AIRWA INC.
For the period ended Apr 30, 2026. Filed Sep 21, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 21, 2026
YYAI$0.85-8.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-04-30; filed 2025-08-13.
0001641172-25-023612
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2026-04-30; filed 2026-09-21.
0001493152-26-043608
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 91 current paragraphs.
29 unchanged; 19 reworded; 43 added; 19 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 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 (43)
Current report
Through Rafael AI, the Company provides end-to-end full-cycle services designed to empower enterprises to transition seamlessly from raw data to intelligent applications. This business is structured around five interconnected AI-related modules, together forming a closed-loop system in which data generation, model refinement, and operational feedback continuously reinforce one another. Its services are tailored to specialist industries such as healthcare, industrial manufacturing, and autonomous driving. We recorded $6.6 million of revenue from our AI services business in the final quarter of our financial year ended April 30, 2026, which was the period during which Rafael AI was our subsidiary.
Current report
Through YYEM, the Company owns patents and other proprietary technology for licensing out to partners worldwide, enabling them to create localized matchmaking experiences tailored to their specific markets and cultures. By providing such patents, we aim to enable our partners to develop matchmaking services that resonate with local users while benefiting from advanced matching algorithms, safety features, and engagement tools. Our technology licensing business generated royalties of $7.3 million in our financial year ended April 30, 2026.
Current report
Our subsidiary YYEM also provides digital marketing solution services related to performance advertising across diversified advertising channels such as Google, TikTok, and Meta. Services typically include marketing strategy and planning; platform account setup and media placement; production of advertising creative (video and other content); and ongoing campaign monitoring, analytics, optimization, and reporting. We have developed key relationships integral to this business, both with companies seeking to promote their products and services and with companies that have direct buying relationships with the platforms, which we are leveraging as we build market share. This business generated approximately $12.0 million of revenue in our financial year ended April 30, 2026.
Current report
On July 27, 2026, we entered into a share purchase agreement with Nova Innovation Tech Ltd, a BVI company, to acquire all the share capital of Oceancrest Investment Holdings Limited, a BVI holding company, which owned 97% of Best Life for $50 million (the “Base Consideration”), payable in USDT (Tether) or cash, with additional earn-out amounts payable if Best Life achieves specified revenue targets.
Current report
Best Life is a cross-border consumer-goods distribution and e-commerce business, leveraging direct brand sourcing, import expertise, bonded warehousing, platform operations, offline retail access, and selected private-label development to sell Japanese and other international consumer products across China and other overseas markets. It has in place business relationships with brand owners and manufacturers upstream and with e-commerce platforms, supermarkets, specialty retailers, and online resellers downstream. While Best Life historically has focused on Asia, it has recently launched an international expansion program to the UK, the U.S., Canada, and New Zealand.
Current report
On July 30, 2026, we closed on the transaction, paying $30 million toward the purchase price and receiving all of the shares of the holding company, giving us a 97% equity interest in Best Life. By October 28, we are required to pay the balance of the Base Consideration. If the Target achieves gross revenue of $10 million for the fiscal year ending December 31, 2026, the Company will make an earn-out payment of $30 million, and if it achieves gross revenue of $25 million for the fiscal year ending December 31, 2027, the Company will make an earn-out payment of $50 million.
Current report
To fund the purchase of Best Life, we sold 4,526,380 shares of Common Stock on a split-adjusted basis, following the financial year end on April 30, 2026, under the Sales Agreement described below underResults of Operations — Liquidity and Capital Resources — Financing Activities, raising approximately $16.3 million in gross proceeds.
Current report
Because the acquisition of Best Life occurred after April 30, 2026, it does not form part of management’s analysis of our financial condition and results of operations as of, and for the financial year ended on, that date.
Current report
Our revenue is generated from the sale of customized “data-to-AI” end-to-end solutions, from license fees paid by customers for the use of our technology, and from digital marketing solution services.
