Marwynn Holdings, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, or projections, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under Part II - Item 1A Risk Factors of this Report, and under the “Risk Factors” section of our Registration Statement on Form S-1 (File No.: 333-284245), originally filed with the Securities and Exchange Commission (the “SEC”) on January 13, 2025, as amended. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, or projections, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under Part II - Item 1A Risk Factors of this Report, in the “Risk Factors” section of our annual report on Form 10-K for the fiscal year ended April 30, 2025 and in the audited consolidated financial statements and notes included therein (collectively, the “2024 Annual Report”), as well as in our unaudited condensed consolidated financial statements and the related notes included in this Report. Pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, we have presumed that readers have access to and have read the disclosure under the same heading contained in the 2024 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Previous wording

We have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. In addition, trade-related disruptions—such as shipping delays, port congestion, or container shortages—can create further uncertainty and may require expedited shipping or last-minute procurement efforts at elevated cost. While these changes are intended to mitigate future exposure, they may result in near-term transitional costs, logistical inefficiencies, and supplier onboarding challenges. Diversifying our supply base can also increase production and transportation costs and introduce operational complexity. We are actively working with Costco and other retailers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, there can be no assurance that these efforts will be successful or that such measures will fully offset the challenges posed by current trade policies.

Current wording

For our food and non-alcoholic beverage supply chain business, we have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. In addition, trade-related disruptions—such as shipping delays, port congestion, or container shortages—can create further uncertainty and may require expedited shipping or last-minute procurement efforts at elevated cost. While these changes are intended to mitigate future exposure, they may result in near-term transitional costs, logistical inefficiencies, and supplier onboarding challenges. Diversifying our supply base can also increase production and transportation costs and introduce operational complexity. We are actively working with Costco and other retailers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, there can be no assurance that these efforts will be successful or that such measures will fully offset the challenges posed by current trade policies.

Previous wording

If tariffs escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business performance. See “Risk Factors” under Part II, Item 1A, beginning on page 49 of this Report, for additional information.

Current wording

If tariffs escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business performance. See “Risk Factors” discussed in our 2024 Annual Report, for additional information.

Previous wording

Following our initial public offering, we will be subject to increased operating costs related to our listing on The Nasdaq Capital Market and we are subject to increased costs related to our compliance with Securities Act and Exchange Act periodic reporting annual audit expenses, the legal service expenses, and related consulting services expenses.

Current wording

As a result of our initial public offering, we are subject to increased operating costs related to our listing on The Nasdaq Capital Market and we are subject to increased costs related to our compliance with Securities Act and Exchange Act periodic reporting annual audit expenses, the legal service expenses, and related consulting services expenses.

Previous wording

Current uncertainties about increases in tariffs of imported products from countries may have an adverse effect on our operations. In April 2025, the U.S. government increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries and individualized higher tariffs on certain countries. Based on the tariffs enacted and currently in effect, we anticipate incurring incremental tariff costs, additional costs that we may incur on products shipped to our customers, and costs as a result of pauses on certain of our product imports, in particular products from China. We expect to offset the impact of the enacted tariffs on our revenues with supply chain adjustments, sources of supply or manufacturing locations, and additional cost savings actions. We are actively working with Costco and our other customers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, if other additional tariffs are adopted, we would incur additional tariff costs that could be material. We are actively evaluating the potential impacts of these proposed tariffs, as well as our ability to mitigate their related impacts, this may affect our revenue and cost of revenues.

Current wording

Current uncertainties about increases in tariffs of imported products from countries may have an adverse effect on our operations. In April 2025, the U.S. government increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries and individualized higher tariffs on certain countries. Based on the tariffs enacted and currently in effect, we anticipate incurring incremental tariff costs, additional costs that we may incur on products shipped to our customers, and costs as a result of pauses on certain of our product imports, in particular products from China. We expect to offset the impact of the enacted tariffs on our revenues with supply chain adjustments, sources of supply or manufacturing locations, and additional cost savings actions. For our food and non-alcoholic beverage supply chain business, we have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. We are actively working with Costco and our other customers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, if other additional tariffs are adopted, we would incur additional tariff costs that could be material. We are actively evaluating the potential impacts of these proposed tariffs, as well as our ability to mitigate their related impacts, this may affect our revenue and cost of revenues.

