of allowance for expected credit loss:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Prepayments and other current assets | |
$ | 92,494 | | |
$ | 78,130 | |
Less: allowance for expected credit loss | |
| (745 | ) | |
| (433 | ) |
Total | |
$ | 91,749 | | |
$ | 77,697 | |
The movement of allowances for expected credit loss is as follow:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Balance at beginning of the year/period | |
$ | - | | |
$ | (745 | ) |
(Provision) Reversal | |
| (745 | ) | |
| 312 | |
Total | |
$ | (745 | ) | |
$ | (433 | ) |
NOTE 10 – PROPERTY, PLANT AND EQUIPMENT, NET
As of December 31, 2023 and June 30, 2024, property, plant and equipment,
net consisted of the following:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Leasehold improvement | |
$ | 116,729 | | |
$ | 116,729 | |
Machinery and equipment | |
| 474,220 | | |
| 474,220 | |
Motor vehicles | |
| 354,408 | | |
| 354,408 | |
Furniture and fixtures | |
| 94,261 | | |
| 94,261 | |
Total property plant and equipment, at cost | |
| 1,039,618 | | |
| 1,039,618 | |
Less: accumulated depreciation | |
| (854,715 | ) | |
| (886,431 | ) |
Total property, plant and equipment, net | |
$ | 184,903 | | |
$ | 153,187 | |
Depreciation expense for the six months ended June 30, 2023 and 2024
were $90,492, and $31,716, respectively.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 11 – LEASES
The Company has various operating leases for office
space and photocopiers. The lease agreements do not specify an explicit interest rate. The Company’s management believes that the
Hong Kong Dollar Best Lending Rate (“BLR”) was the most indicative rate of the Company’s borrowing cost for the calculation
of the present value of the lease payments; the rate used by the Company as quoted by the BLR was 5.0% and 6.1% as of December 31, 2023
and June 30, 2024, respectively.
As of December 31, 2023 and June 30, 2024, the
right-of-use assets totaled $59,245, and $180,264, respectively.
As of December 31, 2023 and June 30, 2024, lease liabilities consist
of the following:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Lease liabilities - current portion | |
$ | 47,689 | | |
$ | 102,496 | |
Lease liabilities - non-current portion | |
$ | 17,227 | | |
$ | 79,342 | |
Total | |
$ | 64,916 | | |
$ | 181,838 | |
During the six months ended June 30, 2023 and
2024, the Company incurred total operating lease expenses of $63,448 and $49,550, respectively.
Other lease information is as follows:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Weighted-average remaining lease term - operating leases | |
| 0.5 year | | |
| 1.8 years | |
Weighted-average discount rate - operating leases | |
| 5 | % | |
| 5.8 | % |
The following is a schedule of future minimum payments under operating
leases as of June 30, 2024:
| |
As of June 30, | |
| |
2024 | |
2024 | |
$ | 110,369 | |
2025 | |
| 81,405 | |
Total lease payments | |
| 191,774 | |
Less: imputed interest | |
| (9,936 | ) |
Total operating lease liabilities, net of interest | |
$ | 181,838 | |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 12 – OTHER PAYABLES AND ACCRUED LIABILITIES
Other payables and accrued liabilities are summarized as follow:
| |
As of December 31, | | |
As of June 30 | |
| |
2023 | | |
2024 | |
Provision for staff bonus | |
$ | 555,513 | | |
$ | 96,155 | |
Accrued staff salaries | |
| 16,653 | | |
| 10,487 | |
Accrued administrative expenses | |
| 262,964 | | |
| - | |
Other payables | |
| 2,440 | | |
| 126,439 | |
Deposits received | |
| 13,442 | | |
| - | |
Total | |
$ | 851,012 | | |
$ | 233,081 | |
NOTE 13 – ACCOUNTS PAYABLE
Accounts payable are summarized as follow:
| |
As of December 31, | | |
As of June 30 | |
| |
2023 | | |
2024 | |
Freight fee and other handling charges | |
$ | 18,171,694 | | |
$ | 11,245,350 | |
Freight fee and other handling charges – related party | |
| 474,161 | | |
| 823,690 | |
Total | |
$ | 18,645,855 | | |
$ | 12,069,040 | |
