Maison Solutions Inc.
For the period ended Apr 30, 2025. Filed Aug 14, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Aug 14, 2025
MSS$1.06+8.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-04-30; filed 2024-08-13.
0001213900-24-068336
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-04-30; filed 2025-08-14.
0001213900-25-075991
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 136 current paragraphs.
76 unchanged; 36 reworded; 17 added; 10 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
On June 7, 2025, Maison EL Monte, Inc. entered into a lease termination agreement the lessor, pursuant to the agreement, the lessee Maison El Monte agreed to pay the lessor a total sum of One Hundred Thousand Dollars ($100,000) as consideration for the lessor’s agreement to terminate the lease and release the lessee from all obligations and liabilities under the lease, including, but not limited to, any outstanding rent. The Company closed Maison El Monte store accordingly. The strategic decision to close Maison El Monte store is part of the Company’s ongoing commitment to improve its profitability and support sustainable growth.
Current report
Other income were $3,527,799 for the year ended April 30, 2025 compared to other expense of $118,201 for the year ended April 30, 2024. For the year ended April 30, 2025, other income mainly consisted of 1) $2,600,000 income from sale of software license of two software systems (the smart shelf display and store design software and the supply chain management software) to four licensees for granting them the perpetual, non-exclusive and non-transferable license to utilize both software systems, 2) change in fair value of derivative liability of $801,988, 3) consulting income of $450,000 for providing other non-related supermarkets the comprehensive consulting services aiming at enhancing operational efficiency, optimizing resource allocation, and supporting overall business growth, and 4) other income of $191,551, other income was partly offset by investment loss of $515,740 ($474,965 investment loss from HKGF Arcadia and $40,775 from Alhambra Store). For the year ended April 30, 2024, other expenses mainly consisted of investment loss from equity method investment of $538,542, which was partly offset by $383,161 employee retention credit (“ERC”) received in 2024 and other income of $37,180.
Current report
Net cash provided by operating activities was approximately $4.8 million for the year ended April 30, 2025, which mainly comprised of net income of $920,909, add-back of non-cash adjustments to net income including depreciation and amortization expense of $1,035,485, inventory impairment of $276,900, bad debt expense of $29,493, amortization of OID and debt issuance cost of $55,417, and investment loss from 49% equity investee HKGF Arcadia store of $474,964 and investment loss from 10% cost investee HKGF Alhambra store of $40,775. In addition, for the year ended April 30, 2025, we had cash inflow from (i) decrease to other receivables and other current assets of $545,843, (ii) decrease to prepayments of $824,229, (iii) decrease of inventories of $770,431, (iv) increased outstanding accounts payable of $2,657,601 (including accounts payable from related parties of $65,767), (v) increased outstanding income tax payable of $218,890, (vi) increased operating lease liabilities of $513,802, and (vii) increased accrued expenses and other payables of $138,581.
Current report
However, our net cash provided by operating activities for the year ended April 30, 2025 was impacted by deducting non-cash adjustments from net income including change in fair value of derivative liability of $801,988 and change in deferred taxes by $88,346. In addition, for the year ended April 30, 2025, we had cash outflow from i) increased outstanding accounts receivable of $2,546,650, ii) increased accounts receivable from related parties of $42,753, and iii) increased payment for contract liabilities of $263,768.
Current report
Net cash used in financing activities was approximately $5,818,814 for the year ended April 30, 2025, which mainly consisted of repayment for a note payable arising from the acquisition of Lee Lee of $9,484,005, which was partially offset by increase of bank overdraft of $1,349,202 and proceeds from a convertible note of $2,335,000.
Current report
On June 10, 2024, Lee Lee filed a Statement of Conversion with the Arizona Corporation Commission (the “ACC”) converting Lee Lee Oriental Supermart, Inc. into Lee Lee Oriental Supermart, LLC, an Arizona limited liability company (the “Conversion”). Following the Conversion, AZLL filed a Statement of Merger with the ACC, pursuant to which Lee Lee merged into AZLL, effective August 28, 2024 (the “Merger”). On September 9, 2024, AZLL filed a Statement of Division with the ACC resulting in the restoration of both Lee Lee and AZLL as separate legal entities (the “Division”). The Conversion, the Merger and the Division are herein referred to collectively as the “Lee Lee Reorganization.”
Current report
On October 21, 2024, Lee Lee, AZLL, the Company and the Holders entered into the First Amendment to Senior Secured Note Agreement (the “First Amendment”), which amends that certain Senior Secured Note Agreement, dated as of April 8, 2024.Among other things, the First Amendment amends the Secured Note to (i) reflect the Lee Lee Reorganization, (ii) modify certain cure periods pursuant to an “Event of Default” under the Secured Note, and (iii) include certain covenants and representations with respect to the Lee Lee Reorganization. Additionally, pursuant to the First Amendment, Lee Lee, AZLL and the Company irrevocably waive and forfeit any and all defenses, causes or remedies which may have arisen or may arise as a result of the Lee Lee Reorganization in relation to any action or enforcement of any rights, remedies or provisions of the Secured Note, the Security Agreement and/or otherwise at law taken by the Holders.
Current report
On October 21, 2024, following the execution of the First Amendment, Lee Lee, AZLL and the Holders entered into the Second Amendment to the Senior Secured Note Agreement (the “Second Amendment”). Among other things, the Second Amendment: (i) increases the annual interest rate on the outstanding Principal Amount, effective as of October 8, 2024, to ten percent (10%); (ii) amends the payment schedule of the principal and interest amounts to be due every Monday of each week starting on October 14, 2024, as set forth in Exhibit A of the Second Amendment; (iii) amends the definition of “Events of Default”; and (iv) increases the Default Rate to fourteen percent (14%) per annum. Additionally, pursuant to the Second Amendment, upon execution of the Second Amendment, the Company paid a restructuring fee of $40,000 to the Holders.
Current report
On March 12, 2025, we entered into a note modification agreement dated March 12, 2025 (the “Modification Agreement”) with AZLL, Lee Lee, Holders of the Secured Note, John Xu and Grace Xu (together with the Company, the “Parties”) to modify certain terms of the Note, Security Agreement and Guarantees. Pursuant to the Modification Agreement, the Parties agreed to revise the payment schedule of the Note and extend the maturity date of the Note to May 11, 2026 (the “Extended Maturity Date”). The Modification Agreement also provides for an additional extension fee interest to accrue on the outstanding principal balance of the Note as of January 15, 2025 at an annual rate of eight percent (8%), which shall become payable and immediately due on the earliest of (i) the Extended Maturity Date or (ii) immediately upon the occurrence of any “Event of Default” under any of the Loan Documents or the Modification Agreement, as such term is defined under the applicable Loan Document. Furthermore, the Modification Agreement includes additional “Events of Default” and remedies under the Loan Documents, and additional covenants of the Company, among other things. The Modification Agreement increases the annual interest rate on the outstanding Principal Amount, effective as of February 24, 2024, to twelve percent (12%). Additionally, the amount of each Guaranty Premium shall be added to the outstanding Principal Amount of the Note as of the date Issuer’s liability for payment of the Guaranty Premium becomes fixed and shall accrue interest at the rate set forth in the Note until paid in full. The Modification stated that no new debt or encumbrances without holders’ approval. Absent Holders’ prior, express written authorization, Issuer shall not: (i) pay or incur any indebtedness outside the ordinary course of business; or (b) grant, permit or suffer the attachment of any liens or security interests in or to any Collateral; or (c) enter into any single or series of contracts, agreements or commitments requiring cumulative payments in excess of $10,000.00. Moreover, pursuant to the Modification Agreement, issuer shall not make any distributions to Parent, Grantor, Guarantors or any other related party, company or entity related to the Parent, Grantor or Guarantors through any direct or indirect ownership or control or any other financial arrangement (together, the “Related Parties”). Upon execution of the Modification Agreement, the Company paid the Holders a $35,000 documentation fee pursuant to the terms of the Modification Agreement.
