Revenue Performance - Total revenues for the three months ended October 31, 2025, were $43,750, consistent with the same period in 2024, with no revenue from food and beverage sales[176]. - Revenue from consulting services accounted for 100% of total revenues for both the three months ended October 31, 2025, and 2024, indicating stability in this segment[180]. - Revenues for the three months ended October 31, 2025, and 2024 were both $43,750, indicating no growth in consulting services revenue[185]. - Revenues for the six months ended October 31, 2025, were $85,000, a decrease of $51,874 or 37.90% from $136,874 in 2024[206]. - Revenue from consulting services decreased by $6,988, or 7.60%, from $91,988 in 2024 to $85,000 in 2025, now accounting for 100.00% of total revenues[200]. - Total revenues for the six months ended October 31, 2025, were significantly impacted by a 100% decrease in sales from food and beverage, resulting in a total cost of revenues of $52, compared to $49,281 in 2024, a variance of 99.89%[210]. Operating Expenses - Selling expenses increased by $12,800, or 51.20%, from $25,000 in 2024 to $37,800 in 2025, accounting for 86.40% of total revenues in 2025[190]. - General and administrative expenses rose by $89,496, or 33.74%, from $265,240 in 2024 to $354,736 in 2025, representing 810.83% of total revenues in 2025[191][192]. - Total operating expenses for the six months ended October 31, 2025, were $3,066,979, an increase of $2,198,612 or 253.19% from $868,367 in 2024[205]. - Selling expenses surged to $1,314,168 for the six months ended October 31, 2025, reflecting an increase of 2,068.02% from $60,616 in 2024, primarily due to increased advertising and marketing expenses[212]. - General and administrative expenses rose to $1,752,811, an increase of 117.00% from $807,751 in 2024, driven by higher professional fees and insurance costs[213]. Net Loss - The net loss from continuing operations increased by $82,714, or 33.34%, from $248,058 in 2024 to $330,772 in 2025[194]. - The net loss for the three months ended October 31, 2025, was $896,287, compared to a net loss of $114,371 in 2024, an increase of $781,916 or 683.67%[196]. - The net loss for the six months ended October 31, 2025, was $3,616,040, compared to a net loss of $442,900 in 2024, an increase of $3,173,140 or 716.45%[205]. - For the six months ended October 31, 2025, the company reported a net loss of $3,616,040, an increase of 716.45% compared to a net loss of $442,900 for the same period in 2024[218]. Cash Flow - The company had a cash balance of approximately $1.36 million as of October 31, 2025, with accounts receivable net balance of approximately $0.17 million, of which only 8.7% had been collected[220]. - Net cash used in operating activities from continuing operations was $(486,753) for the six months ended October 31, 2025, a decrease in outflow compared to $(1,062,390) in 2024[225]. - The company reported net cash provided by financing activities of $1,607,213 for the six months ended October 31, 2025, compared to a net cash used of $501 in 2024, mainly from common stock issuance[229]. - The company had net cash used in investing activities of $330,000 for the six months ended October 31, 2025, primarily for loans made to Bio Essence Pharmaceutical[228]. Strategic Initiatives - The company has temporarily paused food and beverage imports from China and is pursuing alternative sourcing strategies to mitigate tariff impacts[167]. - The company plans to diversify its market focus from major mass market channels to ethnic supermarket chains to increase revenue[179]. - The company is actively working with Costco and other retailers to introduce new products that are less sensitive to U.S.-China tariff tensions[167]. - The company is entering the E-Waste Reverse Supply Chain Business, focusing on coordination and logistics management without engaging in physical processing[165]. Risks and Economic Conditions - The company faces risks from increased import tariffs and trade policy uncertainties, which could affect costs and operational efficiency[166]. - The company is monitoring macroeconomic conditions and evaluating the financial impact of ongoing trade policy shifts on its operations[168]. Accounting Policies - The Company adopted the current expected credit loss (CECL) methodology effective May 1, 2023, which requires estimating credit losses for the remaining estimated life of financial assets[234]. - As of October 31, 2025, the allowance for credit losses for discontinued operations was $557,201, with no allowance for continuing operations[236]. - Revenue is recognized when a customer obtains control of promised goods or services, following the five-step model prescribed under ASC 606[237]. - The Company derives revenues primarily from two segments: food and beverage supply chain services and consulting services related to brand management[238]. - Revenue from food and beverage sales is recognized at the point of delivery, net of sales returns and allowances, with no allowance for sales returns for continuing operations as of October 31, 2025[240][243]. - Consulting services revenue is recognized over the service period, which typically ranges from a few months to one year[242]. - The Company uses the asset and liability method for income taxes, recognizing deferred tax assets and liabilities based on enacted tax rates expected to apply in future periods[244]. - The Company is currently evaluating the impact of several recently issued accounting standards, including ASU 2024-03 and ASU 2025-01, but does not expect them to have a material impact on financial statements[250][251]. - The Company has no transition adjustment related to the adoption of CECL, indicating a smooth transition to the new accounting standard[235]. - The Company does not believe that any other recently issued guidance would have a material impact on its financial statement presentation or disclosures[256].
Marwynn Holdings Inc(MWYN) - 2026 Q2 - Quarterly Report