Current report
AI services revenue is generated from the sale of customized “data-to-AI” end-to-end solutions directly to customers. These solutions consist of highly integrated software deliverables that are designed and customized based on customers’ specific requirements. Revenue from the sale of such solutions is recognized when control of the completed software solution is transferred to and accepted by the customer.
Current report
Advertising revenue is generated from the provision of digital marketing solution services related to performance advertising across diversified advertising channels.
Current report
Cost of revenue consists of costs directly attributable to the generation of revenue.
Current report
For our AI services business, cost of revenue consists primarily of salaries, amortization charges related to intangible assets, and depreciation of property and equipment that are directly attributable to the development and delivery of our customized “data-to-AI” end-to-end solutions.
Current report
For our advertising business, cost of revenue consists primarily of media and platform costs and third-party cooperating-platform and campaign delivery costs.
Current report
Our revenue increased by $12.9 million, or 101%, from $12.8 million for the year ended April 30, 2025 to $25.8 million for the year ended April 30, 2026, driven by the recognition of approximately $6.6 million of AI services income following the acquisition of Rafael AI and the recognition of approximately $12.0 million of advertising income following the launch of our advertising business, partially offset by an approximately $5.7 million decrease in license revenue following the termination of the related license agreements.
Current report
Cost of Revenue
Current report
Our cost of revenue increased by $19.5 million, or 655%, from $3.0 million to $22.5 million, primarily due to increased costs as we grew with the addition of our advertising and new AI-related businesses during the year ended April 30, 2026. In particular, Rafael AI had an uptick in expenditure on medical-related research and development from February through April 2026 as it sought to establish itself as a leader in Southeast Asia in developing AI models for traditional Chinese medicine. As a result, gross profit decreased by $6.5 million, or 66%, from $9.8 million to $3.3 million.
Current report
Selling and Marketing Expenses
Current report
Selling and marketing expenses, which primarily consist of salaries, office expenses, rent, utilities, and marketing fees, increased by $0.7 million, from nil for the year ended April 30, 2025, as we promoted our new advertising services and our newly acquired AI services business.
Current report
General and Administrative Expenses
Current report
General and administrative expenses, which mainly relate to salaries, professional fees, and other general office and administrative expenses, increased by $5.5 million, or 167%, from $3.3 million for the year ended April 30, 2025 to $8.7 million for the year ended April 30, 2026, primarily driven by the growth of our business through the acquisition of Rafael AI and related fees and expenses. Bad debt increased by approximately $1.0 million; approximately $1.3 million was paid as commission in relation to the acquisition of Rafael AI; and approximately $2.4 million of professional expenses were paid in relation to the acquisition, such as legal fees, accounting fees, and audit fees.
Current report
Operating activities
Current report
Net cash used in operating activities for the year ended April 30, 2026, was $20.9 million, compared with $0.4 million for the year ended April 30, 2025. The $20.5 million increase in net cash used in operating activities was primarily attributable to the change from net income of $4.6 million in fiscal year 2025 to a net loss of approximately $15.4 million in fiscal year 2026, together with increased cash deployed into digital assets and contract costs. As detailed below, these increases in cash usage were partially offset by a significantly lower increase in accounts receivable in fiscal year 2026, as well as increases in contract liabilities and accounts payable.
Current report
For the year ended April 30, 2026, net cash used in operating activities was $20.9 million, which was primarily attributable to (i) net non-cash and other reconciling items of $20.2 million, primarily consisting of depreciation and amortization expense, impairment losses on intangible assets, an investment in Brightstar, amounts due from a director, other receivables, and a loss on financial assets at fair value through profit or loss; (ii) an increase of approximately $19.2 million in digital assets, primarily reflecting cash used to acquire digital assets during the year; (iii) an increase of $3.8 million in contract costs, reflecting costs incurred and deferred in connection with customer contracts in our AI services business; (iv) an increase of $1.6 million in accounts receivable, primarily attributable to the timing of customer billings and collections; (v) an increase of $0.7 million in prepayments and deposits, primarily reflecting advance payments made in the ordinary course of business; and (vi) a decrease of $4.9 million in income taxes payable, primarily reflecting the settlement of tax liabilities during the year. These cash outflows were partially offset by (i) an increase of approximately $4.4 million in contract liabilities, primarily attributable to consideration received from AI services customers in advance of the satisfaction of the related performance obligations; (ii) an increase of $5.0 million in accounts payable, primarily attributable to the timing of payments to vendors and suppliers in our AI services business; (iii) a decrease of $0.6 million in other receivables, primarily attributable to the collection or settlement of previously outstanding balances; and (iv) an increase of $0.8 million in accrued expenses, primarily attributable to expenses incurred but not yet paid as of year-end.