NOTE 14 – SHAREHOLDERS’ EQUITY
The equity of the Company as of December 31, 2023
and June 30, 2024 represents 200,000 ordinary shares issued and outstanding amounting to $20.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 15 – DISAGGREGATED REVENUES
Information for the Company’s breakdown
of revenues by service type for the six months ended June 30, 2023 and 2024 are as follows:
| |
For the six months ended
June 30, | |
| |
2023 | | |
2024 | |
Freight forwarding services | |
| | |
| |
- Air freight | |
$ | 66,269,298 | | |
$ | 38,744,329 | |
- Ocean freight | |
| 800,077 | | |
| 621,675 | |
Subtotal | |
| 67,069,375 | | |
| 39,366,004 | |
Ancillary logistic services | |
| 77 | | |
| 205 | |
Total | |
$ | 67,069,452 | | |
$ | 39,366,209 | |
Information for the Company’s breakdown
of revenue from freight forwarding services for the six months ended June 30, 2023 and 2024 are as follows:
| |
For the six months ended
June 30, | |
| |
2023 | | |
2024 | |
Export shipments | |
| | |
| |
- Air | |
$ | 66,256,160 | | |
$ | 38,742,336 | |
- Ocean | |
| 785,497 | | |
| 616,158 | |
- Subtotal | |
| 67,041,657 | | |
| 39,358,494 | |
| |
| | | |
| | |
Import shipments | |
| | | |
| | |
- Air | |
| 13,138 | | |
| 1,993 | |
- Ocean | |
| 14,580 | | |
| 5,517 | |
- Subtotal | |
| 27,718 | | |
| 7,510 | |
Total | |
$ | 67,069,375 | | |
$ | 39,366,004 | |
Information for the Company’s breakdown
of export revenue destination for the six months ended June 30, 2023 and 2024 are as follows:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
United States | |
$ | 54,921,468 | | |
| 81.92 | % | |
$ | 27,748,425 | | |
| 70.50 | % |
Canada | |
| 3,656,395 | | |
| 5.45 | % | |
| 1,502,484 | | |
| 3.82 | % |
France | |
| 104,456 | | |
| 0.16 | % | |
| 318,118 | | |
| 0.81 | % |
United Kingdom | |
| 1,776,636 | | |
| 2.65 | % | |
| 2,963,564 | | |
| 7.53 | % |
The Netherlands | |
| 2,997,400 | | |
| 4.47 | % | |
| 2,786,257 | | |
| 7.08 | % |
Singapore | |
| 1,006,911 | | |
| 1.50 | % | |
| 28,414 | | |
| 0.08 | % |
Others (Note) | |
| 2,578,391 | | |
| 3.85 | % | |
| 4,011,232 | | |
| 10.18 | % |
Total export revenue | |
$ | 67,041,657 | | |
| 100 | % | |
$ | 39,358,494 | | |
| 100 | % |
Note: Others represent a number of countries
including, among others, Luxembourg, Spain, Mexico, Belgium, etc.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 15 – DISAGGREGATED REVENUES (continued)
Information for the Company’s breakdown
of revenue by types of customers for the six months ended June 30, 2023 and 2024 are as follows:
| |
For the six
months ended
June 30, | |
| |
2023 | | |
2024 | |
Freight forwarders | |
$ | 66,707,657 | | |
$ | 39,186,625 | |
Direct customers | |
| 361,795 | | |
| 179,584 | |
Total | |
$ | 67,069,452 | | |
$ | 39,366,209 | |
NOTE 16 – INCOME TAX
Cayman Islands and British Virgin Islands (“BVI”)
The Company is incorporated in the Cayman Islands
and several of its wholly-owned subsidiaries are incorporated in BVI. Under the current laws of the Cayman Islands and the BVI, these
entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman
Islands and the BVI.
Hong Kong
On March 21, 2018, the Hong Kong Legislative Council
passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime.
The Bill was signed into law on March 28, 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the
first HKD2 million of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD2 million will be taxed at 16.5%.
The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.
For the six months ended June 30, 2023 and 2024,
the Company generated substantially all of its taxable income in Hong Kong. The tax expenses records in the Company’s result of
operations are almost entirely attributable to income earned in Hong Kong. Should the Company’s operations expand or change in the
future, where the Company generates taxable income in other jurisdictions, the Company’s effective tax rates may substantially change.
