AiRWA adds $23.6M pro forma loss to acquisition report
Pro forma combined results for the year ended April 30, 2026 show $28,730,327 in revenue and a $23,567,151 net loss.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
AiRWA Inc. (YYAI) amended its acquisition report to add audited financial statements for Hongkong Best Life Trade Co., Limited (Best Life) for the years ended April 30, 2026 and 2025, plus unaudited pro forma combined statements. On July 30, 2026, AiRWA acquired all shares of Oceancrest Investment Holdings Limited, which owns 97% of Best Life.
The purchase agreement sets a $50 million base price payable in USDT or U.S. dollars. AiRWA paid $30 million at closing and a further $13 million by the filing date, leaving $7 million due. The seller may receive $30 million if Best Life's gross revenue for the year ended December 31, 2026 exceeds $10 million, and $50 million if its gross revenue for the year ended December 31, 2027 exceeds $25 million. Acquisition-date fair value of consideration transferred was $71,770,948, including $48,963,058 cash consideration and $22,807,890 contingent consideration.
Best Life reported 2026 revenue of $2,923,038 and net income of $1,074,974, compared with $2,511,187 and $444,079, respectively, in 2025. Pro forma combined revenue for the year ended April 30, 2026 was $28,730,327, with a net loss of $23,567,151. The pro forma statement includes $7,830,000 in annual amortization expense and reflects transaction accounting adjustments only.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointBest Life revenue rose to $2,923,038 for the year ended April 30, 2026, from $2,511,187 in 2025.
- Moderate pointBest Life net income increased to $1,074,974 for the year ended April 30, 2026, from $444,079 in 2025.
Negative
- Major pointPro forma combined net loss: $23,567,151 for the year ended April 30, 2026.
Filing Explained
The acquired business’s audited statements show one customer generated
8-K Event Classification
Key Figures
Key Terms
contingent consideration financial
non-controlling interest financial
goodwill financial
performance obligation financial
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
July 30, 2026
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
(Address of principal executive offices, including Zip Code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Introductory Note
On July 30, 2026, AiRWA Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) with the U.S. Securities and Exchange Commission that disclosed the closing, on that day, of the acquisition contemplated by a share purchase agreement with Nova Innovation Tech Ltd, a BVI company, to acquire all the share capital of Oceancrest Investment Holdings Limited, a BVI holding company that owns 97% of Hongkong Best Life Trade Co., Limited, a Hong Kong operating company (the “Target”), for $50 million, payable in USDT or cash, with additional earn-out amounts payable if the Target achieves specified revenue targets (the “Transaction”).
This Current Report on Form 8-K/A (the “Amendment”) amends the Original Report to include the financial statements required to be filed under Item 9.01(a) of Form 8-K and the pro forma financial information required to be filed under Item 9.01(b) of Form 8-K. Except as provided herein, the disclosures made in the Original Report remain unchanged.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The audited financial statements of the Target as of and for the years ended April 30, 2026 and 2025, as required by Item 9.01(a) of Form 8-K, are attached as Exhibit 99.1 this Amendment and are incorporated by reference herein.
(b) Pro forma financial information.
The unaudited pro forma combined financial statements of the Company as of and for the year ended April 30, 2026, as required by Item 9.01(b) of Form 8-K, are attached as Exhibit 99.2 to this Amendment and are incorporated by reference herein.
| -2- |
The following exhibits are furnished with this Form 8-K:
| Exhibit No. | Description | |
| 23.1 | Consent of Li CPA LLC | |
| 99.1 | Audited financial statements of Hongkong Best Life Trade Co., Limited, as of and for the years ended April 30, 2026 and 2025 | |
| 99.2 | Unaudited pro forma combined financial statements of the Company as of and for the year ended April 30, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| -3- |
SIGNATURE
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 hereunto duly authorized.
| AiRWA INC. | ||
| a Delaware corporation | ||
| Dated: October 14, 2026 | By: | /s/ Thomas Tarala |
| Thomas Tarala | ||
| Chief Executive Officer | ||
| -4- |
Exhibit 99.1
AUDITED FINANCIAL STATEMENTS OF HONGKONG BEST LIFE TRADE CO., LIMITED,
AS OF AND FOR THE YEARS ENDED APRIL 30, 2026 AND 2025
| Consolidated Financial Statements for the Years Ended April 30, 2026 and 2025 | ||
| Report of Independent Registered Public Accounting Firm | F-1 | |
| Financial Statements: | ||
| Balance Sheets | F-2 | |
| Statements of Operations and Other Comprehensive Income | F-3 | |
| Statements of Changes in Shareholders’ Equity | F-4 | |
| Statements of Cash Flows | F-5 | |
| Notes to the Financial Statements | F-6 to F-15 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Shareholders of Hongkong Best Life Trade Co., Limited
Opinion the Financial Statements
We have audited the accompanying balance sheets of Hongkong Best Life Trade Co., Limited (the “Target Company”) as of April 30, 2025 and 2026 and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended April 30, 2025 and 2026, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2025 and 2026, and the results of its operations and its cash flows for each of the years in the two-year period ended April 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the U.S. Public Company Accounting Oversight Board (the “PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ Li CPA LLC | |
| We have served as the Target Company’s auditor since 2026. | |
| Aurora, Colorado | |
| PCAOB ID Number 7093 | |
| October 14, 2026 | |
| F-1 |
HONGKONG BEST LIFE TRADE CO., LIMITED
Consolidated Balance Sheets
(Expressed in U.S. dollars, except for the number of shares or where otherwise noted)
| As of April 30, | ||||||||
| 2025 | 2026 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Short-term investments | - | |||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Deferred tax assets | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Amounts due to a related party | ||||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| COMMITMENTS AND CONTINGENCIES | - | |||||||
| Equity | ||||||||
| Ordinary shares (USD$ | ||||||||
| Subscription receivable | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income/(loss) | ( | ) | ||||||
| Total Equity | $ | $ | ||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
HONGKONG BEST LIFE TRADE CO., LIMITED
Consolidated Statements of Income and Comprehensive Income
(Expressed in U.S. dollars, except for the number of shares or where otherwise noted)