Current report
For the year ended April 30, 2025, net cash used in operating activities was approximately $0.4 million, which was primarily attributable to $8.4 million of net cash used as a result of changes in operating assets and liabilities, partially offset by $3.4 million of non-cash items, primarily consisting of $3.0 million of depreciation and amortization expense on our patents, a $0.3 million loss on financial assets at fair value through profit or loss, and shares issued to prior management upon the exercise of warrants issued in earlier periods for services rendered. Changes in operating assets and liabilities included (i) an increase of $12.1 million in accounts receivable, primarily attributable to revenue growth and the timing of customer collections; and (ii) an increase of $0.6 million in prepayments and deposits, primarily attributable to advance payments made by the Company in the ordinary course of business. These cash outflows were partially offset by (i) an increase of $2.3 million in accrued expenses, mainly attributable to the timing of payments for professional fees, compensation, and other operating expenses; and (ii) an increase of $2.0 million in income taxes payable, as income tax liabilities recognized during the year exceeded cash tax payments.
Current report
The cash flow impact from accounts receivable improved significantly in fiscal year 2026. Accounts receivable increased by $1.6 million, compared with an increase of $12.1 million during fiscal year 2025, resulting in a significantly lower amount of operating cash being held as accounts receivable in fiscal year 2026.
Current report
Investing Activities
Current report
Net cash used in investing activities for the year ended April 30, 2026, was $164.1 million, compared with nil for the year ended April 30, 2025. The net cash used in investing activities in fiscal year 2026 was attributable to the Company’s cash payment of $36.0 million for 30% of YYEM and its purchase of $140.0 million of USDT which was later used as consideration for the purchase of Rafael AI but which was offset in part by the acquisition of Rafael AI’s approximately of $11.8 million of cash and cash equivalents.
Current report
Financing Activities
Current report
Net cash provided by financing activities for the year ended April 30, 2026 was $197.7 million, compared with $0.4 million for the year ended April 30, 2025. This increase in financing cash inflows was primarily attributable to the Company’s use of external equity financing in fiscal year 2026. Financing cash inflows during this year primarily consisted of (i) $172.6 million of proceeds from at-the-market offerings of shares; (ii) $14.8 million of proceeds from a registered direct offering of shares; (iii) $5.8 million of proceeds from a private placement of shares to our Chairman at the time; and (iv) $4.6 million of proceeds from another private placement. The Company also received an immaterial amount of proceeds from the exercise of warrants for cash during the year.
Current report
In comparison, net cash provided by financing activities for the year ended April 30, 2025, was approximately $0.4 million, primarily attributable to an increase of approximately $0.7 million in amounts due to a related party, partially offset by an increase of approximately $0.3 million in amounts due from a related party. Accordingly, the year-over-year increase in financing cash flow primarily reflects a shift from limited related-party financing activities in fiscal year 2025 to substantial equity capital raising activities in fiscal year 2026.
