Marwynn Holdings (Nasdaq: MWYN) swings to steep loss and warns on going concern
Marwynn Holdings reported a sharply weaker quarter as it restructures its business. For the quarter ended January 31, 2026, revenue from continuing operations rose to
For the nine months, continuing revenue increased to
The company ended the period with cash of
Positive
- None.
Negative
- Going concern uncertainty: The company reported a nine‑month net loss from continuing operations of
$3,517,720 and operating cash outflows of$1,302,397 , and management states these conditions raise “substantial doubt” about its ability to continue as a going concern within one year. - Rising losses despite higher revenue: Continuing revenue grew to
$1,468,941 for the nine months, but operating expenses increased to$3,702,241 , turning growth into a significantly larger loss and putting more pressure on limited cash resources.
Insights
Losses widened and a going concern warning now dominates Marwynn’s risk profile.
Marwynn’s continuing operations saw revenue climb to
The disposal of Grand Forest for
Management explicitly notes “substantial doubt” about the ability to continue as a going concern within one year, making funding access and execution of its refocused strategy critical. High customer concentration, with a few accounts driving most revenue, and reliance on newer segments like e-waste add operational risk. Future quarterly results and cash flow trends will be central to assessing whether the turnaround gains traction.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
Commission file number:
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Indicate by check mark whether the registrant (1) has filed all reports
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| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant
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There were
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report (this “Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Certain statements contained in this Report, which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward-looking nature constitute “forward-looking statements” within the meaning of the federal securities laws. We intend the forward-looking statements to be covered by the applicable safe harbor under the federal securities laws. In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” or the negative of these terms or other similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on the information we have when the statements are made or management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | our goals and strategies; |
| ● | our future business development, results of operations and financial condition; |
| ● | expected changes in our corporate services income, costs or expenditures; |
| ● | our dividend policy; |
| ● | our expectations regarding demand for and market acceptance of our products and services; |
| ● | our projected markets and growth in markets; |
| ● | our potential need for additional capital and the availability of such capital; |
| ● | competition in our industry; |
| ● | general economic and business conditions in the markets in which we operate; |
| ● | our ability to meet the Nasdaq Capital Market continued listing requirements; |
| ● | relevant government policies and regulations relating to our business and industry; and |
| ● | assumptions underlying or related to any of the foregoing. |
Forward-looking statements necessarily involve risks and uncertainties, and our actual results could differ materially from those anticipated in the forward-looking statements due to a number of factors, including those set forth above under “Risk Factors” and elsewhere in this Report. The factors set forth above under “Risk Factors” and other cautionary statements made in this Report should be read and understood as being applicable to all related forward-looking statements wherever they appear in this Report. The forward-looking statements contained in this Report represent our judgment as of the date of this Report. We caution readers not to place undue reliance on such statements. We operate in an evolving environment where new risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Report.
Unless the context otherwise requires, the terms “the Company,” “our Company,” “we,” “us,” and “our” refer to Marwynn Holdings, Inc., a Nevada corporation, and its consolidated subsidiaries.
MARWYNN HOLDINGS, INC.
FORM 10-Q
For the Quarterly Period Ended January 31, 2026
Table of Contents
| Page No. | ||
| PART I - Financial Information (unaudited) | 1 | |
| ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) | 1 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 30 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 48 |
| ITEM 4. | CONTROLS AND PROCEDURES | 48 |
| PART II - Other Information | 49 | |
| ITEM 1. | LEGAL PROCEEDINGS | 49 |
| ITEM 1A. | RISK FACTORS | 49 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 50 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 50 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 50 |
| ITEM 5. | OTHER INFORMATION | 50 |
| ITEM 6. | EXHIBITS | 51 |
| SIGNATURES | 52 | |
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares)
| January 31, 2026 (Unaudited) | April 30, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Other receivable | - | |||||||
| Due from related party | - | |||||||
| Note receivables | - | |||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Deferred tax assets | - | |||||||
| Total Non-Current Assets | ||||||||
| ASSETS FROM DISCONTINUED OPERATIONS | - | |||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| LIABILITIES FROM DISCONTINUED OPERATIONS | - | |||||||
| Total Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, par value $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional Paid-in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
MARWYNN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in U.S. dollars, except for number of shares)
| For the Three Months ended January 31, | For the Nine
Months ended January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue, net | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General & administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expenses) | ||||||||||||||||
| Other expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income (expense) | ( | ) | ( | ) | ||||||||||||
| Total other income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Income (loss) before income tax provision | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) from continuing operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) from discontinued operations, net of tax | - | ( | ) | ( | ) | |||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net loss per common stock | ||||||||||||||||
| Basic and diluted* | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic and Diluted** | ||||||||||||||||
| * |
| ** |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
MARWYNN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2026 AND 2025
(Amount in of U.S. dollars, except for number of shares)
| Preferred shares | Common shares | Additional paid-in | Retained earnings (accumulated | Total stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit) | equity | ||||||||||||||||||||||
| Balance as of April 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of July 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of common stock | - | - | - | |||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of October 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of January 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance as of April 30, 2024 * | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of July 31, 2024 | ||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of October 31, 2024 | ( | ) | ||||||||||||||||||||||||||
| Net income | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of January 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
MARWYNN HOLDINGS, INC.
UNAUIDTED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amount in U.S. dollars, except for number of shares)
| For the Nine Months ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net income (loss) from discontinued operations | ( | ) | ||||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | - | |||||||
| Depreciation and amortization | ||||||||
| Share-based compensation expense | - | |||||||
| Change in deferred tax assets | ||||||||
| Operating lease expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Deferred IPO costs | - | ( | ) | |||||
| Advance to vendors | ( | ) | - | |||||
| Accounts payable | ( | ) | ||||||
| Deferred revenue | - | ( | ) | |||||
| Income tax payable | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash provided by operating activities from discontinued operations | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Note receivables | ( | ) | - | |||||
Other receivable | ( | ) | - | |||||
| Cash received from disposal of subsidiary | - | |||||||
| Net cash used in investing activities from continuing operations | ( | ) | - | |||||
| Net cash used in investing activities from discontinued operations | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FORM FINANCING ACTIVITIES: | ||||||||
| Bank overdraft | - | |||||||
Loans from (to) shareholders | ( | ) | ||||||
| Proceeds from issuance of common stock | - | |||||||
| Net cash provided by (used in) financing activities from continuing operations | ( | ) | ||||||
| Net cash used in financing activities from discontinued operations | ( | ) | ( | ) | ||||
| Net Cash Provided by (Used in) Financing Activities | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | $ | $ | ||||||
| ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS: | ||||||||
| Cash and equivalents | $ | $ | ||||||
| Cash and equivalents included in discontinued operations | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
MARWYNN HOLDINGS,
INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
Business
Marwynn Holdings, Inc. (“Marwynn” or the “Company”), through its wholly-owned subsidiaries, is primarily engaged in providing supply chain management solutions to customers in the United States of America.
Marwynn was incorporated in the state of Nevada, United States
of America (“U.S.” or United States) on
The Company’s business was operated by the following entities: (1) FuAn Enterprise, Inc (“FuAn”), which was incorporated in the state of California on April 18, 2016. FuAn is a food and non-alcoholic beverage supply chain company that specializes in connecting businesses between different regions, particularly between Asia and the U.S. FuAn’s comprehensive supply chain services include the sourcing of Asian food, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale/warehouse clubs in the U.S. In addition, FuAn provides supply chain consulting, and market expansion support for businesses; (2) Grand Forest Cabinetry Inc (“Grand Forest”), which was incorporated in the state of California, on February 22, 2021. KZS Kitchen Cabinet & Stone Inc (“KZS”) was incorporated in the state of California, on October 11, 2018, and merged with and into Grand Forest on June 1, 2024. Following the merger, all of the home improvement business is now under Grand Forest as the surviving corporation. Grand Forest is an indoor home improvement supply chain provider that focuses on providing high-quality kitchen cabinets, flooring, and home improvement products sourced from international suppliers. The Company disposed of Grand Forest during fiscal year 2026 and it is presented as a discontinued operation in the accompanying unaudited condensed consolidated financial statements. See “Discontinued Operations - Grand Forest” below; and (3) EcoLoopX Corporation (“EcoLoopX”), which was incorporated in the state of California on November 25, 2025, mainly engaged in e-waste reverse supply chain business. Its activities primarily include sourcing recyclable e-waste materials from suppliers and facilitating transactions with customers, as well as logistics management, documentation facilitation, and vendor and partner engagement. The Company believes the expansion into the e-waste reverse supply chain business sector will better align with its long-term growth objectives and enhance its ability to capture emerging market opportunities.
Discontinued Operations - Grand Forest
During the second quarter of fiscal year 2026, following approval by the Board of Directors of the Company, the Company committed to a plan to dispose of Grand Forest Cabinetry Inc.
On October 27, 2025, Marwynn entered into a Securities Purchase Agreement
with Reli Home Décor Inc., a California corporation (the “Buyer”), solely for the purposes of selling all of the shares
it owns in its wholly owned subsidiary Grand Forest. Pursuant to the Purchase Agreement, the Company has agreed to sell all
5
As of January 31, 2026, the unaudited condensed consolidated financial statements of the Company of continuing operation include the following entities:
| Place and date of | % of ownership | |||||||||||
| Name of entities | incorporation | Direct | Indirect | Principal activities | ||||||||
| Marwynn Holdings, Inc. | Parent | |||||||||||
| FuAn Enterprise, Inc. | % | |||||||||||
| EcoLoopX Corporation | % | |||||||||||
Grand Forest Cabinetry Inc. has been classified as a discontinued operation as of April 30, 2025, and for the three and nine months ended January 31, 2026 and 2025, and is presented separately in the unaudited condensed financial statements.
Completion of the IPO
On March 12, 2025, the Company entered into an underwriting agreement
(the “Underwriting Agreement”) with American Trust Investment Services, Inc., as representative of the several underwriters
(the “Representative”), pursuant to which the Company issued and sold an aggregate of
On April 4, 2025, the Underwriter purchased
Liquidity and Going Concern
As reflected in the accompanying unaudited consolidated financial
statements, the Company incurred net loss of $
The Company had $
6
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information with the instructions to the Quarterly Report on Form 10-Q and Article 8 Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. The unaudited condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes for the years ended April 30, 2025 and 2024 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on August 8, 2025. In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation of the interim financial statements have been included. Results for the three and nine months ended January 31, 2026 are not necessarily indicative of the results that may be expected for the year ending April 30, 2026. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in the consolidation.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates and judgments include, but are not limited to, revenue recognition, sales return allowance, estimates used in the lease accounting, the allowance for credit loss, income taxes, the useful lives of long-lived assets and assumptions used in assessing impairment of long-lived assets, and stock-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual amounts may differ from the estimated amounts, such differences are not likely to be material.
