MWYN 10-K
Marwynn Holdings, Inc. (MWYN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
OR
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The aggregate market value of the common stock outstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for the common stock on October 31, 2025, was $
As of July 29, 2026, there were
DOCUMENTS INCORPORATED BY REFERENCE
TABLE OF CONTENTS
i
USE OF CERTAIN DEFINED TERMS
Unless otherwise indicated or the context otherwise requires and for purposes of this report only, references to:
| ● | the “Company,” “the registrant,” “we,” “us,” “our” and “Marwynn” are to Marwynn Holdings, Inc., a Nevada corporation incorporated on February 27, 2024, and its consolidated subsidiaries, except where expressly noted otherwise or the context otherwise requires; |
| ● | “FuAn” means FuAn Enterprise, Inc., a California corporation incorporated, on April 18, 2016, and a wholly-owned subsidiary of Marwynn, which represents our legacy food and beverage operations; |
| ● | “EcoLoopX” means EcoLoopX Corporation, a California corporation incorporated on November 25, 2025, and a wholly-owned subsidiary of Marwynn; and |
| ● | “NexaCore” means Nexacore Technologies, Inc., a Delaware corporation incorporated on March 27, 2026, and a wholly-owned subsidiary of Marwynn. |
Unless we indicate otherwise or unless the context otherwise requires, all information in this prospectus reflects the adjustment for the (i) 1.55-for-1 forward stock split of our common stock effected on September 9, 2024, and (ii) 4.5-for-1 forward stock split of our Series A Super Voting Preferred Stock effected on September 9, 2024 for the purpose of our initial public offering.
ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report (this “Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Certain statements contained in this Report, which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward-looking nature constitute “forward-looking statements” within the meaning of the federal securities laws. We intend the forward-looking statements to be covered by the applicable safe harbor under the federal securities laws. In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” or the negative of these terms or other similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on the information we have when the statements are made or management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | our goals and strategies; |
| ● | our future business plans, development, results of operations and financial condition; |
| ● | expected changes in our corporate services income, costs or expenditures; |
| ● | our dividend policy; |
| ● | our expectations regarding demand for and market acceptance of our products and services; |
| ● | our expectation regarding the use of proceeds from our public offerings; |
| ● | our projected markets and growth in markets; |
| ● | our potential need for additional capital and the availability of such capital; |
| ● | competition in our industry; |
| ● | general economic and business conditions in the markets in which we operate; |
| ● | our ability to meet the Nasdaq Capital Market continued listing requirements; |
| ● | relevant government policies and regulations relating to our business and industry; and |
| ● | assumptions underlying or related to any of the foregoing. |
Forward-looking statements necessarily involve risks and uncertainties, and our actual results could differ materially from those anticipated in the forward-looking statements due to a number of factors, including those set forth above under “Risk Factors” and elsewhere in this Report. The factors set forth above under “Risk Factors” and other cautionary statements made in this Report should be read and understood as being applicable to all related forward-looking statements wherever they appear in this Report. The forward-looking statements contained in this Report represent our judgment as of the date of this Report. We caution readers not to place undue reliance on such statements. We operate in an evolving environment where new risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Report.
iii
SUMMARY OF RISK FACTORS
Our business is subject to varying degrees of risk and uncertainty. Below is a summary of some of our principal risk factors that may affect our business, financial condition and results of operations. This summary does not address all of the risks that we face. Investors should carefully consider the risks and uncertainties summarized below along with additional discussion of such summarized risks under the heading “Risk Factors” herein, together with other information in this Annual Report and our other filings with the SEC.
Risks Relating to Our Business and Industry
| ● | Our management team lacks significant operational experience in the big data AI platform and battery recycling industries, and our failure to successfully manage our entry into these markets could have a material adverse effect on our business, financial condition, and results of operations. |
| ● | We operate in the highly competitive markets of food and beverage supply chain management, big data AI platform hubs, e-waste recycling, and black mass production, and we expect to incur substantial losses without generating significant near-term revenue due to recent expansions. |
| ● | We currently hold no patents for our big data AI platform or battery processing technologies, which limits our ability to protect our intellectual property and exposes us to intense competition and potential infringement claims |
| ● | Our business model portfolio includes fundamentally unrelated industries with no material operational synergies, which may divide management’s attention, strain our financial resources, and create significant inefficiencies. |
| ● | We have an evolving business model, which increases the complexity of our business. |
| ● | Our business is exposed to risks inherent in international operations. Changes in trade policy, including tariffs and global supply chain disruptions, could increase our costs and adversely affect our operations. |
| ● | We have a limited operating history in our current form and limited experience selling our products. As a result of continuing investments to expand our business, we may not achieve or sustain profitability. |
| ● | We will need to raise additional capital to fund our operations in furtherance of our business plan. |
| ● | You may experience future dilution as a result of future equity offerings. |
| ● | If we fail to effectively manage our growth, our business, financial condition and operating results could be harmed. |
| ● | Our future success depends on our ability to develop, maintain, and expand our operating platforms, technology offerings, and commercial relationships. |
| ● | Our operations depend on the availability of feedstock, equipment, components, logistics services, and third-party suppliers, and disruptions in our supply chain could adversely affect our business. |
| ● | A shortage of qualified labor could negatively affect our business and materially reduce earnings. |
| ● | Unfavorable macroeconomic conditions in the U.S. may adversely affect our business, financial condition and results of operations. |
iv
| ● | We are dependent upon the timely delivery of products from our vendors. Prolonged diminution of global supply chains may impact the availability and price stability of future food supplies, which may in turn adversely impact our business. |
| ● | If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in our international operations and our sales and profitability may be negatively impacted. |
| ● | Our relationships with customers may be materially diminished or terminated. The loss of customers could adversely affect our business, financial condition, and results of operations. |
| ● | We rely on technology in our business and any cybersecurity incident, other technology disruption or delay in implementing new technology could negatively affect our business and our relationships with customers. |
| ● | We may be unable to protect or maintain our intellectual property, which could result in customer confusion, a negative perception of our brand and adversely affect our business. |
| ● | If we are unable to renew or replace our current leases on favorable terms, or any of our current leases are terminated prior to expiration of their stated terms, and we cannot find suitable alternate locations, our operations and profitability could be negatively impacted. |
| ● | Failure to retain our senior management and other key personnel may adversely affect our operations. |
| ● | If we are unable to attract, train and retain employees, we may not be able to grow or successfully operate our business. |
| ● | Changes in and enforcement of immigration laws could increase our costs and adversely affect our ability to attract and retain qualified employees |
| ● | Potential labor disputes with employees and increases in labor costs could adversely affect our business. |
| ● | We may incur significant costs to comply with environmental laws and regulations, and we may be subject to substantial fines, penalties and/or third-party claims for non-compliance. |
| ● | Litigation may materially adversely affect our business, financial condition and results of operations. |
| ● | The U.S. government is currently imposing increased tariffs on certain products imported into the U.S., including products imported from China, which may have an adverse impact on our future operating results. |
| ● | Severe weather, natural disasters and adverse climate changes, as well as the legal, regulatory or market measures being implemented to address climate change, may materially adversely affect our financial condition and results of operations. |
| ● | Our business may be affected by the impacts of unfavorable geopolitical events or other market disruptions on consumer confidence and spending patterns. |
| ● | Our current indebtedness may adversely affect our liquidity position and ability of future financing. |
| ● | Our business is subject to fluctuations in commodity prices, operating costs, and inflation, which could adversely affect our profitability and results of operations. |
v
Food and Non-Alcoholic Beverages
| ● | We have experienced a significant decline in revenue within our FuAn business segment, which could materially and adversely affect our business, financial condition, and results of operations. |
| ● | Our industry is characterized by low margins, and periods of significant or prolonged inflation or deflation affect our product and operational costs, which may negatively impact our profitability. |
| ● | Competition may increase in the future, which may adversely impact our margins and ability to retain customers, and make it difficult to maintain our market share, growth rate and profitability. |
| ● | If more competitors enter this market segment in the future, our operating results may be negatively impacted through a loss of sales, reduction in margins from competitive price changes, and/or greater operating costs, such as marketing costs, due to the increase of competition. |
| ● | Changes in consumer eating habits could materially and adversely affect our business, financial condition, and results of operations. |
| ● | Our operations may be adversely affected by the disruption of logistics services or poor handling of products by third party logistics service providers. |
| ● | Significant portions of our inventory are perishable and vulnerable to spoilage and other loss. |
| ● | If we fail to comply with requirements imposed by applicable law and other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business. |
| ● | If the products distributed by us are alleged to have caused injury or illness, or to have failed to comply with governmental regulations, we may need to recall our products and may experience product liability claims. |
| ● | Increased commodity prices and availability may impact profitability. |
Risks Related to E-Wase Business
| ● | We have a limited operating history and face significant risks related to our new EcoloopX business strategy, including substantial capital requirements, facility construction and feedstock procurement challenges, commodity price volatility, regulatory compliance, and intense industry competition. |
| ● | Failure on the parts of recycling and processing partners to comply with applicable laws and regulation may disrupt e-waste reverse supply chain which may have a material adverse effect on our results of operations and financial condition. Our planned expansion into the production of “black mass” will significantly increase our regulatory burden and direct operational risk. |
| ● | The economic value of recyclable materials is partially influenced by commodity prices such as copper, lithium, nickel, and cobalt. |
| ● | Our ability to generate revenue depends on securing reliable sources of electronic waste materials. |
| ● | Growth of our EcoLoopX platform depends in part on the development of battery recycling and circular economy markets. |
vi
Risks Related to AI Services Business
| ● | Our AI powered big data platform will operate in an industry characterized by rapid technological change, unpredictable market adoption, and an intensely uncertain regulatory landscape, which together expose us to significant legal and financial risks |
Risks Related to Our Common Stock and Preferred Stock
| ● | You may experience extreme stock price volatility, including any stock-run up, unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock. |
| ● | Volatility in our common stock price may subject us to securities litigation. |
| ● | We have failed to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted. |
| ● | We do not intend to pay dividends for the foreseeable future. |
| ● | If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our shares of common stock, the price of our common stock and trading volume could decline. |
| ● | The market price of our common stock may be volatile or may decline regardless of our operating performance. |
| ● | Our management has broad discretion to determine how to use the funds raised in our initial public offering and may use them in ways that may not enhance our results of operations or the price of our shares of common stock. |
| ● | As a “controlled company” within the meaning of the Nasdaq Marketplace Rule 5615(c), we intend to choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders. |
| ● | Anti-takeover provisions in our charter documents and Nevada law, along with our status as a “controlled company,” could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock. |
| ● | We have 135,000 shares of Series A Super Voting Preferred Stock with super voting rights. |
| ● | We cannot predict the impact our multi-class share structure may have on the stock price of our common stock. |
| ● | We are an emerging growth company and a smaller reporting company, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors. |
| ● | If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected. |
| ● | Our management and principal stockholders own a significant percentage of our stock and will be able to exert control over matters subject to stockholder approval. |
| ● | Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us. |
| ● | We are subject to the periodic reporting requirements of Section 15(d) and 12(b) of the Exchange Act that require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit. |
vii
PART I
Item 1. Business.
BUSINESS
Overview
Marwynn Holdings, Inc., or “Marwynn,” was incorporated on February 27, 2024 in Nevada, as a holding company. We currently operate, or are developing operations, in three principal business areas: (i) electronic waste recycling (“E-waste Business”) through EcoLoopX Corporation (“EcoLoopX”); (ii) advanced artificial intelligence application development and related infrastructure solutions (“AI & Infrastructure Services”) through NexaCore Technologies, Inc. (“NexaCore”); and (iii) food and non-alcoholic beverage supply chain and brand management services through FuAn Enterprise, Inc. (“FuAn”).
E-Waste Business
As part of our business diversification strategy, we incorporated EcoLoopX on November 25, 2025. Its current strategy is to develop direct e-waste recycling operations and the capability to produce “black mass,” an intermediate material derived from processed lithium-ion batteries that may contain recoverable metals such as lithium, nickel, cobalt and copper.
On June 9, 2026, EcoLoopX hired Frank Xu as its sales director. Mr. Xu is responsible for diversifying EcoLoopX’s e-waste collection channels, developing corporate business-to-business electronic disposal networks, and supporting business development initiatives throughout the United States. Currently, EcoLoopX purchases scrapped copper from e-waste recycling plants for sale.
AI and Infrastructure Services
On March 27, 2026, we incorporated NexaCore to explore opportunities involving advanced artificial intelligence application development and related infrastructure solutions, which we refer to as our “AI and Infrastructure Services.” NexaCore remains in the development stage, and we are continuing to evaluate potential technologies, projects, commercial relationships and business models in this sector.
Food and Beverage Services
Through FuAn, we provide food and beverage supply chain and brand management services in the United States. FuAn was incorporated in California on April 18, 2016 and historically focused on sourcing authentic premium Asian foods, snacks and non-alcoholic beverages, distributing branded products in the U.S. market, and providing related brand management services.
Beginning in early 2025, increased tariffs on goods imported from China adversely affected FuAn’s traditional sourcing model. In response, we began transitioning our product portfolio from imported Asian food and beverage products toward domestically sourced products. This transition remains ongoing.
Corporate Reorganization and Discontinued Home Improvement Business
Prior to the reorganization described below, our business was operated by the following entities: (1) FuAn, which was incorporated in the state of California on April 18, 2016, and is primarily engaged in sourcing authentic premium Asian foods, snacks and non-alcoholic beverages, distributing the branded goods in the U.S. market, and providing brand management services; and (2) Grand Forest Cabinetry Inc (“Grand Forest”), incorporated in the state of California on February 22, 2021, and KZS Kitchen Cabinet & Stone Inc (“KZS”), incorporated in the state of California on October 11, 2018 and merged with and into Grand Forest on June 1, 2024. Following the merger, all of the home improvement business were conducted under Grand Forest, which was engaged in the sale of high-quality indoor home improvement products sourced from international suppliers.
1
On April 29, 2024, Yin Yan (our chairperson, chief executive officer and president, and spouse of Fulai Wang), Fubao Wang, Xiangjing Wu, Gang Wu, Dan Yu, and Qiang Zhang, as the stockholders of FuAn, entered into a share exchange agreement with Marwynn to transfer all of their ownership in FuAn for 7,399,080 shares of common stock of Marwynn (“FuAn Transaction”). On April 25, 2024, Hong Le Liang, Sen Zhong (spouse of Zhifen Zhou, our former chief financial officer, secretary and director) and Fu Lai Wang (spouse of Yin Yan, our chairperson, chief executive officer and president), as the stockholders of Grand Forest, entered into a share exchange agreement with Marwynn to transfer all of their ownership in Grand Forest for 4,976,244 shares of common stock of Marwynn (“Grand Forest Transaction”). On April 25, 2024, Hong Le Liang and Jiechun Wu, as the stockholders of KZS, entered into a share exchange agreement with Marwynn to transfer all of their ownership in KZS for 2,132,676 shares of common stock of Marwynn (“KZS Transaction”). On April 30, 2024, the FuAn Transaction, Grand Forest Transaction and KZS Transaction closed, and Marwynn issued a total of 14,508,004 shares of its common stock to the stockholders of FuAn, Grand Forest and KZS. As a result of the share exchanges, all the stockholders of FuAn, Grand Forest and KZS became the stockholders of Marwynn and Marwynn became the parent of FuAn, Grand Forest and KZS (the “Reorganization”).
In an effort to consolidate the operation of the home improvement business, on June 1, 2024, KZS merged with and into Grand Forest with Grand Forest being the surviving entity (the “Merger”). Following the Merger, all of the home improvement business was housed under Grand Forest. Grand Forest remained a wholly-owned subsidiary of Marwynn until its sale in 2025.
On October 27, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Reli Home Décor Inc., a California corporation (the “Buyer”), solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary, Grand Forest. On December 22, 2025, the Company completed the sale of all of its equity interests of Grand Forest to the Buyer. Following the sale of Grand Forest, the Company is no longer an indoor home improvement supply chain provider.
Recent Events and Developments
On October 27, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Reli Home Décor Inc., a California corporation (the “Buyer”), solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary, Grand Forest Cabinetry Inc., a California corporation (“Grand Forest”). Grand Forest is engaged in the business of indoor home improvement supply chain management. On December 22, 2025, the Company completed the sale of all of its equity interests of Grand Forest to the Buyer. Following the sale of Grand Forest, the Company is no longer an indoor home improvement supply chain provider.
On November 25, 2025, the Company incorporated EcoLoopX Corporation to explore and develop our E-waste Business. On June 9, 2026, the Company hired Frank Xu as Sales Director for EcoLoopX to focus on diversifying its e-waste collection channels, building out corporate B2B electronic disposal networks, and supporting business development initiatives throughout the United States.
On March 27, 2026, the Company incorporated Nexacore Technologies, Inc. to explore and develop our business for AI & Infrastructure Services.
Our Services and Products
The Company is maintaining its food and beverage supply chain company but has prioritized the development of our E-waste Business and AI and Infrastructure Services.
Food and Beverage Supply Chain and Brand Management Solutions
Historically, FuAn’s food and beverage supply chain business focused on sourcing Asian food, snacks, and non-alcoholic beverages, and distributing the branded goods to mainstream markets, grocery stores and wholesale/warehouse clubs in the U.S. In addition, FuAn provides supply chain consulting, and market expansion support for businesses. The Company continues to operate its traditional international trading business; however, it has reallocated its strategic emphasis toward an energy-focused business.
2
During 2025 and continuing into 2026, the United States has introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates. Our current food and non-alcohol beverage business relies on international supply chains and imported products. This dependence exposes us to risks associated with shifting global trade policies, tariffs, and geopolitical tensions and may increase our cost of goods sold.
As a result, for our Food and Beverage Services, we are actively pursuing alternative sourcing strategies and diversifying our supply base. During the quarter ended April 30, 2026, we had two primary vendors located in Taiwan and New Zealand. As we continue to try to expand our business operations and develop relationships with new suppliers and retail partners, we may encounter additional risks associated with supplier reliability, product quality control, logistics coordination, and regulatory compliance across multiple jurisdictions. Our expansion efforts may also require increased working capital, new operational infrastructure, and additional personnel, which could increase our operating expenses.
As our growth strategy develops, we have reallocated its strategic emphasis toward an energy and technology-focused business. See “Risk Factors” for additional information.
Typical Flow of our Supply Chain Platform
FuAn sources and distributes food, snacks, and non-alcoholic beverage products, and coordinates transportation, customs clearance, regulatory compliance, warehousing, and distribution in connection with customer orders.
In addition, we provide specific services to clients who may only require certain aspects of our expertise.
Our Products and Customers
Currently, we are limiting our offerings to certain frozen foods, dry groceries, snacks, and non-alcoholic beverages.
Our customers at FuAn are primarily wholesalers in the food and beverage industry who rely on our expertise to source premium Asian related products and/or to manage their supply chains efficiently. As of April 30, 2026, six customers associated with FuAn’s business segments attributed to approximately 29% of our total revenues.