Current report
On January 8, 2025, the Company entered into a sales agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”), pursuant to which the Company could sell from time to time, at its option, shares of the Company’s common stock through or to the Agent, as sales agent or principal. Sales under the Sales Agreement would be made pursuant to the Company’s registration statement on Form S-3 (File No. 333- 279880) (the “Registration Statement”), filed with the SEC on January 8, 2025, and were described in detail in the related base prospectus and prospectus supplement, as amended, included as part of the Registration Statement. The compensation payable to the Agent as sales agent would be 3.0% of the gross proceeds from each sale of shares through or to the Agent pursuant to the Sales Agreement. During the year ended April 30, 2026, the Company sold 1,147,525 shares of common stock pursuant to the Sales Agreement for aggregate gross proceeds of approximately $172.6 million. As of the date of this Annual Report, the Company is unable to sell shares under the Sales Agreement as the Registration Statement is not available for use as a result of the Company not being current in its reporting obligations under the Securities Exchange Act of 1934. The Company does not expect to be eligible to resume sales under the Sales Agreement until at least August 1, 2027.
Current report
Royalty income
Current report
Advertising revenue
Current report
The Company also provides digital marketing solution services related to performance advertising across diversified advertising channels (e.g., Google, Meta, etc.). Services typically include: (i) marketing strategy and planning; (ii) platform account setup and media placement; (iii) production of advertising creative (including video and other content); and (iv) ongoing campaign monitoring, analytics, optimization, and reporting.
Current report
Revenue from the Company’s performance advertising services is recognized over time because customers simultaneously receive and consume the benefits of the Company’s performance as the Company performs the services.
Current report
AI revenue
Current report
The Company acquired Rafael AI on January 30, 2026. Rafael AI generates revenue from the sale of customized “data-to-AI” end-to-end software solutions directly to customers. Rafael AI is the sole legal and beneficial owner of the software and enters into contracts with its customers as a principal in the related transactions. The sale of customized “data-to-AI” end-to-end solutions is considered a distinct product as it is highly integrated, interdependent, and interrelated. The customers cannot use any component on a standalone basis to obtain economic benefits. The contracts contain a single performance obligation, which is to deliver a complete integrated software solution to the customers in exchange for the agreed consideration. The performance obligation is satisfied when the customers obtain control upon completion and delivery of all software deliverables. The customers do not simultaneously receive and consume benefits as the Company performs the contracts and do not control the software during development. Furthermore, the software has no alternative use, and Rafael AI does not have an enforceable right to payment for partial performance. The terms of pricing and payment stipulated in the contract are fixed, without variable consideration, a significant financing component, non-cash consideration, and consideration payable to customers. Upon delivery of products, Rafael AI does not accept product returns or refunds except for quality issues. Rafael AI has obligations to make refunds when the product has not been delivered. Rafael AI usually provides a one-year product warranty for delivered products. Rafael AI recognizes revenue when control of the products has been transferred to customers. The transfer of control is considered complete when products have been accepted and received by customers. Amounts received in advance are recorded as contract liabilities. Contract liabilities are recognized as revenue when the products are delivered to, and accepted by, the customers. This activity falls within the scope of ASC 606.
Current report
In September 2025, the FASB issued ASU 2025-06,Intangibles—Goodwill and Other (Topic 350): Internal-Use Software. This standard simplifies the accounting for internal-use software costs and is effective for fiscal years beginning after December 15, 2026. The Company does not expect adoption of this standard to have a material impact on its financial position, results of operations, or cash flow.
Current report
In December 2025, FASB issued Accounting Standards Update ASU 2025-11,Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. This standard clarifies disclosure requirements for interim financial statements and is effective for interim periods beginning after December 15, 2026. Early adoption is permitted. The Company is assessing the potential impact of this guidance on its consolidated financial statements.
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Removed paragraphs (19)
Previous report
The Company operates through YYEM, a Hong Kong-based subsidiary established in November 2021 that is engaged in the emerging love and marriage market sector.
Previous report
YYEM’s mission is to empower global connections through innovative matchmaking technology. We own advanced patents and other proprietary technology which we license out, and we are using this intellectual property to develop an AI-powered matchmaking platform to license to partners worldwide, enabling them to create localized matchmaking experiences tailored to their specific markets and cultures. We believe our pioneering technology has the power to transform the matchmaking industry, leading to greater success for our licensees and their clients, and ultimately leading to more people finding successful life partnerships.