| For the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Income from operations | ||||||||
| Other income | ||||||||
| Interest income | ||||||||
| Other income, net | — | |||||||
| Total other income, net | ||||||||
| Income before income taxes | ||||||||
| Income tax expense | ||||||||
| Net income | $ | $ | ||||||
| Other comprehensive income/(loss) | ||||||||
| Foreign currency translation adjustments | ( | ) | ||||||
| Total comprehensive income | $ | $ | ||||||
| Earnings per share | ||||||||
| Ordinary shares – Basic and diluted | $ | $ | ||||||
| Weighted average shares outstanding used in calculating basic and diluted earnings per share | ||||||||
| Ordinary shares – Basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
HONGKONG BEST LIFE TRADE CO., LIMITED
Consolidated Statements of Changes in Equity
(Expressed in U.S. dollars, except for the number of shares or where otherwise noted)
| Accumulated other | Total controlling shareholders’ | |||||||||||||||||||||||
| Ordinary Shares | Subscription | Retained | comprehensive | (deficit) | ||||||||||||||||||||
| Shares | Amount | receivable | earnings | income (loss) | equity | |||||||||||||||||||
| BALANCES, April 30, 2024 | $ | $ | ( | ) | $ | $ | — | $ | | |||||||||||||||
| Foreign currency translation | — | — | — | — | ||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||
| BALANCES, April 30, 2025 | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||
| Balance | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||
| Foreign currency translation | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
| Shareholder distribution | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||
| BALANCES, April 30, 2026 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||
| Balance | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
HONGKONG BEST LIFE TRADE CO., LIMITED
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars, except for the number of shares or where otherwise noted)
| For the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Cash flow from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to cash flow provided by operating activities: | ||||||||
| Credit losses for receivables | ||||||||
| Deferred tax benefit | ( | ) | ( | ) | ||||
| Accrued interest income | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Income tax payables | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash provided by operating activities | $ | $ | ||||||
| Cash flow from investing activities: | ||||||||
| Purchase of short-term investments | $ | ( | ) | $ | ( | ) | ||
| Redemption of short-term investments | ||||||||
| Net cash provided by investing activities | $ | $ | ||||||
| Cash flow from financing activities: | ||||||||
| Repayment to a related party | ( | ) | ( | ) | ||||
| Dividend distribution | — | ( | ) | |||||
| Net cash used in financing activities | $ | ( | ) | $ | ( | ) | ||
| Effect of exchange rate changes | ( | ) | ||||||
| Net increase in cash | ||||||||
| Cash, beginning of the year | ||||||||
| Cash, end of the year | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
Hongkong Best Life Trade Co., Limited
Notes to Consolidated Financial Statements
For the Years Ended April 30, 2025 and 2026
1. Organization and Description of Business
Hongkong Best Life Trade Co., Limited (the “Company” or “Best Life”) is a limited liability company, which was incorporated in Hong Kong on August 26, 2014. The Company is principally engaged in selling products on cross-border e-commerce platforms, including daily necessities, 3C products (computers, communications, and consumer electronics), and health supplements. The Group’s principal operations and geographic markets are mainly in Hong Kong, Mainland China, United States, the Middle East and South America.
2. Summary of Significant Accounting Policies
Basis of presentation and principle of consolidation
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
Use of estimates and assumptions
The preparation of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from the estimates, and as such, differences could be material to these consolidated financial statements.
Cash
Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation.
Short-term investments
Short-term investments primarily consist of time
deposits with original maturities of more than three months but less than one year. These time deposits are classified as short-term
investments and carried at amortized cost. Interest income is recognized using the effective interest method and recorded in
“Interest income” in the consolidated statements of income. For the years ended April 30, 2025 and 2026, the Company
recognized interest income of $
Accounts receivable
Accounts
receivable are recognized and carried at the original invoiced amount less an allowance for credit losses and do not bear interest.
The Company adopted ASU No. 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments (“ASC 326”) on its accounts receivable and records the allowance for credit
losses as an offset to accounts receivable, and the estimated credit losses charged to the allowance is recognized under
“general and administrative” in the consolidated statements of income and comprehensive income. The Company assesses
collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on
similar business line or product offered and on an individual basis when the Company identifies specific customers with known
disputes or collectability issues. In determining the amount of the allowance for expected credit losses, the Company considers
historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the
Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of
future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Under this
accounting guidance, the Company measures credit losses on its accounts receivable using the current expected credit loss model
under ASC 326. As of April 30, 2025 and 2026, the Company recorded allowances for expected credit losses against accounts
receivable of $
| F-6 |
Inventories
Inventories,
consisting of finished goods, are stated at the lower of cost or net realizable value. The cost of inventory is determined using the
weighted average cost method. Inventory is written down for damaged and slow-moving goods, which is dependent upon factors such as
historical and forecasted customers’ demand. Once inventory is written down, a new, lower cost basis for that inventory is
established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established
cost basis. $
Other current assets
Other current assets consist of interest receivable, which is classified as either current or non-current based on the terms of the respective agreements. Under ASC 326, the Group measures expected credit losses on its other current assets using the current expected loss model. As of April 30, 2025 and April 30, 2024, no allowance for expected credit loss against other current assets was recognized.