Significant components of the provision for income taxes are as follows:
| |
For the six months ended
June 30, | |
| |
2023 | | |
2024 | |
Hong Kong profit tax: | |
| | |
| |
- Current period | |
$ | 818,056 | | |
$ | - | |
- Tax reduction | |
| (1,538 | ) | |
| - | |
Income tax expenses | |
$ | 816,518 | | |
$ | - | |
The effective tax rates on income/loss before
income taxes for the six months ended June 30, 2023 and 2024 was 15.66% and 0.00%, respectively.
No provision for deferred taxation has been made
as there were no material temporary difference at reporting date.
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 16 – INCOME TAX (continued)
The following table reconciles statutory rate
to effective tax rate:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Hong Kong statutory income tax rate | |
| 16.50 | % | |
| 16.50 | % |
- Non-taxable income | |
| (0.41 | )% | |
| 2.45 | % |
- Non-deductible expenses | |
| 0.03 | % | |
| (11.76 | )% |
- Deductible temporary difference not recognized | |
| 0.16 | % | |
| (0.60 | )% |
- Tax reduction | |
| (0.03 | )% | |
| - | % |
- Income tax at concessionary rate | |
| (0.59 | )% | |
| - | % |
- Tax loss not recognized | |
| - | % | |
| (6.59 | )% |
Effective tax rate | |
| 15.66 | % | |
| 0.00 | % |
Significant components of the Company’s
net deferred tax asset were as follows:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Deferred tax asset | |
| | |
| |
Net operating loss carryforwards | |
$ | - | | |
$ | 29,336 | |
Total deferred tax asset | |
| - | | |
| 29,336 | |
Valuation allowance | |
| - | | |
| (29,336 | ) |
Deferred tax asset, net of allowance | |
$ | - | | |
$ | - | |
Realization of the Company’s deferred tax
asset is dependent upon the Company generating sufficient taxable income in future years to obtain benefit from the reversal of temporary
differences.
Management considered all available evidence under
existing tax law and anticipated expiration of tax statutes and determined that a valuation allowance of $29,336 was required as of June
30, 2024 for the deferred tax asset due to the unpredictability of future profit streams.
NOTE 17 – RELATED PARTY TRANSACTIONS
(a) Names and relationship of related parties:
|
|
Existing Relationship with the Company |
Rich Fame International Limited |
|
One of the directors is Mr. Chan. 100% fully owned by Hao Jingyu, the spouse of one of the directors, Mr. Chan. |
|
|
|
Top Star E-Commerce Logistics Limited |
|
Director and shareholder is Leung Sau Fong, the spouse of one of the shareholders, Mr. Kwong. |
|
|
|
Business Great Group Limited |
|
Sole director and sole shareholder is one of the shareholders, Mr. Kwong. |
|
|
|
Business Great Global Supply Chain Limited |
|
Sole director and sole shareholder is one of the shareholders, Mr. Kwong. It became a wholly owned subsidiary of the Company via share exchange arrangement on March 16, 2022. |
|
|
|
Business Great Global Supply Chain (Shenzhen) Company Limited |
|
Sole director and sole shareholder is one of the directors, Mr. Chan. |
|
|
|
Profit Sail International Express (SZX) Company Limited |
|
One of the shareholders and sole director is Hao Jingyu, the spouse of one of the directors, Mr. Chan. |
|
|
|
Granful Solutions Limited |
|
One of the directors is Leung Sau Fong, the spouse of one of the shareholders, Mr. Kwong. |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 17 – RELATED PARTY TRANSACTIONS (CONTINUED)
(b) Summary of balances with related parties:
| |
| |
As of December 31, | | |
As of June 30, | |
Amounts due to related parties: | |
Note | |
2023 | | |
2024 | |
Profit Sail International Express (SZX) Company Limited | |
(1) | |
$ | 153,317 | | |
$ | 159,519 | |
Rich Fame International Limited | |
(1) | |
| 111,090 | | |
| 64,231 | |
Top Star E-Commence Logistic Limited | |
(1) | |
| 205,127 | | |
| - | |
Total | |
| |
$ | 469,534 | | |
$ | 223,750 | |
| |
| |
As of December 31, | | |
As of June 30, | |
Amount due from a related party: | |
Note | |
2023 | | |
2024 | |
Profit Sail International Express (SZX) Company Limited | |
(2) | |
$ | 117,327 | | |
| 567,886 | |
Total | |
| |
$ | 117,327 | | |
$ | 567,886 | |
Notes:
1. | Advances from related parties to the Company and general
and administrative expenses paid by the related parties on behalf of the Company. Amounts due to related parties are non-trade, unsecured,
non-interest bearing and repayable on demand. |
2. | General
