Maison Solutions Inc.
For the period ended Jul 31, 2025. Filed Sep 22, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2025 · Filed Sep 22, 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-Q
Period ended 2025-01-31; filed 2025-03-17.
0001213900-25-024574
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-31; filed 2025-09-22.
0001213900-25-090145
Item 2. 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 152 previous paragraphs and 144 current paragraphs.
93 unchanged; 30 reworded; 17 added; 27 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 12 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
As part of the Company’s ongoing commitment to improve its profitability and support sustainable growth, the Company closed Maison El Monte store. On June 7, 2025, Maison EL Monte, Inc. entered into a lease termination agreement with Jendo Ermi, LP (“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.
Current report
The increase in general and administrative expenses during the three months ended July 31, 2025 was primarily due to increased office expenses by $0.2 million, increased supplies by $38,460, increased meal and entertainment expense by $12,500, increased officer’s payroll expense by $10,370, increased pest control expense by $14,130 and increased other G&A expense by 5,500, which was partly offset by decreased professional fees by $0.2 million and decreased other expenses by $70,000.
Current report
For the three months ended July 31, 2025 and 2024, total operating expenses for Maison El Monte were $324,861 and $563,515, respectively.
Current report
Other Expenses, Net
Current report
Other expense were $42,415 for the three months ended July 31, 2025 compared to other expense of $197,232 for the three months ended July 31, 2024. For the three months ended July 31, 2025, other expense mainly consisted of $848,493 investment loss from HKGF Arcadia, which was partly offset by 1) change in fair value of derivative liability of $309,904, 2) consulting income of $335,000 for providing other non-related supermarkets the comprehensive consulting services aiming at enhancing operational efficiency, optimizing resource allocation, and supporting overall business growth, 3) income tax refund of $0.1 million, and 4) $61,174 other income.
Current report
For the three months ended July 31, 2025 and 2024, other expenses for Maison El Monte were $482,143 and $202, respectively. For the three months ended July 31, 2025, other expenses mainly consisted of loss on disposal of store assets of $489,380, which is partly offset by other income by $7,237.
Current report
Interest Expense
Current report
For the three months ended July 31, 2025 and 2024, interest expense for Maison El Monte were $4,655 and $4,331.
Current report
Income tax expense was $320,543 for the three months ended July 31, 2025, a decrease of $308,237 from income taxes expense of $628,780 for the three months ended July 31, 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 two California-based supermarkets.
Current report
Net Loss from Discontinued Operation
Current report
We generated net loss from discontinued operation Maison El Monte of $ 756,735 and $ 410,228 for the three months ended July 31, 2025 and 2024, respectively.
Current report
Net Income (Loss)from Continuing Operation
Current report
Net cash provided by operating activities was approximately $1.1 million for the three months ended July 31, 2025, which mainly comprised of net loss of $1,656,651, add-back of non-cash adjustments to net loss including depreciation and amortization expense of $220,759, inventory impairment of $215,594, amortization of OID and debt issuance cost of $434,472, investment loss from 49% equity investee HKGF Arcadia store of $848,493, and $489,380 loss from disposal of assets due to Maison El Monte store closure. In addition, for the three months ended July 31, 2025, we had cash inflow from (i) decreased outstanding accounts receivables of $315,825, (ii) increased outstanding accounts payable of $526,792 (including accounts payable from related parties of $32,596), (iii) increased outstanding income tax payable of $404,080, (iv) increased operating lease liabilities of $109,854, and (v) increased accrued expenses and other payables of $294,899.
Current report
However, our net cash provided by operating activities for the three months ended July 31, 2025 was impacted by deducting non-cash adjustments from net loss including change in fair value of derivative liability of $309,904 and change in deferred taxes by $83,537. In addition, for the three months ended July 31, 2025, we had cash outflow from i) increased accounts receivable from related parties of $45,382, ii) increased purchase of inventories of $394,209, iii) increased cash outflow on prepayment of $216,362, iv) increase cash outflow on other receivables and other current assets of $39,701, v) increased payment of other long-term payables of $1,200, and iii) increased payment for contract liabilities of $26,501.