Previous wording

We derive our revenues from (i) sale of food and beverages, (ii) sale of indoor home improvement products, and (iii)** **consulting services. The following table presents our revenue by product and service types and as percentage of our total revenues for the periods presented.

Current wording

We derive our revenues from (i) sale of food and beverage, (ii) sale of indoor home improvement products, and (iii)** **consulting services. The following table presents our revenues by product and service types and as percentage of our total revenues for the periods presented.

Previous wording

Sales of food and beverages accounted for 21.44% and 34.42% of total sales for the three months ended January 31, 2025 and 2024, respectively. Sales of food and beverages decreased by $404,967 from $984,927 for the three months ended January 31, 2024 to $579,960 for the three months ended January 31, 2025. The decrease in our sales was primarily due to significantly reduced purchase orders from Costco, one of our largest customers, particularly in demand for White Rabbit ice cream. We are in the process of a product rotation and update for White Rabbit brand products with Costco and are waiting for Costco’s approval before we can relaunch the sale of the White Rabbit brand product. The timing and outcome of this relaunch are subject to uncertainty, including the potential impact of U.S. tariffs on goods imported from China. We are also working with Costco and other retailers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. We are also working with Costco on bringing more new products to their stores.

Current wording

Sales of food and beverage accounted for nil and 1.58% of total sales for the three months ended July 31, 2025 and 2024, respectively. Sales of food and beverage decreased by $44,886 or 100.00% from $44,886 for the three months ended July 31, 2024 to $nil for the three months ended July 31,2025. The decrease in our sales was primarily due to cease of the purchase orders from Costco, particularly in demand for White Rabbit ice creams. We are actively seeking new retailers and working with them to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. We are also working with Costco on bringing more new products to their stores.

Previous wording

Consulting services accounted for 1.62% and nil of total revenues for the three months ended January 31, 2025 and 2024, respectively. Revenue from consulting services increased by $43,749, or 100.00% from nil for the three months ended January 31, 2024 to $43,749 for the three months ended January 31, 2025. We started our consulting services business in March 2024 through providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels.

Current wording

Revenue from consulting services accounted for 1.76% and 1.70% of total revenues for the three months ended July 31, 2025 and 2024, respectively. Revenue from consulting services decreased by $6,989, or 14.49% from $48,239 for the three months ended July 31, 2024 to $41,250 for the three months ended July 31, 2025. We started our consulting services business in March 2024 through providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels.

Previous wording

We derive our costs from (i) sale of food and beverages, (ii) sale of indoor home improvement products, and (iii) consulting services. The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.

Current wording

We derive our costs from (i) sale of food and beverage, (ii) sale of indoor home improvement products, and (iii) consulting services. The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.

Previous wording

Cost of revenues from sale of food and beverages decreased by $189,938, or 36.66% from $518,119 for the three months ended January 31, 2024, to $328,181 for the three months ended January 31, 2025. Our cost of revenues from sale of food and beverages primarily include inventory costs, storage and freight costs. The decrease in our cost of revenues for sale of food and beverages was mainly due to decreased sales volume resulting from decreased purchase orders from Costco, we did not have any orders from Costco for the three months ended January 31, 2025 while we had 11 orders from Costco for the three months ended January 31, 2024. We also had reduced storage fees and freight costs. The average purchase price for White Rabbit ice cream was $17.61 per case for the three months ended January 31, 2024.

Current wording

Cost of revenues from sale of food and beverage decreased by $23,773, or 100.00% from $23,773 for the three months ended July 31, 2024, to $nil for the three months ended July 31, 2025. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs. The decrease in our cost of revenues for sale of food and beverage was mainly due to cease of purchase orders from Costco, we did not have any orders from Costco for the three months ended July 31, 2025 and 2024.We also had reduced storage fees and freight costs.

Previous wording

Sales for the three months ended January 31, 2025 and 2024 were $2,704,760 and $2,861,579, respectively, a decrease of $156,819 or 5.48%. The decrease of sales in 2025 was primarily attributed to decreased sale of food imports and distribution by $404,967 which was partly offset by increased home remodeling products by $204,399 and increased consulting services by $43,749.