For the year ended April 30, 2026, two customers accounted for 71% and 12% of the Company’s total sales. As of April 30, 2026, four customers accounted for 62 %, 11%, 11% and 11% of the Company’s total outstanding accounts receivable balance, respectively. For the year ended April 30, 2025, two customers accounted for 72% and 13% of the Company’s total sales. As of April 30, 2025, three customers accounted for 34%, 33% and 33% of the Company’s total outstanding accounts receivable balance, respectively.
Competition
The global food and beverage supply chain and brand management solutions market is relatively fragmented and highly competitive. There are three main competitors in our Asian food and non-alcoholic market (Royal Asia (Tai Foong USA, Inc.), Bibigo (Schwan’s Consumer Brands, Inc.) and Anjinomoto Co., Inc.). These companies are well established, better recognized and more experienced in operating multiple distribution locations and expanding management, and have greater marketing and financial resources than we do.
E-Waste Business
Through our wholly-owned subsidiary, EcoLoopX Corporation (“EcoLoopX”), we launched our E-waste Business. In May 2026, the Company decided to become a direct e-waste recycling operator and announced plans that it intends to produce “black mass” - a critical intermediate material in the lithium-ion battery recycling value chain. EcoLoopX is in the process of evaluating its options for entering into the black mass business, including a greenfield project and/or acquisition of existing facility. EcoLoopX’s proposed E-waste Business includes:
| ● | Direct physical sorting, dismantling, and mechanical shredding of end-of-life electronics and batteries. | |
| ● | High-purity chemical and mechanical separation to extract commodity-grade battery feedstock. | |
| ● | Upstream aggregation and multi-jurisdictional sourcing of enterprise IT assets and distributors. | |
| ● | Comprehensive hazardous materials regulatory compliance, logistics tracking, and cross-border environmental documentation management. |
3
EcoLoopX’s long-term strategy combines nationwide collection and reverse logistics with owned processing infrastructure, including leased warehouse facilities, black mass production, and downstream battery material processing. Currently, EcoLoopX purchases scrapped copper from e-waste recycling plants for sale. For the fiscal year ended April 30, 2026, EcoLoopX sold waste recycled copper materials to Golden Honest Trading Limited, which sales accounted for approximately 71% of our total revenue.
AI and Infrastructure Services
Through the wholly-owned subsidiary, NexaCore Technologies, Inc. (“NexaCore”), we intend to explore and develop our AI and Infrastructure Services, which includes:
| ● | Enterprise AI Application. NexaCore intends to designs, develops, and implements specialized artificial intelligence (AI) computing platforms, custom software applications, and managed technical support services tailored for enterprise clients. This includes delivering secure, managed cloud environments and Infrastructure-as-a-Service (IaaS) solutions optimized specifically for high-throughput, data-intensive AI workloads. |
| ● | Clean Energy Infrastructure & Solar Power Plant Development. To directly support the substantial, continuous energy requirements of modern high-density data centers and enterprise AI application platforms, NexaCore intends to engage in the planning, sourcing, construction, and operational management of commercial solar power plants. This integrated approach allows us to secure reliable, sustainable, and cost-effective green energy infrastructure, minimizing carbon footprints while insulating our data ecosystems from grid volatility. |
As a part of this initiative, we intend to engage in the following:
| ● | Deployment of enterprise-grade AI software applications and deep learning model processing services. |
| ● | Provisioning of IaaS and cloud storage optimized for high-density enterprise environments. |
| ● | Sourcing, land acquisition, and project development for high-density data centers. |
| ● | Engineering, management, and continuous operation of utility-scale solar energy infrastructure. |
As of the date of this filing, our AI and Infrastructure Services are in the exploration and development stage and are not yet fully operational.
Strategic Business Realignment
During the fiscal year 2025, management implemented a strategic restructuring to try to optimize shareholder value by shifting its focus from low-margin consumer goods distribution to development of its energy and technology-focused businesses. While FuAn remains a wholly-owned asset, it is no longer our primary business focus. Instead, our forward-looking business initiatives and resource allocations are concentrated heavily on developing (i) EcoLoopX for our E-waste Business, and (ii) NexaCore for our AI and Infrastructure Services.
We currently do not have any experience in the E-waste Business or AI and Infrastructure Services. We have hired Frank Xu as sales directors for EcoLoopX to focus on diversifying e-waste collection channels, building out corporate B2B electronic disposal networks, and to assist with business development initiatives throughout the US. We intend to build a vertically integrated e-waste and battery recycling platform, pairing a national collection network with owned processing infrastructure. As operations scale, the workforce will transition from logistics to a full-scale industrial team spanning procurement, manufacturing, and engineering, with hiring carefully paced to support revenue growth. For our initial phase, we intend to focus on establishing executive leadership, launching the collection network, and preparing the company’s first facility.
4
Our Intellectual Property
We rely on a combination of trademarks, and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality procedures, non-disclosure agreements with third parties, and other contractual protections, to protect our intellectual property rights.
We currently do not own any registered trademarks or patents.
Unauthorized parties may attempt to infringe our intellectual property rights through unauthorized use, misappropriation or other means to undermine our business. Monitoring unauthorized use of our intellectual property is practically challenging and could be costly, and we cannot be certain that the steps we have taken will prevent unauthorized use or misappropriation of our intellectual property, including but not limited to our trademarks, logos, or designs. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.
We own the domain name for our websites www.marwynnholdings.com and www.fuanus.com.
Our Corporate Information
Our principal executive office is located at c/o Marwynn Holdings, Inc., 2955 Main Street, Ste 100A, Irvine, CA 92614. The telephone number of our principal executive office is 949-706-9966.
Implications of Being an Emerging Growth Company
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Implications of Being a Smaller Reporting Company
Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter.
5
Implication of Being a Controlled Company
Our chairperson, chief executive officer, and President, Ms. Yin Yan, currently controls approximately 90.85% of the aggregate voting power of our outstanding voting securities. As a result, we will be deemed a “controlled company” within the meaning of the Nasdaq Marketplace Rule 5615(c). As a controlled company, we are permitted and intend to elect to rely on certain exemptions from corporate governance rules of The Nasdaq Capital Market, including:
| ● | An exemption from the rule that a majority of our board of directors must be independent directors; |
| ● | An exemption from the rules that our compensation committee and nominating committee be composed entirely of independent directors; |
| ● | An exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and |
| ● | An exemption from the rule that our director nominees must be selected or recommended solely by a majority of independent directors or nominations committee comprising solely of independent directors. |
We have elected to rely on some of the “controlled company” exemptions. Our nominating and corporate governance and compensation committees will not consist entirely of independent directors.
Government Regulations
FuAn
Legal compliance is important to our operations. We are required to comply, and it is our policy to comply, with all applicable laws in the numerous jurisdictions in which we do business.
As a marketer and distributor of food products in the U.S., we are subject to the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the U.S. Food and Drug Administration (the “FDA”). The FDA regulates food safety and quality through various statutory and regulatory mandates, including manufacturing and holding requirements for foods through good manufacturing practice regulations, hazard analysis and critical control point requirements for certain foods, and the food and color additive approval process. The agency also specifies the standards of identity for certain foods, prescribes the format and content of information required to appear on food product labels, regulates food contact packaging and materials, and maintains a Reportable Food Registry for the industry to report when there is a reasonable probability that an article of food will cause serious adverse health consequences. For certain product lines, we are also subject to the Federal Meat Inspection Act, the Poultry Products Inspection Act, the Perishable Agricultural Commodities Act, the Packers and Stockyard Act and regulations promulgated by the USDA to interpret and implement these statutory provisions. The USDA imposes standards for product safety, quality and sanitation through the federal meat and poultry inspection program. The USDA reviews and approves the labeling of these products and also establishes standards for the grading and commercial acceptance of produce shipments from our suppliers. We are also subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, which imposes certain registration and record keeping requirements on facilities that manufacture, process, pack or hold food for human or animal consumption.
The recently published and pending rules under the Food Safety Modernization Act (“FSMA”) will significantly expand food safety requirements, including those which impact our business. Among other things, FDA regulations implementing the FSMA require us to establish and maintain comprehensive, prevention-based controls across the food supply chain that are both verified and validated. The FSMA also imposes new requirements for food products imported into the U.S. and provides the FDA with mandatory recall authority.
6
FuAn and our food and beverage products are also subject to state and local regulation through such measures as the licensing of our facilities; enforcement by state and local health agencies of state and local standards for our products; and regulation of our trade practices in connection with the sale of our products. Our facilities are subject to regulations issued pursuant to the U.S. Occupational Safety and Health Act by the U.S. Department of Labor. These regulations require us to comply with certain manufacturing, health and safety standards to protect employees from accidents and to establish hazard communication programs to transmit information on the hazards of certain chemicals which may be present in products that we distribute.
Our distribution facilities must be registered with the FDA biennially and are subject to periodic government agency inspections by the FDA and USDA. Our facilities are generally inspected at least annually by federal and/or state authorities.
Our business and employment practices are also subject to regulation by numerous federal, state and local regulatory agencies, including, but not limited to, the U.S. Department of Labor, which sets employment practice standards for workers. Additionally, our business relies heavily on third-party logistics. We must ensure that our cooperators and third-party logistics providers comply with regulations set forth by and the U.S. Department of Transportation, as well as its agencies, the Surface Transportation Board, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety Administration, which collectively regulate our trucking business through the regulation of operations, safety, insurance and hazardous materials. We must comply with the safety and fitness regulations promulgated by the Federal Motor Carrier Safety Administration, including those relating to drug and alcohol testing and hours of service. Such matters as weight and dimension of equipment also fall under federal and state regulations. We also are subject to federal and state immigration laws, regulations and programs that regulate our ability to hire or retain foreign employees. In addition, we are subject to the U.S. False Claims Act, and similar state statutes, which prohibit the submission of claims for payment to the government that are false and the knowing retention of overpayments.
Our operations are also subject to a broad range of U.S. federal, state, and local environmental laws and regulations, as well as zoning and building regulations. Environmental laws and regulations cover a variety of procedures, including appropriately managing wastewater and stormwater; complying with clean air laws; proper handling and disposal of solid and hazardous wastes; and protecting against and appropriately investigating and remediating spills and releases. For the fiscal year ended April 30, 2023, the costs of managing our compliance with environmental laws and regulations was nominal.
The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits bribery of public officials to obtain or retain business in foreign jurisdictions. The FCPA also requires us to keep accurate books and records and to maintain internal accounting controls to detect and prevent bribery and to ensure that transactions are properly authorized. We have implemented appropriate policy and will continue to maintain a robust anti-corruption compliance program applicable to our operations.
For the purchase of items produced, harvested or manufactured outside of the U.S., we are subject to applicable customs laws regarding the import and export of various products. Certain activities, including working with customs brokers and freight forwarders, are subject to applicable regulation by U.S. Customs and Border Protection, which is a part of the Department of Homeland Security.
Employees and Human Capital Resources
As of April 30, 2026, we had a total of 2 full-time employees, both of whom served in management positions.. We believe that we maintain a satisfactory working relationship with our employees, and we have not experienced any significant labor disputes or any difficulty in recruiting staff for our operations. None of our employees is represented by a labor union.
Employee Engagement, Talent Development & Benefits. We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. We provide our employees with competitive salaries and bonuses, and intend to provide opportunities for equity ownership.
Diversity, Inclusion, and Culture. Much of our success is rooted in the diversity of our teams and our commitment to inclusion. We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our entire workforce. We believe that our business benefits from the different perspectives a diverse workforce brings, and we pride ourselves on having a strong, inclusive and positive culture based on our shared mission and values.
7
Item 1A. Risk Factors
Set forth below are the risk factors that we believe are material to our investors and a summary thereof. You should carefully consider the following risk factors, as well as the other information in this Annual Report on Form 10-K, and in our other public filings. The occurrence of any of these risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described in our public filings when evaluating our business.
Risks Related to our Business and Industry
General Operations
Our management team lacks significant operational experience in the big data AI platform and battery recycling industries, and our failure to successfully manage our entry into these markets could have a material adverse effect on our business, financial condition, and results of operations.
Historically, our core business has not involved big data artificial intelligence infrastructure, e-waste recycling, or the industrial production of black mass. Consequently, our executive officers and management team have limited direct experience managing the unique technical, regulatory, and commercial challenges inherent in these specific sectors. Developing a big data AI platform hub and scaling battery processing facilities require highly specialized knowledge. If our management is unable to effectively adapt to these new operational demands, or if we fail to attract and retain qualified technical personnel and industry experts, our expansion efforts could be severely restricted. Any failure to successfully execute our strategy in these new markets could lead to a material adverse effect on our business, financial condition, and results of operations.
We operate in the highly competitive markets of food and beverage supply chain management, big data AI platform hubs, e-waste recycling, and black mass production, and we expect to incur substantial losses without generating significant near-term revenue due to recent expansions.
We face intense competition across all of our targeted operating segments. The big data AI platform sector is dominated by well-capitalized technology companies with established infrastructure and stable cooperations among partners, while the e-waste and battery recycling markets include both legacy processors and rapidly growing specialized firms with advanced or patented processing technologies. Similarly, the food and beverage supply chain industry is highly fragmented and competitive. We anticipate incurring significant upfront capital expenditures and operating expenses to build out our AI infrastructure and physical battery processing capabilities. Because these development cycles are highly capital-intensive and time-consuming, we do not anticipate generating material revenue or achieving substantial commercial milestones from these new business lines in the near term. If we cannot compete effectively, secure necessary market share, or successfully manage operations across these diverse segments, we may never achieve profitability.
We currently hold no patents for our big data AI platform or battery processing technologies, which limits our ability to protect our intellectual property and exposes us to intense competition and potential infringement claims.
To date, we have not acquired or developed any patents covering our artificial intelligence infrastructure, e-waste reverse supply chain processes, or “black mass” production methods. The markets for AI and advanced battery processing are characterized by rapid technological change and are dominated by competitors with extensive and established intellectual property portfolios. Without formal patent protection, we must rely entirely on unpatented proprietary know-how and trade secrets, and we may be unable to prevent competitors from reverse-engineering or independently developing technologies and business models that are similar or superior to ours. Furthermore, as we expand into these heavily patented fields, we face a heightened risk of inadvertently infringing upon the intellectual property rights of established technology companies or legacy recyclers. Any claims of infringement against us, regardless of their merit, could result in costly litigation, force us to pay substantial royalties, or require us to cease utilizing critical technologies, which would have a material adverse effect on our business and results of operations.
8
Our business model portfolio includes fundamentally unrelated industries with no material operational synergies, which may divide management’s attention, strain our financial resources, and create significant inefficiencies.
Following our planned expansions, our operations will span three distinct and unrelated sectors: food and beverage supply chain management, AI platform hubs, and hazardous battery recycling for black mass production. These distinct business lines do not share overlapping customer bases, supply chains, technical requirements, or regulatory frameworks. Consequently, we do not anticipate realizing any material operational or financial synergies among them. Managing such disparate operations requires widely divergent expertise and the appropriate allocation of capital across entirely separate markets. This highly fragmented organizational structure may severely distract our management team, spread our financial and operational resources too thinly, and prevent us from competing effectively against those competitors that are exclusively focused on a single industry. If we cannot effectively manage the complexities and resource demands of these divided operations, our overall business, financial condition, and results of operations will be materially adversely affected.
We have an evolving business model, which increases the complexity of our business.
Our business model has evolved in the past and continues to do so. In prior years we have added additional types of services and product offerings and in some cases, we have modified or discontinued those offerings. We intend to continue to try to offer additional types of products or services, and we do not know whether any of them will be successful. From time to time we have also modified aspects of our business model relating to our product mix. We do not know whether these or any other modifications will be successful. The additions and modifications to our business have increased the complexity of our business and placed significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of our business are likely to have similar effects. Further, any new business or website we launch that is not favorably received by the market could damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our business.
Our business is exposed to risks inherent in international operations. Changes in trade policy, including tariffs and global supply chain disruptions, could increase our costs and adversely affect our operations.
Our supply chain operations rely heavily on international suppliers, primarily located in Asia, to source materials, components, and finished products for our food, non-alcoholic beverage, and home improvement sectors. A significant portion of our food and cabinetry offerings are sourced or manufactured outside the United States, including in China, Vietnam, and other Asian countries. As a result, our cost structure and sourcing strategy are inherently exposed to geopolitical instability, macroeconomic fluctuations, and shifting trade policies.
Recent actions by the U.S. presidential administration, including the imposition of significant tariffs on imports from countries such as China, Mexico, Vietnam, and Canada, have heightened uncertainty in the global trade environment. These tariffs—along with potential retaliatory measures by other countries—may increase inflationary pressure and raise the costs of goods and shipping for our imported products. While several tariff announcements have been followed by announcements of limited exemptions and temporary pauses, these actions are unprecedented, have caused substantial uncertainty and volatility in financial markets and may result in further retaliatory measures. We have currently paused our imports from China in response to these developments and are actively seeking alternative sourcing arrangements domestically and in other countries where tariff exposure may be lower. However, diversifying our supplier base may result in increased procurement and logistics costs and added operational complexity.
The full extent and duration of these tariff programs remain uncertain and depend on numerous factors, including future U.S. trade negotiations, political developments, responses from foreign governments, and the potential granting of exemptions or exclusions. Even in regions not currently subject to tariffs, ongoing trade instability may prompt suppliers to raise prices, prioritize other markets, or modify production and delivery timelines. These dynamics could result in higher input and shipping costs, delays in product availability, or the need to engage new suppliers on less favorable terms.
9
In addition to direct cost increases, a volatile global trade environment increases the likelihood of supply chain disruption. Trade barriers, political conflict, and uncertainty surrounding tariffs can lead to logistics challenges such as shipping delays, port congestion, container shortages, and other transportation bottlenecks. These disruptions may hinder our ability to maintain adequate inventory levels or meet customer demand on a timely basis.
We do not currently hedge against commodity price or input cost volatility. Consequently, sustained increases in the cost of imported food products, cabinetry materials, or packaging could compress our gross margins if we are unable to offset these increases through pricing adjustments or operational efficiencies. Our efforts to mitigate these impacts through selective price increases or cost-saving initiatives may not succeed and could result in lower sales volumes or reduced profitability.
There is no guarantee that we could quickly secure replacement suppliers or routes that are as cost-effective or reliable as our current ones. Consequently, prolonged trade tensions or supply chain disturbances could significantly increase our operating costs and lead to inventory shortfalls, which may require us to adjust pricing or absorb margin impacts. Any failure to manage these international trade and supply chain risks could materially and adversely affect our business, financial condition, and results of operations.
We have a limited operating history in our current form and limited experience selling our products. As a result of continuing investments to expand our business, we may not achieve or sustain profitability.