7
Cash and cash equivalents
Cash include cash on hand and demand deposits that are highly liquid
in nature and have original maturities when purchased of three months or less. The Company’s cash is maintained at financial
institutions in the United States of America. Deposits in these financial institutions may, from time to time, exceed the Federal
Deposit Insurance Corporation (“FDIC”)’s federally insured limits. The standard insurance amount is $
Accounts Receivable, Net
On May 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell.
The Company adopted ASC 326 and all related subsequent amendments thereto effective May 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The was no transition adjustment of the adoption of CECL.
Accounts receivable represents the amounts that the Company has an
unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The
Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis
and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual
receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s
historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends.
Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company had $
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated
depreciation and impairment losses, if any. Expenditures for maintenance and repairs are expensed as incurred, while additions,
renewals and improvements that extend the useful lives of property and equipment are capitalized. When assets are retired or
otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any resulting gain
or loss is reflected in the unaudited condensed consolidated statement of operations. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.
| Estimated Useful Life | |||
| Furniture and fixtures | |||
| Office equipment |
8
Impairment of Long-Lived Assets
Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
The Company evaluates events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such a determination is made. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on the above analysis, no impairment loss was recognized related to these long-lived assets as of January 31, 2026 and April 30, 2025.
Income Tax
The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.
The Company utilizes a two-step approach to evaluate measure
uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if
the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of
related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than
Revenue Recognition
In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
9
The Company derives its revenues primarily from three business segments to (i) provide food and beverage supply chain and brand management services, (ii) consulting service related to brand management, and (iii) sale of recyclable e-waste materials.
Revenue from food and beverage sales
FuAn sources authentic premium Asian foods from various suppliers and then distributes to customers (mainly supermarket and grocery stores) in the U.S. The Company accounts for revenue from sales of authentic premium Asian foods on a gross basis as the Company is responsible for fulfilling the promise to provide the desired authentic premium Asian foods products to customers and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All of FuAn’s contracts are fixed price contracts and have one single performance obligation as the promise is to transfer the individual goods to customers.
The sales transaction price is indicated in each purchase order with a Deduct from Invoice (“DFI”) discount which automatically reduces per unit cost on invoice, and payment terms are primarily set as “net 30.” The Company elects to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. The Company’s revenue from sales of authentic premium Asian food products is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Revenue from the sale of food products is reported net of sales returns and allowance.
Consulting services revenue
Consulting services revenue primarily consists of service income from providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels. The Company’s contracts with customers for supply chain and brand management services are fixed-price contracts. The Company also believes that it serves as a principal in this type of transaction because it has the latitude in establishing prices with customers, and is responsible for bearing the related costs to complete the designated services. It normally takes a few months up to one year to complete the designated services. Revenue is recognized over the service period.
Revenue from recyclable e-waste materials sales
Revenue from recyclable e-waste materials consists primarily of sales of recyclable and recycled items, including metals, plastics, paper, electronic waste, and processed feedstock, to traders and downstream commercial customers. Currently, the Company’s customers for these transactions are primarily located in Hong Kong. The Company is in the process of expanding its customer base and is actively developing relationships with potential customers in the United States.. The Company recognizes revenue on a gross basis as it acts as the principal in these arrangements. The Company obtains control of the materials prior to transfer, has discretion in establishing pricing, and bears inventory risk before control is transferred to the customer. Customer contracts are generally fixed-price arrangements and typically include a single performance obligation of selling of the e-waste materials. Revenue is recognized at a point in time when control of the materials transfers to the customer, which generally occurs upon delivery in accordance with the contractual shipping terms. Customer contracts generally do not include variable consideration, material rights of return, or significant financing components.
Sales Returns and Allowances
For food and beverage, the Company accrues estimated sales returns based on past experience and the current trend of product sales. There was no allowance for sales returns for continuing operations as of January 31, 2026 and April 30, 2025.
10
Disaggregation of Revenue
The following table provides information about disaggregated revenue from continuing operations by product or service type:
| For the three months ended January 31 | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from food and beverage sales | $ | $ | ||||||
| Revenue from consulting services | ||||||||
| Revenue from recyclable e-waste materials sales | - | |||||||
| Total revenues | $ | $ | ||||||
| For the nine months ended January 31 | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from food and beverage sales | $ | $ | ||||||
| Revenue from consulting services | ||||||||
| Revenue from recyclable e-waste materials sales | - | |||||||
| Total revenues | $ | $ | ||||||
Cost of Revenues
Cost of revenues consists of merchandise purchase costs, labor and other costs, duty and freight-in costs, packaging costs, processing and sorting costs, and labor costs associated with providing consulting services to customers.
Shipping and Handling Costs
Shipping and handling costs include costs incurred for delivery of
the products to customers, and are included in selling expenses. Shipping and handling costs from continuing operations were $
Operating Expenses
Operating expenses primarily consist of selling expenses and general and administrative (“G&A”) expenses. Selling expenses mainly consist of advertising and marketing expenses, sales commission and showroom maintenance expenses. G&A expenses mainly consist of payroll expense, office and auto leasing, contracted labor, food testing, consulting, deprecation and insurance expenses. All costs associated with selling and general and administrative function are expensed as incurred.
Segment Information
An operating segment is a component of the Company that engages in
business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports
that are provided to and regularly reviewed by the Company’s chief financial officer, the Company’s chief operating decision
maker (the “CODM”) in order to allocate resources and assess the performance of the
11
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM or decision-making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM, reviews operating results by the revenue of different products. Based on management’s assessment, the Company has determined that it has three operating segments as defined by ASC 280, including sale of food and beverage, consulting services and sale of e-waste materials.
The following tables present summary information by segment for the three months ended January 31, 2026 and 2025, respectively:
| For the three months ended January 31, 2026 (unaudited) | ||||||||||||||||
| Sale of food and beverage | Consulting services | Sale of e-waste materials | Total | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ( | ) | - | |||||||||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Capital expenditure | $ | - | $ | - | $ | - | $ | - | ||||||||
| For the three months ended January 31, 2025 (unaudited) | ||||||||||||
| Sale of food and beverage | Consulting services | Total | ||||||||||
| Sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Operating expense | ||||||||||||
| Income (loss) from operations | ( | ) | ||||||||||
| Other expense, net | ( | ) | ( | ) | ( | ) | ||||||
| Income tax provision | ( | ) | ( | ) | ||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Capital expenditure | $ | - | $ | - | $ | - | ||||||
12
The following tables present summary information by segment for the nine months ended January 31, 2026 and 2025, respectively:
| For the nine months ended January 31, 2026 (unaudited) | ||||||||||||||||
| Sale of food and beverage | Consulting services | Sale of e-waste materials | Total | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income, net | - | |||||||||||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Capital expenditure | $ | - | $ | - | $ | - | $ | - | ||||||||
| Total reportable assets | $ | $ | $ | $ | ||||||||||||
| For the nine months ended January 31, 2025 (unaudited) | ||||||||||||
| Sale of food and beverage | Consulting services | Total | ||||||||||
| Revenues, net | $ | $ | $ | |||||||||
| Cost of revenues | ||||||||||||
| Operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Capital expenditure | $ | — | $ | — | $ | — | ||||||
| Total reportable assets | $ | $ | — | $ | ||||||||
As of January 31, 2026 and April 30, 2025, all of the Company’s assets are located in the United States.
For the nine and three months ended January 31, 2026, the Company generate
revenue from the U.S. was $
For the nine and three months ended January 31, 2025, the Company generate
revenue from the U.S. was $
Fair Value of Financial Instruments
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 defined in ASC 820-10 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels (Level 1 is the highest priority and Level 3 is the lowest priority):
| ● | Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. |
| ● | Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or other observable inputs that can be corroborated by observable market data. |
| ● | Level 3 — Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include the Company’s own data. |
13
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, inventories, prepaid expenses and other current assets, short-term loan payable, accounts payable, accrued expenses and other current liabilities and deferred revenue approximate the fair value of the respective assets and liabilities as of January 31, 2026 and April 30, 2025 based upon the short-term nature of the assets and liabilities.
The Company believes that the carrying amount of long-term loan approximates its fair value at January 31, 2026 and April 30, 2025 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates.
Leases
Under ASC 842, “Leases,” a contract is or contains a lease when the Company has the right to control the use of an identified asset. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by the Company.
The Company determines if the lease is an operating or finance lease at the lease commencement date based upon the terms of the lease and the nature of the asset. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Marwynn’s warehouse and office lease is classified as an operating lease, reflected in the operating lease right-of-use assets, current portion of operating lease liabilities and non-current portion of operating lease liabilities on the unaudited condensed consolidated balance sheets. Marwynn’s equipment lease is classified as a finance lease, reflected in the property and equipment, current portion of finance lease liabilities and non-current portion of finance lease liabilities on the consolidated balance sheets.
The lease liability for both operating lease and finance lease is measured at the present value of future lease payments, discounted using the discount rate for the lease at the commencement date. As the Company is typically unable to determine the implicit rate, the Company uses an incremental borrowing rate based on the lease term and economic environment at commencement date. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU assets include adjustments for prepayments and accrued lease payments. The right-of-use (“ROU”) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives.
ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, “Property, Plant, and Equipment,” as ROU assets are long-lived nonfinancial assets.
ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU assets are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The right-of-use (“ROU”) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives. There was no impairment of the Company’s ROU assets as of January 31, 2026 and April 30, 2025.
Statement of Cash Flows
In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies using the average exchange rate in the period. As a result, amounts related to assets and liabilities reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
14
Related Parties and Transactions
The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.
Parties, which can be a corporation or individual, are related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Transactions between related parties commonly occurring in the normal course of business are related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it nonetheless requires their disclosure.
Share-based Compensation
The Company accounts for share-based compensation awards to officers, directors, employees, and for acquiring goods and services from nonemployees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the vesting period. The Company accounts for forfeitures when they occur.
Earnings (loss) per Common Stock
Basic earnings (loss) per common stock is computed by dividing net
income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net
income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been
outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if
the additional common shares were dilutive. Diluted earnings (loss) per share are based on the assumption that all dilutive convertible
shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the
outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments.
Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance,
if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the
if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period
(or at the time of issuance, if later). Potential common stock that has an anti-dilutive effect (i.e., those that increase income
per common stock or decrease loss per common stock) are excluded from the calculation of diluted loss per share. For the three months
ended January 31, 2026 and 2025, the Company
The following table sets forth the computation of basic and diluted net loss per share for the three months ended January 31, 2026 and 2025:
| For the three months ended January 31, (unaudited) | ||||||||
| 2026 | 2025 | |||||||
| Net (loss) income attributable to the Company from continuing operations | $ | ( | ) | $ | ||||
| Net loss attributable to the Company from discontinued operations | - | ( | ) | |||||
| Weighted average common stock outstanding - basic | ||||||||
| Weighted average common stock outstanding - diluted | * | |||||||
| Net (loss) income per share of common stock from continuing operations - basic | $ | ( | ) | $ | ||||
| Net loss per share of common stock from discontinued operations - basic | $ | - | $ | ( | ) | |||
| Net (loss) income per share of common stock from continuing operations - diluted | $ | ( | ) | $ | ||||
| Net loss per share of common stock from discontinued operations - diluted | $ | - | $ | ( | ) | |||
15
The following table sets forth the computation of basic and diluted net loss per share for the nine months ended January 31, 2026 and 2025:
| For the nine months ended January 31, (unaudited) | ||||||||
| 2026 | 2025 | |||||||
| Net loss attributable to the Company from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Net (loss) income attributable to the Company from discontinued operations | ( | ) | ||||||
| Weighted average common stock outstanding - basic | ||||||||
| Weighted average common stock outstanding - diluted | * | |||||||
| Net loss per share of common stock from continuing operations - basic | $ | ( | ) | $ | ( | ) | ||
| Net (loss) income per share of common stock from discontinued operations - basic | $ | ( | ) | $ | ||||
| Net loss per share of common stock from continuing operations - diluted | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock from discontinued operations -diluted | $ | ( | ) | $ | ||||
| * |
Commitments and Contingencies
Certain conditions may exist as of the date the unaudited condensed consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s unaudited condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. As of January 31, 2026 and April 30, 2025, the Company has no such contingencies.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
For the three months ended January 31, 2026, three customers accounted
for
16
For the nine months ended January 31, 2026, two customers accounted
for
As of January, 31, 2026, four customers accounted for
For the three months ended January 31, 2026, three vendors accounted
for
For the nine months ended January 31, 2026, three vendors accounted
As of January 31, 2026, no vendor accounted for more than 10%
of the Company’s total outstanding accounts payable balance from continuing operations. As of April 30, 2025, one vendor accounted
for
Recent Accounting Pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The ASU was issued in response to the SEC’s August 2018 final amendments in Release No. 33-10532, Disclosure Update and Simplification that updated and simplified disclosure requirements that the SEC believed were duplicative, overlapping, or outdated. The guidance in ASU 2023-06 is intended to align GAAP requirements with those of the SEC and to facilitate the application of GAAP for all entities. The amendments introduced by ASU 2023-06 are effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. If, by June 30, 2027, the SEC has not removed the applicable requirements from its existing regulations, the pending content of the associated amendment will be removed from the ASC and will not become effective for any entities. Early adoption is permitted. The adoption of ASU 2023-06 is not expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or related disclosures.
On November 4, 2024, the FASB issued an ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions (such as cost of sales; selling, general, and administrative expenses; and research and development). The amendments in the ASU require disclosure in the notes to financial statements of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same tabular disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.
17
In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the adoption of this standard to determine its impact on its disclosures.
In March 2025, the FASB issued ASU 2025-02—Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adoption of this standard to its unaudited condensed consolidated financial statements and disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the 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 period 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.
In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 18) and Revenue from contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. 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 reporting period 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.
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 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.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s unaudited condensed financial statement presentation or disclosures.
18
NOTE 3 — DISCONTINUED OPERATIONS
On October 27, 2025, Marwynn entered into a Securities Purchase Agreement
with Reli Home Décor Inc., solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary Grand Forest.
Pursuant to the Purchase Agreement, the Company has agreed to sell all
The Condensed Unaudited Consolidated Balance Sheet and Condensed Unaudited Consolidated Statements of Operations, and the notes to the Condensed Unaudited Consolidated Financial Statements, were retroactively reclassified for all periods presented to reflect the discontinuation of Grand Forest in accordance with FASB ASC 205.
The following table summarizes the carrying value of the assets and liabilities of the disposed group as of December 22, 2025 and April 30, 2025.
| As of December 22, 2025 (unaudited) | As of April 30, 2025 (unaudited) | |||||||
| ASSETS | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Account receivables, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Deferred tax assets, net | ||||||||
| Property and equipment, net | ||||||||
| Less: impairment allowance | ( | ) | - | |||||
| Operating lease right-of-use assets, net | ||||||||
| Less: impairment allowance | ( | ) | - | |||||
| Finance lease right-of-use assets, net | ||||||||
| Less: impairment allowance | ( | ) | - | |||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Short-term loan payable | $ | $ | ||||||
| Account Payable | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Financing lease liability – current | ||||||||
| Income tax payable | ||||||||
| Auto loan payable - current | ||||||||
| Due to related parties | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities – non-current | ||||||||
| Finance lease liabilities – non-current | ||||||||
| Auto loan payable - non-current | ||||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
19
The following table presents the components of discontinued operations reported in the unaudited condensed consolidated statements of operations for the periods ended December 22, 2025 and the three months and nine months ended January 31, 2025 (unaudited):
| For the period from November 1, 2025 to December 22, 2025 | For the three months ended January 31, 2025 | For period from May 1, 2025 to December 22, 2025 | For the nine months ended January 31, 2025 | |||||||||||||
| Revenue, net | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General & administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) income from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expenses): | ||||||||||||||||
| Other income (expenses) | ( | ) | ( | ) | ||||||||||||
| Impairment loss | - | - | ( | ) | - | |||||||||||
| Gain on disposal | - | - | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expenses), net | ( | ) | ( | ) | ||||||||||||
| (Loss) income before income tax expense | ( | ) | ( | ) | ||||||||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ||||||||||
| Net (loss) income from discontinued operations, net of tax | $ | - | $ | ( | ) | $ | ( | ) | $ | |||||||
20
NOTE 4 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net were $
Accounts receivable by aging bucket as of January 31, 2026 and April 30, 2025, consisted of the following:
| Accounts receivable by aging bucket | Balance as of January 31, 2026 (unaudited) | Balance as of April 30, 2025 | ||||||
| Less than six months | $ | $ | ||||||
| Seven to nine months | ||||||||
| Ten to twelve months | ||||||||
| Total accounts receivable, net | $ | $ | ||||||
As of the date of this report, subsequent collection of the outstanding
accounts receivable from continuing operations as of January 31, 2026 was nil, and subsequent collection of the outstanding accounts
receivable from continuing operations as of April 30, 2025 was $
NOTE 5 — NOTE RECEIVABLES
On May 10, 2025, the Company’s subsidiary FuAn entered into
a short-term note receivable agreement with a third-party company Bio Essence Pharmaceutical Inc. (“BEP”) to lend $
On June 5, 2025 and July 10, 2025, the Company advanced $
On November 19, 2025, the Company entered into a short-term note receivable
agreement with a third party company Valemi Inc. (“Borrower”), pursuant to which the Company loaned $
As of January 31,2026, the outstanding balance of note receivables
was $
NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets, consisted of the following:
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Advance to vendors(i) | $ | $ | ||||||
| Security deposits(ii) | ||||||||
| Prepaid service fee(iii) | ||||||||
| Accrued interest receivable(iv) | — | |||||||
| Others | — | |||||||
| Total | $ | $ | ||||||
| (i) |
21
| (ii) |
| (iii) |
| (iv) |
NOTE 7 — PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Furniture and fixture | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expenses from continuing operations were $
NOTE 8 — INTANGIBLE ASSETS, NET
Intangible asset, net consisted of the following:
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Software | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
On November 19, 2023, the Company purchased a supply chain cloud
management system from a third-party vendor at a cost of $
22
Amortization expenses for the three months ended January 31,
2026 and 2025 were $
Amortization expenses for the nine months ended January 31, 2026
and 2025 were $
As of January 31, 2026, the estimated future amortization expenses of the intangible assets were as follow:
| 12 months ending January 31, | Amortization expenses | |||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | - | |||
| Total | $ | |||
NOTE 9 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following:
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Payroll and payroll tax payable | $ | $ | ||||||
| Sales tax payable | - | |||||||
| Credit card payable | ||||||||
| Professional fee payable | - | |||||||
| Total | $ | $ | ||||||
As of January 31, 2026, professional fees payable primarily consisted of outstanding legal fees related to SEC filing compliance services provided by the Company’s SEC counsel, as well as fees for legal services associated with acquisitions and discontinued operations, audit fees for potential acquisitions, and Nasdaq listing fees.
NOTE 10 — LEASE
Operating lease
On January 19, 2024, FuAn entered into a sublease agreement with
the landlord to lease an office in Irvine, California with a lease term of
Total lease expenses from continuing operations amounted to $
As of January 31, 2026 and April 30, 2025, the average remaining term
of the lease is
23
The Company’s operating ROU assets and lease liabilities were as follows:
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Operating ROU: | ||||||||
| Operating lease right-of-use assets | $ | |||||||
| Less: accumulated amortization of ROU assets | ( | ) | ( | ) | ||||
| ROU assets, net | $ | $ | ||||||
| Operating lease liabilities: | ||||||||
| Operating lease liabilities, current | $ | $ | ||||||
| Operating lease liabilities, non-current | - | - | ||||||
| Total lease liabilities | $ | $ | ||||||
As of January 31, 2026, future maturity of the Company’s operating lease liabilities is as follows:
| Years Ending January 31, | Operating lease liabilities | |||
| 2027 | $ | |||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liabilities | $ | |||
NOTE 11 — INCOME TAXES
Marwynn is a Nevada holding company subject to
FuAn and EcoLoopX were incorporated in the State of California, and
are subject to
For the three months ended January 31, 2026, and 2025, the provision for income taxes consisted of the following:
| Three months ended January 31, 2026 (unaudited) | Three months ended January 31, 2025 (unaudited) | |||||||
| Current: | ||||||||
| Federal income tax expense | $ | $ | ||||||
| State income tax expense | ||||||||
| Deferred: | ||||||||
| Federal income tax expense | — | |||||||
| State income tax expense | — | — | ||||||
| Total income tax expense | $ | $ | ||||||
24
The following table reconciles the Company’s effective income tax rate for the three months ended January 31, 2026 and 2025:
| Three months ended January 31, 2026 (unaudited) | Three months ended January 31, 2025 (unaudited) | |||||||
| Federal statutory rate | ( | )% | % | |||||
| State statutory rate, net of effect of state income tax deductible to federal income tax | ( | )% | % | |||||
| Permanent difference – penalties, interest, and others | % | % | ||||||
| Valuation allowance | % | ( | )% | |||||
| Effective tax rate | % | % | ||||||
For the nine months ended January 31, 2026, and 2025, the provision for income taxes consisted of the following:
| Nine months ended January 31, 2026 (unaudited) | Nine months ended January 31, 2025 (unaudited) | |||||||
| Current: | ||||||||
| Federal income tax expense | $ | $ | ||||||
| State income tax expense | ||||||||
| Deferred: | ||||||||
| Federal income tax expense | — | |||||||
| State income tax expense | — | — | ||||||
| Total income tax expense | $ | $ | ||||||
The following table reconciles the Company’s effective income tax rate for the nine months ended January 31, 2026 and 2025:
| Nine months ended January 31, 2026 (unaudited) | Nine months ended January 31, 2025 (unaudited) | |||||||
| Federal statutory rate | ( | )% | ( | )% | ||||
| State statutory rate, net of effect of state income tax deductible to federal income tax | ( | )% | ( | )% | ||||
| Permanent difference – penalties, interest, and others | % | % | ||||||
| Valuation allowance | % | % | ||||||
| Effective tax rate | % | % | ||||||
25
Deferred tax assets and liabilities are recognized
for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax
bases using enacted tax rates in effect for the year in which the differences are expected to reverse.
