Maison Solutions Inc.
For the period ended Oct 31, 2025. Filed Dec 22, 2025.
View on SEC.govAbout this filing
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.
Oct 31, 2025 · Filed Dec 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 2025-07-31; filed 2025-09-22.
0001213900-25-090145
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-22.
0001213900-25-124433
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 144 previous paragraphs and 200 current paragraphs.
104 unchanged; 37 reworded; 49 added; 3 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 8 previous and 16 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 (49)
Current report
Going Concern
Current report
Critical Accounting Policy and Estimates
Current report
Derivative liability
Current report
A derivative is an instrument whose value is “derived” from an underlying instrument or index such as a future, forward, swap, option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in other contracts and for hedging activities.
Current report
The Company does not invest in separable financial derivatives or engage in hedging transactions. However, the Company entered into certain debt financing transactions as disclosed in Note 12 containing certain conversion features that have resulted in the instruments being deemed derivatives. The Company evaluates such derivative instruments to properly classify such instruments within equity or as liabilities in the financial statements.
Current report
The classification of a derivative instrument is reassessed at each reporting date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified.
Current report
Instruments classified as derivative liability is remeasured using the Black-Scholes model at each reporting period (or upon reclassification) and the change in fair value is recorded on the consolidated statement of operations. The Company had derivative liability of $2,462,150 and $1,004,230 as of October 31, 2025 and April 30, 2025, respectively.
Current report
Fair value of financial instruments
Current report
The Company’s financial instruments include in current assets and current liabilities are reported in the consolidated balance sheets at cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Fair value measurements of nonfinancial assets and non-financial liabilities are primarily used in the impairment analysis of intangible assets and long-lived assets.
Current report
The Company applies the fair value measurement accounting standard in accordance with ASC 820-10, “Fair Value Measurements and Disclosures,” whenever other accounting pronouncements require or permit fair value measurements. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are required to be disclosed by level within the following fair value hierarchy:
Current report
Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Current report
Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. As of October 31, 2025 and April 30, 2025, the Company has level 2 fair value calculations on derivative liability.
Current report
Level 3 – Inputs lack observable market data to corroborate management’s estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
Current report
When determining fair value, whenever possible the Company uses observable market data, and relies on unobservable inputs only when observable market data is not available.
Current report
The following is the change in derivative liability for the three months ended October 31, 2025:
Current report
The following is the change in derivative liability for the six months ended October 31, 2025:
Current report
Digital assets, net
Current report
The Company accounts for all digital assets held as crypto assets, a subset of indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles - Goodwill and Other - Crypto Assets. The Company has ownership of and control over its digital assets and the Company may use third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheet at fair value.
Current report
The Company determines and records the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”), based on quoted prices on the active exchange(s) that the Company has determined is the principal market for such assets (Level I inputs). The Company determines the cost basis of its digital assets using the specific identification of each unit received. Realized and unrealized gains and losses are recorded to other income (expense), net in the Company’s consolidated statement of operations. See Note 7 - Digital Assets, Net, for further information regarding digital assets.
Current report
During the three and six months ended October 31, 2025, the Company purchased digital assets. The table below summarizes the amounts shown on the Company’s consolidated balance sheet as of October 31, 2025.
Current report
Gross profit was approximately $6.5 million and $7.9 million for the three months ended October 31, 2025 and 2024, respectively. Gross margin was 23.4% and 26.9% for the three months ended October 31, 2025 and 2024, respectively. Our supermarkets’ sales profit margins decreased by 3.5% for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. The decrease in our gross profit was mainly due to the increase of cost of goods sold due to inflation while we kept our products’ selling price at a constant level or with a minimum increase for certain products in order to be competitive. For the three months ended October 31, 2025 and 2024, gross profit for Maison El Monte were nil and $266,133, respectively.
Current report
Total operating expenses were approximately $7.8 million for the three months ended October 31, 2025, an increase of approximately $0.8 million, compared to approximately $7.0 million for the three months ended October 31, 2024. Total operating expenses as a percentage of revenues were 28.3% and 23.7% for the three months ended October 31, 2025 and 2024, respectively.