Marwynn Holdings, Inc. was formed as a holding company on February 27, 2024, and operates through its wholly-owned subsidiaries FuAn, EcoLoopX and NexaCore. FuAn was incorporated in California on April 18, 2016, EcoLoopX was incorporated in the state of California on November 25, 2025, and NexaCore was incorporated in state of Delaware on March 27, 2026. Both EcoLoopX and NexaCore are startups and have limited operations at this time. As a result, we have a limited operating history and limited experience selling our products, establishing relationships with consumers, customers, suppliers, vendors and distributors and building our brand reputation. These and other factors combine to make it more difficult for us to accurately forecast our future operating results, which in turn makes it more difficult for us to prepare accurate budgets and implement strategic plans. We expect that this uncertainty will continue to exist in our business for the foreseeable future. If we do not address these risks and uncertainties successfully, our operating results could differ materially from our estimates and forecasts, and from the expectations of investors or analysts, which could harm our business and result in a decline in the trading price of our common stock.
As a developing company, we will need to adopt and implement a plan to increase awareness of our products, secure distribution channels, and foster and strengthen our supply, manufacturing and distribution relationships. It is likely our strategic priorities will need to evolve over time and our business would be materially and adversely affected if we do not properly adapt our strategies to our changing needs and changes in the market. As our operations develop and grow, we expect to experience significant increases in our working capital requirements. Even if we obtain additional capital and achieve profitability, given the competitive and evolving nature of the industry in which we operate, we may be unable to sustain or increase profitability and our failure to do so would adversely affect the Company’s business, including our ability to raise additional funds.
We will need to raise additional capital to fund our operations in furtherance of our business plan.
Until we are profitable, we will need to raise additional capital in order to fund our operations in furtherance of our business plan. The proposed financing may include shares of common stock, shares of preferred stock, warrants to purchase shares of common stock or preferred stock, debt securities, units consisting of the foregoing securities, equity investments from strategic development partners or some combination of each. Any additional equity financings may be financially dilutive to, and will be dilutive from an ownership perspective to, our stockholders, and such dilution may be significant based upon the size of such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.
10
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at varying prices. We cannot predict whether future issuances of shares of our common stock or the availability of shares for resale in the open market will decrease the market price per share of our common stock. We are not restricted from issuing additional shares of common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive shares of common stock. Sales of a substantial number of shares of our common stock in the public market or the perception that such sales might occur, including, for example, sales under an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act, could materially adversely affect the market price of the shares of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of any future stock issuances reducing the market price of our common stock and diluting their stock holdings in us.
If we fail to effectively manage our growth, our business, financial condition and operating results could be harmed.
As we continue to expand, our continued growth could strain our existing resources, and we could experience ongoing challenges, including:
| ● | managing our operational, administrative and financial capabilities and other resources; |
| ● | managing our brand portfolio, including further expanding our private label offerings, products and services; |
| ● | expanding marketing channels and deepening end customer outreaches; |
| ● | staying abreast of the evolving industry demands and market developments and catering to consumers’ changing tastes; |
| ● | developing and applying technologies necessary to support our expanded operations; |
| ● | effectively managing our supply chain; |
| ● | responding to changes in the regulatory environment; |
| ● | exploring new market opportunities such as new monetization channels; and |
| ● | addressing other challenges resulting from our expansion. |
All efforts to address the potential challenges on our way to expansion require significant managerial, financial and human resources. We cannot assure you that we will be able to effectively or timely address operating difficulties and challenges to keep up with our growth. If we are unable to successfully address these difficulties, risks and uncertainties, our business, financial conditions and results of operations could be materially and adversely affected.
Additionally, we expect to continue expanding our operations through the growth of our subsidiaries, including NexaCore and EcoloopX, the development of new products and services, the leasing and operation of warehouse and manufacturing facilities, strategic acquisitions, and the expansion of our customer base and workforce. Our ability to successfully execute these initiatives will require us to effectively manage operational complexity, recruit and retain qualified personnel, integrate new technologies and acquired businesses, expand our internal controls and information systems, and maintain effective financial, legal, compliance, and administrative processes.
11
As our business grows, we expect to incur additional operating expenses and capital expenditures related to personnel, technology infrastructure, manufacturing facilities, logistics operations, cybersecurity, and regulatory compliance. If our management systems, operational processes, or internal controls fail to scale efficiently with our growth, we could experience operational disruptions, reduced productivity, higher costs, customer dissatisfaction, delays in project execution, or difficulties integrating acquisitions and new business lines.
In addition, our growth strategy depends on our ability to identify qualified employees, secure adequate financing when needed, establish effective management systems, maintain relationships with customers and strategic partners, and successfully execute our expansion plans. There can be no assurance that we will be able to achieve these objectives in a timely or cost-effective manner.
Any failure to effectively manage our anticipated growth could materially and adversely affect our business, financial condition, results of operations, cash flows, and the value of our common stock.
Our future success depends on our ability to develop, maintain, and expand our operating platforms, technology offerings, and commercial relationships.
Our growth strategy is centered on expanding our operating businesses and technology platforms, including EcoloopX’s electronic waste recycling and critical minerals recovery operations and NexaCore’s artificial intelligence and AI-enabled energy solutions. Our ability to compete successfully depends on our ability to continue developing these businesses, expand our service offerings, maintain strong customer and supplier relationships, attract strategic partners, and enhance our reputation in the markets we serve.
We expect to continue investing in new technologies, operational capabilities, strategic acquisitions, and business development initiatives. There can be no assurance that these investments will achieve the anticipated commercial acceptance or generate the expected financial returns. Our customers may choose competing technologies or service providers, market demand may evolve differently than anticipated, or we may be unable to successfully commercialize new products or services.
In addition, our reputation and market recognition are important to attracting customers, suppliers, strategic partners, and acquisition opportunities. Any deterioration in our reputation resulting from operational issues, cybersecurity incidents, product performance, regulatory matters, customer dissatisfaction, or negative publicity could adversely affect our ability to compete and grow.
If we are unable to successfully expand our operating platforms, commercial capabilities, and market presence, our business, financial condition, results of operations, and future prospects could be materially adversely affected.
Our operations depend on the availability of feedstock, equipment, components, logistics services, and third-party suppliers, and disruptions in our supply chain could adversely affect our business.
Our subsidiaries, including EcoloopX and NexaCore Technologies, rely on a network of suppliers, logistics providers, equipment manufacturers, technology vendors, and service providers to support our operations. EcoloopX depends on the timely availability of electronic waste, end-of-life batteries, recyclable materials, processing equipment, warehouse facilities, transportation services, and related industrial supplies. NexaCore Technologies relies on cloud infrastructure providers, software vendors, hardware manufacturers, semiconductor suppliers, and other technology partners to develop and deliver its artificial intelligence and AI-enabled energy solutions.
Our ability to meet customer demand depends on maintaining reliable sources of supply, accurately forecasting operational requirements, effectively managing inventory, coordinating logistics, and maintaining productive relationships with suppliers and business partners. Disruptions resulting from supplier capacity constraints, transportation delays, labor shortages, geopolitical events, natural disasters, inflation, tariffs, trade restrictions, cybersecurity incidents, or the financial instability of suppliers may increase costs, delay customer deliveries, postpone facility construction or equipment installation, interrupt manufacturing operations, or reduce product availability.
12
In addition, as we expand our warehouse operations, manufacturing facilities, and processing capacity, we will need to effectively manage inventory levels, warehouse operations, procurement activities, and distribution networks. Failure to accurately forecast demand or effectively manage our supply chain could result in excess inventory, inventory shortages, increased operating costs, reduced margins, lost sales opportunities, or customer dissatisfaction.
If we are unable to maintain a reliable and efficient supply chain or establish and preserve long-term relationships with key suppliers, equipment manufacturers, technology vendors, logistics providers, and feedstock suppliers, our business, financial condition, results of operations, and growth strategy could be materially adversely affected.
A shortage of qualified labor could negatively affect our business and materially reduce earnings.
The future success of our operations, including the achievement of our strategic objectives, depends on our ability, and the ability of third parties on which we rely to supply and to deliver our products, to identify, recruit, develop and retain qualified and talented individuals. As a result, any shortage of qualified labor could significantly and adversely affect our business. Employee recruitment, development and retention efforts that we or such third parties undertake may not be successful, which could result in a shortage of qualified individuals in future periods. Any such shortage could decrease our ability to effectively serve our customers and achieve our strategic objectives. Such a shortage would also likely lead to higher wages for employees (or higher costs to purchase the services of such third parties) and a corresponding reduction in our results of operations.
Unfavorable macroeconomic conditions in the U.S. may adversely affect our business, financial condition and results of operations.
Our operating results may be substantially affected by the operating and economic conditions in the regions in which we operate. Economic conditions can affect us in the following ways:
| ● | A reduction in discretionary spending by consumers could adversely impact sales of Asian food and non-alcoholic beverage products. Future economic conditions affecting disposable consumer income, such as employment levels, business conditions, changes in housing market conditions, the availability of consumer credit, inflation, interest rates, tax rates and fuel and energy costs, could reduce overall consumer spending. |
| ● | Food cost and fuel cost inflation experienced by consumers can lead to reductions in the frequency of and the amount spent by consumers for our products, which could negatively impact our business by reducing demand for our customer’s products and the supply chain and distribution services we provide them. |
| ● | Heightened uncertainty in the financial markets negatively affects consumer confidence and discretionary spending, which can cause disruptions with our customers and suppliers. |
| ● | Liquidity issues and the inability of our customers to consistently access credit markets to obtain cash to support their operations can cause temporary interruptions in our ability to conduct day-to-day transactions involving the collection of funds from such customers. |
| ● | Liquidity issues and the inability of suppliers to consistently access credit markets to obtain cash to support their operations can cause temporary interruptions in our ability to obtain our products and supplies needed by us in the quantities and at the prices requested. |
13
In addition, our existing operations are primarily in the U.S. The geographic concentration of our operations creates an exposure to economic conditions in the U.S. and any financial downturn in the U.S. could materially adversely affect our financial condition and results of operations.
Global health developments and economic uncertainty resulting from pandemics, such as the COVID-19 pandemic, and governmental action related thereto, may adversely affect, our business, financial condition and results of operations.
The impact of pandemics may have an adverse impact on numerous aspects of our business, financial condition and results of operations including, our growth, product costs, supply chain disruptions, labor shortages, logistics constraints, customer demand for our products and industry demand generally, consumer spending, our liquidity, the price of our securities and trading markets with respect thereto, and the global economy and financial markets generally. We cannot predict the duration of future pandemics or future governmental regulations or legislation that may be passed as a result of ongoing or future outbreaks. The impact of pandemics and the enactment of additional governmental regulations and restrictions may further adversely impact the global economy, the food, non-alcoholic beverage and home improvement industry, and our business specifically, despite prior or future actions taken by us.
We are dependent upon the timely delivery of products from our vendors. Prolonged diminution of global supply chains may impact the availability and price stability of future food supplies, which may in turn adversely impact our business.
The global supply chain, ranging from consumer goods, electronics, and industrial raw materials to food supplies, was negatively impacted by the COVID-19 pandemic, shipping bottlenecks, and rapidly rising freight costs. We import the majority of our products. Production is widely dispersed internationally and we depend on manufacturers of our products to timely deliver these components of our inventory in quantities sufficient to meet customer demand. Any disruptions or delays in our supply chains as a result of labor shortages, commodity shortages, or inefficiencies in distribution or logistical services could cause delays in the shipment or delivery of products customers. Any prolonged diminution of global supply chains may impact the availability and price stability of supplies for our products, which may in turn adversely impact our business.
If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in our international operations and our sales and profitability may be negatively impacted.
Our ability to successfully conduct supply chain operations in, and source products and materials from, international markets is affected by many of the same risks we face in our U.S. operations, as well as unique costs and difficulties of managing international operations. Our international operations, including any expansion in international markets, may be adversely affected by local laws and customs, U.S. laws applicable to foreign operations and other foreign legal and regulatory constraints, as well as political, social and economic conditions. Risks inherent in international operations also include, among others, potential adverse tax consequences; international trade disputes, trade policy changes or potential tariffs and other import-related taxes and controls; inability to sell certain products due to customs actions, including regulatory enforcement inquiries, holds, detentions, and exclusions; greater difficulty in enforcing intellectual property rights; limitations on access to ports; risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance; geopolitical or military conflicts or acts of war such as the conflicts in Ukraine and the Middle East, as well as any related sanctions or other government or private responses; compliance with forced labor laws; compliance with environmental and responsible sourcing laws and regulations; and challenges in our ability to identify and gain access to local suppliers. For example, trade tensions between the U.S. and China have led to a series of significant tariffs on the importation of certain products. As a portion of our products are sourced, directly or indirectly, outside of the U.S., major changes in tax or trade policies, tariffs or trade relations could adversely impact the cost of, demand for, and profitability of product sales in our U.S. locations. Other countries may also change their business and trade policies in anticipation of or in response to increased import tariffs and other changes in U.S. trade policy and regulations. In addition, our operations in international markets create risk due to foreign currency exchange rates and fluctuations in those rates, which may adversely impact our sales and profitability. While the conflicts in Ukraine and the Middle East have not directly impacted the Company to date, we continue to monitor the impacts of such conflicts and their potential effects on the world economy and global supply chain which on a go-forward basis could impact our operations, sales and profitability.
14
Our relationships with customers may be materially diminished or terminated. The loss of customers could adversely affect our business, financial condition, and results of operations.
We have maintained long-standing relationships with a number of our customers. However, those customers could unilaterally terminate their relationship with us or materially reduce the amount of business they conduct with us at any time. Our customers may shift their purchase orders from us to other competitors due to market competition, change of customer requirements and preferences, or because of the customer’s financial condition. There is no guarantee that we will be able to maintain relationships with any of our customers on acceptable terms, or at all. The loss of a number of customers could adversely affect our business, financial condition, and results of operations.
We rely on technology in our business and any cybersecurity incident, other technology disruption or delay in implementing new technology could negatively affect our business and our relationships with customers.
We use technology in our business operations, and our ability to serve customers most effectively depends on the reliability of our technology systems. We use software and other technology systems, among other things, to generate and select orders, to make purchases, to manage warehouses and to monitor and manage our business on a day-to-day basis. Further, our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including customers’ and suppliers’ personal information, private information about employees, and financial and strategic information about us and our business partners.
These technology systems are vulnerable to disruption from circumstances beyond our control, including fire, natural disasters, power outages, systems failures, security breaches, espionage, cyber-attacks, viruses, theft and inadvertent releases of information. Any such disruption to these software and other technology systems, or the technology systems of third parties on which we rely, the failure of these systems to otherwise perform as anticipated, or the theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, any or all of which could potentially adversely affect our customer service, decrease the volume of our business and/or result in increased costs and lower profits.
A significant cybersecurity incident involving our cybersecurity infrastructure may result from actions by our employees, suppliers, third-party administrators, or unknown third parties or through cyber-attacks. The risk of such an incident can exist whether software services are in our technology systems or are in cloud-based software services. Intrusions and other incidents have occurred, and may occur again, in our systems and in the systems of our suppliers and third-party administrators. Any such incident could result in operational impairments, significant harm to our reputation and financial losses.
A significant cybersecurity incident could affect our data framework or cause a failure to protect the personal information of our customers, suppliers or employees, or sensitive and confidential information regarding our business and could give rise to legal liability and regulatory action under data protection and privacy laws. Any such cybersecurity incident involving our or our suppliers’ cybersecurity infrastructure could have a material adverse effect on our business, results of operations and financial condition.
Further, as we pursue our strategy to grow our businesses and pursue new initiatives that improve our operations and cost structure, we are also expanding and improving our information technology, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. If we fail to assess and identify cybersecurity risks associated with new initiatives, we may become increasingly vulnerable to such risks. Information technology systems continue to evolve and, in order to remain competitive, we need to implement new technologies in a timely and efficient manner. Investments will continue to be made in attracting, retaining, and training our human capital to remain current on the ever-changing industry best practices related to information security. If our competitors implement new technologies more quickly or successfully than we do, such competitors may be able to provide lower cost or enhanced services of superior quality compared to those we provide, which could have an adverse effect on our results of operations.
15
We may be unable to protect or maintain our intellectual property, which could result in customer confusion, a negative perception of our brand and adversely affect our business.
We believe that our intellectual property has substantial value and has contributed significantly to the success of our business. Our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could cause customer confusion or negatively affect customers’ perception of our brand, services and products, and eventually adversely affect our sales and profitability. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether we are successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liability, force us to cease use of certain trademarks or other intellectual property or force us to enter into licenses with others. Any one of these occurrences may have a material adverse effect on our business, results of operations and financial condition.
If we are unable to renew or replace our current leases on favorable terms, or any of our current leases are terminated prior to expiration of their stated terms, and we cannot find suitable alternate locations, our operations and profitability could be negatively impacted.
We currently have leases for our offices, showrooms and some of our warehouses. Our ability to re-negotiate favorable terms on an expiring lease or to negotiate favorable terms for a suitable alternate location, and our ability to negotiate favorable lease terms for additional locations, could depend on conditions in the real estate market, competition for desirable properties, our relationships with current and prospective landlords, and/or other factors that are not within our control. Any or all of these factors and conditions could negatively impact our growth and profitability.
Failure to retain our senior management and other key personnel may adversely affect our operations.
Our success is substantially dependent on the continued service of our senior management and other key personnel. These executives have been primarily responsible for determining the strategic direction of our business and for executing our growth strategy and are integral to our brand and culture, and our reputation with suppliers and customers. The loss of the services of any of these executives and other key personnel could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace them on a timely basis, if at all. In addition, any such departure could be viewed in a negative light by investors and analysts, which may cause our stock price to decline. The loss of key employees could negatively affect our business.
If we are unable to attract, train and retain employees, we may not be able to grow or successfully operate our business.
The food and non-alcoholic beverage and home improvement product supply chain and distribution industry is labor intensive. Our success depends in part upon our ability to attract, train and retain a sufficient number of employees who understand and appreciate our culture and are able to represent our brand effectively and establish credibility with our business partners and customers. Our ability to meet our labor needs, while controlling wage and labor-related costs, is subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force of the regions in which we are located, unemployment levels within those regions, prevailing wage rates, changing demographics, health and other insurance costs and changes in employment legislation.
In the event of increasing wage rates, if we fail to increase our wages competitively, the quality of our workforce could decline, causing our customer service to suffer, while increasing our wages could cause our profits to decrease. If we are unable to hire and retain employees capable of meeting our business needs and expectations, our business and brand image may be impaired. Any failure to meet our staffing needs or any material increase in turnover rates of our employees may adversely affect our business, results of operations and financial condition.
16
Changes in and enforcement of immigration laws could increase our costs and adversely affect our ability to attract and retain qualified employees.
