Revenue Performance - Total revenues for the three months ended January 31, 2025, were $2,704,760, a decrease of 5.48% from $2,861,579 in the same period of 2024[157]. - Revenue for the three months ended January 31, 2025, was $2,704,760, a decrease of $156,819 or 5.48% compared to $2,861,579 in 2024[172]. - Total revenues for the nine months ended January 31, 2025, were $8,198,563, a decrease of $355,613 or 4.16% compared to $8,554,176 for the same period in 2024[197]. - Sales of food and beverages decreased by $1,659,631 or 72.65%, accounting for 7.62% of total sales in 2025 compared to 26.71% in 2024[188]. - Sales of home remodeling products increased by $1,168,281 or 18.63%, representing 90.72% of total sales for the nine months ended January 31, 2025[189]. - Revenue from consulting services was $135,737 for the nine months ended January 31, 2025, a 100% increase from nil in 2024[190]. Cost and Profit Analysis - Cost of revenues increased by $93,483 or 6.26%, from $1,493,502 in 2024 to $1,586,985 in 2025, primarily due to increased costs from indoor home improvement products and consulting services[176]. - Gross profit decreased by $250,302 or 18.30%, from $1,368,077 in 2024 to $1,117,775 in 2025, with a gross margin of 41.33% compared to 47.81% in 2024[178]. - Gross profit for the nine months ended January 31, 2025, was $3,774,952, a slight decrease of $11,718 or 0.31% from $3,786,670 in 2024[196]. - Cost of revenues for the nine months ended January 31, 2025, was $4,423,611, a decrease of $343,895 or 7.21% from $4,767,506 in 2024[201]. - Cost of revenues from the sale of food and beverages decreased by $871,181 or 71.23%, while costs for home remodeling products increased by $450,839 or 12.72%[201]. Expenses Overview - Selling expenses increased by $6,352 or 4.01%, from $158,527 in 2024 to $164,879 in 2025, primarily due to increased payroll and shipping expenses[179]. - General and administrative expenses rose by $140,374 or 17.32%, from $810,473 in 2024 to $950,847 in 2025, accounting for 35.15% of total revenues[182]. - Selling expenses decreased by $93,803 or 16.28% to $482,538 for the nine months ended January 31, 2025, primarily due to reduced shipping expenses by $18,694 or 52.88% and decreased sales commission expenses by $199,417 or 99.46%[204]. - General and administrative expenses increased by $1,262,477 or 55.05% to $3,555,609 for the nine months ended January 31, 2025, driven by increased payroll expenses by $559,031 or 87.49% and professional fees by $499,108 or 473.51%[205][206]. Net Income and Loss - Net income for the three months ended January 31, 2025, was $23,418, a decrease of $256,526 or 91.63% compared to $279,944 in 2024[171]. - Net loss for the nine months ended January 31, 2025, was $419,482, a decrease of net income of $1,069,332 or 164.55% compared to net income of $649,850 in 2024[210]. Cash Flow and Working Capital - Cash balance as of January 31, 2025, was approximately $0.23 million, with accounts receivable of approximately $1.06 million, of which approximately $0.3 million or 26.26% has been collected[212]. - Net cash outflow from operating activities was $280,712 for the nine months ended January 31, 2025, compared to cash inflow of $783,410 in 2024, reflecting a decrease of $1,064,122[221]. - Net cash used in investing activities was $56,772 for the nine months ended January 31, 2025, compared to $393,655 in 2024, primarily for the purchase of fixed assets[222]. - Net cash used in financing activities was $795,462 for the nine months ended January 31, 2025, compared to net cash provided of $111 in 2024, mainly due to repayment of bank loans and related party debts[224]. - Total working capital amounted to approximately $1.2 million as of January 31, 2025[215]. Strategic Initiatives - The company raised gross proceeds of $8,200,000 from its IPO, which will be used for supply chain enhancements, business expansion, and working capital[145][147][146]. - The company is actively pursuing alternative sourcing strategies due to increased import tariffs, particularly on products from China, which may impact costs and logistics[148][149]. - The company is working with Costco to introduce new products that are less sensitive to tariff tensions, although the success of these efforts remains uncertain[149][159]. - The company plans to increase revenue by diversifying markets and expanding its sales force in southern California, with ongoing discussions with regional distributors[217]. - The company is working with large food distributors in Asia to introduce more authentic premium Asian foods to the U.S.[198]. Accounting and Financial Reporting - The Company adopted the current expected credit loss (CECL) methodology effective May 1, 2023, which requires an estimate of credit losses for the remaining estimated life of financial assets[231]. - As of January 31, 2025, and April 30, 2024, the Company had an allowance for credit losses of $32,339 and $24,698, respectively[233]. - The allowance for sales returns as of January 31, 2025, and April 30, 2024, amounted to $205,988[241]. - Revenue is recognized from two primary business segments: food and beverage supply chain services and indoor home improvement products[236]. - Revenue from food and beverage sales is recognized at the point of delivery, with all contracts being fixed price[237]. - Revenue from indoor home improvement products is recognized when control of merchandise is transferred to the customer, either at the point of sale or upon delivery[239]. - The Company utilizes a two-step approach for recognizing uncertain income tax positions, evaluating if the position is likely to be sustained on audit[244]. - The Company does not expect the adoption of ASU 2023-09 to have a material impact on its financial statements and disclosures[247]. - The Company has elected the extended transition period for complying with new accounting standards under the JOBS Act, delaying adoption until applicable to private companies[245]. - The Company maintains allowances for doubtful accounts based on historical experience and various assumptions regarding collectability[230].
Marwynn Holdings Inc(MWYN) - 2025 Q3 - Quarterly Report