Maison Solutions Inc 8-K, filed Mar 19, 2024
Maison Solutions Inc. (MSS)
About this 8-K
Maison Solutions Inc filed this 8-K on March 19, 2024, reporting on events of March 18, 2024.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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CURRENT REPORT
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Item 2.02. Results of Operations and Financial Condition.
On March 18, 2024, Maison Solutions Inc. (the “Company”) issued a press release announcing its financial results for the third quarter and first nine months of fiscal 2024 ended January 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) is furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in the filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release, dated March 18, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
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.
| Date: March 18, 2024 | MAISON SOLUTIONS INC. | |
| By: | /s/ John Xu | |
| John Xu | ||
| Chief Executive Officer, Chairman and President | ||
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Exhibit 99.1
Maison Solutions Reports Fiscal 2024 Third Quarter
and Nine-Month Financial Results
MONTEREY PARK, Calif., March 18, 2024 – Maison Solutions Inc. (“Maison Solutions” or the “Company”), (Nasdaq: MSS), a U.S.-based specialty grocery retailer offering traditional Asian food and merchandise to modern consumers, today announced financial results for the third quarter and first nine months of fiscal 2024 ended January 31, 2024.
“We continue to make considerable operational progress through store renovations, new store openings, and acquisitions of additional stores to efficiently grow our footprint,” said John Xu, President and Chief Executive Officer of Maison Solutions. “Our El Monte store, which is the first of our planned store renovations, is on track to be completed later this month, and will provide a vibrant, contemporary shopping experience for customers, while leveraging our recently purchased software suite to drive revenues through optimization of store design, layout and shelf displays. Additionally, we remain on schedule to open our flagship, 37,000 square-foot, store in Rowland Heights, California later this year, which we believe will become one of the largest and most advanced Asian grocery supercenters in the state.
Fiscal 2024 Third Quarter Financial Results
Total revenues, net, were $13.6 million for the fiscal 2024 third quarter, compared with $15.6 million for the prior-year quarter. Results primarily reflected competition from two newly opened Asian supermarkets near the Company’s San Gabriel store, the end of certain COVID-19 customer relief programs, and a temporary slow-down at the Company’s El Monte store during its renovation. Revenue for perishable goods, which include meat, seafood, vegetables and fruit, were $7.2 million for the fiscal 2024 third quarter, versus $8.7 million for the same period last year. Revenues for non-perishable goods, which include grocery, liquor, cigarettes, lottery tickets, newspapers, reusable bags, non-food, and health products, were $6.4 million for the fiscal 2024 third quarter, compared with $6.9 million for last year’s fiscal third quarter.
Total cost of revenues, which includes rental expense, depreciation, the direct costs of purchased merchandise, shrinkage costs, store supplies, and inbound shipping costs, decreased 10.5 percent to $10.4 million for the fiscal 2024 third quarter, from $11.6 million for fiscal 2023 third quarter. The decline primarily is related to lower sales and reduced freight costs.
Gross profit for the fiscal 2024 third quarter equaled $3.2 million, compared with $4.0 million from the same period last year. Gross margin was 23.4 percent, versus 25.6 percent for the same quarter last year.
Operating loss was approximately $307,000 for the fiscal 2024 third quarter, compared with a loss of approximately $48,000 for the fiscal 2023 third quarter. The change mainly was due to the revenue and gross profit declines.
Net loss attributable to Maison Solutions was approximately $549,000, or a loss of $0.03 per share, for the third quarter of fiscal 2024, versus net income attributable to Maison Solutions of approximately $988,000, or $0.06 per fully diluted share, for the prior-year period. Contributing to the net loss in the fiscal 2024 third quarter was a reduction in “other income,” primarily due to $1.3 million in employee retention credits received by the Company related to the COVID-19 pandemic in last year’s fiscal third quarter that was not repeated in the fiscal 2024 period.
At January 31, 2024, the Company had cash and equivalents of $9.4 million, up from $2.6 million at April 30, 2023. Maison Solutions completed an initial public offering on October 10, 2023, generating gross proceeds of approximately $10.0 million, before underwriting discounts and commissions. On November 22, 2023, the Company completed a private placement, generating gross proceeds of approximately $5 million, before deducting offering expenses.