Federal and state governments from time to time implement immigration laws, regulations or programs that regulate our ability to attract or retain qualified foreign employees. Some of these changes may increase our obligations for compliance and oversight, which could subject us to additional costs and make our hiring process more cumbersome or reduce the availability of potential employees. Although we have implemented, and are in the process of enhancing, procedures to ensure our compliance with the employment eligibility verification requirements, there can be no assurance that these procedures are adequate and some of our employees may, without our knowledge, be unauthorized workers. The employment of unauthorized workers may subject us to fines or civil or criminal penalties, and if any of our workers are found to be unauthorized, we could experience adverse publicity that negatively impacts our brand and makes it more difficult to hire and keep qualified employees. We may be required to terminate the employment of certain of our employees who are determined to be unauthorized workers. The termination of a significant number of employees may disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in adverse publicity. Our financial performance could be materially harmed as a result of any of these factors.
Potential labor disputes with employees and increases in labor costs could adversely affect our business.
A considerable amount of our operating costs are attributable to labor costs and, therefore, our financial performance is greatly influenced by increases in wage and benefit costs. As a result, we are exposed to risks associated with a competitive labor market. Rising health care costs and the nature and structure of work rules will always be important issues. Any work stoppages or labor disturbances as a result of employee dissatisfaction with their current employment terms could have a material adverse effect on our financial condition, results of operations and cash flows. We also expect that in the event of a work stoppage or labor disturbance, we could incur additional costs and face increased competition.
We may incur significant costs to comply with environmental laws and regulations, and we may be subject to substantial fines, penalties and/or third-party claims for non-compliance.
Our operations are subject to various federal, state, and local laws, rules and regulations relating to the protection of the environment, including those governing:
| ● | the discharge of pollutants into the air, soil, and water; |
| ● | the management and disposal of solid and hazardous materials and wastes; |
| ● | employee exposure to hazards in the workplace; and |
| ● | the investigation and remediation of contamination resulting from releases of petroleum products and other regulated materials. |
We may incur substantial costs, including fines or penalties and third-party claims for property damage or personal injury, as a result of any violations of environmental or workplace safety laws and regulations or releases of regulated materials into the environment. In addition, we could incur investigation, remediation and/or other costs related to environmental conditions at our currently or formerly owned or operated properties.
Litigation may materially adversely affect our business, financial condition and results of operations.
From time to time, we may be party to various claims and legal proceedings. We evaluate these claims and proceedings to assess the likelihood of unfavorable outcomes and to estimate, if probable and estimable, the amount of potential losses. Based on these assessments and estimates, we may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our assessments and estimates.
17
Even when not merited, the defense of these lawsuits or legal proceedings, including potential securities litigation and/or other legal actions, is expensive and may divert management’s attention, and we may incur significant expenses in defending these lawsuits or legal proceedings. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could negatively impact our financial position, cash flows or results of operations.
The U.S. government is currently imposing increased tariffs on certain products imported into the U.S., including products imported from China, which may have an adverse impact on our future operating results.
We sell our products based on the cost of such products plus a percent markup. The U.S. government has imposed and continues to propose increased tariffs on certain products imported into the U.S., including products imported from China. During the first quarter of 2025, the U.S. government has introduced additional trade policy actions that have increased import tariffs across a wide range of countries at various rates. These tariff changes and subsequent retaliatory actions have the potential to increase product costs for us. Some of our imported products and imported products purchased from domestic brokers are subject to these increased tariffs and accordingly, our purchase costs have increased and may increase further. As a result of such developments, we have currently paused all imports from China and are actively seeking alternative sourcing arrangements domestically and in other countries where tariff exposure may be lower. We may also determine to increase our sales prices in order to pass these increased costs to our customers. In the event we determine to take such action, our customers may reduce their orders from us, which could negatively affect our profitability and operating results. If we are unable to diversity our supply chain and reduce China sourcing, we remain subject to substantial potential exposure to tariffs, which would have significant impacts on our cost structure and product margins.
In addition, any changes in tariffs or additional restrictions on various products may be announced with little or no advance notice. The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to tariffs, trade agreements, products or policies, are difficult to anticipate or predict, which makes it difficult for us to operate optimally. If we are unable to navigate further changes in U.S. or international trade policy, it could have a material adverse impact on our business and results of operations. We are closely monitoring potential changes in international trade policy and assessing the potential impact of these and other trade policy changes on our business operations and financial performance.
Severe weather, natural disasters and adverse climate changes, as well as the legal, regulatory or market measures being implemented to address climate change, may materially adversely affect our financial condition and results of operations.
Severe weather conditions and other natural disasters in areas where our distribution network covers or from which we obtain the products we sell may materially adversely affect our operations and our product offerings and, therefore, our results of operations. Such conditions may result in physical damage to, or temporary or permanent closure of, one or more of our distribution centers, an insufficient work force in our market regions and/or temporary disruption in the supply of products, including delays in the delivery of goods to our warehouses and/or a reduction in the availability of products in our offerings. In addition, adverse climate conditions and adverse weather patterns, such as drought or flood, that impact growing conditions and the quantity and quality of crops may materially adversely affect the availability or cost of certain products within our supply chain. Any of these factors may disrupt our businesses and materially adversely affect our financial condition, results of operations and cash flows.
There is an increased focus around the world by regulatory and legislative bodies at all levels towards policies relating to climate change and the impact of global warming, including the regulation of greenhouse gas (GHG) emissions, energy usage and sustainability efforts. Increased compliance costs and expenses due to the impacts of climate change on our business, as well as additional legal or regulatory requirements regarding climate change or designed to reduce or mitigate the effects of carbon dioxide and other GHG emissions on the environment, may cause disruptions in, or an increase in the costs associated with, the running of our business, particularly with regard to our distribution and supply chain operations. Moreover, compliance with any such legal or regulatory requirements may require that we implement changes to our business operations and strategy, which would require us to devote substantial time and attention to these matters and cause us to incur additional costs. The effects of climate change, and legal or regulatory initiatives to address climate change, could have a long-term adverse impact on our business and results of operations.
18
Our business may be affected by the impacts of unfavorable geopolitical events or other market disruptions on consumer confidence and spending patterns.
Our net sales, profit, cash flows and future growth may be affected by negative local, regional, national or international political or economic trends or developments that reduce consumers’ ability or willingness to spend, including the effects of national and international security concerns such as war, terrorism or the threat thereof. Conflicts such as the Russian invasion of Ukraine in February 2022 and the financial and economic sanctions and other measures imposed by the European Union, the U.S., and other countries and organizations in response thereto create market disruption and volatility and instability in the geopolitical environment. The extent to which this or similar conflicts escalate and the resulting impact on the global market remains uncertain. We monitor such conflicts, but do not, and cannot, know if any such ongoing geopolitical conflicts will result in broader economic and security concerns or in material implications for our business. These events could have a material adverse effect on our customers, our business partners and our third-party suppliers.
Our current indebtedness may adversely affect our liquidity position and ability of future financing.
As of the date of this report, we have $100,000 in third party financing (including short-term loan of $100,000) outstanding and $683,662 in unsecured promissory notes to related parties outstanding, which could adversely affect our cash flow, our ability to raise additional capital or obtain financing in the future, or react to changes in business and repay other debts. We may not be able to generate a sufficient amount of cash needed to pay interest and principal on our debt facilities or refinance all or a portion of our indebtedness, due to a number of factors, including significant change of economic conditions, market competition, weather conditions, natural disaster, and failure to execute our business plan.
Our business is subject to fluctuations in commodity prices, operating costs, and inflation, which could adversely affect our profitability and results of operations.
Our operations are subject to changes in the prices of commodities, raw materials, energy, transportation, labor, and other operating inputs. EcoloopX’s recycling and black mass production business depends on the availability and cost of electronic waste, end-of-life batteries, processing equipment, utilities, warehouse facilities, transportation services, and skilled labor. The market value of recovered materials, including lithium, nickel, cobalt, copper, aluminum, graphite, and other critical minerals, may fluctuate significantly due to changes in global supply and demand, geopolitical developments, technological advancements, government policies, and macroeconomic conditions.
NexaCore Technologies is also exposed to increases in operating costs associated with software development, cloud computing infrastructure, artificial intelligence platforms, data center services, semiconductor components, and highly skilled technical personnel. Inflationary pressures, wage increases, higher energy costs, increased interest rates, supply chain disruptions, or rising technology infrastructure costs may increase our operating expenses and reduce our operating margins.
Our ability to maintain profitability depends, in part, on our ability to effectively manage costs, improve operational efficiency, negotiate favorable commercial terms with customers and suppliers, and adjust pricing when market conditions permit. Competitive market conditions, long-term customer contracts, or rapidly changing market dynamics may limit our ability to pass increased costs on to customers in a timely manner or at all.
In addition, periods of sustained inflation, economic uncertainty, or recession may reduce customer capital expenditures, delay investment decisions, decrease demand for our products and services, and increase financing costs associated with our growth strategy. Conversely, significant declines in commodity prices may reduce the value of recovered materials produced by EcoloopX, negatively affecting revenue and profitability.
If we are unable to effectively manage fluctuations in commodity prices, operating costs, inflationary pressures, or changing market conditions, our business, financial condition, results of operations, cash flows, and future growth prospects could be materially adversely affected.
19
Food and Non-Alcoholic Beverages
We have experienced a significant decline in revenue within our FuAn business segment, which could materially and adversely affect our business, financial condition, and results of operations.
A significant portion of the our total revenue is generated by a single customer, Golden Honest Trading Limited, which purchased waste recycled copper materials from EcoLoopX. Sales to this customer totaled $3.0 million, representing approximately 71% of the Company’s total revenue. The remaining 29% of total sales was contributed by six customers associated with the FuAn business segment, of which, two customers accounted for 13% of total sales, primarily from the import and distribution of frozen lamb from New Zealand and mochi products from Taiwan.
Revenue within our FuAn business segment has recently declined significantly by 9% compared to fiscal year 2025. If we are unable to stabilize and recover the revenue in the FuAn segment, or if we lose Golden Honest Trading Limited, experience a reduction in their purchase volumes, or face adverse changes in their financial condition, our business will suffer. Our ability to generate sustainable revenue depends heavily on maintaining these relationships or rapidly diversifying our customer base and product lines, and we cannot assure you that we will be successful in doing so.
Our industry is characterized by low margins, and periods of significant or prolonged inflation or deflation affect our product and operational costs, which may negatively impact our profitability.
The food and non-alcoholic beverage supply chain and distribution industry is characterized by relatively high inventory turnover with relatively low profit margins. Volatile food costs have a direct impact on our industry. During the previous years, our industry experienced significantly elevated commodity and supply chain costs including the cost of labor, sourced goods, energy, fuel and other inputs necessary for the distribution of food and non-alcoholic beverage products, and elevated levels of inflation may continue or worsen and contribute to loss of revenue and gross profit margin in particular product categories. Our business and results of operations may be adversely affected if we are unable to adjust to these rising cost and inflationary pressures.
Periods of significant product cost inflation or deflation may adversely affect our results of operations if we are unable to pass on all or a portion of such product cost increases to our customers in a timely manner. In addition, periods of rapidly increasing inflation may adversely affect our business due to the impact of such inflation on discretionary spending by consumers and our limited ability to increase prices in the current, highly competitive environment.
Competition may increase in the future, which may adversely impact our margins and ability to retain customers, and make it difficult to maintain our market share, growth rate and profitability.
The Asian food and non-alcoholic beverage supply chain and distribution industry, as a whole, in the U.S. is fragmented and highly competitive, with local, regional, multi-regional distributors, and specialty competitors. With the growing demand for Asian cuisines, others are operating, or may begin operating in this niche market in the future. Those potential competitors include: (i) national and regional foodservice distributors, (ii) local wholesalers and brokers, (iii) food retailers, and (iv) farmers’ markets. The national and regional distributors are experienced in operating multiple distribution locations and expanding management, and they have greater marketing and financial resources than we do. Even though they currently offer only a limited selection of Asian specialty foods, they may be able to devote greater resources to sourcing, promoting and selling their products if they choose to do so. Conversely, the local wholesalers and brokers are small in size with a deep understanding of local preferences, but their lack of scale results in high risk and limited growth potential.
20
If more competitors enter this market segment in the future, our operating results may be negatively impacted through a loss of sales, reduction in margins from competitive price changes, and/or greater operating costs, such as marketing costs, due to the increase of competition.
Disruption of relationships with vendors could negatively affect our business. Suppliers may increase product prices, which could increase our product costs.
We purchase our food and non-alcoholic beverage items and related products from directly from manufacturers. If our manufacturer fails to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms.
The purchase prices of our products vary from time to time, which is subject to market conditions and negotiation with our suppliers. We may not always be able to mitigate the impact of these price fluctuations, and our performance results could be adversely affected by such fluctuations.
As a food and non-alcoholic beverage distributor, it is necessary for us to maintain an inventory of products that may have declines in product pricing levels between the time we purchase the product from suppliers and the time we sell the product to customers, which could reduce the margin on that inventory, adversely affecting our results of operations.
Changes in consumer eating habits could materially and adversely affect our business, financial condition, and results of operations.
We provide supply chain and distribution services primarily related to Asian food and non-alcoholic beverage products. Changes in consumer eating habits (such as a decline in portion sizes, or a shift in preferences toward western foods) could reduce demand for our customer’s products and the services we provide them. Consumer eating habits could be affected by a number of factors, including attitudes regarding diet and health or new information regarding the health effects of consuming certain foods. If consumer eating habits change significantly, we may be required to modify or discontinue sales of certain items in our product portfolio, and we may experience higher costs and/or supply shortages associated with our efforts to accommodate those changes as our suppliers adapt to new eating preferences.
Additionally, changes in consumer eating habits may result in the enactment or amendment of laws and regulations that impact the ingredients and nutritional content of our food products, or laws and regulations requiring us to disclose the nutritional content of our food products. Compliance with these laws and regulations, as well as others regarding the ingredients and nutritional content of food products, may be costly and time-consuming. We cannot make any assurances regarding our ability to effectively respond to changes in consumer culture preference, health perceptions or resulting new laws or regulations or to adapt our product offerings to trends in eating habits.
Our operations may be adversely affected by the disruption of logistics services or poor handling of products by third party logistics service providers.
We rely on third party logistics service providers to provide a range of transportation and logistics services, including the delivery of products, some of which are perishable, to our retail stores, warehouse and/or our customers. Any failure to provide on-time delivery or failure to maintain our products in good condition during delivery may have a material adverse impact on our business operations and our reputation. In such event, we be unable to seek full recourse against the logistics service providers in default under the terms of the service contracts or enforce in full any judgments obtained.
Significant portions of our inventory are perishable and vulnerable to spoilage and other loss.
Our operations involve the storage and stocking of a wide range of products with limited shelf life. Due to unexpected material fluctuations or abnormalities in the supply and demand of our products or changes in consumers’ preferences or the introduction of new products in the market, we may experience decrease in demand and overstocking of our products. Our products may also be returned by our customers in large quantities due to, among other things, product quality issues or delayed or incorrect delivery, resulting in shelving of products that may increase the risk of obsolescence.
21
In addition, certain of our products require specific handling throughout the supply chain. For instance, temperature control is required in warehouse or during the transportation of frozen foods in order to maintain the safety and quality of such products. Any unexpected and adverse changes in the optimal storage conditions or poor handling of products may cause damage to or result in deterioration or contamination of our products. As such, any of the aforesaid events may result in an increased risk of inventory obsolescence.
If we fail to comply with requirements imposed by applicable law and other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business.
We are subject to regulation by various federal, state, and local governments, applicable to food safety and sanitation, ethical business practices, securities, transportation, minimum wage, overtime, other wage payment requirements, employment discrimination, immigration, and human health and safety. While we attempt to comply with all applicable laws and regulations, we cannot represent that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulations. If we fail to comply with applicable laws and regulations, we may be subject to investigations, criminal sanctions or civil remedies, including fines and injunctions. The cost of compliance or the consequences of non-compliance, including debarments, could have an adverse effect on our results of operations. In addition, governmental units may make changes in the regulatory frameworks within which we operate that may require us to incur substantial increases in costs in order to comply with such laws and regulations.
If the products distributed by us are alleged to have caused injury or illness, or to have failed to comply with governmental regulations, we may need to recall our products and may experience product liability claims.
We, like any other food and non-alcoholic beverage distributor, may be subject to product recalls, including voluntary recalls or withdrawals, if the products we distribute are alleged to have caused injury or illness, to have been mislabeled, misbranded, or adulterated or to otherwise have violated applicable governmental regulations. We may also choose to voluntarily recall or withdraw products that we determine do not satisfy our quality standards, whether for taste, appearance, or otherwise, in order to protect our brand and reputation. Any future product recall or withdrawal that results in substantial and unexpected expenditures, destruction of product inventory, damage to our reputation, and/or lost sales due to the unavailability of the product for a period of time, could materially adversely affect our results of operations and financial condition.
We also face the risk of exposure to product liability claims in the event that the use of products sold by us are alleged to have caused injury or illness. We cannot be sure that consumption of our products will not cause a health-related illness in the future or that we will not be subject to claims or lawsuits relating to such matters. Further, even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image.
Our product liability insurance plans may not continue to be available at a reasonable cost or, if available, may not be adequate to cover all of our liabilities. We generally seek contractual indemnification and insurance coverage from parties supplying products to us, but this indemnification or insurance coverage is limited, as a practical matter, to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by such suppliers. If we do not have adequate insurance or contractual indemnification available, product liability relating to defective products could materially adversely affect our results of operations and financial condition.
Increased commodity prices and availability may impact profitability.
Many of our products include ingredients such as wheat, corn, oils, sugar, and other commodities. Commodity prices worldwide have been increasing. While commodity price inputs do not typically represent the substantial majority of our product costs, any increase in commodity prices may cause our vendors to seek price increases from us. We may not be able to mitigate vendor efforts to increase our costs, either in whole or in part. In the event we are unable to mitigate potential vendor price increases, we may in turn consider raising our prices, and our customers may be deterred by any such price increases. Our profitability may be impacted through increased costs to us which may affect our gross margins, or through reduced revenue as a result of a decline in the number and average size of customer transactions.
22
E-Waste Business
We have a limited operating history and face significant risks related to our new EcoloopX business strategy, including substantial capital requirements, facility construction and feedstock procurement challenges, commodity price volatility, regulatory compliance, and intense industry competition.