| January 31, 2026 (unaudited) | April 30, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Operating lease liabilities, net of ROU | $ | $ | ||||||
| Depreciation | - | |||||||
| Bad debt expense | - | |||||||
| NOL | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net | $ | - | $ | |||||
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential
application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax
positions. As of January 31, 2026 and April 30, 2025, the Company had $
NOTE 12 — RELATED PARTY TRANSACTIONS
The Company’s related party transactions from continuing operations consisted of the following:
Due from a related party
| Name of Related Party | Nature | Relationship | January 31, 2026 (unaudited) | April 30, 2025 | ||||||||
| Yin Yan | $ | — | ||||||||||
| Total | $ | — | $ | |||||||||
As of April 30, 2025, due from a related party was the advances payment that the Company paid to the related party. On May 20, 2025, the Company received the full repayment from this related party. As of January 31, 2026, there was no balance of due from a related party for continuing operations.
NOTE 13 — STOCKHOLDERS’ EQUITY
Prior to April 2024, Grand Forest borrowed interest free funds
from its stockholders as working capital and recorded such borrowings as due to related parties. On April 19, 2024, three stockholders
of Grand Forest converted total of $
On April 19, 2024, one stockholder of KZS converted $
26
On April 29, 2024, all the stockholders of FuAn transferred their
Marwynn was incorporated in the state of Nevada on February 27,
2024. The Company is authorized to issue
On April 24, 2024, the Company entered a Subscription Agreement
with an individual investor, pursuant to the subscription agreement, on April 30, 2024, the Company issued
On April 24, 2024, the Company entered a Subscription Agreement
with another individual investor, pursuant to the subscription agreement, on April 30, 2024, the Company issued
On April 25, 2024, Marwynn and Marwynn’s CEO Yin Yan (also
the initial major stockholder of Marwynn) entered into a Series A Super Voting Preferred Stock Purchase Agreement (“Purchase
Agreement”), pursuant to the purchase agreement, Marwynn’s CEO purchased
On September 9, 2024, the Company filed an Amended and Restated
Articles of Incorporation to effect (i)
Initial public offering (the “IPO”)
On March 12, 2025, the Company entered into an underwriting agreement
with American Trust Investment Services, Inc (the “Underwriter”) in connection with the Company’s IPO of
The IPO closed on March 14, 2025, and the Company received net proceeds
of approximately $
On April 4, 2025, the Underwriter purchased
The Company also agreed to issue to the Representative (or its permitted
assignees) a warrant (“Representative Warrant”) to purchase up to
27
Following is a summary of the activities of warrants for the period ended January 31, 2026:
| Number of Warrants | Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Outstanding as of April 30, 2025 | $ | |||||||||||
| Exercisable as of April 30, 2025 | — | $ | — | — | ||||||||
| Granted | — | — | — | |||||||||
| Exercised | — | — | — | |||||||||
| Forfeited | — | — | — | |||||||||
| Expired | — | — | — | |||||||||
| Outstanding as of January 31, 2026 (unaudited) | $ | |||||||||||
| Exercisable as of January 31, 2026 (unaudited) | — | $ | — | — | ||||||||
Stock Purchase Agreement
On October 28, 2025, the Company entered into and closed a stock purchase
agreement with certain investors, pursuant to which the subscribers agreed, subject to the terms and conditions of the agreement, to
purchase an aggregate of
As of January 31, 2026 and April 30, 2025, total number of shares
of common stock issued and outstanding was
Stock-based compensation
On July 24, 2024, the Board of Directors
granted non-qualified stock options to each of its three independent directors. Each director received options to purchase
The grant-date fair value of the stock options
awarded to directors was $
28
Following is a summary of the activities of stock options for the nine months ended January 31, 2026:
| Number of Stock Options | Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Outstanding as of April 30, 2025 | $ | |||||||||||
| Exercisable as of April 30, 2025 | — | $ | — | — | ||||||||
| Granted | — | — | — | |||||||||
| Exercised | — | — | — | |||||||||
| Forfeited | — | — | — | |||||||||
| Expired | — | — | — | |||||||||
| Outstanding as of January 31, 2026 (unaudited) | $ | |||||||||||
| Exercisable as of January 31, 2026 (unaudited) | $ | |||||||||||
NOTE 14 — SUBSEQUENT EVENTS
The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the unaudited condensed consolidated financial statements were issued and determined the Company has following subsequent event that needs to be disclosed.
On February 10, 2026, Marwynn issued a press release announcing the
signing of a non-binding Letter of Intent (“LOI”) to acquire a
29
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, or projections, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under Part II - Item 1A Risk Factors of this Report, in the “Risk Factors” section of our annual report on Form 10-K for the fiscal year ended April 30, 2025 and in the audited consolidated financial statements and notes included therein (collectively, the “2025 Annual Report”), as well as in our unaudited condensed consolidated financial statements and the related notes included in this Report. Pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, we have presumed that readers have access to and have read the disclosure under the same heading contained in the 2025 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our,” or the “Company” are to Marwynn Holdings, Inc. and its wholly-owned operating subsidiaries, except where the context requires otherwise.
Business Overview and Recent Development
Marwynn Holdings, Inc. (“Marwynn” or the “Company”) was incorporated in the state of Nevada, United States of America (“USA”) on February 27, 2024. The Company is a holding company with no material operations of its own, Marwynn conducts substantially all its operations through its wholly-owned subsidiaries.
FuAn Enterprise, Inc (“FuAn”), a subsidiary of Marwynn, was incorporated in the state of California on April 18, 2016. FuAn is a food and non-alcoholic beverage supply chain company that specializes in connecting businesses between different regions, particularly between Asia and the U.S. FuAn’s comprehensive supply chain services include the sourcing of Asian food, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale/warehouse clubs in the U.S. In addition, FuAn provides supply chain consulting, and market expansion support for businesses. With a focus on sourcing Asian foods and non-alcoholic beverages, FuAn aims at becoming a leading importer and distributor of premium Asian foods and non-alcoholic beverages to the U.S. markets.
On December 22, 2025, the Company completed the sale of all of its equity interests of Grand Forest Cabinetry Inc. (“Grand Forest”) to a third-party buyer. Following the sale of Grand Forest, the Company is no longer indoor home improvement supply chain provider.
On November 19, 2025, the board of directors approved the formation of a wholly owned subsidiary to operate within the electronic waste supply chain business (“E-Waste Reverse Supply Chain Business”). The subsidiary, EcoLoopX Corporation, was incorporated in the state of California on November 25, 2025, and provides non-operational supply chain services. It does not engage in any physical processing, dismantling, recycling, or hazardous materials handling. Instead, its activities are limited to coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support. The Company believes that concentrating its resources in the food and beverage and expanding into the e-waste reverse supply chain business sector will better align with its long-term growth objectives and enhance its ability to capture emerging market opportunities.
On February 10, 2026, we issued a press release announcing the signing of a non-binding Letter of Intent (“LOI”) to acquire a 51% equity interest in DJ Mex Corp. (“DJ Mex”), a U.S.-based operator specializing in electronic-waste sourcing, logistics coordination, and recyclable materials trading. Following our due diligence, in March 2026, the Company decided not to pursue the acquisition of DJ Mex.
30
Business Trends and Uncertainties
During 2025 and continuing into 2026, the United States has introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries and individualized higher tariffs on certain other countries, such as China. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses. In February 2026, the U.S. Supreme Court invalidated tariffs predicated on the International Emergency Economic Powers Act (IEEPA), ruling that such taxing authority rests with Congress. In response, the administration has transitioned to alternative statutory frameworks, such as Section 122, while continuing to maintain Section 232 and Section 301 duties. This shifting landscape remains characterized by a complex series of temporary surcharges, targeted exemptions, and ongoing litigation regarding importer refunds. Our current food and non-alcohol beverage business relies heavily on international supply chains and imported products. This dependence exposes us to risks associated with shifting global trade policies, tariffs, and geopolitical tensions, particularly in the Asia-Pacific region, and could negatively impact affect our business in multiple ways, including increased costs of our products. These tariffs have introduced additional volatility into our procurement and logistics operations and may increase our cost of goods sold.
For our food and non-alcoholic beverage supply chain business, we have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. While we have temporarily paused imports from China, future sourcing decisions may change depending on market conditions, supplier availability, and trade policies. In addition, trade-related disruptions—such as shipping delays, port congestion, or container shortages—can create further uncertainty and may require expedited shipping or last-minute procurement efforts at elevated cost. While these changes are intended to mitigate future exposure, they may result in near-term transitional costs, logistical inefficiencies, and supplier onboarding challenges. Diversifying our supply base can also increase production and transportation costs and introduce operational complexity. During the quarter ended January 31, 2026, we had two primary vendors located in Taiwan and New Zealand. As we continue to expand our business operations and develop relationships with new suppliers and retail partners, we may encounter additional risks associated with supplier reliability, product quality control, logistics coordination, and regulatory compliance across multiple jurisdictions. Our expansion efforts may also require increased working capital, new operational infrastructure, and additional personnel, which could increase our operating expenses. We are actively working with Costco and other retailers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, there can be no assurance that these efforts will be successful or that such measures will fully offset the challenges posed by current trade policies.
We continue monitoring the fluid nature of proposed tariffs and any impact they may have on our operations and will continue to monitor macroeconomic conditions and evaluate the financial and operational impact of ongoing trade policy shifts. These risks could intensify depending on future developments and we are actively incorporating these considerations into our future operation planning, including assessing pricing actions, cost-control measures, and long-term sourcing strategies.
If tariffs escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business performance. See “Risk Factors” discussed in our 2024 Annual Report, for additional information.