and administrative expenses paid by the Company on behalf of a related party. An amount due from a related party is non-trade, unsecured,
non-interest bearing and repayable on demand. |
Amount
due from a related party is presented net of allowance for expected credit loss:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Amount due from a related party | |
$ | 118,275 | | |
$ | 572,142 | |
Less: allowance for expected credit loss | |
| (948 | ) | |
| (4,256 | ) |
Total | |
$ | 117,327 | | |
$ | 567,886 | |
The movement of allowances
for expected credit loss is as follows:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Balance at beginning of the year/period | |
$ | — | | |
$ | (948 | ) |
Provision | |
| (948 | ) | |
| (3,308 | ) |
Total | |
$ | (948 | ) | |
$ | (4,256 | ) |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 17 – RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Summary of related party transactions:
A summary of trade transactions with related parties
for the six months ended June 30, 2023 and 2024 are listed below:
| |
For the six months ended June 30, | |
Services fee income from a related party: | |
2023 | | |
2024 | |
Profit Sail International Express (SZX) Company Limited | |
$ | 144,320 | | |
$ | 75,208 | |
Total | |
$ | 144,320 | | |
$ | 75,208 | |
The amounts for the six months ended June 30, 2023 and 2024 represented
services fee income from provision of logistics and freight handling services based on a mutually agreed price for each transaction.
| |
For the six months ended June 30, | |
Freight charges and other handling charges charged by related parties: | |
2023 | | |
2024 | |
Profit Sail International Express (SZX) Company Limited | |
$ | 607,232 | | |
$ | 1,030,041 | |
Top Star E-Commerce Logistics Limited | |
| 2,295,753 | | |
| 492,070 | |
Total | |
$ | 2,902,985 | | |
$ | 1,522,111 | |
The amounts for the six months ended June 30, 2023 and 2024 represented
charges paid for freight and other handling services based on a mutually agreed price for each transaction.
| |
For the six months ended June 30, | |
Other income - management fee income from a related party: | |
2023 | | |
2024 | |
Profit Sail International Express (SZX) Company Limited | |
$ | 12,981 | | |
$ | 3,316 | |
Total | |
$ | 12,981 | | |
$ | 3,316 | |
PSI GROUP HOLDINGS LTD
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 17 – RELATED PARTY TRANSACTIONS (CONTINUED)
The amounts for the six months ended June 30, 2023 and 2024 represented
services fee income from provision of management services based on the contractual terms of the related agreements. On April 15,
2019, the Company entered into several management fee agreements with Profit Sail International Express (SZX) Company Limited for the
provision of management services including administrative, handling and office services, effective from May 1, 2019. The agreements
shall remain valid until further notice by both parties.
| |
For the six months ended June 30, | |
IT maintenance fee charged by a related party: | |
2023 | | |
2024 | |
Rich Fame International Limited | |
$ | 172,333 | | |
$ | 48,077 | |
Total | |
$ | 172,333 | | |
$ | 48,077 | |
The amounts for the six months ended June 30, 2023 and 2024 represented
charges paid for information technology services based on the contractual terms of the related agreement.
On January 1, 2020, the Company entered into an agreement with
Rich Fame International Limited for the provision of information technology services including maintenance, consultancy and cloud hosting
services. The agreement was effective for a 12-month term from January 1 2020 to December 31, 2020 and continuing thereafter
on an annual or a half-year basis.
NOTE 18 – SUBSEQUENT EVENTS
The Company evaluates subsequent events that
have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events:
(1) recognized, or those that provide additional evidence with respect to conditions that existed at the dates of the balance sheets,
including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence
with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has analyzed
its operations subsequent to June 30, 2024 to the date of 12 December 2024, these unaudited interim condensed consolidated financial statements
were issued, unless as disclosed below, there are not any material subsequent events that require disclosure in these unaudited interim
condensed consolidated financial statements.