Revenue recognition
The Company follows the rules and guidance set out under ASC 606, Revenue from Contracts with Customers (“ASC 606”), when recognizing revenue from contracts with customers. The core principle of ASC 606 requires an entity to recognize revenue to depict the transfer of goods to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods recognized as performance obligations are satisfied. In accordance with ASC 606, revenue is recognized when the Company satisfies the performance obligations by delivering the promised goods to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation.
The Company identifies each distinct sales transaction as a performance obligation. The recognition and measurement of revenue is based on the assessment of individual contract terms. The Company applies a practical expedient to expense contract acquisition costs as incurred when those costs would be amortized over one year or less. The Company has no material incremental costs of obtaining contracts with customers where the Company expects the benefit of those costs to be longer than one year, which would need to be recognized as assets.
The Company has only one revenue stream, which is the sale of products primarily through cross-border e-commerce platforms. The Company’s revenue is primarily generated from product sales to individual customers through cross-border e-commerce platforms, with a small portion derived from offline sales and sales to corporate customers. The Company’s product portfolio mainly consists of daily necessities, 3C products, and health supplements, and includes both proprietary brands and non-proprietary brands (including brands the Company is authorized to sell).
The Company enters into a distinct agreement with its customers, through sales contract or sales order, to sell products in exchange for sales proceeds. The Company’s promise to sell products to its customers is considered distinct and is identified as one performance obligation.
The Company charges its customers sales proceeds at a fixed amount, which is explicitly stated in the sales contract and sales order and is based on the unit price and quantity supplied to the customer. There is no variable consideration or significant financing component in the sales contract and sales order. Customers are usually required to pay in advance or pay upon delivery. Under certain circumstances, the Company may offer a short payment term of approximately 30 days to its customers. Revenue is recognized at the point in time when control of the product transfers to the customer.
The Company follows the rules and guidance set out in ASC 606 when determining whether it is acting as a principal or an agent in the contract with its customers. The core principle of ASC 606 requires an entity to determine whether the nature of its promise is a performance obligation to provide the goods itself (that is, the entity is a principal) or to arrange for those goods to be provided by the other party (that is, the entity is an agent). The following steps are applied to achieve that core principle:
Step 1: Identify the specified goods to be provided to the customer
Step 2: Assess whether it controls each specified good before that good is transferred to the customer
| F-7 |
ASC 606-10-55-39 provides indicators to support an entity’s evaluation of control. The Company recognizes the product sales revenue on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices.
Warranty
The Company’s standard contracts typically do not include warranty provisions. The Company provides warranty services in accordance with industry practices and statutory warranty requirements. As such, these warranty services are classified as assurance-type warranties. Since the contract price and term is fixed and enforceable and assurance-type warranty guarantees the functionality of a product and the warranty is not accounted for as a separate performance obligation, thus no transaction price is allocated to it.
Under ASC 460, Guarantees, at the time a sale is recognized, the Company shall record estimated future warranty costs. The Company provides warranty services in accordance with the government-mandated guarantees policy. These estimated costs for warranties are determined at completion and are not for warranties separately sold by the Company. Generally, the estimated claim rates of warranties are based on actual warranty experience or the Company’s best estimate. There were no such reserves for the years ended April 30, 2025 and 2026 because the Company considered that the claim rates of warranties had been immaterial historically and are expected to remain immaterial for the years in question.
Cost of revenue
Cost of revenue primarily consists of the direct costs of products sold.
Selling and marketing expenses
Selling and marketing expenses primarily consist of shipping and delivery costs, e-commerce platform fees, and other marketing expenses.
General and administrative expenses
General and administrative expenses mainly consist of staff cost, rent, and depreciation expenses related to general operations, professional service expenses, and other general corporate expenses.
Income taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Provision for income taxes consists of current taxes and deferred taxes.
Current tax is recognized based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognized in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the consolidated statements of income and comprehensive income, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have any significant uncertain tax positions nor interest and penalty associated with tax positions as of April 30, 2025 and 2026.
| F-8 |
Segment reporting
In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Improvements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 for the year ended April 30, 2025, retrospectively to all periods presented in its consolidated financial statements. The adoption of this ASU had no material impact on reportable segments identified and had no effect on the Company’s consolidated financial position, results of operations, or cash flow.
Based on the criteria established by ASC 280, Segment Reporting, the Company uses the management approach in determining its operating segments. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company derives substantially all its revenue from a single principal activity, which is the sale of daily necessities, 3C products, and health supplements. Although these products span multiple brands, end-uses, and geographic markets, they exhibit similar economic characteristics, overlapping customer bases, and consistent cost structures. In addition, the CODM assesses performance based on Company-wide metrics, including revenue, gross profit, and operating expenses, and makes all significant operating, financing, and investment decisions at the consolidated level. Accordingly, management has determined that the Company has one operating segment and therefore one reportable segment.
Comprehensive income
Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains, and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currency.
Earnings per share
Earnings per share (“EPS”) are computed in accordance with ASC Topic 260, Earnings per Share (“ASC 260”). Basic EPS is computed by dividing the income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares.