Current report
Convertible Note Payable
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 July 31, 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.
Removed paragraphs (27)
Previous report
The increase in general and administrative expenses during the three months ended January 31, 2025 was primarily due to increased office expense by $384,127, increased amortization expense by $70,958 due to the new trademark acquired through the acquisition of Lee Lee, increased utility expense by $25,459, increased bad debt expense by $62,483, and increased repair and maintenance expense by $194,464, which was partly offset by decreased professional fee by $149,822.
Previous report
Other Income (Expenses), Net
Previous report
Interest Income (Expense), Net
Previous report
Income tax expense was $8,416 for the three months ended January 31, 2025, decrease of $150,240 from income taxes expense of $158,656 for the three months ended January 31, 2024. The decrease was mainly due to the utilization of NOL from the subsidiaries that had NOL since Maison files consolidated income tax return.
Previous report
Net Income (loss)
Previous report
Revenues
Previous report
Our net revenues were approximately $94.9 million for the nine months ended January 31, 2025, an increase of approximately $53.7 million or 130.6%, from approximately $41.1 million for the nine months ended January 31, 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 $59.0 million, which was partly offset by decreased sales of Maison Monterey Park by $1.3 million, decreased sales of Maison San Gabriel by $2.2 million, decreased sales of Maison Monrovia by $1.4 million and decreased sales of Maison El Monte by $0.5 million, as compared to the nine months ended January 31, 2024. Our four California-based supermarkets contributed $35.8 million in revenue during the nine months ended January 31, 2025, a decrease of approximately $5.3 million, as compared to the nine months ended January 31, 2024. The $5.3 million decrease was mainly due to increased competition from newly opened Asian supermarkets in nearby area, the effect of certain COVID-19 pandemic-era relief programs ending in fall 2023 such as losing access to foods stamps due to resume of work requirement for food stamps, as well as the temporary slow-down of the Maison El Monte store due to renovation.
Previous report
Cost of Revenues
Previous report
Gross Profit and Gross Margin
Previous report
Gross profit was approximately $24.0 million and $9.4 million for the nine months ended January 31, 2025 and 2024, respectively. Gross margin was 25.3% and 22.9% for the nine months ended January 31, 2025 and 2024, respectively. Our supermarkets’ sales profit margins increased by 2.4% for the nine months ended January 31, 2025 compared to the nine months ended January 31, 2024. The increase in our gross profit was mainly due to the higher gross profit from our new acquired subsidiary Lee Lee.
Previous report
Total Operating Expenses
Previous report
Total operating expenses were approximately $20.5 million for the nine months ended January 31, 2025, an increase of approximately $10.9 million, compared to approximately $9.7 million for the nine months ended January 31, 2024. Total operating expenses as a percentage of revenues were 21.7% and 23.6% for the nine months ended January 31, 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, advertising and promotion expense, postage & delivery expense and merchant service charges as result of the acquisition of Lee Lee. Payroll expense increased by $6.4 million in the nine months ended January 31, 2025, as compared to the nine months ended January 31, 2024 due to the increase of hourly rate and increased number of employees due to the acquisition of Lee Lee. Utility expenses increased by $0.8 million in the nine months ended January 31, 2025, as compared to the nine months ended January 31, 2024. Merchant service charges increased by $0.8 million in the nine months ended January 31, 2025, as compared to the nine months ended January 31, 2024 due to increased sales describe above. Other miscellaneous expenses increased by $0.1 million in the nine months ended January 31, 2024, as compared to the nine months ended January 31, 2024.
Previous report
The increase in general and administrative expenses during the nine months ended January 31, 2025 was primarily due to increased office expenses of approximately $569,593, increased professional fees by $475,934, increased amortization expense by $343,458 due to the new trademark acquired through the acquisition of Lee Lee, increased insurance expense by $259,519, increased repair and maintenance expense by $550,870, and increased office expenses and supplies by $555,953.