On July 18, 2024, the Business Combination was
completed, and the ordinary shares of PS International Group Ltd. commenced trading on Nasdaq Stock Market on July 19, 2024, further details
of which are set out in Note 1 to the unaudited interim condensed consolidated financial statements.
Exhibit
99.2
PS
International group ltd. Announces First Half 2024 Unaudited Financial Results
HONG KONG, Dec. 12, 2024 (GLOBE NEWSWIRE) -- PS International
Group Ltd.(NASDAQ: PSIG) (“PSIG” or the “Company”), a long-established global logistics service provider
headquartered in Hong Kong specializes in cross-border air freight services, today announced its unaudited financial results for
the six months ended June 30, 2024.
The unaudited financial results presented in this announcement pertain to PSI Group Holdings Ltd and its subsidiaries, rather than PS
International Group Ltd., as the business combination had not yet been completed until July 18, 2024.
Financial Summary for the Six Months Ended
June 30, 2024 (all results compared to the six months ended June 30, 2023, unless otherwise noted)
| ● | Revenues
were $39.4 million, a decrease of 41.3%. |
| ● | Gross profit
were $1.2 million, a decrease of 84.2%. |
| ● | Net loss
was $0.4 million, compared with net profit of $4.4 million. |
Key Components of Our Results of Operations
The following table sets forth
a summary of our consolidated results of operations for the six months ended June 30, 2023 and 2024. This information should be read together
with our consolidated financial statements and related notes included elsewhere in this document.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Revenues | |
| 66,925,132 | | |
| 39,291,001 | |
Revenues - Related Party | |
| 144,320 | | |
| 75,208 | |
Revenues | |
| 67,069,452 | | |
| 39,366,209 | |
| |
| | | |
| | |
Cost of Revenue | |
| 56,569,809 | | |
| 36,617,952 | |
Cost of Revenue – Related Party | |
| 2,902,985 | | |
| 1,522,111 | |
Total Cost of Revenue | |
| 59,472,794 | | |
| 38,140,063 | |
| |
| | | |
| | |
Gross Profit | |
| 7,596,658 | | |
| 1,226,146 | |
| |
| | | |
| | |
General and administrative expenses | |
| 2,277,814 | | |
| 1,717,555 | |
Total operating expenses | |
| 2,277,814 | | |
| 1,717,555 | |
| |
| | | |
| | |
Income (Loss) from Operations | |
| 5,318,844 | | |
| (491,409 | ) |
| |
| | | |
| | |
Other (Expense) Income: | |
| | | |
| | |
Bank interest income | |
| 44,900 | | |
| 39,076 | |
Interest expense | |
| (1,291 | ) | |
| - | |
Other income | |
| 122,365 | | |
| 6,374 | |
Exchange (loss) gain | |
| (271,736 | ) | |
| 335 | |
Total other (expense) income | |
| (105,762 | ) | |
| 45,785 | |
| |
| | | |
| | |
Income (Loss) Before Income Tax | |
| 5,213,082 | | |
| (445,624 | ) |
Income Tax | |
| 816,518 | | |
| - | |
Net Income (Loss) | |
| 4,396,564 | | |
| (445,624 | ) |
Revenues
We generate revenue primarily
from the provision of air and ocean export and import freight forwarding services during the six months ended June 30, 2023 and 2024.
The table below sets forth the breakdown of our revenue by service type for the years or periods indicated.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Freight forwarding services | |
| | |
| |
- Air freight | |
| 66,269,298 | | |
| 38,744,329 | |
- Ocean freight | |
| 800,077 | | |
| 621,675 | |
Subtotal | |
| 67,069,375 | | |
| 39,366,004 | |
Ancillary logistic services | |
| 77 | | |
| 205 | |
Total | |
| 67,069,452 | | |
| 39,366,209 | |
Freight forwarding services
Our freight forwarding services
include arranging for consignment upon receipt of booking instructions from customers, cargo pick up, obtaining cargo space, preparation
of freight documentation, arranging for customs clearance and cargo handling at origin and destination as well as other related logistics
services such as supporting transportation for freight forwarding purposes. For the six months ended June 30, 2023 and 2024, our revenue
was principally derived from the provision of air freight forwarding services, which amounted to US$66.3 million and US$38.7 million,
respectively, representing 98.8% and 98.2% of our total revenue for the same period.