Current report
The increase in operating expenses was primarily attributable to the increase in general and administrative expenses during the three months ended October 31, 2025 was primarily due to stock compensation expense increased by $1.1 million, which was partly offset by decreased professional expense by $98,725, decreased bad debt expense by $64,014, decreased office supplier by $63,615 and decreased office expense by $77,233.
Current report
The increase in operating expense was partially offset by decrease in selling expenses during the three months ended October 31, 2025 was primarily due to decreased payroll and employee benefits by $356,335, which was partly offset by increase in bank service charge by $78,698, increase in utilities expenses by $58,887 and increase in other G&A expenses by $58,644.
Current report
Other expenses were $3,324,260 for the three months ended October 31, 2025 compared to other expenses of $189,395 for the three months ended October 31, 2024. For the three months ended October 31, 2025, other expenses mainly consisted of 1) change in fair value of derivative liability of $35,914, 2) loss on note conversion of $2,694,951, 3) unrealized loss on digital assets investment of $882,404, which was partly offset by other income of $289,009, was mainly from providing comprehensive consulting services focusing on enhancing operational efficiency, optimizing resource allocation, and supporting overall business growth to other non-related supermarkets.
Current report
For the three months ended October 31, 2025 and 2024, other income for Maison El Monte were $248,683 and $3,104, respectively. For the three months ended October 31, 2025, other income mainly consisted of rent income of $240,000.
Current report
We generated net income from discontinued operation Maison El Monte of $ 241,037 and net loss of $ 253,937 for the three months ended October 31, 2025 and 2024, respectively.
Current report
Net Loss from Continuing Operation
Current report
Revenues
Current report
Cost of Revenues
Current report
Gross Profit and Gross Margin
Current report
Total Operating Expenses
Current report
Total operating expenses were approximately $14.2 million for the six months ended October 31, 2025, an increase of approximately $1.2 million, compared to approximately $13.0 million for the six months ended October 31, 2024. Total operating expenses as a percentage of revenues were 25.9% and 22.6% for the six months ended October 31, 2025 and 2024, respectively.
Current report
The increase in selling expenses during the six months ended October 31, 2025 was primarily due to increased bank service fees by $132,422, increased computer expense by $28,323, increased delivery expense by $48,816, which was partly offset by decreased utilities expense by $65,449.
Current report
For the six months ended October 31, 2025 and 2024, total operating expenses for Maison El Monte were $322,507 and $1,084,578, respectively.
Current report
Other Expenses, Net
Current report
Interest Expense
Current report
For the six months ended October 31, 2025 and 2024, interest expense for Maison El Monte were $8,885 and $8,637, respectively.
Current report
Income Taxes Provisions
Showing the first 40 of 49 passages. Open the source sections for the rest.
Removed paragraphs (3)
Previous report
Liquidity
Previous report
Critical Accounting Policy
Previous report
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.
Reworded paragraphs (37)
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%. 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.
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 and six months ended October 31, 2025, the Company recorded nil and $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
On November 3, 2023, we incorporated a wholly-owned subsidiary, AZLL LLC (“AZLL”), in Arizona. On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee Oriental Supermart, Inc. (“Lee Lee”) for an aggregate purchase price of approximately $22.2 million, consisting of: (i) $7.0 million in cash paid immediately at the closing of the transaction, and (ii) a senior secured promissory note (the “Secured Note”) with an original principal amount of approximately $15.2 million pursuant to a senior secured note agreement dated April 8, 2024 and amended on October 21, 2024 (as amended, the “Senior Secured Note Agreement”). Lee Lee is a three-store supermarket chain operating in Arizona under the name Lee Lee International Supermarkets and specializing in ethnic groceries.
Current wording
On November 3, 2023, we incorporated a wholly-owned subsidiary, AZLL LLC (“AZLL”), in Arizona. On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee Oriental Supermart, Inc. (“Lee Lee”) for an aggregate purchase price of approximately $22.2 million. Lee Lee is a three-store supermarket chain operating in Arizona under the name Lee Lee International Supermarkets and specializing in ethnic groceries.
Previous 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.
Current wording
The inflation rate for the United States was 3.0% for the six months ended October 31, 2025, 2.6% for the six months ended October 31, 2024 according to Bureau of Labor Statistics. Inflation increased our purchase costs, occupancy costs, and payroll costs.