Current report
On October 21, 2024, AZLL entered into a First Amendment to Guarantee of Note (the “AZLL Guarantee Amendment”), which amends the AZLL Guarantee to reflect the Lee Lee Reorganization. Additionally, pursuant to the AZLL Guarantee Amendment, AZLL irrevocably waives any and all defenses, causes or remedies which may have arisen or may arise as a result of the Lee Lee Reorganization in relation to any action or enforcement of any rights, remedies or provisions of the AZLL Guarantee, the Secured Note, the Security Agreement and/or otherwise at law taken by the Holders.
Current report
On October 21, 2024, the Xu Guarantors entered into a First Amendment to Guarantee of Note (the “Xu Guarantee Amendment” and, together with the AZLL Guarantee Amendment, the “Guarantee Amendments”), which amends the Xu Guarantee to reflect the Lee Lee Reorganization. Additionally, pursuant to the Xu Guarantee Amendment, the Xu Guarantors irrevocably waive any and all defenses, causes or remedies which may have arisen or may arise as a result of the Lee Lee Reorganization in relation to any action or enforcement of any rights, remedies or provisions of the Xu Guarantee, the Secured Note, the Security Agreement and/or otherwise at law taken by the Holders.
Current report
Convertible Note Payable
Current report
On March 12, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor” or “Holder”), pursuant to which we agreed to issue and sell (i) a senior unsecured convertible promissory note in the aggregate original principal amount of $3,000,000 with an original issue discount of eight and a half percent (8.5%) (the “Initial Note”), convertible into shares (the “Conversion Shares”) of Class A common stock, $0.0001 par value per share of the Company (the “Common Stock”), and (ii) a note purchase warrant (the “Incremental Warrant”), exercisable for one or more senior unsecured convertible promissory notes in the aggregate original principal amount of up to $6,500,000 with an original issue discount of eight and a half percent (8.5%) and substantially in the form of the Initial Note (each an “Additional Note” and collectively, the “Additional Notes” and together with the Initial Note, the “Notes”). On March 12, 2025 (the “Closing Date”), we issued and sold to the Investor the Initial Note for a purchase price of $2,745,000, representing an original issue discount of eight and a half percent (8.5%), which matures on March 12, 2027, and the Incremental Warrant, which expires on March 12, 2028. The Initial Note bears interest at a rate to 5.25% per annum and may increase to a rate of 18.00% per annum upon the occurrence of an Event of Default (as defined in the Initial Note), for so long as such event remains uncured. Accrued interest will be paid on a monthly basis and, at the Company’s option, will either be paid in cash or paid-in-kind in shares of Common Stock, subject to certain terms and conditions as set forth in the Initial Note.
Current report
The Note Holder may exercise the Incremental Warrant, in whole or in part, in increments of up to $1,500,000, but subject to a minimum increment of $250,000, at any time prior to March 12, 2028. The Incremental Warrant also provides that the Company may request that the Holder exercise the Incremental Warrant if certain terms and conditions are satisfied as set forth in the Incremental Warrant. The aggregate exercise price to purchase the maximum aggregate principal amount of Additional Notes issuable under the Incremental Warrant is $5,947,500, which gives effect to an original issue discount of eight and a half percent (8.5%) for each such Additional Note issued upon the exercise of the Incremental Warrant. The Note Holder is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the ninetieth (90) Trading Day following the effective date of the initial Registration Statement (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on March 12, 2028 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Maison. The incremental warrant is contingent for exercise upon effectiveness of the initial registration statement, as of April 30, 2025, the initial registration statement was not effective yet and is under SEC review, however, the Company expects it will meet the registration effectiveness deadline described below.
Current report
On March 12, 2025, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investor pursuant to which the Company agreed to register the resale of the Conversion Shares issued or issuable upon conversion of the Initial Note and any Additional Notes. The Registration Rights Agreement requires, among other things, the Company to file an initial resale registration statement covering the Conversion Shares with the SEC within 30 calendar days after the Closing Date. The Company is obligated to use its best efforts to have the registration statement declared effective by the SEC as soon as practicable, but in no event later than the 60th calendar day following the Closing Date (the “Effectiveness Deadline”). However, in the event the Company is notified by SEC that the registration statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline will be accelerated to the fifth business day following the date on which the Company is so notified if such date precedes the initial Effectiveness Deadline. In the event the registration statement is subject to a full SEC review, or the Company is required to update the financial statements therein, which causes the registration statement not to be declared effective by the Effectiveness Deadline, the Effectiveness Deadline will automatically be deemed to be extended for so long as necessary, provided that the Company is using its best efforts to promptly respond to and satisfy the requests of the SEC. During any such period, the Company will not be in default of satisfying the Effectiveness Deadline.
Current report
On September 3, 2024, a claim was filed against Maison El Monte alleging violations of the Unruh Civil Rights Act and the California Disabled Persons Act for building not having adequate access for disabilities. The case Management Conference is scheduled for January 30, 2025. On April 8, 2025, both parties reached a confidential settlement agreement and release of claims, and the Company agreed to pay $6,000 to settle the case.
Current report
On October 17, 2024, a complaint was filed against HKGF Alhambra, HKGF Arcadia, Maison El Monte, Maison San Gabriel, Maison Monrovia, Maison Monterey Park and Tion Hin for unpaid invoices of seafood purchase for $115,388.39. The case management conference is scheduled for August 4, 2025. The management is not able to estimate the outcome of the case due to early stage of the case.
Removed paragraphs (10)
Previous report
The accompanying consolidated financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the year ended April 30, 2024, the Company had a net loss of approximately $3.34 million. The Company had an accumulated deficit of approximately $2.82 million as of April 30, 2024, and negative cash flow from operating activities of approximately $3.50 million for the year ended April 30, 2024. The historical operating results including recurring losses from operations raise substantial doubt about the Company’s ability to continue as a going concern.
Previous report
Other expenses was $118,201 for the year ended April 30, 2024 compare to other income of $1,849,534 for the year ended April 30, 2023. For the year ended April 30, 2024, other expenses mainly consisted of investment loss from equity method investment of $538,542, which was partly offset by $383,161 employee retention credit (“ERC”) received in 2024 and other income of $37,180. For the year ended April 30, 2023, other income mainly consisted of $1.9 million ERC received for the year ended April 30,2023. The ERC is a refundable tax credit for businesses that continued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020 to December 31, 2021.