Ancillary logistics services
Our ancillary logistics services
involve the provision of a wide range of logistics services, such as cargo pickup, cargo handling at ports and local transportation, and
warehousing related services, such as repackaging, labelling, palletization, preparation of shipping documentation, arrangement of customs
clearance and warehousing.
Revenue from freight forwarding
services is mainly derived from export shipments. The following table sets forth the breakdown of revenue from freight forwarding services
for the six months ended June 30, 2023 and 2024.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Export shipments | |
| | |
| |
- Air | |
| 66,256,160 | | |
| 38,742,336 | |
- Ocean | |
| 785,497 | | |
| 616,158 | |
- Subtotal | |
| 67,041,657 | | |
| 39,358,494 | |
| |
| | | |
| | |
Import shipments | |
| | | |
| | |
- Air | |
| 13,138 | | |
| 1,993 | |
- Ocean | |
| 14,580 | | |
| 5,517 | |
- Subtotal | |
| 27,718 | | |
| 7,510 | |
Total | |
| 67,069,375 | | |
| 39,366,004 | |
For the six months ended
June 30, 2023 and 2024, we focused on export freight forwarding services, which contributed to US$67.0 million and US$39.4 million, respectively,
representing 99.9% and 99.9% of our revenue from freight forwarding services during the same period.
For the six months ended
June 30, 2023 and 2024, our revenue was principally derived from the provision of air and ocean export freight forwarding services. The
table below sets forth the breakdown of export revenue by destination for the years or periods indicated.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$, except percentages | |
United States | |
| 54,921,468 | | |
| 81.92 | % | |
| 27,748,425 | | |
| 70.50 | % |
Canada | |
| 3,656,395 | | |
| 5.45 | % | |
| 1,502,484 | | |
| 3.82 | % |
France | |
| 104,456 | | |
| 0.16 | % | |
| 318,118 | | |
| 0.81 | % |
United Kingdom | |
| 1,776,636 | | |
| 2.65 | % | |
| 2,963,564 | | |
| 7.53 | % |
The Netherlands | |
| 2,997,400 | | |
| 4.47 | % | |
| 2,786,257 | | |
| 7.08 | % |
Singapore | |
| 1,006,911 | | |
| 1.50 | % | |
| 28,414 | | |
| 0.08 | % |
Others (Note) | |
| 2,578,391 | | |
| 3.85 | % | |
| 4,011,232 | | |
| 10.18 | % |
Total export revenue | |
| 67,041,657 | | |
| 100 | % | |
| 39,358,494 | | |
| 100 | % |
Note: Others represent a number of countries
including, among others, Luxembourg, Spain, Mexico and Belgium, etc.
For the six months ended
June 30, 2023 and 2024, our revenue from freight forwarding services for export shipments to the United States contributed to US$54.9
million and US$27.7 million, respectively, representing 81.9% and 70.5 % of our total export revenue during the same period.
The following table sets
forth the breakdown of our revenue by type of customers for the six months ended June 30, 2023 and 2024:
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Freight forwarders | |
| 66,707,657 | | |
| 39,186,625 | |
Direct customers | |
| 361,795 | | |
| 179,584 | |
Total | |
| 67,069,452 | | |
| 39,366,209 | |
We focus on provision of freight
forwarding services to freight forwarders, which generated revenue of US$66.7 million and US$39.2 million for the six months ended June
30, 2023 and 2024, respectively representing 99.4% and 99.5% of our total revenue for the same period.
Cost of Revenue
The table below sets forth
the breakdown of cost of revenue by service type for the six months ended June 30, 2023 and 2024.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Freight forwarding services | |
| | |
| |
- Air freight | |
| 58,762,055 | | |
| 37,486,005 | |
- Ocean freight | |
| 706,676 | | |
| 626,154 | |
Subtotal | |
| 59,468,731 | | |
| 38,112,159 | |
Ancillary logistic services | |
| 4,063 | | |
| 27,904 | |
Total | |
| 59,472,794 | | |
| 38,140,063 | |
Our cost of revenue amounted
to US$59.5 million and US$38.1 million for the six months ended June 30, 2023 and 2024, respectively. The trend of cost of revenue of
each of the service types was in line with the trend of the revenue of respective service types during the period.