Previous 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.
Current wording
As of October 31, 2025, we had approximately 334 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 $3.04 million and $3.89 million for the three months ended October 31, 2025 and 2024, respectively. Our payroll and payroll tax expenses were $6.87 million and $7.33 million for the six months ended October 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, 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.
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, Lucky Taro Total, Connex All Produce Total, and Gulf Cost Sea Trade Crop. For the three months ended October 31, 2025, these four suppliers accounted for 11.59%, 9.38%, 6.95% and 4.70% of the Company’s total purchases, respectively. For the six months ended October 31, 2025, these four suppliers accounted for 11.05%, 6.52%, 4.83% and 5.23% of the Company’s total purchases, respectively. For the three and six months ended October 31, 2024, Maison has major vendors, including Lawrence Wholesale, XHJC Holding Inc, K.C. Produce, and Bach Cuc. For the three months ended October 31, 2024, these four suppliers accounted for 14.23%, 6.84%, 6.60% and 6.39% of the Company’s total purchases, respectively. For the six months ended October 31, 2024, these four suppliers accounted for 11.66%, 8.78%, 5.51% and 8.83% 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 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.
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. We spent $0.23 million for the three months ended October 31, 2025 for repairs and maintenance and supermarket renovation, an increase of $0.09 million compared to $0.14 million for the three months ended October 31, 2024. We spent $0.47 million for the six months ended October 31, 2025 for repairs and maintenance and supermarket renovation, a decrease of $0.04 million compared to $0.43 million for the six months ended October 31, 2024.
Previous 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.
Current wording
As reflected in the accompanying unaudited consolidated financial statements, for the six months ended October 31, 2025, the Company had a net loss of $5,973,499 from continuing operation. The Company had an accumulated deficit of $8.2 million and negative working capital of $4.19 million as of October 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 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.
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 and six months ended October 31, 2025 and 2024. The Company provided a reserve for inventory shrinkage of $6,084 and $110,229 for the three months ended October 31, 2025 and 2024, respectively. The Company provided a reserve for inventory shrinkage of $221,678 and $314,833 for the six months ended October 31, 2025 and 2024, respectively.
Previous 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.
Current wording
The Company’s contract liability related to gift cards was $631,610 and $701,929 as of October 31, 2025 and April 30, 2025, respectively.
Previous 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,
Current wording
Our net revenues were approximately $27.6 million for the three months ended October 31, 2025, a decrease of approximately $1.7 million or 5.9%, from approximately $29.4 million for the three months ended October 31, 2024. The decrease in net revenues was driven by decreased sales of Maison Monterey Park by $0.8 million, decreased sales of Maison Monrovia by $0.1 million, which was partly offset by increased sales of Maison San Gabriel by $0.3 million and increased sales of Lee Lee stores by $0.5 million, as compared to the three months ended October 31, 2024. Our California-based supermarkets contributed $8.8 million in revenue during the three months ended October 31, 2025, a decrease of approximately $1.2 million, as compared to the three months ended October 31, 2024. The $1.3 million decrease was mainly due to high competition from nearby Asian supermarkets because there are too many supermarkets including Asia supermarkets in the surrounding area of our stores. For the three months ended October 31, 2025 and 2024, revenue for Maison El Monte were nil and $1,668,193, 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
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 wording
For the three months ended October 31, 2025 and 2024, total operating expenses for Maison El Monte were $7,646 and $521,063, respectively.
Previous 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.
Current wording
For the three months ended October 31, 2024, other expenses mainly consisted of investment loss from equity method investment of $226,274, which was partly offset by other income of $36,879.
Previous 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.
Current wording
Interest expense was $620,320 for the three months ended October 31, 2025, an increase of $382,246 from $238,074 for the three months ended October 31, 2024. For the three months ended October 31, 2025, the interest expense was for the SBA loans, bank loan, convertible note and note payable arising from the acquisition of Lee Lee. For the three months ended October 31, 2024, the interest expense was for the SBA loans and note payable arising from the acquisition of Lee Lee.