Previous report
We plan to acquire and open additional supermarkets with a portion of the proceeds of our IPO and the PIPE Offering to expand our footprint to both the West Coast and the East Coast. This includes completing the acquisition of the remaining 90% equity interests in both the Alhambra Store and Dai Cheong; opening new satellite stores in both Southern and Northern California in 2024 or 2025; acquiring up to five (5) center stores in 2024 and 2025 as part of our East Coast expansion; and establishing a new warehouse in New York City to serve the East Coast by the end of 2025.
Previous report
Net cash provided by operating activities was approximately $0.5 million for the year ended April 30, 2023 and was mainly comprised of net income of approximately $1.6 million, add-back of non-cash adjustments to net income including depreciation and amortization expense of approximately $0.4 million, and bad debt expense of $0.2 million. Our cash inflow increase from our operating activities was also due to payment collected from accounts receivable from related parties of $0.2 million, decrease of inventories of approximately $0.3 million, increase from change of operating lease liabilities of approximately $0.2 million, and an increase of outstanding taxes payable of approximately $0.3 million.
Previous report
However, our net cash provided by operating activities for the year ended April 30, 2023 was mainly offset by subtracting a non-cash adjustment from net income for reversal of inventory reserve of $0.1 million, a decreased cash inflow from our operating activities due to an increase of outstanding accounts receivable of approximately $0.3 million, an increase of outstanding other receivables and other current assets of approximately $0.5 million, an increase of prepayment of approximately of $0.8 million, an increase of payment for accounts payable of $0.6 million, an increase of payment for accounts payable to related parties of $0.2 million, and an increased payment for accrued liability and other payables of $0.5 million.
Previous report
We had a net loss of $3,387,029 for the year ended April 30, 2024, an increase of $5,026,330 compared with a net income of $1,639,301 for the year ended April 30, 2023. Our cash outflow of $3,503,146 for the year ended April 30, 2024 represented an increase of $3,987,337 cash outflow, compared with a $484,191 cash inflow in the year ended April 30, 2023. The increased net cash outflow for the year ended April 30, 2024 was mainly due to increased cash outflow from net loss by $5,026,330 with change of non-cash adjustments by $458,470, increased prepaid payment to vendors by $896,876, increased security deposits by $494,371, increased income tax paid by $853,138, which was partly offset by increased collection from accounts receivable by $461,790, increased cash inflow from inventories by $570,843, decreased cash outflow on accounts payable by $530,018, decreased cash outflow on accrued expenses and other payables by $845,930, and increased payment from contract liabilities by $435,289.
Previous report
Net cash provided by investing activities was approximately $1.9 million for the year ended April 30, 2023, which mainly consisted of loan repayment from third parties of approximately $4.4 million. This was partially offset with the purchase of equipment of $49,388 and payment for acquisition of subsidiary Maison Monterey Park of $2.5 million.
Previous report
Net cash used in financing activities was approximately $0.7 million for the year ended April 30, 2023, which mainly consisted of bank overdrafts of $281,941, repayment on loans payable of $362,731, and repayment to related parties of $101,965.
Previous report
In May 2020, Maison El Monte was named as a co-defendant in a complaint filed by a consumer advocacy group alleging violations of a California health and safety regulation. The case is pending in the Superior Court of the State of California. It is reasonably possible that a loss may be incurred; however, the possible range of losses is not reasonably estimable given the pending status of the case. As such, the Company has not made any accruals of possible loss for the year ended April 30, 2023 and 2024 related to this case.
Previous report
In June 2022, Maison San Gabriel entered into a confidential settlement agreement with the plaintiff in connection with a California employment law case whereby Maison San Gabriel agreed to pay $245,000 to plaintiff in full settlement of all claims in the case. As a result of the settlement agreement, the Company accrued $245,000 as a loss relating to the case as of April 30, 2024.
Reworded paragraphs (36)
Previous wording
We are a fast-growing, specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, in particular to members of Asian-American communities. We are committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which we operate. To achieve this, we are developing a center-satellite stores network. Since our formation in July 2019, we have acquired equity interests in four (4) traditional Asian supermarkets in Los Angeles, California. Since April 30, 2022, we have been operating these supermarkets as center stores. The center stores target traditional Asian-American, family-oriented customers with a variety of meat, fresh produce and other merchandise, while additionally stocking items which appeal to the broader community. We are operating these traditional Asian-American, family-oriented supermarkets with our management’s deep cultural understanding of our consumers’ unique consumption habits. In addition to the traditional supermarkets, on December 31, 2021, we acquired a 10% equity interest in a new grocery store located in Alhambra, California, a young and active community (the “Alhambra Store”) from Mrs. Grace Xu, the spouse of Mr. John Xu, our chief executive officer (“CEO”), Chairman and President. Our intention is to acquire the remaining 90% equity interest in the Alhambra Store and operate it as our first satellite store. The investment in the Alhambra Store is considered a related party transaction because Mrs. Xu is the spouse of Mr. Xu, our CEO, Chairman and President. Please refer to “Certain Relationships and Related Party Transactions” for further explanation. In May 2021, the Company acquired 10% of the equity interests in Dai Cheong, a wholesale business which mainly supplies foods and groceries imported from Asia, which is owned by John Xu, our CEO, Chairman and President. We intend to acquire the controlling ownership of Dai Cheong. By adding Dai Cheong to our portfolio, we will take the first step toward creating a vertically integrated supply-retail structure. Having an importer as a part of our portfolio will allow us the opportunity to offer a wider variety of products and to reap the benefits of preferred wholesale pricing. On June 27, 2023, we invested $1,440,000 for 40% equity interest in HKGF Market of Arcadia, LLC (“HKGF Arcadia”), a supermarket in the city of Arcadia, California, to further expands our footprint to new neighborhood. On December 6, 2023, we invested additional $360,000 for another 10% equity interest in HKGF Arcadia. On February 1, 2024, the Company and JC Business Guys, Inc., the only other member of HKGF Arcadia (“JC Business Guys”), entered into a third amendment to the operating agreement of HKGF Arcadia to decrease our pe…
Excerpt shortened here; the source contains the full paragraph.
Current wording
We are a fast-growing, specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, in particular to members of Asian-American communities. We are committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which we operate. To achieve this, we are developing a center-satellite stores network.
Previous wording
The inflation rate for the United States was 3.4% for the year ended April 30, 2024, 4.9% for the year ended April 30, 2023 and 8.3% for the year ended April 30, 2022 according to Bureau of Labor Statistics. Inflation increased our purchase costs, occupancy costs, and payroll costs.
Current wording
The inflation rate for the United States was 2.3% for the year ended April 30, 2025, 3.4% for the year ended April 30, 2024 according to Bureau of Labor Statistics. Inflation increased our purchase costs, occupancy costs, and payroll costs.
Previous wording
As of April 30, 2024, we had approximately 355 employees including employees from our newly acquired subsidiary Lee Lee. Our employees are not unionized nor, to our knowledge, are there any plans for them to unionize. We have never experienced a strike or significant work stoppage. We consider our employee relations to be good. Minimum wage rates in some states have recently increased. For example, in California, the minimum wage was $15.50 per hour in 2023, and increased to $16 per hour starting from January 1, 2024. Our payroll and payroll tax expenses were $7.4 million and $6.2 million for the years ended April 30, 2024 and 2023, respectively.