Net cash used in operating activities was approximately $887,000 for the nine months ended January 31, 2024, compared with net cash provided by operating activities of approximately $364,000 for the similar period last year.
Nine-Month Fiscal Year 2024 Financial Results
Total revenues, net, were $41.1 million for the first nine months of fiscal 2024, approximately the same as for the first nine months of fiscal 2023. Perishable goods revenues were $22.4 million, versus $23.1 million for the first nine months of the last fiscal year. Non-perishable goods revenues were $18.7 million, versus $18.1 million for the first nine months of fiscal 2023.
Total cost of revenues were $31.7 million for the fiscal 2024 year-to-date period, compared with $31.8 million for the prior-year period.
Gross profit was $9.4 million for the first nine months of fiscal 2024 and fiscal 2023. Gross margin improved by 10 basis points to 22.9 percent, from 22.8 percent for the first nine months of fiscal 2023.
Operating loss was approximately $270,000 for the fiscal 2024 nine-month period, compared with operating income of approximately $80,000 for the same period in fiscal 2023. The change was principally related to higher selling and general and administrative expenses.
Net loss attributable to Maison Solutions was approximately $562,000, or a loss of $0.03 per share, for the first nine months of fiscal 2024, versus net income attributable to Maison Solutions of approximately $921,000, or $0.06 per fully diluted share, for the prior-year period.
About Maison Solutions Inc.
Maison Solutions Inc. is a U.S.-based specialty grocery retailer offering traditional Asian food and merchandise to U.S. consumers, particularly to members of Asian-American communities. The Company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which the Company operates. Since its formation in 2019, the Company has acquired equity interests in four traditional Asian supermarkets in the Los Angeles area, and has been operating them under the brand name HK Good Fortune. To learn more about Maison Solutions, please visit the Company’s website at www.maisonsolutionsinc.com. Follow the Company on LinkedIn and X.
Cautionary Note Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the Company’s ability to grow organically and through acquisitions, improve efficiencies throughout the organization, reduce costs related to operating and opening new stores, and, over the longer term, use knowledge gained from implementing the software to open new revenue streams. No assurance can be given that the proceeds will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement for the initial public offering filed with the SEC. Copies are available on the SEC’s website at www.sec.gov. Maison Solutions undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Investor Relations and Media Contact:
PondelWilkinson Inc.
Judy Lin or Laurie Berman
310-279-5980
info@maisonsolutionsinc.com
(financial tables follow)
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MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended January 31, | Nine Months Ended January 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Revenues | ||||||||||||||||
| Supermarket | $ | 13,598,479 | $ | 15,637,095 | $ | 41,116,998 | $ | 41,215,255 | ||||||||
| Total Revenues, Net | 13,598,479 | 15,637,095 | 41,116,998 | 41,215,255 | ||||||||||||
| Cost of Revenues | ||||||||||||||||
| Supermarket | 10,410,684 | 11,626,723 | 31,699,886 | 31,815,554 | ||||||||||||
| Total Cost of Revenues | 10,410,684 | 11,626,723 | 31,699,886 | 31,815,554 | ||||||||||||
| Gross Profit | 3,187,795 | 4,010,372 | 9,417,112 | 9,399,701 | ||||||||||||
| Selling Expenses | 2,438,846 | 2,664,054 | 6,984,543 | 6,670,088 | ||||||||||||
| General and Administrative Expenses | 1,056,118 | 1,394,570 | 2,702,660 | 2,649,419 | ||||||||||||