Previous wording
For the three months ended July 31, 2025 and 2024, interest expense for Maison El Monte were $4,655 and $4,331.
Current wording
For the three months ended October 31, 2025 and 2024, interest expense for Maison El Monte were $4,230 and $4,306, respectively.
Previous wording
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 wording
Income tax benefit was $88,676 for the three months ended October 31, 2025, a decrease of $649,661 from income taxes expense of $560,985 for the three months ended October 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.
Previous 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.
Current wording
Net loss attributable to the Company from continuing operation was $5,212,923 for the three months ended October 31, 2025, an increase of net loss of $5,150,765, or 8,286.6%, from a net loss of $62,158 attributable to the Company for the three months ended October 31, 2024. This was mainly attributable to the reasons discussed above, which included a decrease in gross profit by $1,433,815, increased loss on note conversion by $2,694,951, increased unrealized loss on digital assets investment by $882,404 and increased operating expenses by $849,500.
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 $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.
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 or sliced. The cost of revenues increased by $0.3 million, from $41.5 million for the six months ended October 31, 2024, to approximately $41.8 million for the six months ended October 31, 2025. The increase in cost of revenues was mainly from increased cost of revenues from Lee Lee stores by $2.5 million which was partly offset by decreased cost of revenues from our three California based supermarket by $2.3 million. For the six months ended October 31, 2025 and 2024, Cost of revenue for Maison El Monte were $767,419 and $2,745,358, respectively.
Previous 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.
Current wording
Gross profit was approximately $13 million and $16 million for the six months ended October 31, 2025 and 2024, respectively. Gross margin was 23.7% and 27.9% for the six months ended October 31, 2025 and 2024, respectively. Our supermarkets’ sales profit margins decreased by 4.1% for the six months ended October 31, 2025 compared to the six months ended October 31, 2024. The decrease in our gross profit was mainly due to the increase cost of goods sold due to inflation. For the six months ended October 31, 2025 and 2024, gross profit (loss) for Maison El Monte were $(13,840) and $394,124, respectively. We sold products in Maison El Monte store at a big discount due to the closure of the store.
Previous wording
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 wording
The increase in operating expenses was primarily attributable to the increase in general and administrative expenses during the six months ended October 31, 2025 was primarily due to stock compensation expense increased by $1.1 million and increased other G&A expenses by $0.3 million, which was partly offset decreased professional expense by $0.3 million.
Previous wording
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 wording
Other expenses were $3,366,675 for the six months ended October 31, 2025 compared to other expense of $386,627 for the six months ended October 31, 2024. For the six months ended October 31, 2025, other expenses mainly consisted of 1)investment loss of $848,493 from HKGF Arcadia, 2) loss on note conversion of $2,694,951, 3) unrealized loss on digital assets investment of $882,404, which was partly offset by change in fair value of derivative liability of $273,990 and other income of $785,183, which was mainly the $0.56 million consulting income from providing comprehensive consulting services focusing on enhancing operational efficiency, optimizing resource allocation, and supporting overall business growth to other non-related supermarkets.
Previous wording
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 wording
For the six months ended October 31, 2025, other expenses for Maison El Monte were $238,115. For the six months ended October 31,2024, other income for Maison El Monte were $7,208. For the six months ended October 31, 2025, other expenses mainly consisted of loss on disposal of store assets of $489,380, which was partly offset by other income by $260,150.
Previous wording
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 wording
We generated net loss from discontinued operation Maison El Monte of $584,462 and $701,442 for the six months ended October 31, 2025 and 2024, respectively.
Previous wording
Cash Flows for the three Months Ended July 31, 2025 Compared to the three Months Ended July 31, 2024
Current wording
Cash Flows for the six Months Ended October 31, 2025 Compared to the six Months Ended October 31, 2024
Previous 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.
Current wording
As of October 31, 2025, we had cash and cash equivalents of approximately $1,365,377. We had net loss from continuing operation attributable to us of $5,973,499 for the six months ended October 31, 2025, and had a working capital deficit of approximately $4.19 million as of October 31, 2025. As of October 31, 2025, the Company had outstanding loan facilities of approximately $2.60 million SBA loans, $5.0 million bank loan, and $6.00 million convertible note payable.