Current wording
As of April 30, 2025, we had approximately 378 employees including employees from our newly acquired subsidiary, Lee Lee, which is based in the State of Arizona. Our employees are not unionized nor, to our knowledge, are there any plans for them to unionize. We have never experienced a strike or significant work stoppage. We consider our employee relations to be good. Minimum wage rates in some states have recently increased. For example, in California, the minimum wage was $15.50 per hour in 2023 and increased to $16.50 per hour starting from January 1, 2025; in Arizona, the minimum wage was $13.85 per hour in 2023, and increased to $14.35 per hour starting from January 1, 2024. Our payroll and payroll tax expenses were $15.0 million and $7.4 million for the years ended April 30, 2025 and 2024, respectively.
Previous wording
Maison believes that a centralized and efficient vendor and supply management system is the key to profitability. Maison has major vendors, including ONCO Food Corp., GF Distribution, Inc., and XHJC Holding Inc. For the year ended April 30, 2024, these three suppliers accounted for 15%, 7% and 26% of the Company’s total purchases, respectively. For the year ended April 30, 2023, three suppliers accounted for 20%, 14%, and 18% of the Company’s total purchases, respectively. Maison believes that its centralized vendor management enhances its negotiating power and improves its ability to manage vendor payables.
Current wording
Maison believes that a centralized and efficient vendor and supply management system is the key to profitability. Maison has major vendors, including Lawrence Wholesale, BRC International Inc, XHJC Holding Inc, K.C. Produce and GF Distribution, Inc. For the year ended April 30, 2025, these five suppliers accounted for 11%, 7%, 7%, 5%, and 4% of the Company’s total purchases, respectively. For the year ended April 30, 2024, three suppliers accounted for 26%, 15% and 7% of the Company’s total purchases, respectively. Maison believes that its centralized vendor management enhances its negotiating power and improves its ability to manage vendor payables.
Previous wording
From time to time, Maison conducts maintenance on the fixtures and equipment for its stores. Any maintenance or renovations could interrupt the operation of our stores and result in a decline in customer volume. Significant maintenance or renovation would affect our operations and operating results. Meanwhile, improving the store environment can also attract more customers and lead to an increase in sales. Maison focused on improving and renovating our stores for the years ended April 30, 2024 and 2023. We spent $201,608 for the year ended April 30, 2024 for repairs and maintenance and supermarket renovation, a decrease of $71,797 compared to $273,405 for the year ended April 30, 2023.
Current wording
From time to time, Maison conducts maintenance on the fixtures and equipment for its stores. Any maintenance or renovations could interrupt the operation of our stores and result in a decline in customer volume. Significant maintenance or renovation would affect our operations and operating results. Meanwhile, improving the store environment can also attract more customers and lead to an increase in sales. Maison focused on improving and renovating our stores for the years ended April 30, 2025 and 2024. We spent $0.86 million (including $0.48 million for Lee Lee) for the year ended April 30, 2025 for repairs and maintenance and supermarket renovation, an increase of $0.66 million compared to $0.20 for the year ended April 30, 2024 mainly due to the acquisition of our new subsidiary Lee Lee.
Previous wording
The Company plans to increase its revenue by strengthening its sales force, providing attractive sales incentive programs, recruiting experienced industry-related managerial personnel, increasing marketing and promotion activities, seeking suppliers with competitive price and good quality products, opening or acquiring additional specialty supermarkets in the locations that have less-competition. If deemed necessary, management could also seek to raise additional funds by way of admitting strategic investors, or private or public offerings, or by seeking to obtain loans from banks or others, to support the Company’s daily operation. While management of the Company believes in the viability of its strategy to generate sufficient revenues and its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern depends upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. If the Company is unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay, reduce or cease its operations.
Current wording
As reflected in the accompanying consolidated financial statements for the year ended April 30, 2025, the Company had a net income of $1,169,273. However, the Company had an accumulated deficit of approximately $1.65 million and negative working capital of $9.82 million as of April 30, 2025. The Company also needs approximately $5.64 million cash to repay Lee Lee’s acquisition price by May 2026, the acquisition was completed on April 8, 2024. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. The Company plans to increase its revenue by strengthening its sales force, providing attractive sales incentive programs, recruiting experienced industry-related managerial personnel, increasing marketing and promotion activities, seeking suppliers with competitive price and good quality products, opening or acquiring additional specialty supermarkets in the locations that have less-competition. If deemed necessary, management could also seek to raise additional funds by way of admitting strategic investors, or private or public offerings, or by seeking to obtain loans from banks or others, to support the Company’s daily operation. While management of the Company believes in the viability of its strategy to generate sufficient revenues and its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern depends upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. If the Company is unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay, reduce or cease its operations.
Previous wording
Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The Company records inventory shrinkage based on historical data and management’s estimates and provided a reserve for inventory shrinkage for the fiscal years ended April 30, 2024 and 2023.
Current wording
Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The Company records inventory shrinkage based on historical data and management’s estimates and provided a reserve for inventory shrinkage for the fiscal years ended April 30, 2025 and 2024. The Company provided a reserve (reversal) for inventory shrinkage of $276,900 and $(5,961) for the years ended April 30, 2025 and 2024, respectively .
Previous wording
The Company’s contract liability related to gift cards was $965,696 and $449,334 as of April 30, 2024 and 2023, respectively.
Current wording
The Company’s contract liability related to gift cards was $701,929 and $965,696 as of April 30, 2025 and 2024, respectively.
Previous wording
Cost of revenue includes the purchase price of consumer products, inbound and outbound shipping costs, including costs related to our sorting and delivery center, which is the warehouse attached to the El Monte store, and where we are the transportation service provider. Shipping costs to receive products from our suppliers are included in our inventory and recognized in cost of revenues upon sale of products to our customers.
Current wording
Cost of revenue includes the purchase price of consumer products, inbound and outbound shipping costs, including costs related to our sorting and delivery center, and where we are the transportation service provider. Shipping costs to receive products from our suppliers are included in our inventory and recognized in cost of revenues upon sale of products to our customers.
Previous wording
Our net revenues were approximately $58.0 million for the year ended April 30, 2024, an increase of approximately $2,644,049 or 4.8%, from approximately $55.4 million for the year ended April 30, 2023. The increase in net revenues was driven by the inclusion of revenues from our newly acquired subsidiary (acquired in April 2024) Lee Lee of $4.6 million, and increased sales of Maison Monterey Park supermarket (acquired in July 2023) by $4.4 million, which was partly offset by decreased sales of Maison San Gabriel by $3.3 million, decreased sales of Maison Monrovia by $1.6 million and decreased sales of Maison El Monte by $1.5 million, as compared to the year ended April 30, 2023. Our existing four (4) supermarkets contributed $53.4 million in revenue during the year ended April 30, 2024, a decrease of approximately $2.0 million, as compared to the year ended April 30, 2023. The $2.0 million decrease was mainly due to increased competition from newly opened Asian supermarkets near Maison San Gabriel, effect from ending of certain Covid-9 pandemic-era relief programs in fall 2023 such as losing access to foods stamps due to resume of work requirement for food stamps, as well as temporary slow-down of Maison El Monte store due to renovation.