We are also entering the E-Waste Reverse Supply Chain Business, which focuses on coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support related to discarded electronic products. The Company will not engage in any physical processing, dismantling, recycling, or hazardous materials handling. Although we will not handle e-waste directly, this business line may still be subject to evolving environmental regulations, data security laws, and global commodity pricing pressures. We are actively evaluating operational and regulatory risks, and exploring long-term strategies for scalable and compliant growth in this area.
31
Key Factors that Affect Our Results of Operations
Operating cost increase after initial public offering
As a result of our initial public offering, we are subject to increased operating costs related to our listing on The Nasdaq Capital Market and we are subject to increased costs related to our compliance with Securities Act and Exchange Act periodic reporting annual audit expenses, the legal service expenses, and related consulting services expenses.
Competition
The supply chain industry is highly competitive, with a wide range of players offering various services such as logistics, transportation, warehousing, and distribution. Competitors range from large multinational corporations to small and medium-sized enterprises, each with their own strengths and capabilities. Supply chain disruptions often occur due to natural disasters or geopolitical events. We see talent shortage and skills gap in supply chain management. We also face regulatory compliance and trade restrictions. Security and data privacy are also concerns in global trade as well as fluctuations in exchange rates and raw material prices.
Competition for sale of food and beverages varies and includes market demand, supplier relationships, logistics and distribution, regulatory compliance and expanding into new markets. Satisfying diverse consumer preferences and staying ahead of trends are imperative.
The e-waste reverse supply chain industry is highly competitive and includes established recycling companies, third-party logistics providers, environmental service firms, and specialized supply chain coordinators. Key participants range from large integrated waste management companies such as Waste Management, Inc. and Republic Services, Inc. to dedicated e-waste recyclers such as Sims Lifecycle Services. In addition, smaller regional operators and logistics-focused service providers compete for vendor relationships and compliance-driven contracts.
International Trade Policies
Current uncertainties about increases in tariffs of imported products from countries may have an adverse effect on our operations. Throughout 2025 and into early 2026, the United States implemented expansive trade policy actions, significantly increasing import tariffs on a global scale. In February 2026, the U.S. Supreme Court invalidated tariffs predicated on the International Emergency Economic Powers Act (IEEPA), ruling that such taxing authority rests with Congress. In response, the administration has transitioned to alternative statutory frameworks, such as Section 122, while continuing to maintain Section 232 and Section 301 duties. Based on the tariffs enacted and currently in effect, we anticipate incurring incremental tariff costs, additional costs that we may incur on products shipped to our customers, and costs as a result of pauses on certain of our product imports, in particular products from China. We expect to offset the impact of the enacted tariffs on our revenues with supply chain adjustments, sources of supply or manufacturing locations, and additional cost savings actions. For our food and non-alcoholic beverage supply chain business, we have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. We are actively working with Costco and our other customers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. During the quarter ended January 31, 2026, we had two new food-supply vendors from Taiwan and New Zealand. However, if other additional tariffs are adopted, we would incur additional tariff costs that could be material. We are actively evaluating the potential impacts of these proposed tariffs, as well as our ability to mitigate their related impacts, this may affect our revenue and cost of revenues.
32
Three Months Ended January 31, 2026 compared to Three Months Ended January 31, 2025
Revenues from continuing operations
We derive our revenues from (i) sale of food and beverage, (ii) consulting services, and (iii) sale of recyclable e-waste materials. The following table presents our revenues by product and service types and as percentage of our total revenues for the periods presented.
| For the three months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 340,192 | 24.58 | % | $ | 579,960 | 92.99 | % | $ | (239,768 | ) | (41.34 | )% | |||||||||||
| Consulting Services | 43,749 | 3.16 | % | 43,749 | 7.01 | % | - | - | ||||||||||||||||
| Sale of recyclable e-waste materials | 1,000,000 | 72.26 | % | - | - | % | 1,000,000 | 100.00 | % | |||||||||||||||
| Total Revenues | $ | 1,383,941 | 100 | % | $ | 623,709 | 100.00 | % | $ | 760,232 | 121.89 | % | ||||||||||||
Sales of food and beverage
There were $340,192 and $579,960 from sales of food and beverage accounted for the three months ended January 31, 2026 and 2025, respectively. We are actively seeking new retailers and working with them to introduce new products that are less sensitive to the tariff tensions between the U.S. and China.
We also plan to increase our revenue by diversifying our markets from major mass market channels to ethnic supermarkets chains. In addition, we already finished the setup process to become a vendor to some major food distributors. Our decision of disposing Grand Forest is to maximize the efficiency and profitability of its existing business of supply chain consulting, and supply chain services of sourcing Asian foods, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale / warehouse clubs in the US.
Consulting services
There were $43,749 and $43,749 from consulting
services accounted for 3.16% and 7.01% of total revenues for the three months ended January 31, 2026 and 2025, respectively. Revenue from
consulting services remained relatively consistent for the three months ended January 31, 2026 compared to the three months ended January
31, 2025. We started our consulting services business in March 2024 through providing supply chain and brand management services proposals
and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times,
shipping costs and diversify distribution channels.
Sales of recyclable e-waste materials
There were $1,000,000 from sales of recyclable e-waste materials for the three months ended January 31, 2026. We started our recyclable service in January 2026 through focusing on coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support related to discarded electronic products.
Costs of Revenues associated with continuing operations
We incur our costs from (i) sale of food and beverage, (ii) consulting services, and (iii) sale of recyclable e-waste materials.
| For the three months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 270,666 | 20.81 | % | $ | 328,181 | 86.57 | % | $ | (57,515 | ) | (17.53 | )% | |||||||||||
| Consulting Services | 58,746 | 4.52 | % | 50,900 | 13.43 | % | 7,846 | 15.41 | % | |||||||||||||||
| Sale of recyclable e-waste materials | 970,874 | 74.67 | % | % | 970,874 | 100.00 | % | |||||||||||||||||
| Total Cost of Revenues | $ | 1,300,286 | 100.00 | % | $ | 379,081 | 100.00 | % | $ | 921,205 | 243.01 | % | ||||||||||||
Cost of revenues from sale of food and beverage was $270,666 and $328,182 for the three months ended January 31, 2026 and 2025, respectively. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs.
Cost of revenue from consulting service was $58,746 and $50,900 for the three months ended January 31, 2026 and 2025, respectively. Cost of revenues associated with our consulting services was immaterial and primarily consisted of labor costs.
Cost of revenue from sale of recyclable e-waste materials was $970,874 for the three months ended January 31, 2026. Our cost of revenues from sale of recyclable materials primarily consisted of purchasing recyclable materials.
33
Results of Operations
Comparison of the three months ended January 31, 2026 and 2025
The following table summarizes our unaudited condensed consolidated results of operations and as percentage of our total revenues for the period presented.
| For the three months ended January 31, | ||||||||||||||||||||||||
| 2026 | % of Revenues | 2025 | % of Revenues | Dollar Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||||||||
| Revenues, net | $ | 1,383,941 | 100.00 | % | $ | 623,709 | 100.00 | % | $ | 760,232 | 121.89 | % | ||||||||||||
| Cost of revenues | (1,300,286 | ) | (93.96 | )% | (379,081 | ) | (60.78 | )% | (921,205 | ) | 243.01 | % | ||||||||||||
| Gross profit | 83,655 | 6.04 | % | 244,628 | 39.22 | % | (160,973 | ) | (65.80 | )% | ||||||||||||||
| Selling expenses | (14 | ) | (0.001 | )% | (25,722 | ) | (4.12 | )% | 25,708 | (99.95 | )% | |||||||||||||
| General and administrative expenses | (635,248 | ) | (45.90 | )% | (134,823 | ) | (21.62 | )% | (500,425 | ) | 371.17 | % | ||||||||||||
| Total operating expenses | (635,262 | ) | (45.90 | )% | (160,545 | ) | (25.74 | )% | (474,717 | ) | 295.69 | % | ||||||||||||
| Income (loss) from operations | (551,607 | ) | (39.86 | )% | 84,083 | 13.48 | % | (635,690 | ) | (756.03 | )% | |||||||||||||
| Total other income(expense),net | 15,489 | 1.12 | % | (2,283 | ) | (0.37 | )% | 17,772 | (778.45 | )% | ||||||||||||||
| Income (loss) before income tax provision | (536,118 | ) | (38.74 | )% | 81,800 | 13.12 | % | (617,918 | ) | (755.40 | )% | |||||||||||||
| Income tax provision | (12,218 | ) | (0.88 | )% | (1,574 | ) | (0.25 | )% | (10,644 | ) | 676.24 | % | ||||||||||||
| Net income (loss) to the Company from continuing operations | (548,336 | ) | (39.62 | )% | 80,226 | 12.86 | % | (628,562 | ) | (783.49 | )% | |||||||||||||
| Net income (loss) to the Company from discontinued operations, net of tax | - | - | % | (56,808 | ) | (9.11 | )% | 56,808 | (100.00 | )% | ||||||||||||||
| Net income (loss) | $ | (548,336 | ) | (39.62 | )% | $ | 23,418 | 3.75 | % | $ | (571,754 | ) | (2,441.52 | )% | ||||||||||
Revenues from continuing operations
Revenues for the three months ended January 31, 2026 and 2025 were $1,383,941 and $623,709, respectively, an increase of $760,232 or 121.89%. The increase of revenue was primarily attributed to increased sale of recyclable e-waste materials by $1,000,000, partially offset by decreased sale of food imports and distribution by $239,768.
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Cost of revenues associated with continuing operations
The following table presents our costs of revenues by products and services provided as percentage of total cost of revenues for the periods presented.
| For the three months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 270,666 | 20.81 | % | $ | 328,181 | 86.57 | % | $ | (57,515 | ) | (17.53 | )% | |||||||||||
| Consulting Services | 58,746 | 4.52 | % | 50,900 | 13.43 | % | 7,846 | 15.41 | % | |||||||||||||||
| Sale of recyclable e-waste materials | 970,874 | 74.67 | % | % | 970,874 | 100.00 | % | |||||||||||||||||
| Total Cost of Revenues | $ | 1,300,286 | 100.00 | % | $ | 379,081 | 100.00 | % | $ | 921,205 | 243.01 | % | ||||||||||||
Cost of revenues for the three months ended January 31, 2026, and 2025 was $1,300,286 and $379,081, respectively. The increase in cost of revenues was primarily attributable to higher costs associated with the Company’s new operating segment of recyclable e-waste materials, which commenced operations in January 2026.