EcoloopX is in the early stages of executing its business strategy. While management has identified significant opportunities within the electronic waste recycling and battery materials recovery industries, the Company’s operating history remains limited. There can be no assurance that EcoloopX will successfully execute its business plan, achieve projected revenue levels, or generate sustainable profitability.
| - | Capital Requirements. The Company’s growth strategy includes leasing warehouse facilities, acquiring specialized processing equipment, constructing black mass production capabilities, expanding logistics infrastructure, and pursuing strategic acquisitions. These initiatives require significant capital expenditures and working capital. EcoloopX may require additional debt or equity financing to fund future expansion, and there can be no assurance that such financing will be available on acceptable terms or at all. Additional financing could result in shareholder dilution or increased leverage. |
| - | Construction and Commissioning Risk. The successful development of warehouse operations and black mass production facilities depends on timely completion of facility construction, equipment installation, permitting, and commissioning. Delays resulting from supply chain disruptions, contractor performance, equipment availability, labor shortages, adverse weather conditions, or regulatory approvals could increase project costs, postpone commercial operations, and adversely affect financial performance. |
| - | Feedstock Supply Risk. EcoloopX’s operations depend on securing reliable and costeffective sources of electronic waste, lithium-ion batteries, and other recyclable materials. Competition for feedstock has increased as additional recycling companies enter the market. Failure to establish long-term supplier relationships or maintain sufficient material volumes could negatively impact production capacity, operating efficiency, and profitability. |
| - | Commodity Price Volatility. Revenue generated from black mass and recovered critical minerals is influenced by market prices for lithium, nickel, cobalt, copper, graphite, aluminum, and other recovered materials. Significant fluctuations in commodity prices may reduce margins, affect inventory values, or decrease demand for recycled battery materials. |
| - | Customer Concentration Risk. During the Company’s initial growth stage, a significant portion of revenue may be derived from a limited number of commercial customers or strategic partners. The loss of one or more significant customers, reductions in purchase volumes, contract terminations, or adverse changes in customer financial condition could materially affect operating results until the customer base becomes more diversified. |
| - | Environmental and Regulatory Compliance. Electronic waste recycling and battery processing are subject to extensive federal, state, and local environmental laws and regulations governing hazardous materials handling, transportation, emissions, waste management, worker safety, and facility operations. Failure to obtain, maintain, or renew required permits or to comply with applicable regulations could result in fines, operational restrictions, remediation obligations, litigation, or temporary or permanent facility shutdowns. |
| - | Operational and Manufacturing Risks. Black mass production involves complex industrial processes requiring specialized equipment, trained personnel, and consistent quality control. Equipment failures, production interruptions, utility outages, labor shortages, workplace accidents, fires, explosions, contamination events, or manufacturing defects could interrupt production, increase operating costs, and adversely affect customer relationships. |
| - | Technology and Process Risk. The Company intends to utilize proprietary operating procedures, automation technologies, and artificial intelligence to improve logistics, manufacturing efficiency, and operational decision-making. There can be no assurance that these technologies will perform as expected or provide the anticipated operational benefits. Failure to successfully implement or integrate new technologies could reduce productivity and increase operating costs. |
23
| - | Acquisition and Integration Risk. EcoloopX intends to pursue acquisitions of recycling businesses, processing facilities, logistics companies, and complementary technologies. Acquisitions involve numerous risks, including inaccurate valuation assumptions, undisclosed liabilities, integration challenges, loss of key personnel, customer attrition, operational disruption, and failure to realize anticipated synergies. |
| - | Competition. The electronic waste recycling and battery materials recovery industry is highly competitive and includes large publicly traded companies, privately held regional recyclers, metal processors, waste management companies, and vertically integrated battery recycling firms. Many competitors possess greater financial resources, broader geographic coverage, established customer relationships, and larger processing capacities than EcoloopX. Increased competition could reduce pricing, compress margins, and limit growth opportunities. |
| - | Supply Chain Risk. The Company’s operations rely on specialized processing equipment, transportation providers, replacement parts, utilities, and third-party service providers. Global supply chain disruptions, transportation delays, inflation, tariffs, geopolitical events, or shortages of critical equipment could delay expansion plans and increase operating expenses. |
| - | Cybersecurity and Information Systems. EcoloopX depends on digital information systems for logistics management, inventory control, production planning, financial reporting, customer management, and operational monitoring. Cybersecurity incidents, ransomware attacks, system failures, or unauthorized access to confidential information could disrupt operations, result in regulatory investigations, expose the Company to liability, and damage its reputation. |
| - | Workforce Availability. The Company’s future success depends on its ability to recruit, train, and retain experienced executives, engineers, plant operators, environmental professionals, sales personnel, and technical specialists. Competition for qualified employees within the recycling, manufacturing, and critical minerals industries is significant, and labor shortages or employee turnover could adversely affect operations. |
As such, our inability to execute on our proposed business plan may have a material adverse effect on our results of operations and financial condition.
Failure on the parts of recycling and processing partners to comply with applicable laws and regulation may disrupt e-waste reverse supply chain which may have a material adverse effect on our results of operations and financial condition. Our planned expansion into the production of “black mass” will significantly increase our regulatory burden and direct operational risks.
Electronic waste materials may be subject to federal, state, and international environmental and hazardous materials regulations. At present, EcoLoopX provides non-operational supply chain services and does not engage in any physical processing, dismantling, recycling, or hazardous materials handling. EcoLoopX currently functions as an asset-light supply chain integrator thatconnects upstream e-waste generators, such as electronics distributors, IT asset disposition providers, and enterprise users, with licensed downstream processors, recyclers, and refiners in the United States and Asia. As such, our current model relies on third-party licensed refiners, recycling and processing partners to comply with applicable laws and regulations, and for processors, recyclers and refiners in Asia, cross-border shipments of e-waste may be affected by export controls, customs requirements, or international environmental agreements. Failure on the parts of those refiners, recycling and processing partners to comply with applicable laws and regulation may disrupt e-waste reverse supply chain which may have a material adverse effect on our results of operations and financial condition.
In April 2026, the Company announced plans to expand EcoLoopX beyond supply chain integration to include the direct physical processing and production of “black mass.” These proposed operations involve the direct handling, storage, transportation, and processing of certain parts of lithium-ion batteries. These activities will subject us directly to complex federal, state, and local environmental and safety laws governing hazardous waste and chemical exposure. Securing and maintaining the necessary environmental permits for this expansion will require significant capital and time. Any failure to strictly comply with these regulatory frameworks could result in material fines, facility shutdowns, or remediation liabilities. Furthermore, future changes in environmental laws regarding battery disposal or black mass refining could force us to materially alter our processing operations, increasing our capital expenditures and delaying our timeline to operation.
24
The economic value of recyclable materials is partially influenced by commodity prices such as copper, lithium, nickel, and cobalt.
Our e-waste reverse supply chain business relies on the economic value of recyclable materials is partially influenced by commodity prices such as copper, lithium, nickel, and cobalt. Sharp fluctuations in copper, lithium, nickel, and cobalt prices may have a material adverse effect on our results of operations and financial condition.
Our ability to generate revenue depends on securing reliable sources of electronic waste materials.
Our ability to generate revenue depends on securing reliable sources of electronic waste materials. Increased demand for e-waste recycling and high competition for raw materials can cause shortages, impacting operating capacity, and may have a material adverse effect on our results of operations and financial condition.
Growth of our EcoLoopX platform depends in part on the development of battery recycling and circular economy markets.
The infrastructure for end-of-life battery collection and reverse logistics is underdeveloped, making it difficult to secure a steady, high-volume supply of feedstock for recycling facilities. In addition, battery recycling is a process-heavy, capital-intensive industry, with costs for storage, transportation, and specialized handling often exceeding the value of the recovered materials. The ability to grow of our EcoLoopX platform depends in part on the development of battery recycling and circular economy markets.
AI Services
Our AI powered big data platform will operate in an industry characterized by rapid technological change, unpredictable market adoption, and an intensely uncertain regulatory landscape, which together expose us to significant legal and financial risks.
The market for big date and artificial intelligence infrastructure is in an early stage of development and is subject to profound and rapid shifts. We cannot predict whether broad-based commercial adoption of our AI platform hub will materialize, or if new, disruptive innovations will render our intended services outdated before we can achieve profitability.
Beyond the highly complex network of current data privacy and intellectual property laws, we face great uncertainty regarding future legislative frameworks. Lawmakers globally are still continuously debating and proposing fragmented new regulations governing data and AI safety, algorithmic bias, data provenance, and the ethical deployment of machine learning models. We cannot forecast how these evolving legal standards will be interpreted or enforced. Any new development in regulations may dramatically restrict our operations or exponentially increase our compliance costs.
Furthermore, the deployment of AI involves inherent and unknown operational limitations. AI models are susceptible to generating inaccurate information, or “hallucinations”, exhibiting unintended biases, and exposing vulnerabilities in cybersecurity and data protection. If our platform, or the third-party models we may rely upon, yields flawed, biased, or harmful outputs, we could face severe reputational damage, consumer protection litigation, and heightened regulatory scrutiny. If we fail to successfully manage these technological, ethical, and regulatory uncertainties, our business, financial condition, and results of operations will be materially adversely affected.
25
Risks Related to Our Common Stock and Preferred Stock
You may experience extreme stock price volatility, including any stock-run up, unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.
Our common stock may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. In particular, our common stock may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices, given that we have relatively small public floats. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects.
Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock. As a result of this volatility, investors may experience losses on their investment in our common stock. Furthermore, the potential extreme volatility may confuse the public perception of the value of our stock, distort the market perception of our stock price, our company’s financial performance, public image, and negatively affect the long-term liquidity of our common stock, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our common stock and understand the value thereof.
Volatility in our common stock price may subject us to securities litigation.
Stock markets, in general, have experienced, and continue to experience, significant price and volume volatility, and the market price of our common stock may continue to be subject to similar market fluctuations unrelated to our operating performance or prospects. This increased volatility, coupled with depressed economic conditions, could have a depressing effect on the market price of our common stock.
In addition, the securities markets have, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. Any of these factors could result in large and sudden changes in the volume and trading price of our common stock and could cause our stockholders to incur substantial losses. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted securities class action litigation against that company. If we were involved in a class action suit or other securities litigation, it would divert the attention of our senior management, require us to incur significant expense and, whether or not adversely determined, have a material adverse effect on our business, financial condition, results of operations and prospects.
We have failed to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
On January 29, 2026, we received a written notice from the staff of the Listing Qualifications Department of Nasdaq (the “Staff”) that for 30 consecutive business days from December 15, 2025 to January 28, 2026, the closing bid price of our common stock listed on the Nasdaq Capital Market was below $1.00 and no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rules 5550(a)(1), which requires a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”). On July 10, 2026, the Company received a letter from Nasdaq, notifying the Company that the Staff had determined that for the last 10 consecutive business days, from June 25, 2026 to July 9, 2026, the closing bid price of the Company’s common stock has been at $1.00 per share or greater and, accordingly, that the Company had regained compliance with the Minimum Bid Price Requirement for continued listing on Nasdaq.
There can be no assurance that we will maintain compliance with the applicable continued listing standards set forth in the Nasdaq Listing Rules. Delisting from Nasdaq could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity. In the event we are delisted from Nasdaq, the only established trading market for our common stock would be eliminated, and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems. As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our shares. Delisting would likely also reduce the visibility, liquidity, and value of our common stock, reduce investor interest in our company, and may increase the volatility of our common stock. Delisting could also cause a loss of confidence of potential industry partners, lenders, and employees, which could further harm our business and our future prospects.
26
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our shares of common stock, the price of our common stock and trading volume could decline.
The trading market for our common stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our common stock and the trading volume to decline.
The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above your purchase price.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our revenue and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; |
| ● | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; |
| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and |
| ● | other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business.
27
Our management has broad discretion to determine how to use the funds raised in our offeringd and may use them in ways that may not enhance our results of operations or the price of our shares of common stock.
We anticipate that we will use the net proceeds from our offerings along with our existing cash and cash equivalents, to fund enhancements to our current supply chain management as well as the development of additional functionalities of our business expansion, expansion of sales and distribution channels in order to reach a broader customer base, talent development and retention, as well as for working capital and other general corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from our IPO and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our shares of common stock.
As a “controlled company” within the meaning of the Nasdaq Marketplace Rule 5615(c), we have chosen to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders.
Our chairperson, chief executive officer, and President, Ms. Yin Yan, controls approximately 93.93% of the aggregate voting power of our outstanding voting securities, assuming no exercise of the over-allotment option (or 93.74% assuming full exercise of the over-allotment option), and we will be deemed a “controlled company” within the meaning of the listing rules of the Nasdaq Capital Market. A “controlled company” may elect to rely on certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent directors. These independence standards are intended to ensure that directors who meet those standards are free of any conflicting interest that could influence their actions as directors. We intend to rely on the “controlled company” exemptions under the Nasdaq Marketplace Rule 5615(c), and our nominating and corporate governance and compensation committees will not consist entirely of independent directors. Accordingly, our stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Marketplace Rules.
Our status as a controlled company could cause our shares of common stock to be less attractive to certain investors or otherwise harm our trading price. As a result, you would not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.
Anti-takeover provisions in our charter documents and Nevada law, along with our status as a “controlled company,” could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
We are a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes may discourage, delay, or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. An interested stockholder is a person who, together with the affiliates and associates, beneficially owns (or within the prior two years, did beneficially own) ten percent or more of the Company’s capital stock entitled to vote.
In addition, our Amended and Restated Articles of Incorporation (“Articles of Incorporation”) and Second Amended and Restated Bylaws (“Bylaws”) may discourage, delay, or prevent a change in our management or control over us that stockholders may consider favorable. Our Articles of Incorporation and our Bylaws (i) authorize the issuance of “blank check” preferred stock that could be issued by our Board to thwart a takeover attempt; (ii) provide that vacancies on our Board, including newly created directorships, may be filled by a majority vote of directors then in office, and (iii) provide that the Board shall have the power to amend, modify or repeal the Bylaws.
Further, we are a “controlled company” as defined in the Nasdaq Marketplace Rule 5615(c) because more than 50% of the combined voting power of all of our outstanding common stock is beneficially owned by Ms. Yin Yan. Our status as a controlled company may have an anti-takeover effect of delaying, deferring or preventing a change in control of the Company.
We have 135,000 shares of Series A Super Voting Preferred Stock with super voting rights.
Our capital stock as of the date hereof consists of common stock and Series A Super Voting Preferred Stock. All 135,000 shares of Series A Super Voting Preferred Stock have been issued to Ms. Yin Yan, our chairperson, chief executive officer, and President. Each share of common stock is entitled to one (1) vote and each share of Series A Super Voting Preferred Stock is entitled to one thousand (1,000) votes on any matter on which action of the stockholders of the corporation is sought. Approximately 95.75% of Ms. Yin Yan’s voting power stems from her holdings of the Series A Super Voting Preferred Stock. The Series A Super Voting Preferred Stock will vote together with the common stock.
28
Our Articles of Incorporation does not provide for any sunset provisions that limit the lifespan of our Series A Super Voting Preferred Stock, including in the case of the death of a Series A Super Voting Preferred Stock shareholder or intra-family transfers of shares of Series A Super Voting Preferred Stock. The holders of Series A Super Voting Preferred Stock shall not be entitled to receive dividends of any kind or be entitled to any liquidation preference. The Series A Super Voting Preferred Stock shall not be subject to conversion into common stock or other equity authorized to be issued by the Company. The Series A Super Voting Preferred Stock is redeemable at the election of the holder at a redemption price of $0.001 per share. See “Description of Capital Stock” for additional information regarding our Series A Super Voting Preferred Stock.
In addition to the dilutive effect on the voting power and value of our common stock, the foregoing structure of our capital stock may render our common stock ineligible for inclusion in certain securities market indices, and thus adversely affect the price and liquidity of, and public sentiment regarding, our common stock or other securities.
The existence of, and voting rights associated with, our Series A Super Voting Preferred Stock, either alone or in conjunction with certain of the other provisions of our Articles of Incorporation, such as the requirement to have a staggered board, could also have the effect of delaying, deterring or preventing a change in our control or make the removal of our management more difficult.
We cannot predict the impact our multi-class share structure may have on the stock price of our common stock.
We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our common stock or in adverse publicity or other adverse consequences. For example, certain index providers have policies that restrict or prohibit the inclusion of companies with multiple-class share structures in certain of their indices, including the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices. However, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our multi-class capital structure will make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock. These policies may depress the valuations of publicly traded companies that are excluded from the indices compared to those of other similar companies that are included. Because of our multi-class structure, we will likely be excluded from certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make shares of our common stock less attractive to other investors. As a result, the market price of shares of our common stock could be adversely affected.
We are an emerging growth company and a smaller reporting company, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) having the option of delaying the adoption of certain new or revised financial accounting standards, (iii) reduced disclosure obligations regarding executive compensation in our registration statement and our periodic reports and proxy statements and (iv) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until such time that we are no longer an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. Further, pursuant to Section 107 of the JOBS Act, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.
29
We will remain an emerging growth company until the earliest of (i) April 30, 2030, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates was $700.0 million or more as of the last business day of the second fiscal quarter of such year or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.
It is possible that some investors will find our common stock less attractive as a result of the foregoing, which may result in a less active trading market for our common stock and higher volatility in our stock price.
If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected.
Prior to our IPO, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our management has not completed an assessment of the effectiveness of our internal controls over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In the course of auditing our consolidated financial statements for the years ended April 30, 2024 and 2023, we identified several material weaknesses in our internal control over financial reporting and other control deficiencies as of April 30, 2024. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified to date relate to (i) a lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements; (ii) a lack of sufficient documented financial closing policies and procedures and (iii) a lack of an effective review process by the accounting manager which may lead to material audit adjustments to the financial statements.
Following the identification of the material weaknesses and control deficiencies, we plan to take remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with the assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (iv) appointing independent directors and strengthening corporate governance.
However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of our Common stock, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.
30
We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on Form 10-K beginning with our annual report for the fiscal year ending April 30, 2026. However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a smaller reporting company. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified, if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.
Our management and principal stockholders own a significant percentage of our stock and will be able to exert control over matters subject to stockholder approval.
Our chairperson, chief executive officer, and President, Ms. Yin Yan, controls approximately 90.85% of the aggregate voting power of our outstanding voting securities.
Approximately 95.75% of Ms. Yin Yan’s voting power stems from her holdings of the Series A Super Voting Preferred Stock. To the extent that Ms. Yan continues to own a significant percentage of the voting power of our common stock, Ms. Yan will be able to control the management and affairs of our company and most matters requiring stockholder approval, including the election of directors, amendments of our organizational documents and approval of any merger, sale of substantially all our assets or other significant corporate transactions. This concentration of ownership may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you or other stockholders may feel are in your or their best interest as one of our stockholders.
Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
Our Articles of Incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.
We are subject to the periodic reporting requirements of Section 15(d) and 12(b) of the Exchange Act that require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.
We are required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in, and the complexity of our reports cannot be determined at this time and will affect the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit.
31
The costs of maintaining public company reporting requirements could be significant and may preclude us from seeking financing or equity investment on terms acceptable to us and our stockholders. We estimate these costs to be in excess of $500,000 per year and may be higher if our business volume or business activity increases significantly. If our revenues are insufficient or non-existent, or we cannot satisfy many of these costs through the issuance of shares or debt, we may be unable to satisfy these costs in the normal course of business.