Previous wording
The following table summarizes our cash flow data for the three months ended July 31, 2025 and 2024.
Current wording
The following table summarizes our cash flow data for the six months ended October 31, 2025 and 2024.
Previous wording
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 wording
Net cash used in operating activities was approximately $636,479 for the six months ended October 31, 2025, which mainly consisted of net loss of $6.6 million, deducting non-cash adjustments from net loss of $389,565, including change in fair value of derivative liability of $273,990 and change in deferred taxes of $115,575. In addition, for the six months ended October 31, 2025, we had cash outflow from (i) increased outstanding accounts receivable from related parties of $53,030, (ii) increased purchase of inventories of $631,655, (iii) increased cash outflow on prepayment of $428,473, (iv) increased cash outflow on other receivables and other current assets of $286,944, (v) increased cash outflow on accounts payable from related parties of $26,420, (vi) increased payment for contract liabilities of $70,319, and (vii) increased payment of other long-term payables of $1,200.
Previous wording
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 wording
However, our net cash used in operating activities for the six months ended October 31, 2025 was offset by add-back of non-cash adjustments to net loss including depreciation and amortization expense of $441,519, inventory impairment of $221,678, loss on note convertible of $2,694,951, stock compensation expense of $1,075,730, amortization of OID and debt issuance cost of $755,532, 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 six months ended October 31, 2025, we had cash inflow from (i) collection of outstanding accounts receivables of $584,831, (ii) increased outstanding accounts payable of $17,882 , (iii) increased outstanding income tax payable of $345,559, (iv) increased operating lease liabilities of $218,711, and (v) increased accrued expenses and other payables of $185,398.
Previous 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.
Current wording
Net cash provided by operating activities was approximately $4.7 million for the six months ended October 31, 2024, which mainly comprised of net income of $301,731, add-back of non-cash adjustments to net income including depreciation and amortization expense of $527,543, inventory impairment of $314,833, bad debt expense of $62,483 and investment loss from 49% equity investee HKGF Arcadia store of $392,302 and investment loss from 10% cost investee HKGF Alhambra store of $40,775. In addition, for the six months ended October 31, 2024, we had cash inflow from (i) decrease to other receivables and other current assets of $599,926, (ii) increased outstanding accounts payable of $3,783,025 including accounts payable from related parties of $120,804, (iii) increased outstanding income tax payable of $1,222,747, (iv) increased operating lease liabilities of $268,791, and (v) increase of accrued expenses and other payables of $374,645.
Previous 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.*** ***
Current wording
However, our net cash provided by operating activities for the six months ended October 31, 2024 was mainly offset by an increase of inventories of $2,398,913, an increase of prepayments of $442,103, an increase of accounts receivable from related parties of $149,749, and an increase of payment for contract liabilities of $154,898.
Previous wording
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 wording
Net cash used in investing activities was $2.0 million for the six months ended October 31, 2025, which mainly consisted of purchase of equipment of $1,000 and purchase of digital assets of $2,037,096.
Previous 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.
Current wording
Net cash used in investing activities was $195,085 for the six months ended October 31, 2024, which mainly consisted of store renovation and purchase of equipment of $133,085 and investment into HKGF Market of Arcadia, LLC of $62,000.
Previous wording
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.
Current wording
Net cash provided by financing activities was approximately $3.3 million for the six months ended October 31, 2025, which mainly consisted of borrowing from bank loan of $5,250,000, proceeds from promissory note of $4,844,000, which was partially offset by bank overdraft of $385,615, loan to related party of $497,562, repayment of loan payable of $304,171, and repayment of notes payable arising from acquisition of Lee Lee of $5,642,060.
Previous 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.
Current wording
Net cash used in financing activities was approximately $4.2 million for the six months ended October 31, 2024, which mainly consisted of repayment for a note payable arising from the acquisition of Lee Lee of $5,300,000, loan to related party of $65,000 and repayment on SBA loan payable of $32,287, which was partially offset by increase of bank overdraft of $1,225,672 and increase borrowing from related parties $13,738.
Previous 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.
Current wording
As of October 31, 2025 and April 30, 2025, the Company’s aggregate balance on the three SBA loans was $2,591,887 and $2,616,050, respectively.