Gross profit and gross margin associated with continuing operations
The following table presents our gross profit and gross margin by products and services provided as percentage of total revenues for the periods presented.
| For the three months ended January 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Gross profit | Profit Margin to Total Revenues | Gross profit | Profit Margin to Total Revenues | |||||||||||||
| Sale of Food and Beverage | $ | 69,526 | 5.02 | % | $ | 251,779 | 40.37 | % | ||||||||
| Consulting Services | (14,997 | ) | (1.08 | )% | (7,151 | ) | (1.15 | )% | ||||||||
| Sale of recyclable e-waste materials | 29,126 | 2.10 | % | - | - | % | ||||||||||
| Gross Profit and Gross Margin | $ | 83,655 | 6.04 | % | $ | 244,628 | 39.22 | % | ||||||||
The following table presents our gross margin by products and services provided as a percentage of its corresponding categories.
| For the three months ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| Sale of food and beverage | 20.44 | % | 43.41 | % | ||||
| Consulting services | (34.28 | )% | (16.34 | )% | ||||
| Sale of recyclable e-waste materials | 2.91 | % | - | % | ||||
The gross profit for the three months ended January 31, 2026 and 2025 was $83,655 and $244,628, respectively, a decrease of $160,973 or 65.80%. The blended gross profit margin was 6.04% for the three months ended January 31, 2026 compared with 39.22% for the same period in 2025. Gross profit for sale of food and beverage decreased by 72.39% for the three months ended January 31, 2026 due to no sales to Costco. Gross profit for consulting services decreased by 109.74% for the three months ended January 31, 2026. Gross profit from the sale of recyclable e-waste materials increased by 100.0% for the three months ended January 31, 2026, primarily driven by new business that commenced in January 2026.
35
Selling expenses associated with continuing operations
Our selling expenses were $14 for the three months ended January 31, 2026, as compared to $25,722 for the three months ended January 31, 2025, representing an decrease of $25,708, or 99.95%. The decrease in the selling expenses was mainly due to (1) decreased payroll expenses of $25,000, or 100.00% due to decreased number of salespersons, and (2) slightly decreased postage and shipping expenses of $708, or 98.06% as compared to the same period in 2025 resulting from decreased shipping costs incurred for sending product samples for exploring new products for customers. Selling expenses accounted for 0.001% and 4.12% of our total revenues for the three months ended January 31, 2026 and 2025, respectively.
General and administrative expenses associated with continuing operations
Our general and administrative expenses were $635,248 for the three months ended January 31, 2026, as compared to $134,823 for the three months ended January 31, 2025, reflecting an increase of $500,425 or 371.17%. The increase in general and administrative expenses was mainly due to increased professional fee by $340,941 or 608.88% as compared to the same period of 2025, resulting from increased consulting expenses for business development and financial advisory services, increased bad debt expense by $43,749 or 100.00% as compare to the same period of 2025, increased rent expense by $24,186, or 169.95% as compare to the same period of 2025, resulting from new office lease of Marwynn, increased insurance expenses by $24,643, or 100.00% as compared to the same period in 2025, which was mainly due to increased director and officer insurance expenses and increased director compensation expense for our directors and officers by $59,291 or 100% as compared to the same period in 2025.
The increased general administrative expenses were partly offset by decreased subcontract labor cost by $9,000 or 100.00% as compared to the same period in 2025, the decrease was mainly from no contract labor in 2026.
General and administrative expenses accounted for 45.90% and 21.62% of our total revenues for the three months ended January 31, 2026 and 2025, respectively.
Other income (expenses), net
Other income was $15,489 for the three months ended January 31, 2026. Other expenses were $2,283 for the three months ended January 31, 2025.The increase in other income was mainly due to the increase of interest income.
Net income (loss) from continuing operations
We had a net loss from continuing operations of $548,336 for the three months ended January 31, 2026, compared to net income from continuing
operations of $80,226 for the three months ended January 31, 2025, representing an increase net loss of $628,562, or 783.49%. The increase
in our net loss from continuing operations was mainly due to increased operating expenses and decreased gross profit as described above.
Net loss from discontinued operations
We had a loss from discontinued operations of nil for the period from November 1, 2025 to the period ended December 31, 2025, compared to a loss from discontinued operations of $56,808 for the three months ended January 31, 2025, representing a decrease loss of $56,808, or 100.00%.
Net income (loss)
As a result of the above, we had a net loss of $548,336 for the three months ended January 31, 2026, compared to a net income of $23,418 for the three months ended January 31, 2025, an increase of net loss of $571,754 or 2,441.52%, which was mainly resulting from increased consulting fee, insurance expense and decreased gross profit.
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Nine Months Ended January 31, 2026 compared to Nine Months Ended January 31, 2025
Revenues from continuing operations
We derive our revenues from (i) sale of food and beverage, (ii) consulting services and (iii) sale of recyclable e-waste materials. The following table presents our revenues by product and service types and as percentage of our total revenues for the periods presented.
| For the nine months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 340,192 | 23.16 | % | $ | 624,846 | 82.15 | % | $ | (284,654 | ) | (45.56 | )% | |||||||||||
| Consulting Services | 128,749 | 8.76 | % | 135,737 | 17.85 | % | (6,988 | ) | (5.15 | )% | ||||||||||||||
| Sale of recyclable e-waste materials | 1,000,000 | 68.08 | % | - | - | % | 1,000,000 | 100.00 | % | |||||||||||||||
| Total Revenues | $ | 1,468,941 | 100.00 | % | $ | 760,583 | 100.00 | % | $ | 708,358 | 93.13 | % | ||||||||||||
Sales of food and beverage
Sales of food and beverage accounted for 23.16% and 82.15% of total sales for the nine months ended January 31, 2026 and 2025, respectively. Sales of food and beverage decreased by $284,654 or 45.56% from $624,846 for the nine months ended January 31, 2025 to $340,192 for the nine months ended January 31,2026. The decrease in our sales was primarily due to decease of the purchase orders from Costco. We are actively seeking new retailers and working with them to introduce new products that are less sensitive to the tariff tensions between the U.S. and China.
Consulting services
Revenue from consulting services accounted for 8.76% and 17.85% of total revenues for the nine months ended January 31, 2026 and 2025, respectively. Revenue from consulting services decreased by $6,988, or 5.15% from $135,737 for the nine months ended January 31, 2025 to $128,749 for the nine months ended January 31, 2026. We started our consulting services business in March 2024 through providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels.
Sales of recyclable materials
Revenue from sales of recyclable materials accounted for 68.08% and nil of total revenues for the nine months ended January 31, 2026 and 2025, respectively. Revenue from sales of recyclable materials increased by $1,000,000, or 100% from nil for the nine months ended January 31, 2025 to $1,000,000 for the nine months ended January 31, 2026. We started our recyclable service in January 2026 through focusing on coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support related to discarded electronic products.
Costs of Revenues associated with continuing operations
We incur our costs from (i) sale of food and beverage, and (ii) consulting services, and (iii) sale of recyclable e-waste materials. The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.
| For the nine months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 270,666 | 79.56 | % | $ | 351,914 | 56.32 | % | $ | (81,248 | ) | (23.09 | )% | |||||||||||
| Consulting Services | 58,798 | 45.67 | % | 76,448 | 56.32 | % | (17,650 | ) | (23.09 | )% | ||||||||||||||
| Sale of recyclable e-waste materials | 970,874 | 97.09 | % | - | - | % | 970,874 | 100.00 | % | |||||||||||||||
| Total Cost of Revenues | $ | 1,300,338 | 88.52 | % | $ | 428,362 | 56.32 | % | $ | 871,976 | (203.56 | )% | ||||||||||||
37
Cost of revenues from sale of food and beverage decreased by $81,248, or 23.09% from $351,914 for the nine months ended January 31, 2025, to $270,666 for the nine months ended January 31, 2026. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs. The decrease in our cost of revenues for sale of food and beverage was mainly due to decrease sale of food and beverage for the nine months ended January 31, 2026 and 2025.
Cost of revenues associated with our consulting services was immaterial and primarily consisted of labor costs.
Our cost of revenue from sale of recyclable materials was $970,874 and nil for the nine months ended January 31, 2026 and 2025, respectively. Our cost of revenues from sale of recyclable e-waste materials primarily consisted of purchasing recyclable materials.
Results of Operations
Comparison of the nine months ended January 31, 2026 and 2025
The following table summarizes our unaudited condensed consolidated results of operations and as percentage of our total revenues for the period presented.
| For the nine months ended January 31, | ||||||||||||||||||||||||
| 2026 | % of Revenues | 2025 | % of Revenues | Dollar Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||||||||
| Revenues, net | $ | 1,468,941 | 100.00 | % | $ | 760,583 | 100.00 | % | $ | 708,358 | 93.13 | % | ||||||||||||
| Cost of revenues | (1,300,338 | ) | (88.52 | )% | (428,362 | ) | (56.32 | )% | (871,976 | ) | 203.56 | % | ||||||||||||
| Gross profit | 168,603 | 11.48 | % | 332,221 | 43.68 | % | (163,618 | ) | (49.25 | )% | ||||||||||||||
| Selling expenses | (1,314,182 | ) | (89.46 | )% | (86,338 | ) | (11.35 | )% | (1,227,844 | ) | 1,422.14 | % | ||||||||||||
| General and administrative expenses | (2,388,059 | ) | (162.57 | )% | (942,574 | ) | (123.93 | )% | (1,445,485 | ) | 153.36 | % | ||||||||||||
| Total operating expenses | (3,702,241 | ) | (252.03 | )% | (1,028,912 | ) | (135.28 | )% | (2,673,329 | ) | 259.82 | % | ||||||||||||
| Loss from operations | (3,533,638 | ) | (240.56 | )% | (696,691 | ) | (91.60 | )% | (2,836,947 | ) | 407.20 | % | ||||||||||||
| Total other income (expense), net | 31,319 | 2.13 | % | (2,283 | ) | (0.30 | )% | 33,602 | (1,471.84 | )% | ||||||||||||||
| Loss before income tax provision | (3,502,319 | ) | (238.42 | )% | (698,974 | ) | (91.90 | )% | (2,803,345 | ) | 401.07 | % | ||||||||||||
| Income tax provision | (15,401 | ) | (1.05 | )% | (4,668 | ) | (0.61 | )% | (10,733 | ) | 229.93 | % | ||||||||||||
| Net loss from continuing operations | (3,517,720 | ) | (239.47 | )% | (703,642 | ) | (92.51 | )% | (2,814,078 | ) | 399.93 | % | ||||||||||||
| Net income (loss) from discontinued operations, net of tax | (646,656 | ) | (44.02 | )% | 284,160 | 37.36 | % | (930,816 | ) | (327.57 | )% | |||||||||||||
| Net loss | $ | (4,164,376 | ) | (283.50 | )% | $ | (419,482 | ) | (55.15 | )% | $ | (3,744,894 | ) | 892.74 | % | |||||||||
38
Revenues from continuing operations
Revenues for the nine months ended January 31, 2026 and 2025 were $1,468,941 and $760,583, respectively, an increase of $708,358 or 93.13%. The increase of revenues was primarily attributed to increased sale of recyclable e-waste materials by $1,000,000, partially offset by decreased sale of food imports and distribution by $284,654, and decreased consulting services by $6,988.