The table below sets forth
the breakdown of cost of revenue by nature for the six months ended June 30, 2023 and 2024.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Air freight charges | |
| 47,081,030 | | |
| 29,845,670 | |
Ocean freight charges | |
| 653,549 | | |
| 612,256 | |
Logistics and warehousing fees | |
| 11,699,414 | | |
| 7,676,528 | |
Depreciation of property, plant and equipment | |
| 38,801 | | |
| 5,609 | |
Total | |
| 59,472,794 | | |
| 38,140,063 | |
Our cost of revenue mainly
comprised of air and ocean freight charges, and warehouse and transportation cost. Air and ocean freight charges represented costs of
cargo space charged by airlines, shipping liners or other freight forwarders. Air freight charges were the major component of our cost
of revenue, which accounted for 79.2% and 78.2%, respectively, for the six months ended June 30, 2023 and 2024.
Logistics and warehousing
fees primarily represent costs and service fees incurred in relation to warehousing services such as x-ray screening, storage, palletizing
and consolidation performed in our warehouse and costs of local trucking and transportation services. Logistics and warehousing fees represented
a significant portion of our cost of revenue, which accounted for 19.7% and 20.2%, respectively, for the six months ended June 30, 2023
and 2024. The increase in the relative proportions is primarily attributed to increased costs in transportation and pre-loading preparation
for the aircraft.
Depreciation of property,
plant and equipment represents the depreciation of property, plant and equipment related to our warehouse such as x-ray screening equipment
and forklifts.
Gross profit
The table below set forth
the breakdown of gross profit by service type for the six months ended June 30, 2023 and 2024.
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Freight forwarding services | |
| | |
| |
Air freight | |
| 7,507,243 | | |
| 1,258,324 | |
Ocean freight | |
| 93,401 | | |
| (4,479 | ) |
Subtotal | |
| 7,600,644 | | |
| 1,253,845 | |
Ancillary logistic services | |
| (3,986 | ) | |
| (27,699 | ) |
Total | |
| 7,596,658 | | |
| 1,226,146 | |
Our total gross profit amounted
to US$7.6 million and US$1.2 million for the six months ended June 30, 2023 and 2024, respectively. We recorded overall gross profit margin
of 11.3% and 3.0% for the same period. Our gross profit and gross profit margin are mainly affected by the spread we earn between the
freight charge per kilogram payable by our customers and the freight charges payable to suppliers we are able to secure.
General and administrative expenses
Our general and administrative expenses decreased from US$2.3 million
for the six months ended June 30, 2023 to US$1.7 million for the six months ended June 30, 2024, primarily driven by (i) the decrease
in staff costs and benefits in the first six months of 2024 and (ii) increased professional service fees relating the proposed listing
of our company in the United States.
Interest expenses
Our interest expenses decreased
from US$1,291 for the six months ended June 30, 2023 to Nil for the six months ended June 30, 2024, which was primarily attributable to
decrease in short-term bank loans.
Other income
Our other income decreased from US$0.12 million for the six months
ended June 30, 2023 to US$0.01 million for the six months ended June 30, 2024.
Exchange (loss) gain
Our exchange loss of US$271,736
for the six months ended June 30, 2023 changed to exchange gain of US$335 for the six months ended June 30, 2024, which was primarily
driven by fluctuation of RMB and US$ against HKD.
Income tax
Our income tax expense decreased
from US$0.8 million for the six months ended June 30, 2023 to Nil for the six months ended June 30, 2024, which was in line with the decrease
in our net income for the period.
Net income
As a result of the above
factors, our net income decreased by US$4.8 million from US$4.4 million for the six months ended June 30, 2023 to net loss of US$0.4 million
for the six months ended June 30, 2024, our net income margin decreased from 6.6% for the six months ended June 30, 2023 to -1% for the
six months ended June 30, 2024.