Translation of foreign currencies
The Company’s principal place of operations is Hong Kong. The functional currency of the Company is Hong Kong Dollars (“HKD” or “HK$”). The Company’s consolidated financial statements are presented in U.S. dollars (“US$” or “$”). The results of operations and the consolidated statements of cash flows, denominated in the functional currency, are translated to U.S. dollars at the average rate of exchange during the reporting period. Assets and liabilities denominated in the functional currency at the balance sheet dates are translated to U.S. dollars at the applicable rates of exchange in effect at those dates. The equity, denominated in the functional currency, is translated to U.S. dollars at the historical rate of exchange at the time of the transaction. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income in the consolidated statements of changes in shareholders’ equity. Exchange differences arising from the translation of the Company’s results and financial position into U.S. dollars are recognized in other comprehensive income.
| F-9 |
The following table outlines the exchange rates between Hong Kong dollars and U.S. dollars that are used in preparing these consolidated financial statements:
Schedule of Foreign Currencies Translation Exchange Rates
| HKD | ||||
| Exchange rates on April 30, 2026 | ||||
| Average exchange rates for the year ended April 30, 2026 | ||||
| Exchange rates on April 30, 2025 | ||||
| Average exchange rates for the year ended April 30, 2025 | ||||
Fair value of financial instruments
The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| Level 1 — | Quoted prices in active markets for identical assets and liabilities. | |
| Level 2 — | Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
| Level 3 — | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. |
As of April 30, 2025 and 2026, the Company’s financial instruments primarily consisted of cash, accounts receivable, other current assets, amounts due to a related party, and accrued expenses and other current liabilities. For these financial instruments, the carrying amounts approximate their fair values due to the short-term nature of these instruments.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
| F-10 |
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“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, or EGC, 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. Therefore, the Company’s financial statements may not be comparable to those of companies that comply with public company effective dates.
Recent accounting pronouncements not yet adopted
In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosure. This standard requires more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This standard also includes certain other amendments to improve the effectiveness of income tax disclosure. ASU 2023-09 is effective for public business entities, for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. The Company is in the process of evaluating the impact of adopting this new guidance on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosure about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326). The amendments in this update provide all entities with a practical expedient and provide entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is in the process of evaluating the impact of adopting this new guidance on its consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and comprehensive income, and statements of cash flows.
3. Significant Risks
Credit risk
Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and accounts receivable. The maximum exposure of such assets to credit risk as of the balance sheet dates is their carrying amount as of those dates.
As
of April 30, 2025 and 2026, $
Other
current assets that potentially subject the Company to credit risk are monitored through regular and ongoing assessments of the
counterparties’ financial condition and credit history. In addition, the Company evaluates historical collection trends, the
aging profile of receivables, and prevailing economic conditions. Based on these assessments, management believes that adequate
controls are in place to minimize credit risk associated with these assets. As of April 30, 2025 and 2026, the Company recorded
allowances of $
| F-11 |
Concentration risks
For the years ended April 30, 2025 and 2026, the Company’s assets were primarily located in Hong Kong. The Company considers that it is exposed to the following concentrations of risk:
(a) Major customers
For
the years ended April 30, 2025 and 2026, there was one customer that accounted for 10% or more of the Company’s revenue.
Revenue from that customer accounted for approximately
As
of April 30, 2025 and 2026, there were two customers whose receivables accounted for 10% or more of the Company’s total
balances of accounts receivable. These accounted for
(b) Major vendors
For the years ended April 30, 2025 and 2026, no vendor accounted for 10% or more of the Company’s total purchases.
Interest rate risk
Fluctuations in market interest rates may adversely affect the Company’s financial position and results of operations. The Company is exposed to interest rate risk primarily through its bank deposits, which are subject to floating interest rates. This exposure may be more pronounced during periods of significant interest rate volatility. The Company monitors this exposure but, based on the relatively short duration and modest average balance of these deposits, does not consider the potential impact of interest rate fluctuations to be material to its financial position or results of operations. As of the reporting date, the Company has not entered into any interest rate hedging arrangements or derivative instruments to manage this exposure.
4. Accounts receivable
Accounts Receivable
Accounts receivable consisted of the following:
Schedule of Accounts Receivable
| As of April 30, | ||||||||
| 2025 | 2026 | |||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for expected credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
The movement of allowance for expected credit losses is as follows:
Allowance for Expected Credit Losses
| 2025 | 2026 | |||||||
| For the year ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Balance at May 1 | $ | $ | ||||||
| Provision for expected credit losses | ||||||||
| Exchange rate differences | ( | ) | ||||||
| Balance at April 30 | $ | $ | ||||||
5. Inventories
As of April 30, 2025 and 2026, inventories consisted of the following balances:
Schedule of Inventories
| As of April 30, | ||||||||
| 2025 | 2026 | |||||||
| Finished goods | $ | |||||||
| Inventories | $ | $ | ||||||
Write-downs of $
| F-12 |
6. Equity
Ordinary shares
The
Company was established under the laws of Hong Kong on August 26, 2014. The authorized share capital of the Company is HKD$
Subscription receivable
As
of the date these consolidated financial statements are issued, the consideration of these
Dividend distribution
In
January 2026, the board of directors of Best Life approved a profit distribution to its shareholder in the amount of $
7. Income Taxes
(a) Income tax
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
Hong Kong
The
Company incorporated in Hong Kong is subject to profits tax in Hong Kong. According to Tax (Amendment) (No. 3) Ordinance
2018 published by Hong Kong government, effective April 1, 2018, under the two-tiered profits tax rates regime, the
profits tax rate for the first HKD
The components of income/(loss) before income taxes were as follows:
Schedule of Domestic and Foreign Components
| For the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Hong Kong | $ | $ | ||||||
| Non-Hong Kong | - | - | ||||||
| Total | $ | $ | ||||||
Significant components of the provision for income taxes were as follows:
Schedule of Income Tax Expenses
| For
the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Current income tax expense | $ | $ | ||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Total income tax expense | $ | $ | ||||||
| F-13 |
(b) Deferred tax assets
Schedule of Deferred Tax Assets
| 2025 | 2026 | |||||||
| For
the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Allowance for expected credit losses | $ | $ | ||||||
| Inventory write-down | ||||||||
| Total deferred tax assets | $ | $ | ||||||
(c) Uncertain tax position
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and it measures the unrecognized benefits associated with the tax positions. As of April 30, 2025 and 2026, the Company did not have any unrecognized uncertain tax positions and does not believe that its unrecognized tax benefits will change over the next twelve months. For the years ended April 30, 2025 and 2026, the Company did not incur any interest and penalties related to potential underpaid income tax expenses.