Previous report
We have licensing agreements in place with various entities to use the IP in numerous countries across Asia, Europe, and Africa, generating royalties of $12.8 million in our financial year ended April 30, 2025.
Previous report
In February 2025, YYEM entered into an agency agreement to develop content for TikTok across the MENA region, leveraging Twitch-hosted live-streaming in sports, gaming, and lifestyle categories. While no upfront payments were received, the agreement positions us to monetize end-user engagement once our influencer network is developed. Revenue under this agreement will depend on performance-based conversion metrics, and as of April 30, 2025, influencer network capabilities were still nascent. We consider this development a positive step toward the diversification of our revenue streams.
Previous report
On January 8, 2025, we entered into a sales agreement with A.G.P./Alliance Global Partners (“A.G.P.”) under a registered Form S-3 shelf registration, enabling us to raise up to $2,213,152 through periodic sales of common stock. We may sell shares via A.G.P. as agent, or to A.G.P. as principal, and will pay a 3% commission on gross proceeds, plus limited out-of-pocket expense reimbursements. No shares had been sold through this facility as of April 30, 2025, but the agreement provides strategic flexibility for future capital raising.
Previous report
On June 30, 2025, we executed a securities purchase agreement to issue 20 million units (each unit comprising one share of common stock and two five-year warrants with an exercise price of $0.89), targeting gross proceeds of $4.6 million. Closing is contingent on Nasdaq listing compliance and shareholder approval. The warrants allow for cashless exercise if no effective registration is in place. This financing, if consummated, will significantly improve liquidity and capital resources through 2025 and beyond.
Previous report
Expenses
Previous report
Our revenue increased by $7.6 million, or 147.0%, from $5.2 million for the year ended April 30, 2024 to $12.8 million for the year ended April 30, 2025, driven by royalty income from new licensees following the entry into agreements, initially in the form of binding term sheets, with three licensees in January 2024.
Previous report
Our cost of revenue increased by $1.8 million, or 153%, from $1.2 million to $3.0 million, primarily driven by higher amortization costs related to our greater level of intangible assets, many of which were acquired near the end of the financial year ended April 30, 2024. Gross profit increased by $5.8 million, or 145%, from $4.0 million to $9.8 million, driven by our higher royalty income described immediately above.
Previous report
General and administrative expenses, which mainly related to salaries, professional fees, and other general office and administrative expenses, increased by $3.1 million, from $164,000 to $3.3 million, primarily driven by the growth of our business as we increased royalty revenue and by the fact that in the year ended April 30, 2025, we began incurring costs relating to YYEM becoming an operating subsidiary of a Nasdaq-listed company. This included audit fees, legal fees, insurance premiums, and directors’ and officers’ compensation.
Previous report
We finance our operations primarily through cash generated from operations. We had working capital, or net current assets, of $16.0 million as of April 30, 2025, compared to $8.2 million as of April 30, 2024, an increase of approximately $7.6 million, or 93%. In comparison with a year prior, our accounts receivable as of April 30, 2025 increased by $10.0 million as we recognized royalty revenue over the course of the financial year in accordance with our recognition policy while the credit terms of our licensees permitted payment up to 90 days after the end of our financial year in order to afford them time to monetize the licensed technology. As of April 30, 2025, we had retained earnings of $6.1 million.
Previous report
As of April 30, 2025, we had cash and cash equivalents of $54,000, compared to $39,000 as of April 30, 2024.
Previous report
Net cash used in operating activities was $379,000 for the year ended April 30, 2025, compared with a net inflow of $2.5 million of cash from operating activities for the prior year, a decrease of $2.9 million in operating cash flow. A $2.0 million rise in our net income was partially offset by the combined effect of our non-cash adjustments, including a $10.0 million increase in our accounts receivable as described above, as well as sizable increases in amortization expense and income taxes payable as our business grew.