Cost of revenues associated with continuing operations
The following table presents our costs of revenues by products and services provided as percentage of total cost of revenues for the periods presented.
| For the nine months ended January 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 270,666 | 79.56 | % | $ | 351,914 | 56.32 | % | $ | (81,248 | ) | (23.09 | )% | |||||||||||
| Consulting Services | 58,798 | 45.67 | % | 76,448 | 56.32 | % | (17,650 | ) | (23.09 | )% | ||||||||||||||
| Sale of recyclable e-waste materials | 970,874 | 97.09 | % | - | - | % | 970,874 | 100.00 | % | |||||||||||||||
| Total Cost of Revenues | $ | 1,300,338 | 88.52 | % | $ | 428,362 | 56.32 | % | $ | 871,976 | 203.56 | % | ||||||||||||
Cost of revenues for the nine months ended January 31, 2026, and 2025 was $1,300,338 and $428,362, respectively, an increase of $871,976 or 203.56%. The increase in cost of revenues in the same period of 2026 was primarily attributed to increased cost form sale of recyclable e-waste materials by $970,874, or 100.00%, partially offset by decreased cost from sale of food and beverage by $81,248, or 23.09% and decreased cost from consulting service by $17,650, or 23.09%. Cost of revenues for sale of food and beverage as a percentage of total revenues was 79.56% and 56.32%, respectively, for the nine months ended January 31, 2026 and 2025. Cost of revenues for consulting services as a percentage of total revenues was 45.67% and 56.32%, respectively, for the nine months ended January 31, 2026 and 2025. Cost of revenues for sale of recyclable e-waste materials as a percentage of total revenues was 97.09% and nil, respectively, for the nine months ended January 31, 2026 and 2025.
Gross profit and gross margin associated with continuing operations
The following table presents our gross profit and gross margin by products and services provided as percentage of total revenues for the periods presented.
| For the nine months ended January 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Gross profit | Profit Margin to Total Revenues | Gross profit | Profit Margin to Total Revenues | |||||||||||||
| Sale of food and beverage | $ | 69,526 | 4.73 | % | $ | 272,932 | 35.88 | % | ||||||||
| Consulting services | 69,951 | 4.76 | 59,289 | 7.80 | ||||||||||||
| Sale of recyclable e-waste materials | 29,126 | 1.98 | % | - | - | % | ||||||||||
| Gross profit and gross margin | $ | 168,603 | 11.48 | % | $ | 332,221 | 43.68 | % | ||||||||
39
The following table presents our gross margin by products and services provided as a percentage of its corresponding categories.
| For the nine months ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| Sale of food and beverage | 20.44 | % | 43.68 | % | ||||
| Consulting services | 54.33 | 43.68 | ||||||
| Sale of recyclable e-waste materials | 2.91 | % | - | % | ||||
The gross profit for the nine months ended January 31, 2026 and 2025 was $168,603 and $332,221, respectively, a decrease of $163,618 or 49.25%. The blended gross profit margin was 11.48% for the nine months ended January 31, 2026 compared with 43.68% for the same period in 2025. Gross profit for sale of food and beverage decreased by 74.53% for the nine months ended January 31, 2026 due to no sales to Costco. Gross profit for consulting services increased by 17.98% for the nine months ended January 31, 2026. Gross profit from the sale of recyclable materials increased by 100.0% for the nine months ended January 31, 2026, primarily driven by new business that commenced in January 2026.
Selling expenses associated with continuing operations
Our selling expenses were $1,314,182 for the nine months ended January 31, 2026, compared to $86,338 for the nine months ended January 31, 2025, representing an increase of $1,227,844, or 1,422.14%. The increase in the selling expenses was mainly due to (1) increased advertising and marketing expenses of $1,239,500, or 11,804.76%. To attract new customers, increase our market share and improve operation efficiency, we entered into several consulting agreements for business development, market expansion, supply chain management, and strategic financial plan and support advisory services, (2) slightly increased shipping expenses of $844, or 100.72% as compared to the same period in 2025 resulting from shipping costs incurred for sending product samples for exploring new products for customers, which was partly offset by decreased payroll expenses of $12,500, or 16.67%. Selling expenses accounted for 89.46% and 11.35% of our total revenues for the nine months ended January 31, 2026 and 2025, respectively.
General and administrative expenses associated with continuing operations
Our general and administrative expenses were $2,388,059 for the nine months ended January 31, 2026, compared to $942,574 for the nine months ended January 31, 2025, reflecting an increase of $1,445,485 or 153.36%. The increase in general and administrative expenses was mainly due to increased professional fee by $1,269,719 or 220.44% as compared to the same period of 2025, resulting from increased consulting expenses for financial advisory services and increased legal expense related to disposal of subsidiary, increased rent expense by $70,926 or 100.00% as compared to the same period in 2025, resulting from new office lease of Marwynn, increased director compensation expense by $117,875 or 100.00% as compared to the same period in 2025, and increased insurance expenses by $97,112, or 100.00% as compared to the same period in 2025, which was mainly due to increased directors and officers insurance expenses. The increased general administrative expenses were partly offset by decreased payroll expenses by $50,380 or 36.07% as compared to the same period in 2025, the decrease was mainly from decreased gross pay of one of employees of FuAn, decreased subcontract labor cost by $27,000 or 100.00% as compared to the same period of 2025, and decreased meal and entertainment expenses by $34,874 or 99.95% as compared to the same period of 2025 for the purpose of saving the Company’s operating costs.
General and administrative expenses accounted for 162.57% and 123.93% of our total revenues for the nine months ended January 31, 2026 and 2025, respectively.
Other income (expenses), net
Other income were $31,319 for the nine months ended January 31, 2026, compared to other expenses of $2,283 for the nine months ended January 31, 2025. For the nine months ended January 31, 2026, other income mainly consisted of other income of $2,803, and interest income of $36,347 which was partly offset with other expenses of $6,874, and interest expense of $957. For the nine months ended January 31, 2025, other expenses mainly consisted of other expenses of $2,168 and interest expense of $115.
40
Net loss from continuing operations
We had a net loss from continuing operations of $3,517,720 for the nine months ended January 31, 2026, compared to $703,642 for the nine months ended January 31, 2025, representing an increase of $2,814,078, or 399.93%. The increase in our net loss from continuing operations was mainly due to increased operating expenses and decreased gross profit as described above.
Income (loss) from discontinued operations
We had a net loss from discontinued operations of $646,656 for the period from May 1, 2025 to December 22, 2025, compared to a net income from discontinued operations of $284,160 for the nine months ended January 31, 2025, representing a decrease net income from discontinued operations of $930,816, or 327.57%.
Net loss
As a result of the above, we had a net loss of $4,164,376 for the nine months ended January 31, 2026, compared to a net loss of $419,482 for the nine months ended January 31, 2025, representing an increase of net loss of $3,744,894 or 892.74%. The increase was mainly resulting from increased legal and consulting fee, and insurance expense and decreased gross profit.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. We have funded our working capital, operations and other capital requirements in the past primarily by equity financing, borrowing from related parties, cash flow from operations, and bank loans.
In assessing our liquidity, we monitor and analyze our cash on-hand, our ability to generate sufficient revenue sources, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As reflected in our unaudited condensed consolidated financial statements, we had cash balance of approximately $0.30 million as of January 31, 2026. We also had accounts receivable, net balance of approximately $0.22 million as of January 31, 2026, among which approximately none has been collected as of the date of this report.
Our working capital amounted to approximately $2.15 million as of January 31, 2026. Currently, we are working to improve our liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from our principal stockholder. In order to fully implement our business plan and sustain continued growth, we may also seek equity financing from outside investors.
However, as reflected in the accompanying unaudited condensed consolidated financial statements, the Company had net loss from continuing operations of approximately $3.52 million for the nine months ended January 31, 2026 and net loss from discontinued operations of approximately $0.65 million for the period ended December 22, 2025 and cash outflow from operating activities from continuing operations of approximately $1.30 million for the nine months ended January 31, 2026 and cash inflow from operating activities from discontinued operations of approximately $0.20 million for the period ended December 22, 2025. The management plans to increase its revenue of FuAn by diversifying its markets from major mass market channels to ethnic supermarkets chains. The Company expects to increase sales through FuAn’s distribution channels in the near future. The Company’s decision of disposing Grand Forest is to maximize the efficiency and profitability of its existing business of supply chain consulting, and supply chain services of sourcing Asian foods, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale / warehouse clubs in the US.
The Company has historically funded its working capital needs primarily from operations. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility. Based on above reasons, there is a substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the issuance of the unaudited condensed consolidated financial statements.
41
The following table summarizes our cash flows for the nine months ended January 31,2026 and 2025, respectively.
| Nine Months Ended January 31 | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities for continuing operations | $ | (1,302,397 | ) | $ | (1,048,122 | ) | ||
| Net cash provided by operating activities for discontinued operations | 198,788 | 767,410 | ||||||
| Net cash used in operating activities | (1,103,609 | ) | (280,712 | ) | ||||
| Net cash used in investing activities for continuing operations | (880,000 | ) | - | |||||
| Net cash used in investing activities for discontinued operations | (11,900 | ) | (56,722 | ) | ||||
| Net cash used in investing activities | (891,900 | ) | (56,722 | ) | ||||
| Net cash provided by (used in) financing activities for continuing operations | 1,607,213 | (14,289 | ) | |||||
| Net cash used in financing activities for discontinued operations | (382,428 | ) | (756,961 | ) | ||||
| Net cash provided by (used in) financing activities | 1,224,785 | (771,250 | ) | |||||
| Decrease in cash | (770,724 | ) | (1,108,734 | ) | ||||
| Cash, beginning of the period | 1,261,874 | 1,364,780 | ||||||
| Cash, end of the period | $ | 491,150 | $ | 256,046 | ||||
Net cash used in operating activities
Net cash outflow from operating activities from continuing operations increased by $254,275 for the nine months ended January 31, 2026 comparing with the nine months ended January 31, 2025, mainly resulting from (a) increased net loss from continued operations of $2,814,78 with adding back of non-cash adjustments to net loss by 150,630, (b) increased cash outflow on advance to vendors by $501,382, (c) increased outstanding accounts receivable by $862,885, and (d) decreased cash inflow on accounts payable by $71,550, which was partly offset by (a) decreased cash outflow on prepaid expenses and other current assets by $2,739,771, (b) decreased payment on deferred IPO costs by $697,750, (c) decreased cash outflow on accrued expense and other current liabilities by $246,561, (d) decreased cash outflow on income tax payable by $111,900, and (e) decreased cash outflow on deferred revenue by $50,385.
Net cash provided by operating activities from discontinued operations was $198,788 and $767,410 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.