8. Related Party Transactions and Balances
The following is a list of related parties with which the Company has had major transactions in the years ended April 30, 2025 and 2026:
Schedule of Related Party Transactions
| Name | Relationship with the Company | |
| Ms. Yanmei Mo |
(a) The Company entered into the following transactions with the major related party:
| For the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Repayment of loans from related parties during the year | ||||||||
| Ms. Yanmei Mo | $ | $ | ||||||
| Total repayment of loans from related parties during the year | $ | $ | ||||||
(b) The Company had the following balances with the major related party:
| As
of April 30, | ||||||
| 2025 | 2026 | |||||
| Amounts due to a related party | ||||||
| Ms. Yanmei Mo (1) | $ | $ | ||||
| Total amounts due to a related party | $ | $ | ||||
| (1) |
9. Commitments and Contingencies
Commitments
As of April 30, 2026, the Company had no significant financial or capital commitments.
Contingencies
As of April 30, 2026, the Company was not a party to any legal or administrative proceedings. There were therefore no legal or regulatory proceedings, either individually or in the aggregate, that could have resulted in an unfavorable outcome with a material adverse effect on the Company’s results of operations, consolidated financial condition, or cash flow.
| F-14 |
10. Segment information
The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM, the Company’s CEO, for making decisions, allocating resources, and assessing performance.
The CODM considers that the Company mainly carries out its operations in Hong Kong. Internally, the Company reports costs and expenses by nature as a whole for management decision-making and assessment. Based on management’s assessment, the Company has determined that it has only one operating segment and therefore one reportable segment as defined by ASC 280.
The Company’s CODM uses consolidated net income as the measure of segment profit or loss. Significant segment expenses are consistent with those reported in the consolidated statements of income and comprehensive income and include cost of revenue, selling expenses, and general and administrative expenses.
The following table presents the significant segment revenue and expense categories in the Company’s single operating segment, which is the same with the consolidated statements of income and comprehensive income for the years ended April 30, 2025 and 2026.
Schedule of Segment Revenue and Expense
| For
the Years Ended April 30, | ||||||||
| 2025 | 2026 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Other income, net | — | |||||||
| Interest income | ||||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net income of single operating segment | $ | $ | ||||||
11. Subsequent Events
The Company has evaluated all events and transactions that occurred after April 30, 2026 up through October 14, 2026, which is the date the audited consolidated financial statements are available to be issued, and concluded that no subsequent event occurred that would require recognition or disclosure in the Company’s consolidated financial statements.
| F-15 |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On
July 27, 2026, AiRWA Inc. (the “Company” or “AiRWA”) entered into a share purchase agreement (the “Share
Purchase Agreement”) with Nova Innovation Tech Ltd, a BVI company (the “Seller”), to acquire all the share capital
of Oceancrest Investment Holdings Limited, a BVI holding company (the “Holding Company”), which owns 97% of Hongkong Best
Life Trade Co., Limited (“Best Life”), a Hong Kong operating company. The base purchase price is $50 million, payable in
USDT (Tether) or U.S. dollars, of which $30 million was paid on the closing date.
Best Life is a cross-border consumer-goods distribution and e-commerce business, leveraging direct brand sourcing, import expertise, bonded warehousing, platform operations, offline retail access, and select private-label development to sell Japanese and other international consumer products across China and other overseas markets. It has in place business relationships with brand owners and manufacturers upstream and with e-commerce platforms, supermarkets, specialty retailers, and online resellers downstream, including such names as Alibaba Health Hong Kong, AlipayHK, Tmall, Taobao, and Cainiao, each relationship supported by formal cooperation agreements. While Best Life historically has focused on Asia, it has recently launched an international expansion program to the UK, the U.S., Canada, and New Zealand. The transaction is expected to generate revenue synergies through cross-selling opportunities and cost synergies from integrated procurement and logistics. AiRWA anticipates the acquisition will have a positive impact on its financial performance.
On July 30, 2026, AiRWA paid the Seller US$30 million in USDT and received 100% of the issued shares of Oceancrest Investment Holdings Limited, which owns a 97% equity interest in Best Life. The remaining US$20 million of the base purchase price is payable within 90 days of the closing in accordance with the terms of the acquisition agreement. The fair value of the cash consideration transferred was $48,963,058, which reflects the present value of the contractual payments. Based on the probability-weighted assessment performed by a third-party valuation specialist, the fair value of the contingent consideration was estimated to be $22,807,890 as of the acquisition date, all of which relates to the fiscal year 2026 earn-out. The same assessment indicates that the fiscal year 2027 earn-out is not expected to be achieved, and the fair value attributable to that milestone was therefore determined to be zero. The contingent consideration is classified as a liability, with the entire balance of $22,807,890 presented as a current liability in the unaudited pro forma condensed combined balance sheet as of April 30, 2026.
The following unaudited pro forma condensed combined balance sheet, unaudited pro forma condensed combined statement of income and comprehensive income, and the explanatory notes give effect to the merger of Best Life and AiRWA.