Previous report
Other Income (Expenses), Net
Previous report
Other expenses were $221,243 for the nine months ended January 31, 2025 compared to other income of $319,967 for the nine months ended January 31, 2024. For the nine months ended January 31, 2025, other expenses mainly consisted of investment loss of $504,100 ($463,325 investment loss from HKGF Arcadia and $40,775 from Alhambra Store), which was partly offset by other income of $282,857. For the nine months ended January 31, 2024, other income mainly consisted of $0.4 million ERC received, which was partly offset by investment loss from HKGF Arcadia of $63,982. 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
Interest Income (Expense), Net
Previous report
Interest expense was $694,826 for the nine months ended January 31, 2025, an increase of $598,870 from $95,956 for the nine months ended January 31, 2024. For the nine months ended January 31, 2025, the interest expense was for the SBA Loans and note payable arising from the acquisition of Lee Lee. For the nine months ended January 31, 2024, the interest expense was for the SBA Loans and the loans with American First National Bank (the “AFNB Loans”). The AFNB Loans were repaid in full as of April 30, 2024.
Previous report
Income Taxes Provisions
Previous report
Income tax expense was $1,207,740 for the nine months ended January 31, 2025, an increase of $783,018 from income taxes expense of $424,722 for the nine months ended January 31, 2024. The increase was mainly due to increased taxable income from our stores (mainly from Lee Lee stores) for the nine months ended January 31, 2025 compared to the nine months ended January 31, 2024.
Previous report
Net Income (Loss)
Previous report
Net income attributable to the Company was $1,456,662 for the nine months ended January 31, 2025, an increase of $2,019,090, or 359.0%, from a $562,428 net loss attributable to the Company for the nine months ended January 31, 2024. This was mainly attributable to the reasons discussed above, which included an increase in gross profit by $14,541,947, which was partly offset by decreased other income by $101,092, increased investment loss of $440,118, increased interest expenses by $598,870, increased operating expenses by $10,851,151 and increased income tax expense by $783,018.
Previous report
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 report
Net cash used by operating activities was approximately $0.9 million for the nine months ended January 31, 2024, which mainly comprised of net loss of $470,802 with non-cash adjustment to net income including depreciation expense of $274,476, bad debt reversal of $105,322, provision for inventory shrinkage reversal of $1,088, investment loss from 50% equity investee HKGF Arcadia store of $63,982, and changes in deferred taxes of $6,135. In addition, for the nine months ended January 31, 2024, we had cash outflow from 1) increased outstanding accounts receivable from related parties of $219,260, 2) increased inventories on hand of $40,147, 3) increased outstanding accounts receivables of $440,985, 4) payment for accounts payable of $1,451,371, and 5) a decrease to contract liabilities of $141,009.
Previous report
The net cash used by operating activities for the nine months ended January 31, 2024 was mainly offset by increased cash inflow from 1) prepayments of $1,065,243, 2) decrease to outstanding other receivables and other current assets of $124,182, 3) an increase of operating lease liabilities of $227,728, 4) an increase of taxes payables of $108,247, and 5) an increase of accounts payable to related parties of $128,599.
Previous report
We had a net income before noncontrolling interest of $1,296,896 for the nine months ended January 31, 2025, an increase of $1,767,698 compared with net loss of $470,802 for the nine months ended January 31, 2024. Our cash inflow of $6,386,143 for the nine months ended January 31, 2025 represented an increase of $7,273,582 cash inflow, from $887,439 cash outflow in the nine months ended January 31, 2024. The increased net cash inflow for the nine months ended January 31, 2025 was mainly due to increased cash inflow from net income by $1,767,698 with change of non-cash adjustments by $1,371,457, increased cash inflow from accounts receivable by $465,903, increased cash inflow from other receivables and other current assets by $517,915, increased cash inflow from accounts payable by $6,558,481, increased cash inflow from accounts payable from related party by $7,895, increased cash inflow from accrued expenses and other payables by $97,820, increased cash inflow from operating lease liabilities by $168,820 and increased cash inflow from outstanding income tax payable by $1,112,388, which was partly offset by increased cash outflow from prepayments by $796,530 and increased cash outflow from inventories by $4,156,985.
