Company: MVNC
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001683168-25-003814
Chunk: 70

Company: Marvion Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 8
Chunk 70
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 will remain steady; therefore there is a possibility that the Company could post the same amount of profit
for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate
of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without
notice.

    (e)
    Liquidity risk

Liquidity risk is the risk that
the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has
sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash
flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

18.        COMMITMENTS AND
CONTINGENCIES

On August 15, 2024, the Company,
United Warehouse Management Corp., a British Virgin Island corporation (“UWMC”) and eleven shareholders of UWMC entered into
a Share Exchange Agreement (the “SEA”) pursuant to which the shareholders of UWMC agreed to transfer to the Company 4,000
shares of UWMC, constituting all of the issued and outstanding securities of UWMC, in exchange for 148,148,148 shares of common stock
of the Company, par value $0.0001 per share (the “Acquisition Shares”). In addition to the Acquisition Shares, the Company
agreed to make earnout payments in the aggregate amount of $5.5 million (collectively, the “Earn Out Payments”) upon UWMC’s
achievement of certain net income performance milestones during each six-month period ending June 30 and December 31 (each, a “Performance
Period”) for a total of nine Performance Periods. The Earn Out Payments will be payable in the form of interest free promissory
notes and shared equally among Chan Sze Yu, Fong Hiu Ching and Young Chi Kin Eric, who are also shareholders of the Company.

As of December 31, 2024, pursuant
to the terms and calculations of the earnout provision, management has determined the final earnout of $1 million being vested pursuant
to the agreement. As of March 31, 2025, this earnout amount has not been paid to these shareholders and recognized as “earnout payable”
on the