Current wording

Sales for the three months ended July 31, 2025 and 2024 were $2,343,959 and $2,842,608, respectively, a decrease of $498,649 or 17.54%. The decrease of sales was primarily attributed to decreased sale of food imports and distribution by $44,886, decreased consulting services by $6,989, and decreased indoor home improvement products by $446,774.

Previous wording

We sold 7,390 cabinets with average selling price of $162.28 each during the three months ended January 31, 2025 compared with 6,382 cabinets with average selling price of $177.65 each during the three months ended January 31, 2024. We sold 954 boxes of flooring with average selling price of $44.33 per box during the three months ended January 31, 2025 compared with 1,380 boxes of flooring with average selling price of $50.56 per box during the three months ended January 31, 2024. We sold 1,912 pieces of engineered marble or quartz with average selling price of $192.39 per piece during the three months ended January 31, 2025 compared with 1,047 pieces of quartz with average selling price of $226.21 per piece during the three months ended January 31, 2024. Our average selling price decreased significantly during the three months ended January 31, 2025, which was a result of our strategic change of our operations by focusing to develop wholesale customers starting from fiscal year 2024. Selling price to wholesale customers was significantly lower than the selling price to retail customers but the sales quantity for each order was usually larger.

Current wording

We sold 9,119 cabinets with average selling price of $141.52 each during the three months ended July 31, 2025 compared with 11,613 cabinets with average selling price of $151.13 each during the three months ended July 31, 2024. We sold 845 boxes of flooring with average selling price of $50.25 per box during the three months ended July 31, 2025 compared with 1,594 boxes of flooring with average selling price of $50.46 per box during the three months ended July 31, 2024. We sold 2,214 pieces of engineered marble or quartz with average selling price of $197.40 per piece during the three months ended July 31, 2025 compared with 1,925 pieces of quartz with average selling price of $194.83 per piece during the three months ended July 31, 2024. Our average selling price decreased during the three months ended July 31, 2025, which was a result of our strategic change of our operations by focusing to develop wholesale customers as well as to increase our competitiveness.

Previous wording

Cost of revenues for the nine months ended January 31, 2025, and 2024 was $4,423,611 and $4,767,506, respectively, a decrease of $343,895 or 7.21%. The decrease in cost of revenues in 2025 was primarily attributed to decreased cost from sale sale of food and beverages by $871,181, or 71.23%, resulting from decreased sales, which was partly offset by increased cost from home remodeling products by $450,839 or 12.72% and increased cost from consulting services by $76,447 or 100.00%. Cost of revenues for sale of food and beverages as a percentage of total revenues was 4.29% and 14.30%, respectively, for the nine months ended January 31, 2025 and 2024. Cost of revenues for home remodeling products as a percentage of total revenues was 48.73% and 41.43%, respectively, for the nine months ended January 31, 2025 and 2024. Cost of revenues for consulting services as a percentage of total revenues was 0.93% and nil, respectively, for the nine months ended January 31, 2025 and 2024.

Current wording

Cost of revenues for the three months ended July 31, 2025, and 2024 was $1,349,613 and $1,444,553, respectively, a decrease of $94,940 or 6.57%. The decrease in cost of revenues in the same period of 2025 was primarily attributed to decreased cost from sale of food and beverage by $23,773, or 100.00%, decreased cost from indoor home improvement products by $45,671 or 3.27% and decreased cost from consulting service by $25,496, or 99.80%. Cost of revenues for sale of food and beverage as a percentage of total revenues was 0.00% and 0.84%, respectively, for the three months ended July 31, 2025 and 2024. Cost of revenues for indoor home improvement products as a percentage of total revenues was 57.58% and 49.08%, respectively, for the three months ended July 31, 2025 and 2024. Cost of revenues for consulting services as a percentage of total revenues was 0.002% and 0.90%, respectively, for the three months ended July 31, 2025 and 2024.

Previous wording

The following table presents our gross profit and gross margin by product and services provided as percentage of total revenues for the periods presented.

Current wording

The following table presents our gross profit and gross margin by products and services provided as percentage of total revenues for the periods presented.

Previous wording

The following table presents our gross profit and gross margin by product and services provided as percentage of total revenues for the periods presented.