Cash flows
The table below sets forth
a summary of our cash flows for the six months ended June 30, 2023 and 2024:
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Net cash provided by (used in) operating activities | |
| 6,090,423 | | |
| (2,237,934 | ) |
Net cash provided by an investing activity | |
| 2,251,466 | | |
| 9,095 | |
Net cash (used in) provided by financing activities | |
| (130,927 | ) | |
| 26,667 | |
Net increase (decrease) in cash and cash equivalents and restricted cash | |
| 8,210,962 | | |
| (2,202,172 | ) |
Cash provided by operating activities
Our operating cash inflow
is primarily from our operating activities principally from the receipt of payments for our provision of freight forwarding services,
whereas our outflow from operating activities is principally for freight charges, ancillary service fees payable to suppliers, payment
of salaries and employee benefits and general and administrative expenses.
For the six months ended
June 30, 2023, our net cash provided by operating activities was US$6.1 million, mainly attributable to (i) our net income of US$4.4 million
which was primarily adjusted for depreciation of right-of-use assets of US$59,769, allowance for expected credit loss of US$9,253 and
depreciation of property, plant and equipment of US$90,492; (ii) increase in accounts payables to third party of US$7.3 million; (ii)
decrease in amounts due to related companies of US$0.2 million; and (iii) decrease in contract liabilities of US$4,430; which was partially
offset by (iv) increase in accounts receivables of US$5.0 million.
For the six months ended
June 30, 2024, our net cash used in operating activities was US$2.2 million, mainly attributable to (i) our net loss of US$0.4 million
which was primarily adjusted for depreciation of right-of-use assets of US$47,659, and depreciation of property, plant and equipment of
US$31,716; (ii) decrease in accounts payables to third parties of US$6.9 million; (ii) decrease in amounts due to related companies of
US$0.2 million; and (iii) decrease in contract liabilities of US$3,661; which was partially offset by (iv) decrease in accounts receivables
of US$6.5 million.
Cash provided by an investing activity
Our cash provided by an investing
activity is primarily attributable to proceeds on disposal of equity securities and repayment from related parties. Our cash used in investing
activities is primarily for purchase of property, plant and equipment, purchase of equity securities and advance to related parties.
For the six months ended June 30, 2024, our net
cash flow provided by an investing activity was US$9,095, as a result of decrease in restricted cash with maturity of more than three
months when acquired.
Cash (used in) provided by financing activities
For the six months ended June
30, 2024, our net cash provided by financing activities was US$26,667, due to expiry of unpresented check for dividend paid to a shareholder
in prior years.
Recent Development
We have consummated the business combination with
AIB Acquisition Corporation, special purpose acquisition company (“SPAC”) on July 18, 2024, pursuant to the Business
Combination Agreement entered into on December 27, 2023. The ordinary shares of the Company commenced trading on Nasdaq Stock Market on
July 19, 2024. The successful completion of the merger and the listing represents a key moment in the Company’s journey towards
growth and expansion.
About PS International Group
Ltd.
PSIG is
a long-established global logistics and supply chain solution provider, specialized in air freight forwarding services, connecting businesses
from Asian transportation hubs to the US and the rest of the world. The company was founded in 1993, since inception it has provided
standard and tailored logistics services covering over 140 countries. The company’s vision is to make cross-border trade easier
for everyone, helping customers to unlock the value of time through efficient integrated supply chain solutions. PSIG conducts businesses
via operational subsidiaries headquartered in Hong Kong, namely Profit Sail Int’l Express (H.K.) Limited and Business Great
Global Supply Chain Limited, which derive revenue from air and ocean freight forwarding services and supply chain ancillary services.
The company plans to expand its network and enhance its cross-border capacities in the United States, Middle East and Southeast Asia,
with more local cooperations and strategic partnerships. The company continues to invest in its smart logistics system, aiming to
be a leading technology-driven logistics service provider in global e-Commerce market.
Safe Harbor Statement
Certain
statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and
uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes
may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking
statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,”
“estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,”
“continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking
statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you
that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from
the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration
statement and other filings with the SEC, which are available for review at www.sec.gov.
For more information, please
contact:
PS International Group Ltd.
Louis Tsui
Chief Financial Officer
Email: louis.tsui@psi-groups.com
6
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