Previous report
Since our cash level was low in the period before payment from our licensees was due, we had no cash allocated to investing activities, neither putting cash into investments nor receiving cash from investments.
Previous report
The only cash flow we recorded as financing activities were two non-cash items: a $330,000 increase in the value of a guarantee given to the Company by our Chairman in respect of the value of listed shares we own; and $725,000 owed to our Chairman for amounts he paid on behalf of the Company during the year ended April 30, 2025.
Previous report
Prior to the acquisition by YYAI, YYEM was a limited liability company. As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for federal income taxes has been included in the financial statements. In the event of an examination of the Company’s tax return, the tax liability of the members could be changed if an adjustment in the Company’s income is ultimately sustained by the taxing authorities.
Previous report
Share-Based Payment
Previous report
The Company accounts for share-based compensation in accordance with ASC 718, “Compensation—Stock Compensation.” Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.
Previous report
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07 (“ASU 2023-07”). ASU 2023-07 requires more detailed information about reportable segments and expenses, including the requirement to disclose qualitative information about factors used to identify reportable segments and quantitative information about profit and loss measures and significant expense categories. ASU 2023-07 became effective for public companies in fiscal years beginning after December 15, 2023. The Company operates as a single reportable segment. The chief operating decision maker is the Company’s chief executive officer, who assesses performance based on total revenue, expenses, cash flows, and progress made in the Company’s ongoing development efforts. All of the Company’s long-lived assets are located in Hong Kong. The Company reports revenue by geographical location as required under the standard. The Company has analyzed ASU 2023-07 and determined that the required information is presented within the consolidated financial statements and note disclosures herein. The Company does not believe that ASU 2023-07 will have a material impact on the consolidated financial statements.
Reworded paragraphs (19)
Previous wording
Our revenue is generated from license fees paid by customers for the use of our technology.
Current wording
License revenue is generated from license fees paid by customers for the use of our technology.
Previous wording
Cost of revenue consists primarily of amortization charges against intangible assets (specifically, technology rights), which are directly attributable to revenue.
Current wording
For our technology licensing business, cost of revenue consists primarily of amortization charges related to intangible assets, specifically technology rights.
Previous wording
General and administrative expense primarily consists of salaries and benefits for employees involved in general corporate functions; professional fees for external legal, accounting, and other consulting services; traveling expenses; and other general office and administrative expenses.
Current wording
General and administrative expenses primarily consist of salaries and benefits for employees involved in general corporate functions; professional fees for external legal, accounting, and other consulting services; travel expenses; and other general office and administrative expenses.
Previous wording
The following is a summary of our cash flows from operating, investing, and financing activities for the years ended April 30, 2025 and 2024:
Current wording
The following table sets forth a summary of our cash flow for the years ended April 30, 2026 and 2025, as indicated.
Previous wording
Based on our current operating plans, we believe that our existing cash at the time of this filing will be sufficient to meet our anticipated operating needs for at least the next 12 months and that we will have sufficient financial resources available through capital markets fundraising if we should decide to incur additional capital expenditure or make other investments. Our future capital requirements will depend upon many factors, including competing technological and market developments, our R&D efforts, and decisions regarding acquisitions of further patents or companies or other assets.
Current wording
Based on our current operating plans, we believe that our existing cash at the time of this filing will be sufficient to meet our anticipated operating needs for at least the next 12 months and that we will have sufficient financial resources available through capital markets fundraising if we should decide to incur additional capital expenditure or make other investments and to pay amounts potentially owing under an earn-out in respect of Best Life. Our future capital requirements will depend upon many factors, including competing technological and market developments, our R&D efforts, and decisions regarding acquisitions of further companies or other assets, and there can be no guarantee that we will be able to raise sufficient funds on acceptable terms or at all.
Previous wording
Accounts receivable are stated at their historical carrying amount net of allowance for credit losses.
Current wording
Accounts receivable are stated at their historical carrying amount net of an allowance for credit losses.