However, for as long as we remain a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced financial statement disclosure in registration statements, which must include two years of audited financial statements, reduced financial statement disclosure in annual reports on Form 10-K, and exemptions from the auditor attestation of management’s assessment of internal control over financial reporting. We may take advantage of these reporting exemptions until we are no longer a smaller reporting company.
If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as defined in Item 106(a) of Regulation S-K. These risks include, among others, unauthorized access to information systems, ransomware attacks, business interruption, theft of confidential information, fraud, intellectual property loss, and violations of applicable privacy and data protection laws.
Cybersecurity risk management is incorporated into our overall enterprise risk management process. Management periodically evaluates cybersecurity risks in connection with the Company’s operations, information technology systems, and business objectives. As our business expands, particularly through the development of artificial intelligence technologies, warehouse operations, manufacturing facilities, and digital platforms, we expect cybersecurity risks to become increasingly significant.
The Company utilizes commercially available security technologies and administrative controls designed to protect its information systems and data. These measures include user authentication, password management, firewall protection, endpoint security software, data backup procedures, access controls, and software updates. We also evaluate cybersecurity risks associated with
Although we currently manage cybersecurity primarily through internal management and commercially available security solutions, we expect to enhance our cybersecurity program over time as our operations grow, including evaluating the engagement of external cybersecurity professionals, conducting security assessments, and
32
Cybersecurity Risks and Impact
As of the date of this Annual Report, we have
However, cybersecurity threats continue to evolve in sophistication and frequency. Our future operations, including artificial intelligence applications, cloud-based technologies, warehouse management systems, manufacturing operations, and enterprise information systems, may become targets of cyberattacks, ransomware, phishing, malware, data breaches, or other security incidents. Any successful cybersecurity incident could disrupt operations, compromise confidential information, result in regulatory investigations or litigation, damage our reputation, and adversely affect our business, financial condition, and results of operations.
Cybersecurity Governance
Board Oversight
Our Board of Directors oversees the Company’s approach to cybersecurity risk as part of its broader oversight of enterprise risk management. The Board receives updates from management regarding significant cybersecurity matters, including material risks, cybersecurity policies, and any cybersecurity incidents that may arise. As our operations expand, the Board expects to periodically review the Company’s cybersecurity program and related risk management practices.
Management’s Role in Cybersecurity Risk Management
Our executive management team is responsible for the day-to-day oversight of cybersecurity risks and information technology security. Management monitors the Company’s information systems, evaluates potential cybersecurity risks, oversees the implementation of security controls, and coordinates responses to any identified cybersecurity events.
Management also evaluates cybersecurity considerations when implementing new technologies, engaging third-party service providers, expanding operational facilities, and developing artificial intelligence platforms and other digital initiatives..
Roles and Expertise
As the Company continues to expand its operations and technology infrastructure, management expects to evaluate the engagement of qualified cybersecurity professionals or specialized third-party service providers to further strengthen the Company’s cybersecurity capabilities.
33
Cybersecurity Monitoring and Reporting Processes
The Company periodically monitors its information technology environment through routine system administration, software updates, access management, security reviews, and data backup procedures. Management evaluates potential cybersecurity events as they arise and assesses whether any identified incident requires escalation to executive management or the
The Company intends to continue enhancing its cybersecurity governance, policies, procedures, and technical safeguards as its business grows and as cybersecurity risks continue to evolve.
Item 2. Properties
Our current headquarters are located in Irvine, California, where we lease 2,799 square feet of office space pursuant to a lease that expires in March 2027 Our headquarters contain operations, general and administrative functions. We believe that our facilities are adequate to meet our current needs.
Details of our facilities are set out below:
| Facility | Address | Space (square feet) | Expiration Date | |||||
| Headquarter and principal executive offices | 2955 Main Street, Ste 100A, Irvine, CA 92614 | 2,799 | March 15th 2027 | |||||
Item 3. Legal Proceedings
We are not party to any material legal proceedings. We have in the past, and from time to time may be in the future, involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.
Item 4. Mine Safety Disclosures
Not applicable.
34
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock commenced trading on the Nasdaq Capital Market on March 13, 2025, under the symbol “MWYN.”
Holders
As of the date of this Report, there were 20,194,804 shares of common stock and 135,000 shares of Series A Super Voting Preferred Stock issued and outstanding. According to the Company’s transfer agent, the Company had approximately registered 3 stockholders of record as of July 29, 2026. Because brokers and other institutions and nominees hold many of the Company’s shares of Common Stock on behalf of beneficial owners, the Company is unable to estimate the total number of beneficial owners represented by those nominees.
Dividends
We have never declared or paid any cash or other dividends or distributions on our common stock. We currently intend to retain earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.
Securities Authorized for Issuance under Equity Compensation Plans
Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Report on Form 10-K.
Recent Sales of Unregistered Securities
On October 28, 2025, the Company entered into and closed a stock purchase agreement (the “Agreement”) with certain investors (collectively, the “Subscribers”), pursuant to which the Subscribers agreed, subject to the terms and conditions of the Agreement, to purchase an aggregate of 3,140,800 shares of common stock, par value $0.001 per share (the “Shares”), at a purchase price of $0.45 per Share, for aggregate gross proceeds of approximately $1,413,360 (the “Offering”).
The Agreement includes customary representations, warranties, and covenants by the Company and the Subscribers. In addition, pursuant to the Agreement, the Company has agreed to certain piggyback registration rights with respect to the Shares sold in the Offering (the “Registrable Securities”) to allow Subscribers to include their Registrable Securities in public offerings of securities of the Company (including, but not limited to, registration statements related to secondary offering of securities of the Company). The Company will bear the expenses incurred in connection with the filing of any registration statements related to the Registrable Securities.
Each Subscriber has represented that it is an accredited investor within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (“Securities Act”), and has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of the Subscriber’s purchase as contemplated by the Agreement.
Issuer Purchases of Equity Securities
None.
Item 6. [Reserved]
35
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto included elsewhere in this Report on Form 10-K. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, or projections, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of the Annual Report . Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Business Overview and Recent Development
Marwynn Holdings, Inc., or “Marwynn,” was incorporated on February 27, 2024 in Nevada, as a holding company. We currently operate, or are developing operations, in three principal business areas: (i) electronic waste recycling (“E-waste Business”) through EcoLoopX Corporation (“EcoLoopX”); (ii) advanced artificial intelligence application development and related infrastructure solutions (“AI & Infrastructure Services”) through NexaCore Technologies, Inc. (“NexaCore”); and (iii) food and non-alcoholic beverage supply chain and brand management services through FuAn Enterprise, Inc. (“FuAn”).
E-Waste Business
As part of our business diversification strategy, we incorporated EcoLoopX on November 25, 2025. Its current strategy is to develop direct e-waste recycling operations and the capability to produce “black mass,” an intermediate material derived from processed lithium-ion batteries that may contain recoverable metals such as lithium, nickel, cobalt and copper.
On June 9, 2026, EcoLoopX hired Frank Xu as its sales director. Mr. Xu is responsible for diversifying EcoLoopX’s e-waste collection channels, developing corporate business-to-business electronic disposal networks, and supporting business development initiatives throughout the United States. Currently, EcoLoopX purchases scrapped copper from e-waste recycling plants for sale.
AI and Infrastructure Services
On March 27, 2026, we incorporated NexaCore to explore opportunities involving advanced artificial intelligence application development and related infrastructure solutions, which we refer to as our “AI & Infrastructure Services.” NexaCore remains in the development stage, and we are continuing to evaluate potential technologies, projects, commercial relationships and business models in this sector.
Food and Beverage Services
Through FuAn, we provide food and beverage supply chain and brand management services in the United States. FuAn was incorporated in California on April 18, 2016 and historically focused on sourcing authentic premium Asian foods, snacks and non-alcoholic beverages, distributing branded products in the U.S. market, and providing related brand management services.
Beginning in early 2025, increased tariffs on goods imported from China adversely affected FuAn’s traditional sourcing model. In response, we began transitioning our product portfolio from imported Asian food and beverage products toward domestically sourced products. This transition remains ongoing.
36
Recent Development
On March 12, 2025, Marwynn entered into an underwriting agreement with American Trust Investment Services, Inc., as representative of the several underwriters (the “Representative”), pursuant to which the Company issued and sold an aggregate of 2,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in the initial public offering (the “Offering”) pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-284245) and a related prospectus supplements dated March 12, 2025, filed with the Securities and Exchange Commission (“Commission”). The Common Stock was sold at an offering price of $4.00 per share (the “Public Offering Price”), generating gross proceeds to the Company of $8,000,000, before deducting underwriting discounts and commissions and other estimated offering expenses.
The Common Stock commenced trading on The Nasdaq Capital Market on March 13, 2025 under the symbol “MWYN.” The closing of the Offering took place on March 14, 2025. The Company has been using the net proceeds from the Offering towards supply chain enhancements, business expansion, sales and distribution growth, talent development and retention, working capital, and other general corporate purposes.
On April 4, 2025, the Representative purchased 50,000 additional shares of the Company’s common stock, par value $0.001 per share, at a price of $4.00 per share (the “Over-Allotment Shares”). As a result, the Company has raised gross proceeds of approximately $200,000, in addition to the IPO gross proceeds of $8,000,000, or combined gross proceeds in this IPO of $8,200,000, before underwriting discounts and commissions and offering expenses.
On October 27, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Reli Home Décor Inc., a California corporation (the “Buyer”), solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary, Grand Forest. On December 22, 2025, the Company completed the sale of all of its equity interests of Grand Forest to the Buyer. Following the sale of Grand Forest, the Company is no longer an indoor home improvement supply chain provider.
On November 25, 2025, the Company incorporated EcoLoopX Corporation to explore and develop our E-waste Business. On June 9, 2026, the Company hired Frank Xu as Sales Director for EcoLoopX to focus on diversifying its e-waste collection channels, building out corporate B2B electronic disposal networks, and supporting business development initiatives throughout the United States.
On March 27, 2026, the Company incorporated Nexacore Technologies, Inc. to explore and develop our business for AI & Infrastructure Services.
Business Trends and Uncertainties
During 2025 and continuing into 2026, the United States has introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates. Our current food and non-alcohol beverage business relies on international supply chains and imported products. This dependence exposes us to risks associated with shifting global trade policies, tariffs, and geopolitical tensions and may increase our cost of goods sold.
As a result, for our Food and Beverage Services, we are actively pursuing alternative sourcing strategies and diversifying our supply base. During the quarter ended April 30, 2026, we had two primary vendors located in Taiwan and New Zealand. As we continue to try to expand our business operations and develop relationships with new suppliers and retail partners, we may encounter additional risks associated with supplier reliability, product quality control, logistics coordination, and regulatory compliance across multiple jurisdictions. Our expansion efforts may also require increased working capital, new operational infrastructure, and additional personnel, which could increase our operating expenses.
As our growth strategy develops, we have reallocated its strategic emphasis toward an energy and technology-focused business. See “Risk Factors” for additional information.
Key Factors that Affect Our Results of Operations
Operating cost increase after initial public offering
As a result of our initial public offering, we are subject to increased operating costs related to our listing on The Nasdaq Capital Market and we are subject to increased costs related to our compliance with Securities Act and Exchange Act periodic reporting annual audit expenses, the legal service expenses, and related consulting services expenses.
37
Competition
We face intense competition across all of our targeted operating segments. The big data AI platform sector is dominated by well-capitalized technology companies with established infrastructure and stable cooperations among partners, while the e-waste and battery recycling markets include both legacy processors and rapidly growing specialized firms with advanced or patented processing technologies. Similarly, the food and beverage supply chain industry is highly fragmented and competitive. We anticipate incurring significant upfront capital expenditures and operating expenses to build out our AI infrastructure and physical battery processing capabilities. Because these development cycles are highly capital-intensive and time-consuming, we do not anticipate generating material revenue or achieving substantial commercial milestones from these new business lines in the near term.
‘
Within the e-waste segment specifically, the e-waste reverse supply chain industry is highly competitive and includes established recycling companies, third-party logistics providers, environmental service firms, and specialized supply chain coordinators. Key participants range from large integrated waste management companies such as Waste Management, Inc. and Republic Services, Inc. to dedicated e-waste recyclers such as Sims Lifecycle Services. In addition, smaller regional operators and logistics-focused service providers compete for vendor relationships and compliance-driven contracts.
International Trade Policies
Current uncertainties about increases in tariffs of imported products from countries may have an adverse effect on our operations. Throughout 2025 and into early 2026, the United States implemented expansive trade policy actions, significantly increasing import tariffs on a global scale. In February 2026, the U.S. Supreme Court invalidated tariffs predicated on the International Emergency Economic Powers Act (IEEPA), ruling that such taxing authority rests with Congress. In response, the administration has transitioned to alternative statutory frameworks, such as Section 122, while continuing to maintain Section 232 and Section 301 duties. Based on the tariffs enacted and currently in effect, we anticipate incurring incremental tariff costs, additional costs that we may incur on products shipped to our customers, and costs as a result of pauses on certain of our product imports, in particular products from China. We expect to offset the impact of the enacted tariffs on our revenues with supply chain adjustments, sources of supply or manufacturing locations, and additional cost savings actions. For our food and non-alcoholic beverage supply chain business, we have temporarily paused certain imports from China and are actively pursuing alternative sourcing strategies, including domestic suppliers and international partners in lower-risk regions. We are actively working with Costco and our other customers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. During the year ended April 30, 2026, we had two new food-supply vendors from Taiwan and New Zealand. However, if other additional tariffs are adopted, we would incur additional tariff costs that could be material. We are actively evaluating the potential impacts of these proposed tariffs, as well as our ability to mitigate their related impacts, this may affect our revenue and cost of revenues.
Year Ended April 30, 2026 compared to Year Ended April 30, 2025
Revenues from continuing operations
We derive our revenues from (i) sale of food and beverage, (ii) consulting services and (iii) sale of recyclable e-waste materials, part of our E-Waste Business. The following table presents our revenues by product and service types and as percentage of our total revenues for the periods presented.
| For the years ended April 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 570,368 | 13.44 | % | $ | 624,846 | 77.68 | % | $ | (54,478 | ) | (8.72 | )% | |||||||||||
| Consulting Services | 672,498 | 15.85 | % | 179,487 | 22.32 | % | 493,011 | 274.68 | % | |||||||||||||||
| Sale of Recyclable E-waste Materials | 3,000,000 | 70.71 | % | - | - | % | 3,000,000 | 100.00 | % | |||||||||||||||
| Total Revenues | $ | 4,242,866 | 100.00 | % | $ | 804,333 | 100.00 | % | $ | 3,438,533 | 427.50 | % | ||||||||||||
38
Sales of food and beverage
Sales of food and beverage accounted for 13.44% and 77.68% of total sales for the years ended April 30, 2026 and 2025, respectively. Sales of food and beverage decreased by $54,478 or 8.72% from $624,846 for the year ended April 30, 2025 to $570,368 for the year ended April 30, 2026. The decrease in our sales was primarily due to decease of the purchase orders from Costco. We are actively seeking new retailers and working with them to introduce new products that are less sensitive to the tariff tensions between the U.S. and China.
Consulting services
Revenue from consulting services accounted for 15.85% and 22.32% of total revenues for the years ended April 30, 2026 and 2025, respectively. Revenue from consulting services increased by $493,011, or 274.68% from $179,487 for the year ended April 30, 2025 to $672,498 for the year ended April 30, 2026. We started our consulting services business in March 2024 through providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels.
Sales of Recyclable Materials (part of our E-Business Services)
Revenue from sales of recyclable materials accounted for 70.71% and nil of total revenues for the years ended April 30, 2026 and 2025, respectively. Revenue from sales of recyclable materials increased by $3,000,000, or 100% from nil for the year ended April 30, 2025 to $3,000,000 for the year ended April 30, 2026. We started our recyclable service in January 2026 through focusing on coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support related to discarded electronic products.
Costs of Revenues associated with continuing operations
We incur our costs from (i) sale of food and beverage, and (ii) consulting services, and (iii) sale of recyclable e-waste materials (part of our E-Business Services). The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.
| For the years ended April 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 551,482 | 96.69 | % | $ | 332,941 | 53.28 | % | $ | 218,541 | 65.64 | % | ||||||||||||
| Consulting Services | 128,288 | 19.08 | % | 95,637 | 53.28 | % | 32,651 | 34.14 | % | |||||||||||||||
| Sale of Recyclable E-waste Materials | 2,912,621 | 97.09 | % | - | - | % | 2,912,621 | 100.00 | % | |||||||||||||||
| Total Cost of Revenues | $ | 3,592,391 | 84.67 | % | $ | 428,578 | 53.28 | % | $ | 3,163,813 | 738.21 | % | ||||||||||||
Cost of revenues from sale of food and beverage increased by $218,541, or 65.64% from $332,941 for the year ended April 30, 2025, to $551,482 for the year ended April 30, 2026. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs. The increase in our cost of revenues for sale of food and beverage was mainly due to higher purchase costs of food and beverage products for the year ended April 30, 2026.
Cost of revenues associated with our consulting services was immaterial and primarily consisted of labor costs.
39
Our cost of revenue from sale of recyclable materials was $2,912,621 and nil for the years ended April 30, 2026 and 2025, respectively. Our cost of revenues from sale of recyclable e-waste materials primarily consisted of purchasing recyclable materials.
Results of Operations
Comparison of the years ended April 30, 2026 and 2025
The following table summarizes our consolidated results of operations and as percentage of our total revenues for the period presented.
| For the years ended April 30, | ||||||||||||||||||||||||
| 2026 | %
of Revenues | 2025 | %
of Revenues | Dollar Increase (Decrease) | Percent Increase (Decrease) | |||||||||||||||||||
| Revenues, net | $ | 4,242,866 | 100.00 | % | $ | 804,333 | 100.00 | % | $ | 3,438,533 | 427.50 | % | ||||||||||||
| Cost of revenues | (3,592,391 | ) | (84.67 | )% | (428,578 | ) | (53.28 | )% | (3,163,813 | ) | 738.21 | % | ||||||||||||
| Gross profit | 650,475 | 15.33 | % | 375,755 | 46.72 | % | 274,720 | 73.11 | % | |||||||||||||||
| Selling expenses | (1,251,738 | ) | (29.50 | )% | (1,392,569 | ) | (173.13 | )% | 140,831 | (10.11 | )% | |||||||||||||
| General and administrative expenses | (2,678,602 | ) | (63.13 | )% | (3,337,421 | ) | (414.93 | )% | 658,819 | (19.74 | )% | |||||||||||||
| Total operating expenses | (3,930,340 | ) | (92.63 | )% | (4,729,990 | ) | (588.06 | )% | 799,650 | (16.91 | )% | |||||||||||||
| Loss from operations | (3,279,865 | ) | (77.30 | )% | (4,354,235 | ) | (541.35 | )% | 1,074,370 | (24.67 | )% | |||||||||||||
| Total other income (expense), net | 50,386 | 1.19 | % | (5,096 | ) | (0.63 | )% | 55,482 | (1,088.74 | )% | ||||||||||||||
| Loss before income tax provision | (3,229,479 | ) | (76.12 | )% | (4,359,331 | ) | (541.98 | )% | 1,129,852 | (25.92 | )% | |||||||||||||
| Income tax provision | (43,807 | ) | (1.03 | )% | (6,173 | ) | (0.77 | )% | (37,634 | ) | 609.65 | % | ||||||||||||
| Net loss from continuing operations | (3,273,286 | ) | (77.15 | )% | (4,365,504 | ) | (542.75 | )% | 1,092,218 | (25.02 | )% | |||||||||||||
| Net loss from discontinued operations, net of tax | (646,656 | ) | (15.24 | )% | (32,973 | ) | (4.10 | )% | (613,683 | ) | 1,861.17 | % | ||||||||||||
| Net loss | $ | (3,919,942 | ) | (92.39 | )% | $ | (4,398,477 | ) | (546.85 | )% | $ | 478,535 | (10.88 | )% | ||||||||||
Revenues from continuing operations
Revenues for the years ended April 30, 2026 and 2025 were $4,242,866 and $804,333, respectively, an increase of $3,438,533 or 427.50%. The increase of revenues was primarily attributed to increased sale of recyclable e-waste materials by $3,000,000 and consulting services by $493,011, partially offset by decreased sale of food imports and distribution by $54,478.