Previous 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.
Current wording
As of October 31, 2025 and April 30, 2025, the Company had an outstanding note payable of nil and $5,642,060 to the sellers of Lee Lee. The Company repaid this note in full on September 8, 2025.
Previous wording
On March 12, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor” or “Holder”), pursuant to which we agreed to issue and sell (i) a senior unsecured convertible promissory note in the aggregate original principal amount of $3,000,000 with an original issue discount of eight and a half percent (8.5%) (the “Initial Note”), convertible into shares (the “Conversion Shares”) of Class A common stock, $0.0001 par value per share of the Company (the “Common Stock”), and (ii) a note purchase warrant (the “Incremental Warrant”), exercisable for one or more senior unsecured convertible promissory notes in the aggregate original principal amount of up to $6,500,000 with an original issue discount of eight and a half percent (8.5%) and substantially in the form of the Initial Note (each an “Additional Note” and collectively, the “Additional Notes” and together with the Initial Note, the “Notes”). On March 12, 2025 (the “Closing Date”), we issued and sold to the Investor the Initial Note for a purchase price of $2,745,000, representing an original issue discount of eight and a half percent (8.5%), which matures on March 12, 2027, and the Incremental Warrant, which expires on March 12, 2028. The Initial Note bears interest at a rate to 5.25% per annum and may increase to a rate of 18.00% per annum upon the occurrence of an Event of Default (as defined in the Initial Note), for so long as such event remains uncured. Accrued interest will be paid on a monthly basis and, at the Company’s option, will either be paid in cash or paid-in-kind in shares of Common Stock, subject to certain terms and conditions as set forth in the Initial Note.
Current wording
On March 12, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor” or “Holder”), pursuant to which we agreed to issue and sell (i) a senior unsecured convertible promissory note in the aggregate original principal amount of $3,000,000 with an original issue discount of eight and a half percent (8.5%) (the “Initial Note”), convertible into shares (the “Conversion Shares”) of Class A common stock, $0.0001 par value per share of the Company (the “Common Stock”), and (ii) a note purchase warrant (the “Incremental Warrant”), exercisable for one or more senior unsecured convertible promissory notes in the aggregate original principal amount of up to $6,500,000 with an original issue discount of eight and a half percent (8.5%) and substantially in the form of the Initial Note (each an “Additional Note” and collectively, the “Additional Notes” and together with the Initial Note, the “Notes”). On March 12, 2025 (the “Closing Date”), we issued and sold to the Investor the Initial Note for a purchase price of $2,745,000, representing an original issue discount of eight and a half percent (8.5%), which matures on March 12, 2027, and the Incremental Warrant, which expires on March 12, 2028. The Initial Note bears interest at a rate to 5.25% per annum and may increase to a rate of 18.00% per annum upon the occurrence of an Event of Default (as defined in the Initial Note), for so long as such event remains uncured. Accrued interest will be paid on a monthly basis and, at the Company’s option, will either be paid in cash or paid-in-kind in shares of Common Stock, subject to certain terms and conditions as set forth in the Initial Note. The Conversion Price of the Initial Note is initially $1.38 per share of Class A common stock (the “Fixed Price”). Beginning on the effective date of the initial Registration Statement and on the same day of each successive month thereafter (each, a “Fixed Price Reset Date”), the Conversion Price will be reduced to the lower of (i) the then-effective Fixed Price and (ii) 95% of the lowest daily VWAP during the ten (10) consecutive trading days immediately prior to such Fixed Price Reset Date (the “Variable Price”).
Previous wording
On October 17, 2024, a complaint was filed against HKGF Alhambra, HKGF Arcadia, Maison El Monte, Maison San Gabriel, Maison Monrovia, Maison Monterey Park and Tion Hin for unpaid invoices of seafood purchase for $115,388.39. The case management conference is scheduled for August 4, 2025. The management is not able to estimate the outcome of the case due to early stage of the case.
Current wording
On October 17, 2024, a complaint was filed against HKGF Alhambra, HKGF Arcadia, Maison El Monte, Maison San Gabriel, Maison Monrovia, Maison Monterey Park and Tion Hin for unpaid invoices of seafood purchase for $115,388. The case management conference is scheduled for January 5, 2026. The management is not able to estimate the outcome of the case due to early stage of the case.
