Financial Performance - The company reported a net loss of $5,973,499 from continuing operations for the six months ended October 31, 2025, with an accumulated deficit of $8.2 million and negative working capital of $4.19 million [239]. - Net revenues for the three months ended October 31, 2025, were $27,624,503, a decrease of 5.9% compared to $29,351,731 in the same period in 2024 [275]. - Gross profit for the three months ended October 31, 2025, was $6,451,839, down 18.2% from $7,885,654 in 2024 [275]. - The company reported a net loss from continuing operations of $5,212,923 for the three months ended October 31, 2025, compared to a loss of $62,158 in 2024, representing an increase of 8,286.6% [275]. - For the six months ended October 31, 2025, net revenues were approximately $54.8 million, a decrease of $2.7 million or 4.8% from $57.5 million in 2024 [291]. - Net income (loss) attributable to Maison Solutions Inc. for the six months ended October 31, 2025, was a loss of $6.5 million, compared to a profit of $444,899 in 2024, representing a decrease of 1,563.1% [291]. - Net loss from continuing operations increased by 702.5% to $6.04 million in 2025, compared to a net income of $1 million in 2024, primarily due to decreased gross profit and increased operating expenses [306]. Operating Expenses - Total operating expenses increased by 12.2% to $7,808,858 in the three months ended October 31, 2025, compared to $6,959,358 in 2024 [275]. - General and administrative expenses increased by 50.4% to $3,010,952 for the three months ended October 31, 2025, compared to $2,001,346 in 2024 [275]. - Total operating expenses for the six months ended October 31, 2025, were approximately $14.2 million, an increase of $1.2 million or 8.9% from $13.0 million in 2024 [291]. - Total operating expenses rose by 8.9% from approximately $13 million in 2024 to about $14.2 million in 2025, with selling expenses increasing by 1.5% and general and administrative expenses increasing by 28.3% [296][297]. Cash Flow and Financing - Cash and cash equivalents as of October 31, 2025, were approximately $1.37 million, with a working capital deficit of about $4.19 million [307]. - Net cash used in operating activities was approximately $636,479 for the six months ended October 31, 2025, compared to a net cash provided of $4.7 million in 2024 [314][315]. - The company completed an IPO on October 10, 2023, raising net proceeds of approximately $8.72 million from the sale of 2.5 million shares at $4.00 per share [309]. - On November 22, 2023, the company raised approximately $4.60 million through a PIPE offering, selling 1.19 million shares at $4.20 per share [310]. - The company may seek additional financing, which could involve issuing more equity or debt, potentially leading to dilution for existing shareholders [311]. - Net cash used in investing activities was $2.0 million for the six months ended October 31, 2025, primarily due to the purchase of digital assets amounting to $2,037,096 [319]. - Net cash provided by financing activities was approximately $3.3 million for the six months ended October 31, 2025, mainly from a bank loan of $5,250,000 and proceeds from a promissory note of $4,844,000 [320]. Strategic Moves and Investments - The company invested $1,440,000 for a 40% equity interest in HKGF Market of Arcadia, LLC, and an additional $360,000 for another 10% interest, indicating ongoing market expansion efforts [228]. - The company plans to acquire the remaining 90% equity interest in the Alhambra Store, which is currently 10% owned, to operate it as the first satellite store [226]. - The company closed the Maison El Monte store and agreed to pay $100,000 to terminate the lease, reflecting a strategic move to improve profitability [230]. - The company aims to strengthen its sales force and increase marketing activities to boost revenue, indicating a proactive approach to enhance sales performance [240]. Employee Relations - The company has approximately 334 employees as of October 31, 2025, with no unionization plans reported, maintaining good employee relations [236]. Liabilities and Obligations - The derivative liability increased to $2,462,150 as of October 31, 2025, from $1,004,230 as of April 30, 2025 [257]. - The company's contract liability related to gift cards was $631,610 as of October 31, 2025, down from $701,929 as of April 30, 2025 [248]. - The total contractual obligations of the Company as of October 31, 2025, amount to $51,336,132, with $5,202,868 due within one year [348]. Digital Assets - Digital assets held as of October 31, 2025, included 2,550,515 units of Worldcoin with a cost basis of $2,919,500 and a fair value of $2,037,096 [266]. - Other expenses surged to $3.37 million in 2025 from $386,627 in 2024, driven by significant losses including $2.69 million on note conversion and $882,404 in unrealized losses on digital assets [299].
Maison Solutions (MSS) - 2026 Q2 - Quarterly Report