Current wording
Our net revenues were approximately $124.2 million for the year ended April 30, 2025, an increase of approximately $66.2 million or 114.0%, from approximately $58.0 million for the year ended April 30, 2024. The increase in net revenues was driven by the inclusion of revenues from our newly acquired subsidiary, Lee Lee (acquired in April 2024), of $78.2 million, which was partly offset by decreased sales of Maison Monterey Park by $2.3 million, decreased sales of Maison San Gabriel by $2.9 million, decreased sales of Maison Monrovia by $1.5 million and decreased sales of Maison El Monte by $0.6 million, as compared to the year ended April 30, 2024. Our four California-based supermarkets contributed $46.1 million in revenue during the year ended April 30, 2025, a decrease of approximately $7.3 million, as compared to the year ended April 30, 2024. The $7.3 million decrease was mainly due to high competition from nearby Asian supermarkets as there are too many supermarkets including Asia supermarkets in the surrounding area of our stores.
Previous wording
Cost of revenues includes cost of supermarket product sales and occupancy costs, which are store rent expense, depreciation for store property and equipment, inventory shrinkage costs and store supplies. The depreciation expense comes from machinery & equipment, such as refrigerators, water heaters, forklifts, and freezers and furniture & fixtures, such as metal shelves, shopping carts, and LED lights. Shrinkage costs are different for different types of products. For example, fruits and vegetables have a high allowance rate during the receiving and display process. The seafood and meat departments have a low allowance rate because the non-fresh products can freeze and sell for the same price or even higher price after being cut. The cost of revenues increased by $3.5 million, from $42.9 million for the year ended April 30, 2023, to approximately $46.4 million for the year ended April 30, 2024. The increase in cost of revenues was mainly due to increase in our revenue, increase in inventory shrinkage costs by $0.6 million due to write-off inventory from Lee Lee after we took over, and increased occupancy cost by $0.9 million due to increased monthly rent of our existing supermarkets and occupancy costs from Lee Lee.
Current wording
Cost of revenues includes cost of supermarket product sales and occupancy costs, which are store rent expense, depreciation for store property and equipment, inventory shrinkage costs and store supplies. The depreciation expense comes from machinery & equipment, such as refrigerators, water heaters, forklifts, and freezers and furniture & fixtures, such as metal shelves, shopping carts, and LED lights. Shrinkage costs are different for different types of products. For example, fruits and vegetables have a high allowance rate during the receiving and display process. The seafood and meat departments have a low allowance rate because the non-fresh products can freeze and sell for the same price or even higher price after being cut. The cost of revenues increased by $51.5 million, from $46.4 million for the year ended April 30, 2024, to approximately $97.9 million for the year ended April 30, 2025. The increase in cost of revenues was mainly from our newly acquired subsidiary, Lee Lee (acquired in April 2024), by $60.9 million, which was partly offset by decreased cost of revenues from our four California-based supermarkets by $5.8 million.
Previous wording
Gross profit was approximately $11.6 million and $12.5 million for the years ended April 30, 2024 and 2023, respectively. Gross margin was 20.0% and 22.5% for the years ended April 30, 2024 and 2023, respectively. Our supermarkets’ sales profit margins decreased by 2.5% for the year ended April 30, 2024 compared to the year ended April 30, 2023. The decrease in our gross profit was mainly due to the increase in inventory write-off and increase in supermarkets rent as described above.
Current wording
Gross profit was approximately $26.3 million and $11.6 million for the years ended April 30, 2025 and 2024, respectively. Gross margin was 21.3% and 20.0% for the year ended April 30, 2025 and 2024, respectively. Our supermarkets’ sales profit margins increased by 1.3% for the year ended April 30, 2025 compared to the year ended April 30, 2024. The increase in our gross profit was mainly due to the higher gross profit from our new acquired subsidiary Lee Lee.
Previous wording
Total operating expenses were approximately $14.3 million for the year ended April 30, 2024, an increase of approximately $1.9 million, compared to approximately $12.4 million for the year ended April 30, 2023. Total operating expenses as a percentage of revenues were 24.7% and 22.3% for the years ended April 30, 2024 and 2023, respectively. The increase in operating expenses was primarily attributable to the increase in selling expenses, which included the increase in payroll expense, utility expense, advertising and promotion expense, postage & delivery expense and merchant service charges. Payroll expense increased by $1.2 million in the year ended April 30, 2024, as compared to the year ended April 30, 2023 due to the increase of hourly rate and increased number of employees due to the acquisition of Lee Lee. Utility expense increased by $0.2 million in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Advertising and promotion expense increased by $79,971 in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Postage and delivery expenses increased by $55,884 in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Merchant eservice charges increased by $0.1 million in the year ended April 30, 2024, as compared to the year ended April 30, 2023 due to increased sales as describe above.
Current wording
Total operating expenses were approximately $27.6 million for the year ended April 30, 2025, an increase of approximately $13.3 million, compared to approximately $14.3 million for the year ended April 30, 2024. Total operating expenses as a percentage of revenues were 22.3% and 24.7% for the years ended April 30, 2025 and 2024, respectively. The increase in operating expenses was primarily attributable to the increase in selling expenses, which included the increase in payroll expense, utility expense, and merchant service charges as result of the acquisition of Lee Lee. Payroll expense increased by $7.6 million in the year ended April 30, 2025, as compared to the year ended April 30, 2024 due to the increase of hourly rate and increased number of employees due to the acquisition of Lee Lee. Utility expenses increased by $0.9 million in the year ended April 30, 2025, as compared to the year ended April 30, 2024. Merchant service charges increased by $1.1 million in the year ended April 30, 2025, as compared to the year ended April 30, 2024 due to increased sales from Lee Lee as describe above.
Previous wording
The increase in general and administrative expenses during the year ended April 30, 2024 was primarily due to increased office expenses of approximately $459,270, increased professional fee by $231,645 and increased amortization expense of $156,475 due to the new trademark acquired through the acquisition of Lee Lee, which was partly offset by decreased bad debt expenses by $359,035, decreased insurance expense by $31,609, decreased repair and maintenance expense by $71,797, and decrease other miscellaneous expenses by $103,611.
Current wording
The increase in general and administrative expenses during the year ended April 30, 2025 was primarily due to increased office expenses of approximately $554,386, increased professional fees by $1.2 million, increased amortization expense by $390,681 due to the new trademark acquired through the acquisition of Lee Lee, increased insurance expense by $403,442, increased repair and maintenance expense by $648,967, and increased office expenses and supplies by $582,033.
Previous wording
Interest expense was $124,260 for the year ended April 30, 2024, an increase of $166,866, from interest income of $42,606 for the year ended April 30, 2023. For the year ended April 30, 2024, the interest expense was for the SBA Loans and the AFNB Loans. The interest income for the year ended April 30, 2023 was from the loan receivables from Drop in the Ocean, Inc, which was repaid in full as of April 30, 2023.
Current wording
Interest expense was $1,167,895 for the year ended April 30, 2025, an increase of $1,043,635 from $124,260 for the year ended April 30, 2024. For the year ended April 30, 2025, the interest expense was for the SBA loans and note payable arising from the acquisition of Lee Lee. For the year ended April 30, 2024, the interest expense was for the SBA loans and the AFNB loans. The AFNB loans were repaid in full as of April 30, 2024.