Current wording

The following table presents our gross margin by products and services provided as a percentage of its corresponding categories.

Previous wording

The gross profit for the three months ended January 31, 2025 and 2024 was $1,117,775 and $1,368,077 respectively, a decrease of $250,302 or 18.30%. The blended gross profit margin was 41.33% for 2025 compared 47.81% for 2024. Gross profit for sale of food and beverages decreased by 46.06% in 2025 due to decreased sales to Costco. Gross profit for sale of indoor home improvement products decreased by 3.12% in 2025 due to our expansion of wholesale business, for which we offered more discounts to our wholesale customers. Gross profit for consulting services decreased by 100.00% in 2025 due to increased labor cost.

Current wording

The gross profit for the three months ended July 31, 2025 and 2024 was $994,346 and $1,398,055, respectively, a decrease of $403,709 or 28.88%. The blended gross profit margin was 42.42% for three months ended July 31, 2025 compared with 49.18% for the same period in 2024. Gross profit for sale of food and beverage decreased by 100.00% for three months ended July 31, 2025 due to no sales to Costco. Gross profit for sale of indoor home improvement products decreased by 29.62% for three months ended July 31, 2025 due to decreased selling price of our cabinet products. Gross profit for consulting services increased by 81.56% for three months ended July 31, 2025 .

Previous wording

Our selling expenses were 164,879 for the three months ended January 31, 2025, as compared to $158,527 for the three months ended January 31, 2024, representing an increase of $6,352, or 4.01%. The increase in the selling expenses was mainly due to 1) increased payroll expenses by $51,313 or 55.34% due to increased employees; and 2) increased shipping expenses by $3,435 or 29.62% as compared to the same period of 2024; the increase in selling expenses was partly offset by 1) decreased sales commission expenses by $36,834 or 100.00% as compared to the same period in 2024; 2) decreased advertising and marketing expenses by $12,251 or 73.14%. Selling expenses accounted for 6.10% and 5.54% of our total revenues for the three months ended January 31, 2025 and 2024, respectively.

Current wording

Our selling expenses were $1,436,730 for the three months ended July 31, 2025, as compared to $157,729 for the three months ended July 31, 2024, representing an increase of $1,279,001, or 810.89%. The increase in the selling expenses was mainly due to (1) increased advertising and marketing expenses of $1,265,169, or 8,453.62%. To attract new customers, increase our market share and improve operation efficiency, we entered into several consulting agreements for business development, market expansion, supply chain management, and strategic financial plan and support advisory services, (2) increased payroll expenses of $12,020, or 8.71% due to increased hourly pay rate, and (3) slightly increased shipping expenses of $1,245, or 360.88% as compared to the same period in 2024 resulting from shipping costs incurred for sending product samples for exploring new products for customers; the increase in selling expenses was partly offset by decreased sales commission expenses of $1,077, or 100.00%. Selling expenses accounted for 61.30% and 5.55% of our total revenues for the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Our general and administrative expenses were $3,555,609 for the nine months ended January 31, 2025, as compared to $2,293,132 for the nine months ended January 31, 2024, reflecting an increase of $1,262,477 or 55.05%. The increase in general and administrative expenses included increased payroll expense, professional fee, rent expenses, depreciation and amortization , and meal and entertainment expenses which was partly offset by decreased insurance expense, subcontract labor and testing fee.

Current wording

Our general and administrative expenses were $2,271,863 for the three months ended July 31, 2025, as compared to $1,470,162 for the three months ended July 31, 2024, reflecting an increase of $801,701 or 54.53%. The increase in general and administrative expenses included decreased payroll expense, rent expenses, due and subscription expenses, meal and entertainment expenses and other expenses associated with general and administrative expenses, which was partly offset by increased professional fee, depreciation and amortization, travel expense, and insurance expense.

Previous wording

Other income was $472 for the three months ended January 31, 2025, compared to other expenses of $4,088 for the three months ended January 31, 2024. For the three months ended January 31, 2025, other income mainly consisted of other income of $2,227, which was partly offset by interest expense of $1,755. For the three months ended January 31, 2024, other expenses mainly consisted of interest expense of $6,251, which was partly offset with other income of $2,163.