| Total Operating Expenses | 3,494,964 | 4,058,624 | 9,687,203 | 9,319,507 | ||||||||||||
| (Loss) Income from Operations | (307,169 | ) | (48,252 | ) | (270,091 | ) | 80,194 | |||||||||
| Other Income, Net | 898 | 1,277,741 | 383,949 | 1,321,533 | ||||||||||||
| Investment Loss from Equity Method Investment | (51,204 | ) | - | (63,982 | ) | - | ||||||||||
| Interest Expense (Income), Net | (19,425 | ) | 76,052 | (95,956 | ) | 15,705 | ||||||||||
| Total Other Income (Expenses), Net | (69,731 | ) | 1,353,793 | 224,011 | 1,337,238 | |||||||||||
| Loss (Income) Before Income Taxes | (376,900 | ) | 1,305,541 | (46,080 | ) | 1,417,432 | ||||||||||
| Income Tax Provisions | 158,656 | 99,070 | 424,722 | 189,151 | ||||||||||||
| Net (Loss) Income | (535,556 | ) | 1,206,471 | (470,802 | ) | 1,228,281 | ||||||||||
| Net Income Attributable to Noncontrolling Interests | 13,398 | 217,997 | 91,626 | 307,655 | ||||||||||||
| Net (Loss) Income Attributable to Maison Solutions Inc. | $ | (548,954 | ) | 988,474 | $ | (562,428 | ) | $ | 920,626 | |||||||
| (Loss) Income per Share Attributable to Maison Solutions, Inc. | ||||||||||||||||
| - Basic | $ | (0.03 | ) | $ | 0.06 | $ | (0.03 | ) | $ | 0.06 | ||||||
| - Diluted | $ | (0.03 | ) | $ | 0.06 | $ | (0.03 | ) | $ | 0.06 | ||||||
| Weighted Average Number of Common Stock Outstanding | ||||||||||||||||
| - Basic | 19,405,797 | 16,000,000 | 17,334,541 | 16,000,000 | ||||||||||||
| - Diluted | 19,435,915 | 16,000,000 | 17,347,630 | 16,000,000 | ||||||||||||
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MAISON SOLUTIONS INC.
CONSOLIDATED BALANCE SHEETS
| January 31, 2024 (Unaudited) | April 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 9,406,626 | $ | 2,569,766 | ||||
| Accounts receivable | 756,341 | 315,356 | ||||||
| Accounts receivable - related parties | 407,446 | 289,615 | ||||||
| Inventories, net | 3,020,220 | 2,978,986 | ||||||
| Prepayments | 20,000 | 1,547,243 | ||||||
| Other receivables and other current assets | 993,976 | 550,836 | ||||||
| Other receivable - related parties | 33,995 | 33,995 | ||||||
| Total Current Assets | 14,638,604 | 8,285,797 | ||||||
| Restricted cash - non-current | 1,101 | 1,101 | ||||||
| Property and equipment, net | 789,937 | 671,463 | ||||||
| Intangible assets | 3,071,463 | 197,329 | ||||||
| Security deposits | 457,491 | 457,491 | ||||||
| Investment under cost method | 75,000 | - | ||||||
| Investment under cost method – related parties | 203,440 | 203,440 | ||||||
| Investment under equity method | 1,736,018 | - | ||||||
| Operating lease right-of-use assets, net | 21,004,764 | 22,545,190 | ||||||
| Goodwill | 2,222,211 | 2,222,211 | ||||||
| Total Assets | $ | 44,200,029 | $ | 34,584,022 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 1,654,221 | $ | 3,105,592 | ||||
| Accounts payable - related parties | 492,480 | 465,310 | ||||||
| Note payable | - | 150,000 | ||||||
| Current portion of loan payables | 121,942 | 370,828 | ||||||
| Accrued expenses and other payables | 858,342 | 867,796 | ||||||
| Contract liabilities | 308,326 | 449,334 | ||||||
| Other payables - related parties | 241,585 | 241,585 | ||||||
| Operating lease liabilities - current | 1,850,310 | 1,761,182 | ||||||
| Income taxes payable | 1,069,281 | 961,034 | ||||||
| Total Current Liabilities | 6,596,487 | 8,372,661 | ||||||
| Long-term loan payables | 2,512,674 | 2,561,299 | ||||||
| Security deposit from sub-tenants | 111,314 | 105,637 | ||||||
| Operating lease liabilities - non-current | 21,309,934 | 22,711,760 | ||||||
| Deferred tax liability, net | 34,273 | 40,408 | ||||||
| Total Liabilities | 30,564,682 | 33,791,765 | ||||||
| Stockholders’ Equity | ||||||||