Previous wording
Income tax expense was $440,562 for the year ended April 30, 2024, an increase of $104,076, from income taxes expense of $336,486 for the year ended April 30, 2023. The increase was mainly due to increased taxable income from our stores for the year ended April 30, 2024 compared to the year ended April 30, 2023, despite we had significant taxable loss for our parent company.
Current wording
Income tax expense was $173,989 for the year ended April 30, 2025, a decrease of $266,573 from income taxes expense of $440,562 for the year ended April 30, 2024. The decrease in income tax expense was mainly due to the net loss from Maison parent company, decreased taxable income for Maison Monterey Park supermarket, and increased taxable loss for our other three California-based supermarkets.
Previous wording
Net loss attributable to the Company was $3,340,206 for the year ended April 30, 2024, an increase of $4,592,009, or 366.8%, from a $1,251,803 net income attributable to the Company for the year ended April 30, 2023. This was mainly attributable to the reasons discussed above, which included a decrease in gross profit by $830,063, decreased other income by $1,429,193, increased investment loss from equity method investment by $538,542, increased operating expenses by $1,957,590 and increased income tax expense by $104,076, which was partly offset by increased net loss attribute to noncontrolling interest by $434,321.
Current wording
Net income attributable to the Company was $1,169,273 for the year ended April 30, 2025, an increase of $4,509,479, or 135.0%, from a $3,340,206 net loss attributable to the Company for the year ended April 30, 2024. This was mainly attributable to the reasons discussed above, which included an increase in gross profit by $14,721,454 mainly from Lee Lee store, and increased other income by $3,623,198, which was partly offset by increased interest expenses by $1,043,635, and increased operating expenses by $13,282,454.
Previous wording
As of April 30, 2024, we had cash, cash equivalents and restricted cash of approximately $1,101. We had net loss attributable to us of $3,340,206 for the year ended April 30, 2024, and had a working capital deficit of approximately $16.9 million as of April 30, 2024. As of April 30, 2024, the Company had outstanding loan facilities of approximately $2.56 million SBA loan and $15.1 million secured senior note payable due to acquisition of Lee Lee.
Current wording
As of April 30, 2025, we had cash and cash equivalents of approximately $775,360. We had net income attributable to us of $1,169,273 for the year ended April 30, 2025, and had a working capital deficit of approximately $9.82 million as of April 30, 2025. As of April 30, 2025, the Company had outstanding loan facilities of approximately $2.62 million SBA loans, $5.64 million secured senior note payable due to the acquisition of Lee Lee, and $3.00 million convertible note payable.
Previous wording
On November 22, 2023, we entered into certain securities purchase agreements (the “Securities Purchase Agreements”) with certain investors (the “Investors”). Pursuant to the Securities Purchase Agreements, we sold an aggregate of 1,190,476 shares of the Company’s Class A common stock, par value $0.0001 per share, to the Investors at a per share purchase price of $4.20 (the “PIPE Offering”). The PIPE Offering closed on November 22, 2023. We received net proceeds of approximately $4.60 million, after deducting investment banker’s discounts and commissions and offering expenses payable by the Company.
Current wording
On November 22, 2023, we entered into certain securities purchase agreements (the “Securities Purchase Agreements”) with certain investors (the “PIPE Investors”). Pursuant to the Securities Purchase Agreements, we sold an aggregate of 1,190,476 shares of the Company’s Class A common stock, par value $0.0001 per share, to the PIPE Investors at a per share purchase price of $4.20 (the “PIPE Offering”). The PIPE Offering closed on November 22, 2023. We received net proceeds of approximately $4.60 million, after deducting investment banker’s discounts and commissions and offering expenses payable by the Company.
Previous wording
To accomplish such expansion plan, we estimate the total related capital investment and expenditures to be approximately $35 million to $40 million, among which approximately $13 million to $16 million will be required within the next 12 months to support our preparation and opening of new stores in Southern and Northern California and acquiring additional supermarkets on the East Coast. This is based on management’s best estimate as of the date of this Report.
Current wording
We plan to acquire and open additional supermarkets, satellite stores and warehouses to expand our footprint to both the West Coast and the East Coast. To accomplish such expansion plan, we estimate the total related capital investment and expenditures to be approximately $35 million to $40 million, among which approximately $13 million to $16 million will be required within the next 12 months to support our preparation and opening of new stores and acquiring additional supermarkets on the East Coast and additional regions near California. This is based on the management’s best estimate as of the date of this Report.
Previous wording
Net cash used by operating activities was approximately $3.5 million for the year ended April 30, 2024, which mainly comprised of net loss of $3,387,029, add-back of non-cash adjustment to net loss including depreciation expense of $461,868, and investment loss from 49% equity investee HKGF Arcadia store of $538,542. In addition, for the year ended April 30, 2024, we had cash outflow from 1) increased outstanding accounts receivable from related parties of $271,461, 2) increased prepayment to vendors of $1,716,468, 3) increased outstanding other receivables and other current assets of $474,943, 4) increased cash outflow on security deposit of $488,717, 5) payment for accounts payable of $59,633, and 6) payment of income tax payable of $518,516.
Current wording
Net cash used in operating activities was approximately $3.5 million for the year ended April 30, 2024, which mainly comprised of net loss of $3,387,029, add-back of non-cash adjustment to net loss including depreciation expense of $461,868, and investment loss from 49% equity investee HKGF Arcadia store of $538,542. In addition, for the year ended April 30, 2024, we had cash outflow from i) increased outstanding accounts receivable from related parties of $271,461, ii) increased prepayment to vendors of $1,716,468, iii) increased outstanding other receivables and other current assets of $474,943, iv) increased cash outflow on security deposit of $488,717, v) payment for accounts payable of $59,633, and vi) payment of income tax payable of $518,516.
Previous wording
However, our net cash used in operating activities for the year ended April 30, 2024 was mainly offset by subtracting a non-cash adjustment from net loss for reversal of bad debt of $60,000, and increased cash inflow from 1) payment collected from accounts receivable of $203,481, 2) decrease of inventories of $0.9 million, 3) an increase of accounts payable to related parties of $106,725, 4) an increase of operating lease liabilities of $400,913, 5) an increase of accrued expenses and other payables of $342,592, 6) an increase of contract liabilities of $503,326 and 7) an increase of other long-term payables of $19,477.
Current wording
However, our net cash used in operating activities for the year ended April 30, 2024 was partly offset by deducting non-cash adjustments from net loss for reversal of bad debt of $60,000 and reversal of inventory impairment of $5,961. In addition, for the year ended April 30, 2024, we had cash inflow from i) payment collected from accounts receivable of $203,481, ii) decrease of inventories of $914,356, iii) an increase of accounts payable to related parties of $106,725, iv) an increase of accrued expenses and other payables of $342,592, v) an increase of contract liabilities of $503,326, and vi) an increase of operating lease liabilities of $400,913.
Previous wording
Net cash used in investing activities was approximately $12.2 million for the year ended April 30, 2024, which mainly consisted of store renovation and purchase of equipment of $382,132, payment of intangible assets of $2.95 million, payment for investment into TMA Liquor Inc of $75,000, payment for 49% investment into Good Fortune Arcadia supermarket of approximately $1.8 million, and payment for acquisition of subsidiary Lee Lee of $7,000,000.