Previous report
Net cash used in investing activities was approximately $5.1 million for the nine months ended January 31, 2024, which mainly consisted of store renovation and purchase of equipment of $317,083, payment of intangible assets of $2.95 million, payment for investment into TMA Liquor Inc of $75,000, and payment for 50% investment into Good Fortune Arcadia supermarket of approximately $1.8 million.
Previous report
Net cash provided by financing activities was approximately $12.9 million for the nine months ended January 31, 2024, which mainly consisted of net proceeds from issuance of common stock of approximately $13.3 million, which was partially offset by repayment on loans payable of approximately $0.3 million, and repayment for a note payable of $150,000.
Reworded paragraphs (30)
Previous wording
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 wording
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%. As a result of the amendment, we made an additional investment of $62,000. During the three months ended July 31, 2025, the Company recorded $848,493 impairment charges for its investments in HKGF Market of Arcadia due to the Company’s plan of closing the supermarket business in this location.
Previous wording
The inflation rate for the United States was 3.0% for the nine months ended January 31, 2025, 3.4% for the year ended April 30, 2024 and 4.9% for the year ended April 30, 2023 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 2.7% for the three months ended July 31, 2025, 2.9% for the three months ended July 31, 2024 according to Bureau of Labor Statistics. Inflation increased our purchase costs, occupancy costs, and payroll costs.
Previous wording
As of January 31, 2025, we had approximately 376 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 per hour starting from January 1, 2024; 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 $3.5 million and $1.8 million for the three months ended January 31, 2025 and 2024, respectively. Our payroll and payroll tax expenses were $11.5 million and $5.2 million for the nine months ended January 31, 2025 and 2024, respectively.
Current wording
As of July 31, 2025, we had approximately 333 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 $16.00 per hour in 2024 and increased to $16. 50 per hour starting from January 1, 2025; in Arizona, the minimum wage was $14.35 per hour in 2024, and increased to $14.70 per hour starting from January 1, 2025. Our payroll and payroll tax expenses were $3.83 million and $3.44 million for the three months ended July 31, 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 Lawrence Wholesale, BRC International Inc, ONCO Food Corp., GF Distribution, Inc., and XHJC Holding Inc. For the three months ended January 31, 2025, these five suppliers accounted for 5%, 6%, -%, 7% and 5% of the Company’s total purchases, respectively. For the three months ended January 31, 2024, two suppliers accounted for 25%, and 16% of the Company’s total purchases, respectively. For the nine months ended January 31, 2025, these five suppliers accounted for 9%, 8%, 1%, 4%, and 7% of the Company’s total purchases, respectively. For the nine months ended January 31, 2024, three suppliers accounted for 30%, 18% and 9% 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, Gulf Cost Sea Trade Corp, BRC International Inc, and XHJC Holding Inc. For the three months ended July 31, 2025, these four suppliers accounted for 11%, 6%, 4% and 3% of the Company’s total purchases, respectively. For the three months ended July 31, 2024, three suppliers accounted for 11%, 11% and 9% 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 three and nine months ended January 31, 2025 and 2024. We spent $0.24 million for the three months ended January 31, 2025 for repairs and maintenance and supermarket renovation, a decrease of $0.11 million compared to $0.35 million for the three months ended January 31, 2024 Lee. We spent $0.69 million (including $0.4 million for Lee Lee) for the nine months ended January 31, 2025 for repairs and maintenance and supermarket renovation, an increase of $0.25 million compared to $0.44 for the nine months ended January 31, 2024 mainly due to the acquisition of our new subsidiary Lee Lee.
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 three months ended July 31, 2025 and 2024. We spent $0.24 million for the three months ended July 31, 2025 for repairs and maintenance and supermarket renovation, a decrease of $0.06 million compared to $0.29 for the three months ended July 31, 2024.
Previous wording
As reflected in the accompanying consolidated financial statements, for the three and nine months ended January 31, 2025, the Company had a net income of $1,011,763 and $1,456,662, respectively. However, the Company had an accumulated deficit of approximately $1.36 million and negative working capital of $11.50 million as of January 31, 2025. The Company also need approximately $8.0 million cash to repay Lee Lee's acquisition price, 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.