Net cash used in investing activities
Net cash used in investing activities from continuing operations was $880,000 for the nine months ended January 31, 2026, compared to nil for the same period in 2025. The net cash used in investing activities in 2026 mainly consisted of loans made to Bio Essence Pharmaceutical totaling $330,000, loans made to Valemi Inc. totaling $500,000 and other receivable on discontinued subsidiary of $300,000 , which was partly offset by receivable from disposal of subsidiary of $250,000.
Net cash used in investing activities from discontinued operations was $11,900 and $56,772 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.
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Net cash used in financing activities
Net cash provided by financing activities from continuing operations was $1,607,213 for the nine months ended January 31, 2025, compared to net cash used in financing activities of $14,289 for the nine months ended January 31, 2025. The net cash provided by financing activities in 2026 mainly consisted of repayment of loan from shareholder of $193,853 and proceeds from issuance of common stock of $1,413,360. The net cash used in financing activities in 2025 mainly consisted of loan to shareholder of $38,501 but offset with changes in bank overdraft of $24,212.
Net cash used in financing activities from discontinued operations was $382,428 and $756,961 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of January 31, 2026 and April 30, 2025.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the unaudited condensed consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies as disclosed in this report reflect the more significant judgments and estimates used in preparation of our unaudited condensed consolidated financial statements. Further, as an emerging growth company, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for emerging growth companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements and contained in our subsequent filings with the SEC may not be comparable to other public companies.
The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our unaudited condensed consolidated financial statements:
Critical Accounting Estimates
The preparation of the Unaudited Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates and judgments include, but are not limited to, revenue recognition, sales return allowance, the allowance for credit losses, valuation allowance of deferred tax assets, income taxes, the useful lives of long-lived assets and assumptions used in assessing impairment of long-lived assets. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual amounts may differ from the estimated amounts, such differences are not likely to be material.
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Critical Accounting Policies
Accounts Receivable, Net
On May 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell.
The Company adopted ASC 326 and all related subsequent amendments thereto effective May 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The was no transition adjustment of the adoption of CECL.
Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of January 31, 2026 and April 30, 2025, the allowance for credit losses related to continuing operations were $43,749 and nil, respectively. As of December 22, 2025 and April 30, 2025, the allowance for credit losses for discontinued operations were $557,201 and $557,201, respectively.
Revenue Recognition
In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
The Company derives its revenues primarily from three business segments to provide (i) food and beverage supply chain and brand management services, (ii) Consulting service related to brand management and (iii) sale of recyclable e-waste materials.
Revenue from food and beverage sales
FuAn sources authentic premium Asian foods from various suppliers and then distributes to customers (mainly supermarket and grocery stores) in the U.S. The Company accounts for revenue from sales of authentic premium Asian foods on a gross basis as the Company is responsible for fulfilling the promise to provide the desired authentic premium Asian foods products to customers and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All FuAn’s contracts are fixed price contracts and have one single performance obligation as the promise is to transfer the individual goods to customers.
The sales transaction price is indicated in each purchase order with a Deduct from Invoice (“DFI”) discount which automatically reduces per unit cost on invoice, and payment terms are primarily set as “net 30.” The Company elects to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. The Company’s revenue from sales of authentic premium Asian food products is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Revenue from the sale of food products is reported net of sales returns and allowance.
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Consulting services revenue
Consulting services revenue primarily consists of service income from providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels. The Company’s contracts with customers for supply chain and brand management services are fixed-price contracts. The Company also believes that it serves as a principal in this type of transaction because it has the latitude in establishing prices with customers, and is responsible for bearing the related costs to complete the designated services. It normally takes a few months up to one year to complete the designated services. Revenue is recognized over the service period.
Revenue from recyclable e-waste materials sales
Revenue from recyclable e-waste materials consists primarily of sales of recyclable and recycled items, including metals, plastics, paper, electronic waste, and processed feedstock, to traders and downstream commercial customers. Currently, the Company’s customers for these transactions are primarily located in Hong Kong. The Company is in the process of expanding its customer base and is actively developing relationships with potential customers in the United States. The Company recognizes revenue on a gross basis as it acts as the principal in these arrangements. The Company obtains control of the materials prior to transfer, has discretion in establishing pricing, and bears inventory risk before control is transferred to the customer. Customer contracts are generally fixed-price arrangements and typically include a single performance obligation of selling of the e-waste materials. Revenue is recognized at a point in time when control of the materials transfers to the customer, which generally occurs upon delivery in accordance with the contractual shipping terms. Customer contracts generally do not include variable consideration, material rights of return, or significant financing components
Sales Returns and Allowances
For food and beverage, the Company accrues estimated sales returns based on past experience and current trend of product sales. There was no allowance for sales returns for continuing operations as of January 31, 2026 and April 30, 2025. As of December 22, 2025 and April 30, 2025, the allowance for sales returns for discontinued operations were 205,988 and $205,988, respectively.
Income Tax
The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.
The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating our tax positions and estimating its tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company includes interest and penalties related to its tax contingencies in income tax expense.
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Recently Issued Accounting Pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The ASU was issued in response to the SEC’s August 2018 final amendments in Release No. 33-10532, Disclosure Update and Simplification that updated and simplified disclosure requirements that the SEC believed were duplicative, overlapping, or outdated. The guidance in ASU 2023-06 is intended to align GAAP requirements with those of the SEC and to facilitate the application of GAAP for all entities. The amendments introduced by ASU 2023-06 are effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. If, by June 30, 2027, the SEC has not removed the applicable requirements from its existing regulations, the pending content of the associated amendment will be removed from the ASC and will not become effective for any entities. Early adoption is permitted. The adoption of ASU 2023-06 is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.
On November 4, 2024, the FASB issued an ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions (such as cost of sales; selling, general, and administrative expenses; and research and development). The amendments in the ASU require disclosure in the notes to financial statements of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same tabular disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4) Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.
In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the adoption of this standard to determine its impact on its disclosures.
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In March 2025, the FASB issued ASU 2025-02—Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adoption of this standard to its unaudited condensed consolidated financial statements and disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the 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 period 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.
In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 18) and Revenue from contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. 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 reporting period 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.
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 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.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s unaudited condensed financial statement presentation or disclosures.
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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
ITEM 4 - CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the quarter ended January 31, 2026. We did not maintain effective controls over certain aspects of the financial reporting process because: (i) we lack sufficient personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements, and (ii) there is inadequate segregation of duties due to our limited number of accounting personnel. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies in the future when our financial assets and our operations would support the requirements of additional personnel. However, due to our size and our financial resources, remediating the several identified weaknesses has not been possible and may not be economically feasible now or in the future.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurances with respect to financial statement preparation and presentation. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Change in Internal Control over Financial Reporting
There have been no changes in the Company’s internal controls over financial reporting during the three months ended January 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. To the best knowledge of management, there are no material legal proceedings pending against the Company.
ITEM 1A – RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth in the section captioned “Risk Factors” in our Form 10-K filed with the SEC on August 8, 2025 before making an investment decision. If any of the risks actually occur, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section captioned “Special Note Regarding Forward-Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this Report. The risks described in the Registration Statement are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results. Except as set forth below, there have been no material changes to our previously reported risk factors.
The Company may be delisted from the Nasdaq.
On January 29, 2026, Marwynn Holdings, Inc. (the “Company”) received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”), indicating that the Company is not in compliance with the minimum bid price requirement of $1.00 per share under the Nasdaq Listing Rules (the “Listing Rules”). Based on the closing bid price of the Company’s listed securities for the last 30 consecutive business days from December 15, 2025 to January 28, 2026, the Company no longer meets the minimum bid price requirement set forth in the Listing Rules 5550(a)(2). The Notice is only a notification of deficiency and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Capital Market.
In order to maintain the listing of the Company’s common stock on the Nasdaq, the Company’s common stock must comply with certain continued listing requirements, including having:
| ● | at least two registered and active market makers, one of which may be a market maker entering a stabilizing bid; |
| ● | a minimum bid price of at least $1.00 per share; |
| ● | at least 300 total holders (including both beneficial holders and holders of record, but excluding any holder who is directly or indirectly an executive officer, director or the beneficial holder of more than 10% of the total shares outstanding); and |
| ● | at least 500,000 publicly held shares with a market value of at least $1.0 million (excluding any shares held directly or indirectly by officers, directors or any person who is the beneficial owner of more than 10% of the total shares outstanding). |
The Company must also meet at least one of the following continued listing standards:
| ● | stockholders’ equity of at least $2.5 million; |
| ● | market value of the Company’s common stock of at least $35 million; or |
| ● | net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years. |
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The Company believes that it will regain compliance and meet NASDAQ’s continued listing requirements. No assurances, however, can be given that the Company will be able to regain compliance, and continue to satisfy these requirements as some of these requirements are outside of the Company’s direct control, such as the bid price of its common stock, the number of holders of its common stock and the value of its publicly held shares. If the Company is unable to meet these requirements, NASDAQ may take action to delist the Company’s common stock. In such a case, the Company may appeal NASDAQ’s determination to delist its common stock, but such appeal may not be successful.
If the Company’s common stock is delisted from NASDAQ, the Company expects that its common stock would begin trading on the over-the-counter markets. The delisting of the Company’s common stock could result in a reduction in its trading price and would substantially limit the liquidity of the Company’s common stock. In addition, delisting could materially adversely impact the Company’s ability to raise capital or pursue strategic restructuring, refinancing or other transactions. Delisting from NASDAQ could also have other negative results, including the potential loss of confidence by institutional investors.
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
During the quarter ended January 31, 2026, no director or officer of
the Company
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ITEM 6 - EXHIBITS
The following exhibits are filed as part of this Report.
| Exhibit No. | Description of Exhibit | |
| 31.1 | Section 302 Certification – Chief Executive Officer | |
| 31.2 | Section 302 Certification – Chief Financial Officer | |
| 32.1* | Section 906 Certification – Chief Executive Officer | |
| 32.2* | Section 906 Certification – Chief Financial Officer | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act or the Exchange Act, irrespective of any general incorporation language in any filings. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: March 17, 2026 | MARWYNN HOLDINGS, INC. | |
| By: | /s/ Yin Yan | |
| Name: | Yin Yan | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| By: | /s/ Shengnan Xu | |
| Name: | Shengnan Xu | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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FAQ
How did Marwynn Holdings (MWYN) perform financially in the latest quarter?
What is the nine-month financial result for Marwynn Holdings (MWYN)?
Why did Marwynn Holdings (MWYN) issue a going concern warning?
What happened with Marwynn Holdings’ Grand Forest cabinetry business?
How is Marwynn Holdings (MWYN) changing its business mix?
What is Marwynn Holdings’ (MWYN) current cash and working capital position?