Rearranged current paragraphs (10)
Current report — wording carried from 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 or sliced. The cost of revenues decreased by $0.3 million, from $21.5 million for the three months ended October 31, 2024, to approximately $21.2 million for the three months ended October 31, 2025. The decrease in cost of revenues was mainly from Maison Monrovia, Maison San Gabriel and Maison Monterey Park by $0.2 million, $0.3 million and $ 0.6 million respectively, resulting from decreased sales in these stores, which was partly offset by increased cost of revenues from Lee Lee stores by $0.8 million. For the three months ended October 31, 2025 and 2024, Cost of revenue for Maison El Monte were nil and $1,402,060, respectively.
Current report — wording carried from elsewhere
Net Income (Loss) from Discontinued Operation
Current report — wording carried from elsewhere
Results of Operations for the Six Months Ended October 31, 2025 and 2024
Current report — wording carried from elsewhere
*** ***Our net revenues were approximately $54.8 million for the six months ended October 31, 2025, a decrease of approximately $2.7 million or 4.8%, from approximately $57.5 million for the six months ended October 31, 2024. The decrease in net revenues was driven by decreased sales of Maison Monterey Park by $1.6 million, decreased sales of Maison Monrovia by $0.4 million, decreased sales of Maison San Gabriel by $0.6 million and decreased sales of Lee Lee stores by $0.2 million, as compared to the six months ended October 31, 2024. Our California-based supermarkets contributed $17.5 million in revenue during the six months ended October 31, 2025, a decrease of approximately $2.6 million, as compared to the six months ended October 31, 2024. The $2.6 million decrease was mainly due to high competition from nearby Asian supermarkets because there are too many supermarkets including Asia supermarkets in the surrounding area of our stores. For the six months ended October 31, 2025 and 2024, revenue for Maison El Monte were $753,579 and $3,139,482, 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.
Current report — wording carried from elsewhere
For the six months ended October 31, 2024, other expenses mainly consisted of investment loss from equity method investment of $433,077, which was partly offset by other income of $46,450.
Current report — wording carried from elsewhere
Interest expense was $1,272,729 for the six months ended October 31, 2025, an increase of $855,599 from $417,130 for the six months ended October 31, 2024. For the six months ended October 31, 2025, the interest expense was for the SBA loans, bank loan, convertible note and note payable arising from the acquisition of Lee Lee. For the six months ended October 31, 2024, the interest expense was for the SBA loans and note payable arising from the acquisition of Lee Lee.
Current report — wording carried from elsewhere
Income tax expense was $231,867 for the six months ended October 31, 2025, a decrease of $957,898 from income taxes expense of $1,189,765 for the six months ended October 31, 2024. The decrease in income tax expense was mainly due to the taxable 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 — wording carried from elsewhere
Net loss attributable to the Company from continuing operation was $6,044,075 for the six months ended October 31, 2025, an increase of net loss of $7,047,248, or 702.5%, from a net income of $1,003,173 attributable to the Company for the six months ended October 31, 2024. This was mainly attributable to the reasons discussed above, which included a decrease in gross profit by $3,012,329 and increased operating expenses by $1,157,170, increased loss on conversion by $2,694,951, increased unrealized loss on digital assets investment by $882,404, which is partly offset by increased other income by $738,733.
Current report — wording carried from elsewhere
The Additional Note is a senior unsecured obligation of the Company and has a maturity date of October 22, 2027. The Additional Note bears interest at a rate to 5.25% per annum and may increase to a rate of 18.00% per annum upon the occurrence of an Event of Default (as defined in the Initial Note), for so long as such event remains uncured. Accrued interest will be paid on a monthly basis and, at the Company’s option, will either be paid in cash or paid-in-kind in shares of Common Stock, subject to certain terms and conditions as set forth in the Initial Note.
Current report — wording carried from elsewhere
On September 28, 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 all shares of Class A Common Stock issuable upon conversion of the 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 initial 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 90th 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 2nd business day following the date on which the Company is so notified if such date precedes the initial Effectiveness Deadline.