Current wording
As reflected in the accompanying unaudited consolidated financial statements, for the three months ended July 31, 2025, the Company had a net loss of $784,798 from continuing operation. The Company had an accumulated deficit of $3.19 million and negative working capital of $9.78 million as of July 31, 2025.
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 three and nine months ended January 31, 2025 and 2024. The Company provided a reserve (reversal) for inventory shrinkage of $27,639 and $2,471 for the three months ended January 31, 2025 and 2024, respectively. The Company provided a reserve (reversal) for inventory shrinkage of $342,472 and $(1,088) for the nine months ended January 31, 2025 and 2024, respectively.** **
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 three months ended July 31, 2025 and 2024. The Company provided a reserve for inventory shrinkage of $215,594 and $204,604 for the three months ended July 31, 2025 and 2024, respectively.
Previous wording
The Company’s contract liability related to gift cards was $769,739 and $965,696 as of January 31, 2025 and April 30, 2024, respectively.
Current wording
The Company’s contract liability related to gift cards was $675,428 and $701,929 as of July 31, 2025 and April 30, 2025, 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 $34.1 million for the three months ended January 31, 2025, an increase of approximately $20.6 million or 151.1%, from approximately $13.6 million for the three months ended January 31, 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 $21.6 million and increased sales of Maison El Monte by $0.2 million, which was partly offset by decreased sales of Maison Monterey Park by $0.5 million, decreased sales of Maison San Gabriel by $0.5 million and decreased sales of Maison Monrovia by $0.3 million, as compared to the three months ended January 31, 2024. Our four California-based supermarkets contributed $12.5 million in revenue during the three months ended January 31, 2025, a decrease of approximately $1.1 million, as compared to the three months ended January 31, 2024. The $1.1 million decrease of our California-based supermarkets was mainly due to increased competition from newly opened Asian supermarkets in nearby area, the effect of certain COVID-19 pandemic-era relief programs ending in fall 2023 such as losing access to foods stamps due to resume of work requirement for food stamps.
Current wording
Our net revenues were approximately $27.2 million for the three months ended July 31, 2025, a decrease of approximately $1.0 million or 3.6%, from approximately $28.2 million for the three months ended July 31, 2024. The decrease in net revenues was driven by decreased sales of Maison Monterey Park by $0.8 million, decreased sales of Maison San Gabriel by $0.3 million, decreased sales of Maison Monrovia by $0.2 million, which was partly offset by increased sales of Lee Lee stores by $0.3 million, as compared to the three months ended July 31, 2024. Our California-based supermarkets contributed $8.7 million in revenue during the three months ended July 31, 2025, a decrease of approximately $1.3 million, as compared to the three months ended July 31, 2024. The $1.3 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. For the three months ended July 31, 2025 and 2024, revenue for Maison El Monte were $753,579 and $1,471,289, respectively. We closed our Maison El Monte store on June 7, 2025 due to its continuous loss as well as our ongoing commitment to improve its profitability and support sustainable growth,
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 $16.2 million, from $10.4 million for the three months ended January 31, 2024, to approximately 26.6 million for the three months ended January 31, 2025. The increase in cost of revenues was mainly from our newly acquired subsidiary, Lee Lee (acquired in April 2024), by $17.0 million, which was partly offset by decreased cost of revenues from our four California-based supermarkets by $0.8 million.
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 $0.6 million, from $20.0 million for the three months ended July 31, 2024, to approximately $20.6 million for the three months ended July 31, 2025. The increase in cost of revenues was mainly from Lee Lee stores by $1.7 million, which was partly offset by decreased cost of revenues from our four California-based supermarkets by $1.1 million. For the three months ended July 31, 2025 and 2024, Cost of revenue for Maison El Monte were $767,419 and $1,343,298.
