Financial Performance - Revenue for the fiscal year ended October 31, 2025, was approximately $29.22 million, representing an increase of $7.79 million or 36.33% compared to $21.43 million in 2024[382]. - Gross profit for the fiscal year ended October 31, 2025, decreased to approximately $2.62 million, a decline of $1.35 million or 34.11% from $3.97 million in 2024, resulting in a gross profit margin of 8.95%[391]. - Net income for the fiscal year ended October 31, 2025, was $18,122, a decrease of $1.86 million or 99.04% compared to $1.88 million in 2024[382]. - The decline in gross profit margin from 18.52% in 2024 to 8.95% in 2025 was attributed to a decrease in overseas sales, which typically generate higher margins[391]. - Net income decreased by approximately 99.04%, from approximately $1.88 million in 2024 to approximately $18.12 thousand in 2025[414]. Sales and Revenue Sources - Sales in mainland China for the fiscal year ended October 31, 2025, were approximately $26.64 million, accounting for 91.18% of total sales, an increase of $9.36 million or 54.13% from 2024[386]. Costs and Expenses - Cost of sales increased by approximately 52.34% from $17.46 million in 2024 to $26.60 million in 2025, primarily due to higher domestic sales volume with lower gross profit margins[389]. - Operating expenses increased by approximately 42.25% from $1.77 million in 2024 to $2.51 million in 2025, driven by higher general and administrative expenses[380]. - Total operating expenses increased by $746,210, or 42.25%, from $1,766,060 in 2024 to $2,512,270 in 2025[394]. - General and administrative expenses rose by approximately $798,696, or 132.97%, from $600,660 in 2024 to $1,399,356 in 2025, primarily due to increased professional fees related to the IPO[401]. - Research and development expenses increased by approximately $91,581, or 16.38%, from $559,048 in 2024 to $650,629 in 2025, mainly due to higher salaries for R&D personnel[403]. Cash Flow and Working Capital - Cash at the end of the year decreased from $176,236 in 2024 to $122,381 in 2025, reflecting a net decrease of $53,855[418]. - Net cash used in operating activities was approximately $5.29 million in 2025, an increase from $3.04 million in 2024, driven by higher inventory costs and accounts receivable[419]. - Total working capital increased from approximately $9.10 million in 2024 to approximately $14.65 million in 2025[417]. - The net cash provided by financing activities for the fiscal year ended October 31, 2025, was approximately $5.30 million, up from $3.10 million in 2024, driven by proceeds from bank loans and the IPO[424][425]. Accounts Receivable and Cash Management - The company reported net accounts receivables of RMB 70.01 million (approximately $9.88 million) as of October 31, 2025, compared to RMB 44.10 million (approximately $6.19 million) in 2024, indicating a significant increase in receivables[438]. - Cash held in accounts managed by online payment platforms increased from RMB 5,730.32 ($0.804 million) in 2024 to RMB 25,545.70 ($3.604 million) in 2025, representing a growth of approximately 345%[437]. - The company expects no significant credit risk associated with its cash and cash equivalents and restricted cash, which are held by major financial institutions in China[436]. Tax and Obligations - Income tax expense decreased by $201,569, or 74.93%, from $269,003 in 2024 to $67,434 in 2025 due to decreased taxable income[413]. - As of October 31, 2025, the company had total contractual obligations of approximately $4.33 million, with $1.95 million in short-term bank loans and $2.07 million in long-term bank loans[427][428]. Business Strategy and Future Outlook - The company aims to enhance its small-batch customization capacity and expand its product offerings to drive customer engagement and loyalty[378]. - The company plans to continue optimizing operating expenses as it scales its business, expecting absolute increases in operating expenses due to hiring more personnel[380]. - The company has not identified any trends or uncertainties that could materially affect its total revenues, profitability, liquidity, or capital resources for the fiscal year ended October 31, 2025[439]. Revenue Recognition and Accounting Policies - The company’s revenue recognition follows ASC 606, with revenue recognized when control of the product is transferred to the customer[442][445]. - The company recognizes revenue when control of the product is transferred to the customer, with revenue reported net of all value-added taxes (VAT)[444]. - The company has assessed the impact of ASC 606 on its revenue recognition and concluded that there were no significant changes in the timing and pattern of revenue recognition for its current revenue streams[443]. - The company grants credit to customers with good credit standing for a maximum of 360 days, with allowances for expected credit losses based on individual account analysis[446]. - Inventories are stated at the lower of cost or net realizable value, with costs calculated using the weighted average method[447]. - The company has a customer warranty of 30 days for defective products, with historical refund claims being immaterial[444].
MaxsMaking Inc.(MAMK) - 2025 Q4 - Annual Report