The unaudited pro forma condensed combined statement of income and comprehensive income for the year ended April 30, 2026 has been prepared as if the merger of Best Life and AiRWA had been consummated on May 1, 2025. The unaudited pro forma condensed combined balance sheet as of April 30, 2026 has been prepared as if the mergers of Best Life and AiRWA had been consummated on April 30, 2026.
The unaudited pro forma condensed combined statements of income and comprehensive income combine the audited consolidated statement of income and comprehensive income of AiRWA for the year ended April 30, 2026 with the audited consolidated statement of income and comprehensive income of Best Life for the year ended April 30, 2026, giving effect to the business acquisition, as if it had occurred as of May 1, 2025.
The unaudited pro forma condensed combined balance sheet as of April 30, 2026 combines the audited consolidated balance sheet of AiRWA as of April 30, 2026 with the audited consolidated balance sheet of Best Life as of April 30, 2026, giving effect to the business acquisition, as if it had been consummated as of April 30, 2026.
The unaudited pro forma condensed combined financial statements have been derived from and should be read in connection with:
| ● | the accompanying explanatory notes to the unaudited pro forma condensed combined financial statements; |
| ● | the audited consolidated financial statements of Best Life as of and for the year ended April 30, 2026 and the related notes included in this Amendment; and |
| ● | the audited consolidated financial statements of AiRWA as of and for the year ended April 30, 2026 and the related notes included in AiRWA’s Annual Report on Form 10-K for the year ended April 30, 2026 filed with the SEC on September 21, 2026. |
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S- X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). These pro forma adjustments were presented in separate columns after the presentation of the combined historical information of AiRWA and Best Life. The Company has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information does not reflect future events that may occur after the combination. The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of a true picture of the financial position and the results of operations of the combined companies following the completion of the combination. The pro forma adjustments are subject to material change and are based on currently available information and certain assumptions that the Company believes are reasonable.
There were no significant accounting policy differences or other items which required adjustment in the accompanying unaudited pro forma condensed combined financial statements.
AiRWA INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Balance Sheet
As of April 30, 2026
| AiRWA | Best Life | Pro Forma Adjustments | Notes | Pro Forma Combined | ||||||||||||||
| ASSETS | ||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||
| Cash and cash equivalents | $ | 12,780,208 | $ | 1,236,113 | $ | - | a | $ | 14,016,321 | |||||||||
| Accounts receivable, net | 17,997,211 | 384,634 | - | 18,381,845 | ||||||||||||||
| Inventories, net | - | 1,109,608 | - | 1,109,608 | ||||||||||||||
| Contract Cost | 6,548,813 | - | - | 6,548,813 | ||||||||||||||
| ROU asset | 3,679 | - | - | 3,679 | ||||||||||||||
| Digital assets | 19,245,771 | - | - | 19,245,771 | ||||||||||||||
| Deposits | 310,576 | - | - | 310,576 | ||||||||||||||
| Prepayments | 1,234,161 | - | - | 1,234,161 | ||||||||||||||
Other current assets | 1,341,413 | 5,791 | - | 1,347,204 | ||||||||||||||
| Total current assets | 59,461,832 | 2,736,146 | - | 62,197,978 | ||||||||||||||
| NONCURRENT ASSETS | ||||||||||||||||||
| Property and equipment, net | 1,297,703 | - | - | 1,297,703 | ||||||||||||||
| Definite-lived intangible assets, net | 91,943,707 | - | 57,400,000 | a | 149,343,707 | |||||||||||||
| Indefinite-lived intangible assets | - | - | - | - | ||||||||||||||
| Goodwill | 59,924,272 | - | 24,563,556 | a | 84,487,828 | |||||||||||||
| Deferred tax assets | - | 67,677 | - | 67,677 | ||||||||||||||
| Total noncurrent assets | 153,165,682 | 67,677 | 81,963,556 | 235,196,915 | ||||||||||||||
| TOTAL ASSETS | $ | 212,627,514 | $ | 2,803,823 | $ | 81,963,556 | $ | 297,394,893 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||
| Accounts payable | 4,992,442 | - | - | 4,992,442 | ||||||||||||||
| Accrued expenses | 3,453,832 | - | - | 3,453,832 | ||||||||||||||
| Contract liability | 10,802,800 | - | - | 10,802,800 | ||||||||||||||
| Contingent consideration liability | - | - | 22,807,890 | a | 22,807,890 | |||||||||||||
| Other payables and accrued liabilities | - | 14,302 | 48,963,058 | a | 48,977,360 | |||||||||||||
| Finance leases liabilities, current | - | - | - | - | ||||||||||||||
| Amount due to related parties | - | 1,031,001 | - | 1,031,001 | ||||||||||||||
| Tax payables | - | 260,408 | - | 260,408 | ||||||||||||||
| Total current liabilities | 19,249,074 | 1,305,711 | 71,770,948 | 92,325,733 | ||||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||||||
| Deferred tax liabilities | 22,066,490 | - | 9,471,000 | a | 31,537,490 | |||||||||||||
| Total non-current liabilities | 22,066,490 | - | 9,471,000 | 31,537,490 | ||||||||||||||
| TOTAL LIABILITIES | $ | 41,315,564 | $ | 1,305,711 | $ | 81,241,948 | $ | 123,863,223 | ||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||||