Current wording

Other expenses were $3,998 for the three months ended July 31, 2025, compared to other expenses of $11,954 for the three months ended July 31, 2024. For the three months ended July 31, 2025, other expenses mainly consisted of interest expense of $1,962, and other expenses of $3,807, which was partly offset with other income of $1,771. For the three months ended July 31, 2024, other expenses mainly consisted of interest expense of $13,762, which was partly offset by other income $1,808.

Previous wording

Income tax benefit were $20,897 for the three months ended January 31, 2025, representing a decrease of $135,942 or 118.16% from income tax expense of $115,045 for the three months ended January 31, 2024, due to decreased taxable income of Grand Forest. Marwynn, FuAn and Grand Forest file separate income tax return.

Current wording

Income tax expenses were $1,508 for the three months ended July 31, 2025, representing a decrease of $85,233 or 98.26% from $86,741 income tax expense for the three months ended July 31, 2024, due to decreased taxable income of Grand Forest. Marwynn, FuAn and Grand Forest file separate income tax returns.

Previous wording

As a result of the above, we had a net loss of $419,482 for the nine months ended January 31, 2025, compared to net income $649,850 for the nine months ended January 31, 2024, a decrease of net income of $1,069,332 or 164.55%, which was mainly resulting from decreased revenue and increased audit, accounting and consulting fee, rent expense and payroll costs.

Current wording

As a result of the above, we had a net loss of $2,719,753 for the three months ended July 31, 2025, compared to a net loss of $328,531 for the three months ended July 31, 2024, an increase of net loss of $2,391,222 or 727.85%, which was mainly resulting from decreased revenue and increased audit, accounting and consulting fee, and insurance expense.

Previous wording

In assessing our liquidity, we monitor and analyze our cash on-hand, our ability to generate sufficient revenue sources, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As reflected in our unaudited condensed consolidated financial statements, we had cash balance of approximately $0.23 million as of January 31, 2025. We also had accounts receivable balance of approximately $1.06 million as of January 31, 2025, among which approximately $0.3 million or 26.26% has been collected as of the date of this report.

Current wording

In assessing our liquidity, we monitor and analyze our cash on-hand, our ability to generate sufficient revenue sources, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As reflected in our unaudited condensed consolidated financial statements, we had cash balance of approximately $0.21 million as of July 31, 2025. We also had accounts receivable, net balance of approximately $1.09 million as of July 31, 2025, among which approximately $0.3 million or 28.1% has been collected as of the date of this report.

Previous wording

As of January 31, 2025, we also recorded a total of approximately $0.15 million loans payable (including approximately $0.1 million short-term loan, $14,012 short-term auto loan and $35,929 long-term auto loan). We expect that we will be able to continue borrowing under our existing facilities based on past experience, our good credit history, and well-established relationship with the lenders.

Current wording

As of July 31, 2025, we also recorded a total of approximately $0.14 million loans payable (including approximately $0.10 million short-term loan, $9,581 short-term auto loan and $30,897 long-term auto loan). We expect that we will be able to continue borrowing under our existing facilities based on past experience, our good credit history, and well-established relationship with the lenders.

Previous wording

As of January 31, 2025, we had due to related parties balance of approximately $0.95 million. The balance of due to related parties was comprised of advances from our related parties and was used for working capital during our normal course of business. This due to related parties was memorialized pursuant to unsecured promissory notes between Grand Forest and the holders. The unsecured promissory notes are payable on demand on or after August 1, 2025, and carry no interest. In the absence of any demand, the entire principal shall be due on July 31, 2029.

Current wording

As of July 31, 2025, we had a balance due to related parties of approximately $0.23 million. The balance of due to related parties was comprised of advances from our related parties and was used for working capital during our normal course of business. This due to related parties was memorialized pursuant to unsecured promissory notes between Grand Forest and the holders. The unsecured promissory notes are payable on demand on or after August 1, 2025, and carry no interest. In the absence of any demand, the entire principal shall be due on July 31, 2029.

Previous wording

Currently, we are working to improve our liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from our principal stockholder. In order to fully implement our business plan and sustain continued growth, we may also seek equity financing from outside investors. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for our Company to meet its future liquidity and capital requirements for at least 12 months from the issuance date of the consolidated financial statements.