40
Cost of revenues associated with continuing operations
The following table presents our costs of revenues by products and services provided as percentage of total cost of revenues for the periods presented.
| For the years ended April 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||||||||||||
| USD | Percent | USD | Percent | Amount | Percent | |||||||||||||||||||
| Sale of Food and Beverage | $ | 551,482 | 96.69 | % | $ | 332,941 | 53.28 | % | $ | 218,541 | 65.64 | % | ||||||||||||
| Consulting Services | 128,288 | 19.08 | % | 95,637 | 53.28 | % | 32,651 | 34.14 | % | |||||||||||||||
| Sale of Recyclable E-waste Materials | 2,912,621 | 97.09 | % | - | - | % | 2,912,621 | 100.00 | % | |||||||||||||||
| Total Cost of Revenues | $ | 3,592,391 | 84.67 | % | $ | 428,578 | 53.28 | % | $ | 3,163,813 | 738.21 | % | ||||||||||||
Cost of revenues for the years ended April 30, 2026 and 2025 was $3,592,391 and $428,578, respectively, an increase of $3,163,813 or 738.21%. The increase in cost of revenues in the same period of 2026 was primarily attributed to increased cost from sale of recyclable e-waste materials by $2,912,621, or 100.00%, increased cost in sale of food and beverage by $218,541, or 65.64%, and increased cost in consulting service by $32,651, or 34.14%. Cost of revenues for sale of food and beverage as a percentage of total revenues was 13.00% and 41.39%, respectively, for the years ended April 30, 2026 and 2025. Cost of revenues for consulting services as a percentage of total revenues was 3.02% and 11.89%, respectively, for the years ended April 30, 2026 and 2025. Cost of revenues for sale of recyclable e-waste materials as a percentage of total revenues was 68.65% and nil, respectively, for the years ended April 30, 2026 and 2025.
Gross profit and gross margin associated with continuing operations
The following table presents our gross profit and gross margin by products and services provided as percentage of total revenues for the periods presented.
| For the years ended April 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Gross profit |
Profit Margin to Total Revenues |
Gross profit |
Profit Margin to Total Revenues |
|||||||||||||
| Sale of Food and Beverage | $ | 18,886 | 0.45 | % | $ | 291,905 | 36.29 | % | ||||||||
| Consulting Services | 544,210 | 12.83 | % | 83,850 | 10.42 | % | ||||||||||
| Sale of Recyclable E-waste Materials | 87,379 | 2.06 | % | - | - | % | ||||||||||
| Gross Profit and Gross Margin | $ | 650,475 | 15.34 | % | $ | 375,755 | 46.72 | % | ||||||||
The following table presents our gross margin by products and services provided as a percentage of its corresponding categories.
| For
the years ended April 30, | ||||||||
| 2026 | 2025 | |||||||
| Sale of Food and Beverage | 3.31 | % | 46.72 | % | ||||
| Consulting Services | 80.92 | % | 46.72 | % | ||||
| Sale of Recyclable E-waste Materials | 2.91 | % | - | % | ||||
The gross profit for the years ended April 30, 2026 and 2025 was $650,475 and $375,755, respectively, an increase of $274,720 or 73.11%. The blended gross profit margin was 15.34% for the year ended April 30, 2026 compared with 46.72% for the same period in 2025. Gross profit for sale of food and beverage decreased by 93.53% for the year ended April 30, 2026. Gross profit for consulting services increased by 549.03% for the year ended April 30, 2026. Gross profit from the sale of recyclable materials increased by 100.0% for the year ended April 30, 2026, primarily driven by new business that commenced in January 2026.
41
Selling expenses associated with continuing operations
Our selling expenses were $1,251,738 for the year ended April 30, 2026, compared to $1,392,569 for the year ended April 30, 2025, representing a decrease of $140,831, or 10.11%. The decrease in the selling expenses was mainly due to (1) decreased payroll expenses of $100,000, or 100.00%, (2) decreased trade shows expenses of $30,479, or 100.00%, and (3) a slight decrease in advertising and marketing expenses of $10,500, or 0.83%. The decrease was no significant, as the Company maintained a constant level of spending on advertising, marketing, and consulting services to support business development, market expansion, supply chain management, and strategic financial planning. Selling expenses accounted for 29.50% and 173.13% of our total revenues for the years ended April 30, 2026 and 2025, respectively.
General and administrative expenses associated with continuing operations
Our general and administrative expenses were $2,678,602 for the year ended April 30, 2026, compared to $3,337,421 for the year ended April 30, 2025, reflecting a decrease of $658,821 or 19.74%. The decrease in general and administrative expenses was mainly due to decreased professional fee by $1,008,073 or 37.99% as compared to the same period of 2025, resulting from decreased consulting expenses for financial advisory services, decreased travel expense by $78,943 or 94.36%, decreased meal and entertainment expenses by 44,633 or 99.96%, decreased subcontract labor cost by $32,500 or 100.00%, and decreased payroll expenses by $104,470 or 59.91%, which was mainly from decreased gross pay of one of employees of FuAn. The decreased general administrative expenses were partly offset by increased legal expense related to disposal of subsidiary by $357,212 or 1,378.35%, increased rent expense by $78,988 or 105.77% resulting from new office lease of Marwynn, increased director compensation expense by $64,857 or 41.76%, and increased insurance expenses by $82,749, or 217.32%, which was mainly due to increased directors and officers insurance expenses. General and administrative expenses accounted for 63.13% and 414.93% of our total revenues for the years ended April 30, 2026 and 2025, respectively.
Other income (expenses), net
Other income were $50,386 for the year ended April 30, 2026, compared to other expenses of $5,096 for the year ended April 30, 2025. For the year ended April 30, 2026, other income mainly consisted of other income of $2,803, and interest income of $55,847, which was partly offset with other expenses of $7,307, and interest expense of $957. For the year ended April 30, 2025, other expenses mainly consisted of other expenses of $3,830 and interest expense of $1,290, which was partly offset with other income of $24.
Net loss from continuing operations
We had a net loss from continuing operations of $3,273,286 for the year ended April 30, 2026, compared to $4,365,504 for the year ended April 30, 2025, representing a decrease of $1,092,218, or 25.02%. The increase in our net loss from continuing operations was mainly due to decreased operating expenses and increased gross profit as described above.
Loss from discontinued operations
We had a net loss from discontinued operations of $646,656 for the period from May 1, 2025 to December 22, 2025, compared to a net loss from discontinued operations of $32,973 for the year ended April 30, 2025, representing an increase in net loss from discontinued operations of $613,683, or 1,861.17%.
Net loss
As a result of the above, we had a net loss of $3,919,942 for the year ended April 30, 2026, compared to a net loss of $4,398,477 for the year ended April 30, 2025, representing a decrease of net loss of $478,535 or 10.88%. The decrease was mainly resulting from decreased professional fee and increased gross profit.
42
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. We have funded our working capital, operations and other capital requirements in the past primarily by equity financing, borrowing from related parties, cash flow from operations, and bank loans.
In assessing our liquidity, we monitor and analyze our cash on-hand, our ability to generate sufficient revenue sources, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As reflected in our consolidated financial statements, we had cash balance of $152,250 as of April 30, 2026. We also had accounts receivable, net balance of $764,562 as of April 30, 2026, among which $50,000 has been collected as of the date of this report.
Our working capital amounted to approximately $2.45 million as of April 30, 2026. Currently, we are working to improve our liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from our principal stockholder. In order to fully implement our business plan and sustain continued growth, we may also seek equity financing from outside investors.
However, as reflected in the accompanying consolidated financial statements, the Company had net loss from continuing operations of approximately $3.27 million for the year ended April 30, 2026 and net loss from discontinued operations of approximately $0.65 million for the period ended December 22, 2025 and cash outflow from operating activities from continuing operations of approximately $1.75 million for the year ended April 30, 2026 and cash inflow from operating activities from discontinued operations of approximately $0.20 million for the period ended December 22, 2025. The management plans to increase its revenue of FuAn by diversifying its markets from major mass market channels to ethnic supermarkets chains. The Company expects to increase sales through FuAn’s distribution channels in the near future. The Company’s decision of disposing Grand Forest is to maximize the efficiency and profitability of its existing business of supply chain consulting, and supply chain services of sourcing Asian foods, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale / warehouse clubs in the US.
The Company has historically funded its working capital needs primarily from operations. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. The working capital requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility. Based on above reasons, there is a substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the issuance of the consolidated financial statements.
The following table summarizes our cash flows for the years ended April 30,2026 and 2025, respectively.
| Years
Ended April 30 | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities for continuing operations | $ | (1,745,973 | ) | $ | (6,443,160 | ) | ||
| Net cash provided by operating activities for discontinued operations | 198,788 | 1,170,926 | ||||||
| Net cash used in operating activities | (1,547,185 | ) | (5,272,234 | ) | ||||
| Net cash used in investing activities for continuing operations | (580,000 | ) | (13,080 | ) | ||||
| Net cash used in investing activities for discontinued operations | (207,224 | ) | (56,772 | ) | ||||
| Net cash used in investing activities | (787,224 | ) | (69,852 | ) | ||||
| Net cash provided by financing activities for continuing operations | 1,607,213 | 6,264,359 | ||||||
| Net cash used in financing activities for discontinued operations | (382,428 | ) | (1,025,179 | ) | ||||
| Net cash provided by financing activities | 1,224,785 | 5,239,180 | ||||||
| Decrease in cash | (1,109,624 | ) | (102,906 | ) | ||||
| Cash, beginning of the period | 1,261,874 | 1,364,780 | ||||||
| Cash, end of the period | $ | 152,250 | $ | 1,261,874 | ||||
43
Net cash used in operating activities
Net cash outflow from operating activities from continuing operations decreased by $4,697,187 for the year ended April 30, 2026 comparing with the year ended April 30, 2025, mainly resulting from (a) decreased net loss from continued operations of $478,535 with adding back of non-cash adjustments to net loss by 82,527, (b) decreased cash outflow on prepaid expenses and other current assets by $5,067,718, (c) decreased cash outflow on finance lease liabilities by $1,176,744, (d) decreased cash outflow on accrued expense and other current liabilities by $238,675, (e) decreased cash outflow on income tax payable by $138,001 and (f) decreased cash outflow on advance from customers by $50,385, which was partly offset by (a) increased cash outflow on advance to vendors by $599,800, (b) increased cash outflow on accounts receivable by $1,377,884, (c) decreased cash inflow on operating lease liabilities by $1,166,187, and (d) increased cash outflow on accounts payable by $5,210.
Net cash provided by operating activities from discontinued operations was $198,788 and $1,170,926 for the year ended April 30, 2026 and 2025.
Net cash used in investing activities
Net cash used in investing activities from continuing operations was $580,000 for the year ended April 30, 2026, compared to $13,080 for the same period in 2025. The net cash used in investing activities from continuing operations in 2026 mainly consisted of loans made to Bio Essence Pharmaceutical totaling $330,000, loans made to Valemi Inc. totaling $500,000 and other receivable on discontinued subsidiary of $300,000 , which was partly offset by receivable from disposal of subsidiary of $550,000. The net cash used in investing activities from continuing operations in 2025 mainly consisted of purchase of furniture and fixtures of $13,080.
Net cash used in investing activities from discontinued operations was $207,224 and $56,772 for the year ended April 30, 2026 and 2025.
Net cash used in financing activities
Net cash provided by financing activities from continuing operations was $1,607,213 for the year ended April 30, 2026, compared to net cash provided by financing activities from continuing operations of $6,264,359 for the year ended April 30, 2026. The net cash provided by financing activities from continuing operations in 2026 mainly consisted of repayment of loan from shareholder of $193,853 and proceeds from issuance of common stock of $1,413,360. The net cash provided by financing activities from continuing operations in 2025 mainly consisted of proceeds from issuance of common stock of $6,458,713 but offset with loan to shareholder of $194,354.
Net cash used in financing activities from discontinued operations was $382,428 and $1,025,179 for the year ended April 30, 2026 and 2025.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of April 30, 2026 and 2025.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies as disclosed in this report reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, as an emerging growth company, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for emerging growth companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements and contained in our subsequent filings with the SEC may not be comparable to other public companies.
44
The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:
Critical Accounting Estimates
The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates and judgments include, but are not limited to, revenue recognition, sales return allowance, the allowance for credit losses, valuation allowance of deferred tax assets, income taxes, the useful lives of long-lived assets and assumptions used in assessing impairment of long-lived assets. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual amounts may differ from the estimated amounts, such differences are not likely to be material.
Critical Accounting Policies
Accounts Receivable, Net
On May 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell.
The Company adopted ASC 326 and all related subsequent amendments thereto effective May 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The was no transition adjustment of the adoption of CECL.
Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of April 30, 2026 and 2025, the allowance for credit losses related to continuing operations were $47,935 and nil, respectively. As of December 22, 2025 and April 30, 2025, the allowance for credit losses for discontinued operations were $557,201 and $557,201, respectively.
45
Revenue Recognition
In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
The Company derives its revenues primarily from three business segments to provide (i) food and beverage supply chain and brand management services, (ii) Consulting service related to brand management and (iii) sale of recyclable e-waste materials.
Revenue from food and beverage sales
FuAn sources authentic premium Asian foods from various suppliers and then distributes to customers (mainly supermarket and grocery stores) in the U.S. The Company accounts for revenue from sales of authentic premium Asian foods on a gross basis as the Company is responsible for fulfilling the promise to provide the desired authentic premium Asian foods products to customers and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All FuAn’s contracts are fixed price contracts and have one single performance obligation as the promise is to transfer the individual goods to customers.
The sales transaction price is indicated in each purchase order with a Deduct from Invoice (“DFI”) discount which automatically reduces per unit cost on invoice, and payment terms are primarily set as “net 30.” The Company elects to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. The Company’s revenue from sales of authentic premium Asian food products is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Revenue from the sale of food products is reported net of sales returns and allowance.
Consulting services revenue
Consulting services revenue primarily consists of service income from providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels. The Company’s contracts with customers for supply chain and brand management services are fixed-price contracts. The Company also believes that it serves as a principal in this type of transaction because it has the latitude in establishing prices with customers, and is responsible for bearing the related costs to complete the designated services. It normally takes a few months up to one year to complete the designated services. Revenue is recognized over the service period.
Revenue from recyclable e-waste materials sales
Revenue from recyclable e-waste materials consists primarily of sales of recyclable and recycled items, including metals, plastics, paper, electronic waste, and processed feedstock, to traders and downstream commercial customers. Currently, the Company’s customers for these transactions are primarily located in Hong Kong. The Company is in the process of expanding its customer base and is actively developing relationships with potential customers in the United States. The Company recognizes revenue on a gross basis as it acts as the principal in these arrangements. The Company obtains control of the materials prior to transfer, has discretion in establishing pricing, and bears inventory risk before control is transferred to the customer. Customer contracts are generally fixed-price arrangements and typically include a single performance obligation of selling of the e-waste materials. Revenue is recognized at a point in time when control of the materials transfers to the customer, which generally occurs upon delivery in accordance with the contractual shipping terms. Customer contracts generally do not include variable consideration, material rights of return, or significant financing components
46
Sales Returns and Allowances
For food and beverage, the Company accrues estimated sales returns based on past experience and current trend of product sales. There was no allowance for sales returns for continuing operations as of April 30, 2026 and 2025. As of December 22, 2025 and April 30, 2025, the allowance for sales returns for discontinued operations were 205,988 and $205,988, respectively.
Income Tax
The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.
The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating our tax positions and estimating its tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company includes interest and penalties related to its tax contingencies in income tax expense.
Recently Issued Accounting Pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The ASU was issued in response to the SEC’s August 2018 final amendments in Release No. 33-10532, Disclosure Update and Simplification that updated and simplified disclosure requirements that the SEC believed were duplicative, overlapping, or outdated. The guidance in ASU 2023-06 is intended to align GAAP requirements with those of the SEC and to facilitate the application of GAAP for all entities. The amendments introduced by ASU 2023-06 are effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. If, by June 30, 2027, the SEC has not removed the applicable requirements from its existing regulations, the pending content of the associated amendment will be removed from the ASC and will not become effective for any entities. Early adoption is permitted. The adoption of ASU 2023-06 is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.
47
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of income and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquirer in the Acquisition of a Variable Interest Entity. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting period within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 18) and Revenue from contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments clarify the accounting for share-based consideration payable to a customer under Topic 718 and Topic 606. The amendments are effective for annual reporting periods, including interim reporting period within those annual periods, beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
Our financial statements required to be filed pursuant to this Item 8 appear in a separate section of this Report on Form 10-K, beginning on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
48
Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the fiscal year ended April 30, 2026. Accordingly, Management believes that the financial statement contained elsewhere in this Report present fairly in all material respects our
financial position, results of operations and cash flows for the period presented.