| Common stock, par value $0.001; 1,000,000,000 shares authorized, 52,678 shares issued and outstanding as of April 30, 2026 | 52 | 1,279 | (1,279 | ) | b | 52 | ||||||||||||
| Subscription receivable | (1,279 | ) | ||||||||||||||||
| Additional paid-in capital | 182,000,909 | - | b | 182,000,909 | ||||||||||||||
| Retained earnings | (10,689,011 | ) | 1,505,981 | (1,505,981 | ) | b | (10,689,011 | ) | ||||||||||
| Accumulated other comprehensive income (loss) | - | (7,869 | ) | 7,869 | b | - | ||||||||||||
| TOTAL AiRWA Inc. shareholders’ equity | 171,311,950 | 1,498,112 | (1,498,112 | ) | 171,311,950 | |||||||||||||
| Non-controlling interests | - | - | 2,219,720 | a | 2,219,720 | |||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 171,311,950 | 1,498,112 | 721,608 | 173,531,670 | ||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 212,627,514 | $ | 2,803,823 | $ | 81,963,556 | $ | 297,394,893 | ||||||||||
AiRWA INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Statement of Income and Comprehensive Income
For the Year Ended April 30, 2026
| AiRWA | Best Life | Pro Forma Adjustments | Notes | Pro Forma Combined | ||||||||||||||
| REVENUE | $ | 25,807,289 | 2,923,038 | $ | - | $ | 28,730,327 | |||||||||||
| COST OF REVENUE | (22,469,620 | ) | (1,428,696 | ) | - | (23,898,316 | ) | |||||||||||
| GROSS PROFIT | 3,337,669 | 1,494,342 | - | 4,832,011 | ||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||
| Selling and marketing | (746,230 | ) | (72,156 | ) | - | (818,386 | ) | |||||||||||
| General and administrative | (8,714,244 | ) | (201,564 | ) | (7,830,000 | ) | c | (16,745,808 | ) | |||||||||
| Total operating expenses | (9,460,474 | ) | (273,720 | ) | (7,830,000 | ) | (17,564,194 | ) | ||||||||||
| - | - | |||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (6,122,805 | ) | 1,220,622 | (7,830,000 | ) | (12,732,183 | ) | |||||||||||
| NON-OPERATING INCOME | ||||||||||||||||||
| Overprovision for income tax payable | 3,283,634 | - | - | 3,283,634 | ||||||||||||||
| Shares Guarantee income | 427,818 | - | - | 427,818 | ||||||||||||||
| Interest income | 72,735 | 34,570 | - | 107,305 | ||||||||||||||
| Other income | - | 21 | 21 | |||||||||||||||
| TOTAL NON-OPERATING INCOME | 3,784,187 | 34,591 | - | 3,818,778 | ||||||||||||||
| NON-OPERATING EXPENSE | ||||||||||||||||||
| Amortization of Intangible Assets | (3,836,828 | ) | - | - | (3,836,828 | ) | ||||||||||||
| Impairment of intangible assets Credit loss expense | (7,532,712 | ) | - | - | (7,532,712 | ) | ||||||||||||
| Loss on write-off of investment in Brightstar | (955,038 | ) | - | - | (955,038 | ) | ||||||||||||
| Impairment loss - amount due from a director | (2,582,505 | ) | - | - | (2,582,505 | ) | ||||||||||||
| Impairment loss - other receivable | (300,000 | ) | - | - | (300,000 | ) | ||||||||||||
| Loss on investments at fair value, net | (427,818 | ) | - | - | (427,818 | ) | ||||||||||||
| TOTAL NON-OPERATING EXPENSE | (15,634,902 | ) | - | - | (15,634,902 | ) | ||||||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | (17,973,520 | ) | 1,255,213 | (7,830,000 | ) | (24,548,307 | ) | |||||||||||
| INCOME TAXES BENEFIT (EXPENSE) | 1,161,394 | (180,239 | ) | - | 981,155 | |||||||||||||
| NET INCOME (LOSS) | (16,812,125 | ) | 1,074,974 | (7,830,000 | ) | (23,567,151 | ) | |||||||||||
| Less: net income attributable to non-controlling interests | - | - | 32,249 | d | 32,249 | |||||||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO AiRWA Inc.’s SHAREHOLDERS | $ | (16,812,125 | ) | 1,074,974 | $ | (7,862,249 | ) | $ | (23,599,401 | ) | ||||||||
| NET (LOSS) INCOME | (16,812,125 | ) | 1,074,974 | (7,830,000 | ) | (23,567,151 | ) | |||||||||||
| OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||||
| Foreign currency translation adjustments | - | (10,322 | ) | - | (10,322 | ) | ||||||||||||
| OTHER COMPREHENSIVE (LOSS) INCOME | (16,812,125 | ) | 1,064,652 | (7,830,000 | ) | (23,577,473 | ) | |||||||||||
| Less: total comprehensive (loss) income attributable to noncontrolling interests | - | - | - | - | ||||||||||||||
| Total comprehensive (loss) income attributable to AiRWA Inc. ‘s shareholders | (16,812,125 | ) | 1,064,652 | (7,830,000 | ) | (23,577,473 | ) | |||||||||||
| LOSS PER SHARE - BASIC AND DILUTED, ORDINARY SHARES | (720.65 | ) | (1,010.21 | ) | ||||||||||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING* | ||||||||||||||||||
| Basic and diluted | 23,329 | 23,329 | ||||||||||||||||
AiRWA INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(Expressed in U.S. dollar, except for the number of shares, or otherwise noted)
1. Basis of presentation
The unaudited pro forma condensed combined financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto of Hongkong Best Life Trade Co., Limited (“Best Life”) as well as those of AiRWA Inc. (“AiRWA”). The audited consolidated financial statements referred to above for Best Life are contained herein. The audited consolidated financial statements referred to above for AiRWA were included in AiRWA’s Annual Report on Form 10-K for the year ended April 30, 2026.
The unaudited pro forma condensed combined statement of income and comprehensive income for the year ended April 30, 2026 have been prepared as if the merger of Best Life and AiRWA had been consummated on May 1, 2025. The unaudited pro forma condensed combined balance sheet as of April 30, 2026 has been prepared as if the merger of Best Life and AiRWA was consummated on April 30, 2026.