Current wording

Our working capital amounted to approximately $0.95 million as of July 31, 2025. Currently, we are working to improve our liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from our principal stockholder. In order to fully implement our business plan and sustain continued growth, we may also seek equity financing from outside investors.

Previous wording

However, as reflected in the accompanying unaudited condensed consolidated financial statements, the Company had net loss of approximately $0.42 million for the nine months ended January 31, 2025 and cash outflow from operating activities of approximately $0.28 million for the nine months ended January 31, 2025. The management plans to increase its revenue of FuAn by diversifying its markets from major mass market channels to ethnic supermarkets chains. In addition, FuAn has already finished the setup process to become a vendor to some major food distributors. The Company expects to increase sales through its distribution channels in the next quarter. FuAn has already engaged with regional buyers at Costco on new items and is awaiting Costco’s final approval, which the Company expects to happen in the coming months. The Company plans to increase Grand Forest’s revenue by providing more customized products to current customers. Also, the Company plans to expand the market for its products to southern California. The Company is discussing with Los Angeles, California-based distributors about the potential opportunity of setting up a Los Angeles regional office. The Company believes the expanded sales force will strengthen the relationship of its long-time customers based in southern California and help to increase overall sales. The Company had unsecured promissory notes with several stockholders with a total balance of $ 0.95 million as of January 31, 2025. These unsecured promissory notes are payable on demand on or after August 1, 2025, and carry no interest. In the absence of any demand, the entire principal should be due on July 31, 2029. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others.

Current wording

However, as reflected in the accompanying unaudited condensed consolidated financial statements, the Company had net loss of approximately $2.72 million for the three months ended July 31, 2025 and cash outflow from operating activities of approximately $0.10 million for the three months ended July 31, 2025. The management plans to increase its revenue of FuAn by diversifying its markets from major mass market channels to ethnic supermarkets chains. The Company expects to increase sales through FuAn’s distribution channels in the near future. The Company plans to increase Grand Forest’s revenue by providing more customized products to current customers. Also, the Company plans to expand the market for Grand Forest’s products to southern California. The Company is discussing with Los Angeles, California-based distributors about the potential opportunity of setting up a Los Angeles regional office. . The Company believes the expanded sales force will strengthen the relationship of its long-time customers based in southern California and help to increase overall sales. The Company had unsecured promissory notes with several stockholders with a total balance of $ 0.23 million as of July 31, 2025. These unsecured promissory notes are payable on demand on or after August 1, 2025, and carry no interest. In the absence of any demand, the entire principal should be due on July 31, 2029. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others.

Previous wording

The Company has historically funded its working capital needs primarily from operations. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. The Company believes that its cash on hand and operating cash flows will be sufficient to fund its operations over at least the next 12 months from the date of issuance of these unaudited condensed financial statements. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.

Current wording

The Company has historically funded its working capital needs primarily from operations. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility. Based on above reasons, there is a substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the issuance of the consolidated financial statements.

Previous wording

The following table summarizes our cash flows for the nine months ended January 31,2025 and 2024, respectively.

Current wording

The following table summarizes our cash flows for the three months ended July 31,2025 and 2024, respectively.

Previous wording

Net cash provided by (used in) operating activities

Current wording

Net cash used in operating activities

Previous wording

Net cash outflow from operating activities increased by $1,064,122 for the nine months ended January 31, 2025 comparing with the nine month ended January 31, 2024, mainly resulting from a) decreased net income by $1,069,332 with add-back of non-cash adjustments to net loss by $215,555, b) increased cash outflow on inventory by $473,447, c) increased cash outflow on prepaid expenses and other current assets by $439,400, d) increased cash outflow on deferred IPO costs by $697,750, e) increased cash outflow on operating lease liabilities by $241,748, f) increased cash outflow on tax payable by $433,330, which was partly offset by g) increased cash inflow on accounts receivable by $769,835, h) increased cash inflow from account payable by $1,200,275, i) increased cash inflow on deferred revenue by $50,888 and j) decreased cash outflow from accrued expenses and other current liabilities by $54,332.