Previous wording
Gross profit was approximately $7.5 million and $3.2 million for the three months ended January 31, 2025 and 2024, respectively. Gross margin was 22.1% and 23.4% for the three months ended January 31, 2025 and 2024, respectively. Our supermarkets’ sales profit margins decreased by 1.4% for the three months ended January 31, 2025 compared to the three months ended January 31, 2024. The decrease in our gross profit was mainly due to decreased gross profit from Maison Monterey Park resulting from increased competition from newly opened Asian supermarkets in nearby area.
Current wording
Gross profit was approximately $6.6 million and $8.1 million for the three months ended July 31, 2025 and 2024, respectively. Gross margin was 24.2% and 28.9% for the three months ended July 31, 2025 and 2024, respectively. Our supermarkets’ sales profit margins decreased by 4.7% for the three months ended July 31, 2025 compared to the three months ended July 31, 2024. The decrease in our gross profit was mainly due to the increase cost of goods sold due to inflation. For the three months ended July 31, 2025 and 2024, gross profit (loss) for Maison El Monte were $(13,840) and $127,991, respectively. We sold products in Maison El Monte store at a big discount due to the closure of the store.
Previous wording
Total operating expenses were approximately $6.4 million for the three months ended January 31, 2025, an increase of approximately $2.9 million, compared to approximately $3.5 million for the three months ended January 31, 2024. Total operating expenses as a percentage of revenues were 18.8% and 25.7% for the three months ended January 31, 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, advertising and promotion expense, postage & delivery expense and merchant service charges as result of the acquisition of Lee Lee. Payroll expense increased by $1.8 million in the three months ended January 31, 2025, as compared to the three months ended January 31, 2024 due to the increase of hourly rate and increased number of employees due to the acquisition of Lee Lee. Utility expenses increased by $0.2 million in the three months ended January 31, 2025, as compared to the three months ended January 31, 2024. Bank service charges increased by $0.4 million in the three months ended January 31, 2025, as compared to the three months ended January 31, 2024 due to increased sales describe above.
Current wording
Total operating expenses were approximately $6.4 million for the three months ended July 31, 2025, an increase of approximately $0.3 million, compared to approximately $6.1 million for the three months ended July 31, 2024. Total operating expenses as a percentage of revenues were 23.5% and 21.5% for the three months ended July 31, 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 and merchant service charges , but was partly offset by decreased utilities expense. Payroll expense increased by $0.4 million in the three months ended July 31, 2025, as compared to the three months ended July 31, 2024 due to the increase of hourly rate. Merchant service charges increased by $53,723 in the three months ended July 31, 2025, as compared to the three months ended July 31, 2024 due to increased customers who use credit card. Utility expenses decreased by $0.1 million in the three months ended July 31, 2025, as compared to the three months ended July 31, 2024.
Previous wording
Other income were $158,176 for the three months ended January 31, 2025 compare to other expense of $50,306 for the three months ended January 31, 2024. For the three months ended January 31, 2025, other expenses mainly consisted of investment loss of $71,023, which was partly offset by other income of $229,199. For the three months ended January 31, 2024, other expenses mainly consisted of investment loss of $51,204 from HKGF Arcadia, which was partially offset by other income of $898.
Current wording
For the three months ended July 31, 2024, other expenses mainly consisted of investment loss from equity method investment of $206,803, which was partly offset by other income of $9,571.
Previous wording
Interest expense was $269,059 for the three months ended January 31, 2025, an increase of $249,634 from $19,425 for the three months ended January 31, 2024. For the three months ended January 31, 2025, the interest expense was for the SBA Loans and note payable arising from the acquisition of Lee Lee. For the three months ended January 31, 2024, the interest expense was for the SBA Loans and the loans with American First National Bank (the “AFNB Loans”). The AFNB Loans were repaid in full as of April 30, 2024.
Current wording
Interest expense was $652,409 for the three months ended July 31, 2025, an increase of $473,353 from $179,056 for the three months ended July 31, 2024. For the three months ended July 31, 2025, the interest expense was for the SBA loans, convertible note and note payable arising from the acquisition of Lee Lee. For the three months ended July 31, 2024, the interest expense was for the SBA loans and note payable arising from the acquisition of Lee Lee.