| Class A Common stock, $0.0001 par value, 92,000,000 shares authorized; 17,450,476 and 13,760,000 shares issued and outstanding at January 31, 2024 and April 30, 2023, respectively | 1,745 | 1,376 | ||||||
| Class B Common stock, $0.0001 par value, 3,000,000 shares authorized; 2,240,000 shares issued and outstanding | 224 | 224 | ||||||
| Additional paid in capital | 13,313,523 | - | ||||||
| Retained earnings (accumulated deficit) | (39,718 | ) | 522,710 | |||||
| Total Maison Solutions, Inc. Stockholders’ Equity | 13,275,774 | 524,310 | ||||||
| Noncontrolling interests | 359,573 | 267,947 | ||||||
| Total Stockholders’ Equity | 13,635,347 | 792,257 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 44,200,029 | $ | 34,584,022 | ||||
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MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months ended January 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | (470,802 | ) | $ | 1,228,281 | |||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization expenses | 274,476 | 312,549 | ||||||
| Bad debt reversal | (105,322 | ) | - | |||||
| Provision for inventory shrinkage reserve | (1,088 | ) | 29,479 | |||||
| Investment loss | 63,982 | - | ||||||
| Changes in deferred taxes | (6,135 | ) | (8,229 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (440,985 | ) | (880,952 | ) | ||||
| Accounts receivable - related party | (219,260 | ) | 85,981 | |||||
| Inventories | (40,147 | ) | 242,560 | |||||
| Prepayments | 1,065,243 | 703,023 | ||||||
| Other receivables and other current assets | 124,182 | (238,475 | ) | |||||
| Security deposits | - | 5,654 | ||||||
| Accounts payable | (1,451,371 | ) | (1,290,541 | ) | ||||
| Accounts payable - related party | 128,599 | 94,193 | ||||||
| Accrued expenses and other payables | (9,454 | ) | (156,804 | ) | ||||
| Contract Liabilities | (141,009 | ) | (127,138 | ) | ||||
| Operating lease liabilities | 227,728 | 149,489 | ||||||
| Taxes payables | 108,247 | 192,391 | ||||||
| Other long-term payables | 5,677 | 22,764 | ||||||
| Net cash (used in) provided by operating activities | (887,439 | ) | 364,225 | |||||
| Cash flows from investing activities | ||||||||
| Payment for acquisition of subsidiary | - | (2,500,000 | ) | |||||
| Payment for leasehold improvement of the supermarket | (307,427 | ) | ||||||
| Payments of equipment purchase | (9,656 | ) | (24,185 | ) | ||||
| Payments of intangible assets purchase | (2,950,000 | ) | - | |||||
| Loans repaid from third parties | - | 4,410,270 | ||||||
| Investment into TMA Liquor Inc | (75,000 | ) | - | |||||
| Investment into HKGF Market of Arcadia | (1,800,000 | ) | - | |||||
| Net cash (used in) provided by investing activities | (5,142,083 | ) | 1,886,085 | |||||
| Cash flows from financing activities | ||||||||
| Bank overdraft | - | (281,941 | ) | |||||
| Repayments on loan payables | (297,510 | ) | (261,923 | ) | ||||
| Repayments to related parties | - | (62,932 | ) | |||||
| Repayment of note payable | (150,000 | ) | - | |||||
| Borrowings from related parties | - | (34,600 | ) | |||||
| Net proceeds from issuance of common stock | 13,313,892 | - | ||||||
| Net cash provided by (used in) financing activities | 12,866,382 | (641,396 | ) | |||||
| Net changes in cash and restricted cash | 6,836,860 | 1,608,914 | ||||||
| Cash and restricted cash at the beginning of the period | 2,570,867 | 972,431 | ||||||
| Cash and restricted cash at the end of the period | $ | 9,407,727 | $ | 2,581,345 | ||||
| Supplemental disclosure of cash and restricted cash | ||||||||
| Cash | $ | 9,406,626 | $ | 2,580,244 | ||||
| Restricted cash | 1,101 | 1,101 | ||||||
| Total cash and restricted cash | $ | 9,407,727 | $ | 2,581,345 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 81,369 | $ | 29,577 | ||||
| Cash paid for income taxes | $ | 322,610 | $ | 8,481 | ||||
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