Current wording

Net cash outflow from operating activities decreased by $891,460 for the three months ended July 31, 2025 comparing with the three months ended July 31, 2024, mainly resulting from (a) increased net loss of $2,391,222 with adding-back of non-cash adjustments to net loss by 49,313, (b) decreased cash outflow on inventory by $428,069, (c) decreased cash outflow on prepaid expenses and other current assets by $3,195,078, (d) decreased payment on deferred IPO costs by $342,372, (e) decreased cash outflow on tax payable by $71,627, (f) decreased cash outflow on accrued expenses and other current liabilities by $7,915, which was partly offset by (g) increased cash outflow on operating lease liabilities by $10,282, (h) increased outstanding accounts receivable by $478,342, (i) increased cash outflow on accounts payable by $117,684, and (j) increased cash outflow on deferred revenue by $201,614.

Previous wording

Net cash used in financing activities was $795,462 for the nine months ended January 31, 2025, compared to net cash provided in financing activities of $111 for the nine months ended January 31, 2024. The net cash used in financing activities in 2025 mainly consisted of repayment of bank loan of $500,000 and repayment to related parties of $309,539, which was partly offset by increase of new auto loan of $14,077. The net cash used in financing activities in 2024 was mainly consisted of repayment to related parties of $486,674, repayment of auto loan of $13,215 and proceeds from bank loan of $500,000.

Current wording

Net cash used in financing activities was $952,754 for the three months ended July 31, 2025, compared to net cash used in financing activities of $71,469 for the three months ended July 31, 2024. The net cash used in financing activities in 2025 mainly consisted of increased repayment of auto loan by $5,588, increased repayment to related parties by $451,019, and increased note receivable by $690,000, which was partly offset by repayment of loan from shareholder of $193,853. The net cash used in financing activities in 2024 mainly consisted of repayment of auto loan of $5,414, and repayment to related parties of $66,055.

Previous wording

On June 9, 2020, KZS entered into a loan agreement with KZ Kitchen Cabinet & Stone, Inc., an unrelated party whereby KZS borrowed $100,000, with an annual interest rate of 4.75% payable monthly, and the loan principal to be repaid at maturity on June 9, 2025. Upon a breach of the agreement, interest will accrue at a compound rate of 10% per annum and KZ Kitchen Cabinet & Stone, Inc., may declare the unpaid principal balance together with all accrued but unpaid interest thereon and all other sums owed to it under the agreement, immediately due and payable.

Current wording

On June 9, 2020, KZS entered into a loan agreement with KZ Kitchen Cabinet & Stone, Inc., an unrelated party whereby KZS borrowed $100,000, with an annual interest rate of 4.75% payable monthly, and the loan principal to be repaid at maturity on June 9, 2025. Upon a breach of the agreement, interest will accrue at a compound rate of 10% per annum and KZ Kitchen Cabinet & Stone, Inc., may declare the unpaid principal balance together with all accrued but unpaid interest thereon and all other sums owed to it under the agreement, immediately due and payable. As of this report date, the Company is in the process to extend this loan.

Previous wording

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies as disclosed in this report reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, as an emerging growth company, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for emerging growth companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements and contained in our subsequent filings with the SEC may not be comparable to other public companies.

Current wording

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies as disclosed in this report reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, as an emerging growth company, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for emerging growth companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements and contained in our subsequent filings with the SEC may not be comparable to other public companies.

Previous wording

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:

Current wording

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our unaudited condensed consolidated financial statements:

Previous wording

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes 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 historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of January 31, 2025, and April 30, 2024, the Company had allowance for credit losses of $32,339 and $24,698, respectively.

Current wording

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes 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 historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of July 31, 2025 and April 30, 2025, the Company had allowance for credit losses of $557,201 and $557,201, respectively.

Previous wording

For food and beverage and indoor home improvement product sales, the Company accrues estimated sales returns based on past experience and current trend of product sales. The allowance for sales returns as of January 31, 2025 and April 30, 2024 amounted to $205,988, respectively.

Current wording

For food and beverage and indoor home improvement product sales, the Company accrues estimated sales returns based on past experience and current trend of product sales. The allowance for sales returns as of July 31, 2025 and April 30, 2025 amounted to $205,988 and $205,988, respectively.

Previous wording

The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

Current wording

The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s unaudited condensed financial statement presentation or disclosures.