Previous wording
Net income attributable to the Company was $1,011,763 for the three months ended January 31, 2025, an increase of $1,560,717, or 284.3%, from a $548,954 net loss attributable to the Company for the three months ended January 31, 2024. This was mainly attributable to the reasons discussed above, which included an increase in gross profit by $4,353,838, which was partly offset by increased investment loss by $19,819, increased interest expenses by $249,634, and increased operating expenses by $2,932,205.
Current wording
Net loss attributable to the Company from continuing operation was $784,798 for the three months ended July 31, 2025, an increase of net loss of $1,895,934, or 170.6%, from a net income of $1,111,136 attributable to the Company for the three months ended July 31, 2024. This was mainly attributable to the reasons discussed above, which included a decrease in gross profit by $1,578,514 and increased operating expenses by $307,670.
Previous wording
Cash Flows for the Nine Months Ended January 31, 2025 Compared to the Nine Months Ended January 31, 2024
Current wording
Cash Flows for the three Months Ended July 31, 2025 Compared to the three Months Ended July 31, 2024
Previous wording
As of January 31, 2025, we had cash, cash equivalents of approximately $445,357. We had net income attributable to us of $1,456,662 for the nine months ended January 31, 2025, and had a working capital deficit of approximately $11.5 million as of January 31, 2025. As of January 31, 2025, the Company had outstanding loan facilities of approximately $2.51 million SBA loan and $8.29 million secured senior note payable due to the acquisition of Lee Lee.
Current wording
As of July 31, 2025, we had cash and cash equivalents of approximately $1,070,802. We had net loss from continuing operation attributable to us of $784,798 for the three months ended July 31, 2025, and had a working capital deficit of approximately $9.78 million as of July 31, 2025. As of July 31, 2025, the Company had outstanding loan facilities of approximately $2.60 million SBA loans, $4.88 million secured senior note payable due to the acquisition of Lee Lee but which was repaid in full on September 8, 2025, and $3.00 million convertible note payable.
Previous wording
We used part of the proceeds from our IPO to support our business expansion described above. We may also seek additional financing, to the extent needed, and there can be no assurance that such financing will be available on favorable terms, or at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may also seek to issue additional debt or obtain financial support from shareholders.
Current wording
We may also seek additional financing, to the extent needed, and there can be no assurance that such financing will be available on favorable terms, or at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may also seek to issue additional debt or obtain financial support from shareholders.
Previous wording
The following table summarizes our cash flow data for the nine months ended January 31, 2025 and 2024.
Current wording
The following table summarizes our cash flow data for the three months ended July 31, 2025 and 2024.
Previous wording
Net cash provided by operating activities was approximately $6.4 million for the nine months ended January 31, 2025, which mainly comprised of net income of $1,296,896, add-back of non-cash adjustments to net income including depreciation and amortization expense of $779,593, inventory impairment of $342,472, bad debt expense of $29,493 and investment loss from 49% equity investee HKGF Arcadia store of $463,325 and investment loss from 10% cost investee HKGF Alhambra store of $40,775. In addition, for the nine months ended January 31, 2025, we had cash inflow from (i) decrease to other receivables and other current assets of $642,097, (ii) decrease to prepayments of $268,713, (iii) increased outstanding accounts payable of $5,243,603 including accounts payable from related parties of $136,494, (iv) increased outstanding income tax payable of $1,220,635, (v) increased operating lease liabilities of $396,548, and (vi) increase of accrued expenses and other payables of $88,366.
Current wording
Net cash provided by operating activities was approximately $3.6 million for the three months ended July 31, 2024, which mainly comprised of net income of $617,826, add-back of non-cash adjustments to net income including depreciation and amortization expense of $266,895, inventory impairment of $204,604, and investment loss from 49% equity investee HKGF Arcadia store of $166,028 and investment loss from 10% cost investee HKGF Alhambra store of $40,775. In addition, for the three months ended July 31, 2024, we had cash inflow from (i) decrease to other receivables and other current assets of $752,663, (ii) increased outstanding accounts payable of $2,091,840, (iii) increased outstanding of income tax payable of $713,504, (iv) increased operating lease liabilities of $134,896, and (iv) increase of other long-term payables of $15,432.