2. Preliminary Purchase Price Allocation
AiRWA accounted for the acquisition of Best Life as a business combination under ASC 805. The total consideration transferred was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The purchase price exceeded the net fair value of the identifiable assets, resulting in the recognition of goodwill, which primarily reflects the expected synergies from combining operations and Best Life’s established market position.
The following table summarizes the total consideration paid to acquire 97% of Best Life’s issued share capital:
| April 30, 2026 | ||||
| Fair value of cash consideration | 48,963,058 | |||
| Fair value of contingent consideration | 22,807,890 | |||
| Fair value of total consideration transferred | $ | 71,770,948 | ||
| ● | The cash consideration of $48,963,058 represents the present value of the base purchase price stipulated under the Share Purchase Agreement, reflecting the time value of the deferred payment component. | |
| ● | The contingent consideration represents the acquisition-date fair value of the earn-out provisions, which was estimated using a probability-weighted expected payment model. The Company engaged a third-party valuer to estimate the fair value of the contingent consideration. | |
| ● | Therefore, the fair value of total consideration transferred is US$71.77 million. |
The following table summarizes the fair value of the identifiable net assets of Best Life as of April 30, 2026:
| As of April 30, 2026 | ||||||||
| (Book Value) | (Fair Value) | |||||||
| Identifiable assets acquired: | ||||||||
| Cash | $ | 1,236,113 | $ | 1,236,113 | ||||
| Accounts receivable, net | 384,634 | 384,634 | ||||||
| Inventories, net | 1,109,608 | 1,109,608 | ||||||
| Other current assets | 5,791 | 5,791 | ||||||
| Deferred tax assets | 67,677 | 67,677 | ||||||
| Definite-lived intangible assets, net | - | 57,400,000 | ||||||
| Total identifiable assets acquired: | $ | 2,803,823 | $ | 60,203,823 | ||||
| Liabilities assumed: | ||||||||
| Other payables and accrued liabilities | 14,302 | 14,302 | ||||||
| Amount due to related parties | 1,031,001 | 1,031,001 | ||||||
| Tax payables | 260,408 | 260,408 | ||||||
| Deferred tax liabilities | - | 9,471,000 | ||||||
| Total Liabilities assumed | $ | 1,305,711 | $ | 10,776,711 | ||||
| Total identifiable net assets acquired | $ | 1,498,112 | $ | 49,427,112 | ||||
Non-controlling
interest represents the 3% equity interest in Best Life not acquired by AiRWA. The Company elected to measure the non-controlling interest
at its proportionate share of the total fair-value of Best Life (including goodwill) of $73,990,668, resulting in
Goodwill is recognized as a separate asset as the aggregate of (1) the consideration transferred (in accordance with ASC 805, generally at acquisition-date fair value), (2) the fair value of any non-controlling interests, and (3) the fair value of the acquirer’s previously held equity interest, less the fair value of the net identifiable assets. The pro forma balance sheet includes preliminary goodwill of US$24,563,556, representing the excess of purchase consideration over the fair value of identifiable net assets acquired. The identifiable net assets acquired are measured at 100% of their fair value, regardless of the 97% equity interest acquired. Goodwill recognized is provisional and subject to adjustment during the measurement period, not to exceed one year from the acquisition date.
| As of April 30, 2026 | ||||
| Fair value of the consideration | $ | 71,770,948 | ||
| Fair value of non-controlling interest | 2,219,720 | |||
| Total fair value of controlling and noncontrolling interest | $ | 73,990,668 | ||
| Less: Recognized value of the identifiable net assets acquired | 49,427,112 | |||
| Goodwill recognized on consolidated level | $ | 24,563,556 | ||
3. Pro forma adjustments
Adjustments included in the pro forma adjustments’ column of the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of income and comprehensive income include the following:
| a. | Reflects adjustments to record the fair value of identifiable intangible assets, specifically non-competition agreements, patents and customer relationships, together totaling US$57,400,000; the fair value of noncontrolling interest of $2,219,720; the recognition of a corresponding deferred tax liability of US$9,471,000 arising from the difference between the tax base and the accounting basis of the intangible assets; and the resulting goodwill of US$24,563,556 recognized upon completion of the acquisition. |
| b. | Reflects adjustments to record the elimination of AiRWA’s long-term investment of Best Life and Best Life’s net assets. |
| c. | Reflects adjustments to record the amortization of the identifiable intangible assets acquired in the acquisition of Best Life. The Company amortizes the intangible assets on a straight-line basis over their estimated useful lives, which reflect the pattern in which the economic benefits of the intangible assets are expected to be consumed. The following table summarizes the intangible assets acquired and their respective estimated useful lives and annual amortization: |
| Intangible asset | Fair value | Useful life | Annual amortization | |||||||
| Non-competition agreement | 20,900,000 | 5 years | 4,180,000 | |||||||
| Patents | 14,400,000 | 10 years | 1,440,000 | |||||||
| Customer relationships | 22,100,000 | 10 years | 2,210,000 | |||||||
| Total | 57,400,000 | 7,830,000 | ||||||||
The total amortization expense of $7,830,000 is included in general and administrative expenses in the unaudited pro forma condensed combined statement of income and comprehensive income for the year ended April 30, 2026. The amortization is calculated as if the acquisition had been consummated on May 1, 2025.
| d. | Reflects the adjustment to record the portion of net income/(loss) attributable to non-controlling interests. AiRWA holds a 97% equity interest in Best Life, with the remaining 3% held by a non-controlling interest. |