Previous wording
The Company considered various factors, including nature, historical collection experience, the age of the accounts receivable balances, credit quality and specific risk characteristics of its customers, and current economic conditions to develop an estimate of credit losses. Additionally, the Company makes specific allowance for credit losses based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. As of April 30, 2025 and 2024, the Company had made no reserves.
Current wording
The Company considers various factors, including the nature of the receivable, historical collection experience, and age of the accounts receivable balances; the credit quality and specific risk characteristics of its customers; and current economic conditions, to develop an estimate of credit losses. Additionally, the Company makes specific allowance for credit losses based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. As of April 30, 2026 and 2025, the Company recorded an allowance for credit losses of $300,000 and nil, respectively, against other receivables.
Previous wording
Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the years ended April 30, 2025 and 2024 was nil.
Current wording
Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flow expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flow is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Company recognized an impairment charge of approximately $7.5 million for the year ended April 30, 2026. No impairment charge was recognized for the prior year.
Previous wording
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.
Current wording
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements of assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.
Previous wording
The Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled for its products and services. Accounts receivable are recorded when obligations have been performed and billed to the customer. During the period after the right to payment has become unconditional but before a bill has been issued, the amount owed is recorded as accrued revenue (receivables). The Company’s terms and conditions vary by customer and typically provide net 90-day terms.
Current wording
In the case of royalty income, the Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled for its products and services. Accounts receivables are recorded when the right to consideration becomes unconditional. The Company’s terms and conditions vary by customer but typically provide net 90-day terms.
Previous wording
The Company receives royalty income in the form of license fees from customers for the use of the Company’s technology rights by the customers. Royalty income is recognized over time when the Company’s technology rights are used by the customers in accordance with the terms and conditions of the relevant license agreement. Revenue is recognized by the Company not only when invoices have been signed and confirmed by customers but also at the end of each year over the term of the relevant license agreements as the service is provided to the customers.
Current wording
The Company receives royalty income in the form of license fees from customers for the use of the Company’s technology rights by the customers. Royalty income is recognized over time when the Company’s technology rights are used by customers in accordance with the terms and conditions of the relevant license agreement. Revenue is recognized by the Company not only when invoices have been signed and confirmed by customers but also at the end of each year over the term of the relevant license agreements as the service is provided to the customers.
Previous wording
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.
Current wording
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flow, or disclosure.
Previous wording
In November 2024, the FASB issued ASU 2024-03, “Reporting Comprehensive Income — Expense Disaggregation Disclosures”, which focuses on improving the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows.
Current wording
In November 2024, the FASB issued ASU 2024-03,Reporting Comprehensive Income—Expense Disaggregation Disclosures, which focuses on improving disclosure about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, G&A, and research and development). ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In November 2024, the FASB issued ASU 2024-04,Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The amendments provide guidance on accounting for induced conversions of convertible debt instruments. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
Current wording
In November 2024, the FASB issued ASU 2024-04,Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. These amendments provide guidance on accounting for induced conversions of convertible debt instruments. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In January 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures”. The amendment in ASU 2025-01 amends the effective date of ASC 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows.
Current wording
In January 2025, the FASB issued ASU 2025-01,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2025-01 amends the effective date of ASC 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In March 2025, the FASB issued ASU 2025-02,Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments are effective immediately and must be applied on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
Current wording
In March 2025, the FASB issued ASU 2025-02,Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. These amendments are effective immediately and must be applied on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In May 2025, the FASB issued ASU 2025-03,Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
Current wording
In May 2025, the FASB issued ASU 2025-03,Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. These amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In May 2025, the FASB issued ASU 2025-04,Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments clarify the accounting for share-based consideration payable to a customer under Topic 718 and Topic 606. The amendments are effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
Current wording
In May 2025, the FASB issued ASU 2025-04,Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. These amendments clarify the accounting for share-based consideration payable to a customer under Topic 718 and Topic 606. The amendments are effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.
Previous wording
In July 2025, the FASB issued ASU 2025-05,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
Current wording
In July 2025, the FASB issued ASU 2025-05,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. These amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flow.