Previous wording
However, our net cash provided by operating activities for the nine months ended January 31, 2025 was mainly offset by an increase of inventories of $4,197,132, an increase of accounts receivable from related parties of $61,349, and an increase of payment for contract liabilities of $195,957.
Current wording
However, our net cash provided by operating activities for the three months ended July 31, 2024 was mainly offset by an increase of prepayments of $105,091, an increase of inventories of $753,104, an increase of accounts receivable from related parties of $217,153, an increase of payment of accrued expenses and other payables of $246,651, and an increase of payment for contract liabilities of $67,886.*** ***
Previous wording
Net cash used in investing activities was $216,427 for the nine months ended January 31, 2025, which mainly consisted of store renovation and purchase of equipment of $154,427 and investment into HKGF Market of Arcadia, LLC of $62,000.
Current wording
Net cash used in investing activities was $102,631 for the three months ended July 31, 2024, which mainly consisted of store renovation and purchase of equipment of $102,631.
Previous wording
Net cash used in financing activities was approximately $5.7 million for the nine months ended January 31, 2025, which mainly consisted of repayment for a note payable arising from the acquisition of Lee Lee of $6,834,057, loan to related party of $65,000 and repayment on SBA loan payable of $48,624, which was partially offset by increase of bank overdraft of $1,200,983 and increase borrowing from related parties $21,238.
Current wording
Net cash used in financing activities was approximately $2.9 million for the three months ended July 31, 2024, which mainly consisted of repayment for a note payable arising from the acquisition of Lee Lee of $5,000,000 and repayment on SBA loan payable of $16,078, which was partially offset by increase of bank overdraft of $1,707,376 and increase borrowing from related parties $413,738.
Previous 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. 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.
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 January 31, 2025 and April 30, 2024, the Company’s aggregate balance on the three SBA loans was $2,512,675 and $2,561,299, respectively.
Current wording
As of July 31, 2025 and April 30, 2025, the Company’s aggregate balance on the three SBA loans was $2,602,237 and $2,616,050, respectively.
Previous wording
As of January 31, 2025, the Company had an outstanding note payable of $8,292,008 to the sellers of Lee Lee. The Company is required to repay the full amount before May 11, 2026.
Current wording
As of July 31, 2025 and April 30, 2025, the Company had an outstanding note payable of $4,882,060 and $5,642,060 to the sellers of Lee Lee. The Company repaid this note in full on September 8, 2025.
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. Additional information regarding our legal proceedings can be found in Note 17— “Commitments and Contingencies” to the consolidated financial Statements included in this Quarterly Report on Form 10-Q and is incorporated herein by reference.
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
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 schedule for March 9, 2026. In the complaint, the plaintiff’s counsel asked for a range of $300,000 to $3,000,000. It is too premature at this state of litigation to estimate the chance of prevailing.
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.
Previous wording
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. The management is not able to estimate the outcome of the case due to early stage of the case.
Current wording
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.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Net cash used in investing activities was $1,000 for the three months ended July 31, 2025, which mainly consisted of purchase of equipment of $1,000.
Current report — wording carried from elsewhere
Net cash used in financing activities was approximately $790,259 for the three months ended July 31, 2025, which mainly consisted of repayment for a note payable arising from the acquisition of Lee Lee of $760,000, loan to related party of $10,000, bank overdraft of $6,447, and repayment of loan payable of $13,812.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended January 31, 2025 and 2024
Previous report — wording carried elsewhere
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 $39.2 million, from $31.7 million for the nine months ended January 31, 2024, to approximately $70.9 million for the nine months ended January 31, 2025. The increase in cost of revenues was mainly from our newly acquired subsidiary, Lee Lee (acquired in April 2024), by $42.9 million, which was partly offset by decreased cost of revenues from our four California-based supermarkets by $3.7 million.