Current wording
Net cash used in investing activities was approximately $10,132,834 for the year ended April 30, 2024, which mainly consisted of store renovation and purchase of equipment of $382,132, payment of intangible assets of $2,950,000, payment for investment into TMA Liquor Inc of $75,000, payment for 49% investment into Good Fortune Arcadia supermarket of $1,800,000, and payment for acquisition of subsidiary Lee Lee of $7,000,000, which was partly offset by cash acquired from acquisition of Lee-Lee of $2,074,298.
Previous wording
Net cash provided by financing activities was approximately $13.1 million for the year ended April 30, 2024, which mainly consisted of net proceeds from issuance of common stock of approximately $13.3 million, bank overdraft of $97,445 and borrowing from related parties $250,000, which was partially offset by repayment on loans payable of approximately $370,825 million, and repayment for a note payable of $150,000.
Current wording
Net cash provided by financing activities was approximately $13,140,512 for the year ended April 30, 2024, which mainly consisted of net proceeds from issuance of common stock of approximately $13,313,892, bank overdraft of $97,445 and borrowing from related parties $250,000, which was partially offset by repayment on loans payable of $370,825 million, and repayment for a note payable of $150,000.
Previous wording
On January 12, 2022, Maison San Gabriel received an extra $1,850,000 fund from the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. Maison El Monte received an extra $350,000 from the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050.
Current wording
On June 15, 2020, Maison San Gabriel entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. On January 12, 2022, Maison San Gabriel received an extra $1,850,000 loan from the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050.
Previous wording
On June 15, 2020, Maison Monrovia entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. On June 15, 2020, Maison San Gabriel entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. On June 15, 2020, Maison El Monte, entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. Per the SBA loan agreement, all these three loans’ interest payments were deferred to December 2022.
Current wording
On June 15, 2020, Maison El Monte entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050. On January 6, 2022, Maison El Monte received an extra $350,000 loan from the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050.
Previous wording
As of April 30, 2024 and 2023, the Company’s aggregate balance on the three SBA loans was $2,561,299 and $2,624,329, respectively.
Current wording
As of April 30, 2025 and 2024, the Company’s aggregate balance on the three SBA loans was $2,616,050 and $2,561,299, respectively.
Previous wording
On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee for an aggregate purchase price of approximately $22.2 million, consisting of: (i) $7.0 million in cash paid immediately at the closing of the Transaction, and (ii) a senior secured note agreement with an original principal amount of approximately $15.2 million entered on April 8, 2024.
Current wording
On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee for an aggregate purchase price of approximately $22.2 million, consisting of: (i) $7.0 million in cash paid immediately at the closing of the transaction, and (ii) the Secured Note with an original principal amount of approximately $15.2 million pursuant to the Senior Secured Note Agreement.
Previous wording
Under the senior secured note agreement, the Secured Note will accrue interest on the outstanding principal amount at an annual interest rate of five percent (5%). The payment schedule of the principal amount of the secured note is as follows: (i) $2.5 million due and immediately payable on each of May 8, 2024 and June 8, 2024; (ii) $1.5 million due and immediately payable on each of September 8, 2024, October 8, 2024 and November 8, 2024; (iii) $1.0 million due and immediately payable on December 8, 2024; and (iv) approximately $4.7 million due and immediately payable on February 8, 2025. Additionally, pursuant to the terms and conditions of the senior secured note agreement, the principal amount may be adjusted to include certain Premium Guarantees (as defined in the senior secured note agreement) if certain conditions, as set forth in the senior secured note agreement and the purchase agreement, are not met.
Current wording
Under the Senior Secured Note Agreement, the Secured Note will accrue interest on the outstanding principal amount at an annual interest rate of five percent (5%). The payment schedule of the principal amount of the Secured Note is as follows: (i) $2.5 million due and immediately payable on each of May 8, 2024 and June 8, 2024; (ii) $1.5 million due and immediately payable on each of September 8, 2024, October 8, 2024 and November 8, 2024; (iii) $1.0 million due and immediately payable on December 8, 2024; and (iv) approximately $4.7 million due and immediately payable on February 8, 2025. Additionally, pursuant to the terms and conditions of the Senior Secured Note Agreement, the principal amount may be adjusted to include certain Premium Guarantees (as defined in the Senior Secured Note Agreement) if certain conditions, as set forth in the Senior Secured Note Agreement and the Stock Purchase Agreement, are not met.
Previous wording
As of April 30, 2024, the Company had an outstanding note payable of $15,126,065 to the sellers of Lee Lee with an annual interest rate of 5%, the Company is required to repay the full amount before February 8, 2025 as described above.
Current wording
As of April 30, 2025, the Company had an outstanding note payable of $5,642,060 to the sellers of Lee Lee. The Company is required to repay the full amount before May 11, 2026.
Previous wording
On April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Stock Purchase Agreement, AZLL entered into a guarantee (the “Purchaser Guarantee”) to and for the benefit of the Sellers, pursuant to which AZLL unconditionally guarantees the payment by Lee Lee of the Principal Amount, as adjusted pursuant to the Secured Note and the faithful and prompt performance by Lee Lee of the conditions and covenants of the Secured Note.
Current wording
On April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Stock Purchase Agreement, AZLL entered into a guarantee (the “AZLL Guarantee”) to and for the benefit of the Sellers, pursuant to which AZLL unconditionally guarantees the payment by Lee Lee of the principal amount of the Secured Note, as adjusted pursuant to the Secured Note and the faithful and prompt performance by Lee Lee of the conditions and covenants of the Secured Note.
Previous wording
Also on April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Purchase Agreement, John Jun Xu, Chairman, Chief Executive Officer and controlling stockholder of the Company, and Grace Xu, spouse of John Jun Xu (together with John Jun Xu, the “Xu Guarantors”), entered into a guarantee (the “Xu Guarantee” and, together with the Purchaser Guarantee, the “Guarantees”) to and for the benefit of the Sellers, pursuant to which the Xu Guarantors unconditionally guarantee the payment by Lee Lee of the Principal Amount, as adjusted pursuant to the Secured Note and the faithful and prompt performance by Lee Lee of the conditions and covenants of the Secured Note.
Current wording
Also on April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Stock Purchase Agreement, John Jun Xu, Chairman, Chief Executive Officer and controlling stockholder of the Company, and Grace Xu, spouse of John Jun Xu (together with John Jun Xu, the “Xu Guarantors”), entered into a guarantee (the “Xu Guarantee” and, together with the AZLL Guarantee, the “Guarantees”) to and for the benefit of the Sellers, pursuant to which the Xu Guarantors unconditionally guarantee the payment by Lee Lee of the principal amount of the Secured Note, as adjusted pursuant to the Secured Note and the faithful and prompt performance by Lee Lee of the conditions and covenants of the Secured Note.
Previous wording
The Company is otherwise periodically involved in various legal proceedings that are incidental to the conduct of its business, including, but not limited to, employment discrimination claims, customer injury claims, and investigations. When the potential liability from a matter can be estimated and the loss is considered probable, the Company records the estimated loss. Due to uncertainties related to the resolution of lawsuits, investigations, and claims, the ultimate outcome may differ from the estimates. Although the Company cannot predict with certainty the ultimate resolution of any lawsuits, investigations, and claims asserted against it, management does not believe any currently pending legal proceeding to which the Company is a party will have a material adverse effect on its financial statements.
Current wording
The Company is otherwise periodically involved in various legal proceedings that are incidental to the conduct of its business, including, but not limited to, employment discrimination claims, customer injury claims, and investigations. When the potential liability from a matter can be estimated and the loss is considered probable, the Company records the estimated loss. Due to uncertainties related to the resolution of lawsuits, investigations, and claims, the ultimate outcome may differ from the estimates. Although the Company cannot predict with certainty the ultimate resolution of any lawsuits, investigations, and claims asserted against it, management does not believe any currently pending legal proceeding to which the Company is a party will have a material adverse effect on its financial statements. Additional information regarding our legal proceedings can be found in Note 18 — “Commitments and Contingencies” to the consolidated financial Statements included in this Annual Report on Form 10-K and is incorporated herein by reference.
Previous wording
The Company and Defendants believe the allegations in both complaints are without merit and intend to defend each suit vigorously. It is reasonably possible that a loss may be incurred; however, the possible range of losses is not reasonably estimable given the pending status of both cases.
Current wording
The Company and Defendants believe the allegations in both complaints are without merit and intend to defend each suit vigorously. It is reasonably possible that a loss may be incurred; however, the possible range of losses is not reasonably estimable given the pending status of the cases.
Previous wording
On April 9, 2024, a shareholder derivative action was brought by Shah Azad derivatively on behalf of the Company against John Xu, Tao Han, Alexandria Lopez, Bin Wang, Mark Willis, and Xiaoxia Zhang, and the Company itself as a nominal defendant. The complaint was filed in the United States District Court for the Central District of California, Case No. 2:24-cv-02897. On April 12, 2024, another derivative complaint was filed by Arnab Baral in the United States District Court Central District of California, Case No. 2:24-cv-03018. The two cases have since been consolidated, with theAzad case taking lead. The lawsuits allege breaches of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement, waste of corporate assets, and contribution under Section 11(f) of the Securities Act and Section 21D of the Exchange Act. The claims arise from the allegations underlying the class action securities lawsuits. On July 19, 2024, the Court ordered the Azad case stayed until a motion to dismiss is heard in the class action securities action.
Current wording
On April 9, 2024, a shareholder derivative action was brought by Shah Azad derivatively on behalf of the Company against John Xu, Tao Han, Alexandria Lopez, Bin Wang, Mark Willis, and Xiaoxia Zhang, and the Company itself as a nominal defendant. The complaint was filed in the United States District Court for the Central District of California, Case No. 2:24-cv-02897. On April 12, 2024, another derivative complaint was filed by Arnab Baral in the United States District Court Central District of California, Case No. 2:24-cv-03018. The two cases have since been consolidated, with theAzad case taking the lead. The lawsuits allege breaches of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement, waste of corporate assets, and contribution under Section 11(f) of the Securities Act and Section 21D of the Exchange Act. The claims arise from the allegations underlying the class action securities lawsuits. On July 19, 2024, the Court ordered the Azad case stayed until a motion to dismiss is heard in the class action securities action. The Company is not able to make a reasonable estimate about the amount of contingent loss of these cases at current stage.
Previous wording
On September 8, 2023, a complaint was filed by former employee against Maison San Gabriel for wrongful termination and labor law violation. Maison San Gabriel filed a genal denial in November 2023, and case management conference is scheduled for November 21, 2024.
Current wording
On September 8, 2023, a complaint was filed by former employee against Maison San Gabriel for wrongful termination and labor law violation. Maison San Gabriel filed a general denial in November 2023. Status conference is scheduled for July 1, 2025, and final status conference is scheduled for February 26, 2026. Trial is scheduled for March 9, 2026. In the complaint, the plaintiff’s counsel asked for a range of $300,000 to $3,000,000. On August 4, 2025, both parties reached a confidential settlement agreement and release, the Company agreed to pay $25,000 to plaintiff in exchange for plaintiff’s release of all claims.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Since our formation in July 2019, we have acquired equity interests in four (4) traditional Asian supermarkets in Los Angeles, California. Since April 30, 2022, we have been operating these supermarkets as center stores. The center stores target traditional Asian-American, family-oriented customers with a variety of meat, fresh produce and other merchandise, while additionally stocking items which appeal to the broader community. We are operating these traditional Asian-American, family-oriented supermarkets with our management’s deep cultural understanding of our consumers’ unique consumption habits.
Current report — wording carried from elsewhere
In addition to the traditional supermarkets, on December 31, 2021, we acquired a 10% equity interest in a new grocery store located in Alhambra, California, a young and active community (the “Alhambra Store”) from Mrs. Grace Xu, the spouse of Mr. John Xu, our chief executive officer (“CEO”), Chairman and President. Our intention is to acquire the remaining 90% equity interest in the Alhambra Store and operate it as our first satellite store. The investment in the Alhambra Store is considered a related party transaction because Mrs. Xu is the spouse of Mr. Xu, our CEO, Chairman and President. Please refer to “Certain Relationships and Related Party Transactions” for further explanation.
Current report — wording carried from elsewhere
In May 2021, the Company acquired 10% of the equity interests in Dai Cheong, a wholesale business which mainly supplies foods and groceries imported from Asia, which is owned by John Xu, our CEO, Chairman and President. We intend to acquire the controlling ownership of Dai Cheong. By adding Dai Cheong to our portfolio, we will take the first step toward creating a vertically integrated supply-retail structure. Having an importer as a part of our portfolio will allow us the opportunity to offer a wider variety of products and to reap the benefits of preferred wholesale pricing.
Current report — wording carried from elsewhere
On June 27, 2023, we invested $1,440,000 for 40% equity interest in HKGF Market of Arcadia, LLC (“HKGF Arcadia”), a supermarket in the city of Arcadia, California, to further expand our footprint to new neighborhood. On December 6, 2023, we invested an additional $360,000 for another 10% equity interest in HKGF Arcadia. On February 1, 2024, the Company and JC Business Guys, Inc., the only other member of HKGF Arcadia (“JC Business Guys”), entered into a third amendment to the operating agreement of HKGF Arcadia to decrease our percentage equity interest in HKGF Arcadia to 49% and increase JC Business Guy’s percentage equity interest to 51%.
Current report — wording carried from elsewhere
On November 3, 2023, we incorporated a wholly-owned subsidiary, AZLL LLC (“AZLL”), in Arizona. On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee Oriental Supermart, Inc. (“Lee Lee”) for an aggregate purchase price of approximately $22.2 million, consisting of: (i) $7.0 million in cash paid immediately at the closing of the transaction, and (ii) a senior secured promissory note (the “Secured Note”) with an original principal amount of approximately $15.2 million pursuant to a senior secured note agreement dated April 8, 2024 and amended on October 21, 2024 (as amended, the “Senior Secured Note Agreement”). Lee Lee is a three-store supermarket chain operating in Arizona under the name Lee Lee International Supermarkets and specializing in ethnic groceries.
Current report — wording carried from elsewhere
Net cash used in investing activities was $237,355 for the year ended April 30, 2025, which mainly consisted of store renovation and purchase of equipment of $175,355 and investment into HKGF Market of Arcadia, LLC of $62,000.
Current report — wording carried from elsewhere
On June 15, 2020, Maison Monrovia entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June 15, 2050.