Management’s Annual Report on Internal Controls over Financial Reporting
This Report does not include a report of Management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by the rules of the SEC for
newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, during the period ended April 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Rule 10b5-1 Trading Arrangements
During the quarter ended April 30, 2026, no director or officer of the Company
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
49
PART III
Item 10. Directors, Executive Officers and Corporate Governance
MANAGEMENT
Executive Officers and Directors
The following table provides information regarding our executive officers, directors and director nominees as of the date of this report:
| Name | Age | Position | ||
| Executive Officers | ||||
| Yin Yan(2)(3) | 50 | Chairperson of the Board, Chief Executive Officer and President | ||
| Shengnan Xu(3) | 38 | Director, Chief Financial Officer and Secretary | ||
| Tuan Tran | 52 | Chief Operating Officer | ||
| Board of Directors (Non-Employee) | ||||
| Eric Newlan(1) | 64 | Independent Director | ||
| Dandan Wang(1)(2)(3) | 56 | Independent Director | ||
| Dvisha Patel(1)(2) | 33 | Independent Director |
| (1) | Member of the Audit Committee. |
| (2) | Member of the Compensation Committee. |
| (3) | Member of the Nominating Committee. |
Our Leadership Team
Executive Officers
Yin Yan, Chairperson of the Board, Chief Executive Officer, President and Director. Ms. Yin Yan has served as our chairperson, chief executive officer, president and director since April, 2024. She has also served as chief executive officer of our subsidiary FuAn Enterprise since March, 2023. Ms. Yan has been serving as chief executive officer and chair of the board of directors of Bio Essence Corp. an herbal health, diet, and nutrition company whose common stock is registered with the SEC and trades on the OTC-Pink market (symbol: BIOE), for approximately 8 years. She has over 20 years’ experience in real estate, international trade and management. She is a registered lawyer admitted in NSW High Court of Australia. Ms. Yan has a J.D. degree from the University of New South Wales. She also holds an MBA degree in Technology Management and BS in Computer Information System from the University of New South Wales.
Shengnan Xu, Director, Chief Financial Officer and Secretary. Ms. Xu has over a decade of experience in financial management, corporate strategy, and cross-border trading. She has served as a director and Vice President of Finance at Harbin Langhesheng Trading Co., Ltd., a wholesale trading company, from 2022, where she has helped lead initiatives in supply chain optimization and international market expansion. Prior to that, from 2012 to 2022, she served as General Manager and Controller at Harbin Mingde Investment Co., Ltd., where she oversaw economic consulting and corporate advisory services, as well as financial operations and internal controls. Her leadership spanned operational finance, business planning, and strategic consulting for regional enterprises. Ms. Xu holds a bachelor’s degree in Arts and Finance from Heilongjiang International University. Her background in financial oversight and strategic execution supports her ability to contribute meaningfully to the Company’s board oversight and business planning.
Tuan Tran, Chief Operating Officer. Mr. Tran has served as our chief operating officer (COO) since April 1, 2024. He has also served as chief operating officer for our subsidiary Fuan Enterprise since October 1, 2023, where he oversees the company’s day-to-day administrative and operational functions. Prior to joining Fuan Enterprise, Mr. Tran held several key positions that highlight his extensive experience in operations management. His previous roles in operations leadership include serving as COO at Bio Essence Corporation from 2018 until joining FuAn in 2023, COO at AMF Pharma, General Manager at Harmony Health Labs, and VP of Operations at SK Laboratories. Mr. Tuan Tran has over 20 years of experience in quality and operations working in the nutrition, dietary supplements and OTC industries. Mr. Tran’s current responsibilities include, but are not limited to production, warehouse and distribution, quality, customer service, R&D, procurement, human resources, and safety.
50
Mr. Tran has extensive knowledge in FDA regulations, GMPs, food safety, auditing, quality system, HACCP, Process Analytical Technology, CAPA, and Lean Manufacturing. Mr. Tran also specializes in crisis management, regulatory compliance, quality systems implementation, and supplier qualification.
Mr. Tran received his Bachelors of Science Degree in Public Health from Southern Connecticut State University. He holds certifications in Pharmaceutical Engineering, Six Sigma Green Belt, Food Safety, Technical Writing and HACCP. Mr. Tran is a senior member with the American Society for Quality.
Independent Director
Eric Newlan, Director. Mr. Newlan was appointed to our Board on July 24, 2024. Since 1987, Mr. Newlan has practiced law in the North Texas area and is currently managing member of Newlan Law Firm, PLLC, Flower Mound, Texas, a firm engaged principally in the area of securities regulation. He earned a B.A. degree in Business from Baylor University, Waco, Texas, and a J.D. degree from the Washburn University School of Law, Topeka, Kansas. Mr. Newlan is a member of the Texas Bar. Since January 2020, he has served as Vice President and a Director of Black Bird Biotech, Inc., a publicly-traded company (Symbol: BBBT) engaged in the manufacture and sale of biopesticide products. From May 2022 through June 2023, Mr. Newlan served as Vice President, Secretary and a Director of Accredited Solutions, Inc., a publicly-traded company (symbol: ASII) engaged in the sale and distribution of Diamond Creek high alkaline water. Since June 2016, Mr. Newlan has been Vice President and a Director of Touchstone Enviro Solutions, Inc., a purveyor of environmentally-friendly products. Based on the above qualifications, the Company believes Mr. Newlan is qualified to be on the Board.
Dandan Wang, Director. Ms. Wang was appointed to our Board on July 24, 2024. Ms. Wang graduated from Dongbei University of Finance and Economics with a major in Finance in 1997. She received her MBA degree in 2003. She worked for Bank of Communications since 1988 and was promoted to Vice President of Commercial Lending Division. In 2001, she moved to China Guangfa Bank where she served as Vice President in various divisions including commercial lending, marketing, private banking and compliance before her retirement in 2023. Based on the above qualifications, the Company believes Ms. Wang is qualified to be on the Board.
Dvisha Patel, Director. Ms. Patel was appointed to our Board on July 24, 2024. Ms. Patel is a seasoned professional with a proven track record of executing successful strategic and operational plans across various industries. As a management consultant, Ms. Patel has advised clients, from startups to Fortune 500 companies, on a range of business issues, from increasing user engagement to building new operational processes to identifying cost-savings opportunities. Her extensive expertise also includes in-house roles, including at Vereto (senior customer growth manager, since November 2023), Amazon (senior product marketing manager, April 2022-June 2023; senior vendor manager July 2021-April 2022), AARETE (consultant, February 2019-May 2021) and W.B. Mason (November 2016 - February 2019), where she managed and grew multi-million-dollar P&Ls. Throughout her career, she has balanced achieving business goals with advocating for the needs of end users, customers, and clients. Ms. Patel holds a Master of Business Administration from UCLA Anderson School of Management and a Bachelor of Science in Business Administration from Boston University. Based on the above qualifications, the Company believes Ms. Patel is qualified to be on the Board.
Family Relationships
There are no family relationships among any of our officers or directors.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers were involved in any legal proceedings described in Item 401(f) of Regulation S-K in the past ten years.
Promoters and Control Persons.
To the best of our knowledge, none of our promoters or control persons were involved in any legal proceedings described in Item 401(f)(1)-(6) of Regulation S-K in the past five years. Ms. Yin Yan, our chairperson, chief executive officer and president is deemed a promoter and control person.
51
Board Composition
Our board of directors consists of five (5) members.
We are, and will continue to be, a “controlled company” under the corporate governance rules of The Nasdaq Capital Market. The Nasdaq Marketplace Rule 5615(c) defines a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. Ms. Yan currently controls approximately 93.89% of the voting power of our outstanding voting securities. As a result, we qualify for exemptions from certain corporate governance requirements under the Nasdaq Marketplace Rules. We intend to rely on certain exemptions to The Nasdaq Capital Market corporate governance requirements.
Accordingly, at the time of this report, we do not intend to have a fully independent compensation committee or nominating and corporate governance committee, nor do we require independent director oversight of director nominations.
Our nominating and corporate governance committee and our board of directors may consider a broad range of factors relating to the qualifications and background of board nominees, which may include diversity, which is not only limited to race, gender or national origin. We have no formal policy regarding board diversity. Our nominating and corporate governance committee’s and our board of directors’ priority in selecting board members is identification of persons who will further the interests of our stockholders through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business, understanding of the competitive landscape and professional and personal experiences and expertise relevant to our growth strategy. Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation or removal. Our Bylaws also provide that our directors may be removed with or without cause by a vote of the holders of a majority of the voting power of the issued and outstanding stock entitled to vote and that any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office, though less than a quorum, and not by the stockholders, unless the board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders.
Director Independence. Our board of directors has determined that all members of our board of directors are independent directors, with the exception of Yin Yan and Shengnan Xu, including for purposes of the rules of the Nasdaq and relevant federal securities laws and regulations.
Term of Office. In accordance with the terms of our Articles of Incorporation and Bylaws, at each annual meeting of the stockholders, the holders of shares of stock entitled to vote in the election of directors will elect directors to hold office until the next succeeding annual meeting or until the director’s earlier death, resignation, disqualification, or removal.
Our Articles of Incorporation and Bylaws provide that the number of our directors shall be fixed from time to time by a resolution of the majority of our board of directors.
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which has the composition and responsibilities described below. Each of the below committees has a written charter approved by our board of directors. Each of the committees reports to our board of directors as such committee deems appropriate and as our board of directors may request. Copies of the charters are posted on the investor relations section of our website. Members serve on these committees until their resignation or until otherwise determined by our board of directors.
52
Audit Committee
Our audit committee is comprised of Dandan Wang, Dvisha Patel and Eric Newlan, with Mr. Newlan serving as chair of the committee. Our board of directors has determined that each member of the audit committee meets the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the applicable Nasdaq Marketplace Rules, and has sufficient knowledge in financial and auditing matters to serve on the audit committee. Dandan Wang qualifies as an audit committee financial expert under Item 407 of Regulation S-K. We have adopted an audit committee charter, detailing the principal functions of the audit committee, including:
| ● | assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors; the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; |
| ● | pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
| ● | reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; |
| ● | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
| ● | obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
| ● | meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
| ● | reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation Committee
We have elected to rely on the “controlled company” exemption and our compensation committees does not consist entirely of independent directors.
53
Our compensation committee is comprised of Dandan Wang, Dvisha Patel and Yin Yan, with Yin Yan, our chairperson, chief executive officer and president, serving as chair of the committee. Only Mses. Wang and Patel are non-employee directors, as defined by Rule 16b-3 promulgated under the Exchange Act and “independent” as defined in the applicable Nasdaq Marketplace Rules. We have adopted a compensation committee charter which details the principal functions of the compensation committee, including:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| ● | reviewing and making recommendations to our Board of Directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers; |
| ● | reviewing our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; assisting management in complying with our proxy statement and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; and |
| ● | producing a report on executive compensation to be included in our annual proxy statement; and reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the Nasdaq Marketplace Rules and the SEC.
Nominating and Governance Committee
We have elected to rely on the “controlled company” exemption and our nominating and corporate governance committees does not consist entirely of independent directors.
Our nominating and governance committee is comprised of Dandan Wang, Yin Yan and Shengnan Xu, with Yin Yan our chairperson, chief executive officer and president, serving as the chair of the committee. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including:
| ● | identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the Board of Directors, and recommending to the Board of Directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the Board of Directors; |
| ● | developing and recommending to the Board of Directors and overseeing implementation of our corporate governance guidelines; |
| ● | coordinating and overseeing the annual self-evaluation of the Board of Directors, its committees, individual directors and management in the governance of the company; and |
| ● | reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
54
The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and is directly responsible for approving the search firm’s fees and other retention terms.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Leadership Structure and Risk Oversight
Our board of directors does not have a policy regarding the separation of the roles of chief executive officer and chairperson of the board of directors, as our board of directors believes it is in the best interest of the Company to make that determination based on the position and direction of the Company and the membership of the board of directors. Our board of directors has determined that having an employee director serve as chairperson is in the best interest of our stockholders at this time because of the efficiencies achieved in having the role of chief executive officer and chairperson combined, and because the detailed knowledge of our day-to-day operations and business that the chief executive officer possesses greatly enhances the decision-making processes of our board of directors as a whole.
The chairperson of the board of directors and the other members of the board of directors work in concert to provide oversight of our management and affairs. Our board of directors encourages communication among its members and between management and the board of directors to facilitate productive working relationships. Working with the other members of the board of directors, our chairperson also strives to ensure that there is an appropriate balance and focus among key board responsibilities such as strategic development, review of operations and risk oversight.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee. For a description of transactions between us and members of our compensation committee and affiliates of such members, see the section titled “Certain Relationships and Related Party Transactions.”
Compensation Committee Report
We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under Section e(5) of Item 407 of Regulation S-K.
Insider Trading Policy
We have
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all our employees, officers and directors, including those officers responsible for financial reporting. A copy of our code of business conduct and ethics is available on the investor relations section of our website. We intend to disclose any amendments to the code, or any waivers of its requirements, on our website or in a Current Report on Form 8-K.
55
Clawback Policy
Our board of directors has adopted a clawback policy (the “Clawback Policy”) permitting the Company to seek the recoupment of incentive compensation received by any of the Company’s current and former executive officers (as determined by the board in accordance with Section 10D of the Exchange Act and the Nasdaq Marketplace Rules) and such other senior executives/employees who may from time to time be deemed subject to the Clawback Policy by the board (collectively, the “Covered Executives”). The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the board. If the board cannot determine the amount of excess incentive compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons.
Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed, except that such persons were late with their filing on their Form 3s.
Item 11. Executive Compensation
Summary Compensation Table
The following table shows all of the compensation awarded to or earned by or paid to our named executive officers for fiscal years ended April 30, 2026 and 2025.
| Name and Principal Position | Fiscal
Year | Salary
($) | Bonus
($) | Stocks
Award ($) | Option
Awards ($) | All
Other Compensation ($) | Total
($) | |||||||||||||||||||||
| Yin Yan* | 2025 | 120,000 | — | — | — | — | 120,000 | |||||||||||||||||||||
| Chairperson, Chief Executive Officer and President | 2026 | 120,000 | — | — | — | 120,000 | ||||||||||||||||||||||
| Shengnan Xu | 2025 | — | — | — | — | — | — | |||||||||||||||||||||
| Director, Chief Financial Officer and Secretary | 2026 | 101,000 | — | — | — | — | 101,000 | |||||||||||||||||||||
| Zhifen Zhou** | 2025 | 101,000 | -- | -- | -- | -- | 101,000 | |||||||||||||||||||||
| Former Director, Chief Financial Officer and Secretary | 2026 | — | -- | -- | -- | -- | — | |||||||||||||||||||||
| Tuan Tran* | 2025 | 100,000 | — | — | — | — | 100,000 | |||||||||||||||||||||
| Chief Operating Officer | 2026 | 63,269.26 | — | — | — | — | 63,269.26 | |||||||||||||||||||||
| * | Paid by FuAn. |
| ** | Paid by Grand Forest. Zhifen Zhou resigned as our director, chief financial officer and secretary on September 16, 2025. |
| *** | Shengnan Xu was appointed as our director, chief financial officer and secretary on September 18, 2025. |
56
Employment Agreements
We do not have any employment agreement or consulting agreement contracts with our executive officers. The annual salary for Yin Yan, our chairperson, chief executive officer, and president is $120,000 per year. and the annual salary for Tuan Tran, our chief operating officer, is $63,269.26 per year.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.
Outstanding Equity Awards as of April 30, 2026
There were no outstanding equity incentive plan awards held by any named executive officer as of April 30, 2026.
2024 Amended and Restated Equity Incentive Plan
The 2024 Equity Incentive Plan was originally adopted on June 18, 2024, and was subsequently amended and restated on January 8, 2025 pursuant to the 2024 Amended and Restated Equity Incentive Plan, or the 2024 Plan, for the purpose of granting share based compensation awards to current or prospective employees, directors, officers, advisors or consultants of the Company or its affiliates and align their interests with ours. The maximum aggregate number of shares of common stock which may be issued pursuant to all awards under the 2024 Plan is 93,000. As of the date of this report, stock options to purchase a total of 93,000 shares of common stock have been granted to independent directors under the 2024 Plan, as part of the compensation package for non-executive independent directors. See “Non-Employee Director Compensation” below.
10b5-1 Plan
Following the expiration of their respective lock-up agreements with the underwriters in connection with the IPO, our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. The director or officer may amend or terminate the plan in limited circumstances. Our directors and executive officers may also buy or sell additional shares of our common stock outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.
Limitations of Liability and Indemnification Matters
We executed a standard form of indemnification agreement (Indemnification Agreement) with each of our Board members and executive officers (each, an Indemnitee).
Pursuant to and subject to the terms, conditions and limitations set forth in the Indemnification Agreement, we agreed to indemnify each Indemnitee, against any and all expenses incurred in connection with the Indemnitee’s service as our officer, director and or agent, or is or was serving at our request as a director, officer, employee, agent or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise but only if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. In addition, the indemnification provided in the indemnification agreement is applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven. Additionally, the Indemnification Agreement establishes processes and procedures for indemnification claims, advancement of expenses and costs and contribution obligations.
Non-Employee Director Compensation
Our policy with respect to the compensation payable to our non-employee directors provides that directors shall receive a fee of $10,000 per year during the term of their directorship paid in four (4) equal quarterly installments commencing in the first quarter starting March 11, 2025. In addition, directors are entitled to receive an initial stock award to purchase 31,000 shares of the Company’s common stock. The per share exercise price of each option granted to the director shall equal 100% of the fair market value (as defined by the Board) of a share of common stock on the date the option is granted. The initial award shall vest over three (3) years of which 1/3 of the options shall vest on the first anniversary of the grant date, and the remaining 2/3 of the options shall vest over two years on an annual basis, subject to the director continuing in service on the Board through each such vesting date. The term of each stock option granted to the director shall be ten (10) years from the date of grant. As of the date hereof, options have fully vested.
57
Directors may be reimbursed for travel, food, lodging and other expenses directly related to their service as directors. Directors will also be entitled to the protection provided by their indemnification agreements and the indemnification provisions in our Articles of Incorporation and Bylaws.
No compensation was paid to our non-employee directors for services as a director during the fiscal year ended April 30, 2026.
Certain U.S. Federal Income Tax Consequences of the 2024 Plan
The following is a general summary of certain U.S. federal income tax consequences under current tax law to the Company (to the extent it is subject to U.S. federal income taxation on its net income) and to participants in the 2024 Plan who are individual citizens or residents of the United States for federal income tax purposes (“U.S. Participants”) of stock options which are ISOs, or stock options which are NQSOs, unrestricted stock, restricted stock, restricted stock units, performance stock, performance units, SARs, and dividend equivalent rights. This summary does not purport to cover all of the special rules that may apply, including special rules relating to limitations on our ability to deduct certain compensation, special rules relating to deferred compensation, golden parachutes, U.S. Participants subject to Section 16(b) of the Exchange Act or the exercise of a stock option with previously-acquired common stock shares. This summary assumes that U.S. Participants will hold their common stock shares as capital assets within the meaning of Section 1221 of the Code. In addition, this summary does not address the foreign, state or local or other tax consequences, or any U.S. federal non-income tax consequences, inherent in the acquisition, ownership, vesting, exercise, termination or disposition of an award under the 2024 Plan, or common stock shares issued pursuant thereto. Participants are urged to consult with their own tax advisors concerning the tax consequences to them of an award under the 2024 Plan or common stock shares issued thereunder pursuant to the Plan.
A U.S. Participant generally does not recognize taxable income upon the grant of a NQSO if structured to be exempt from or comply with Code Section 409A. Upon the exercise of a NQSO, the U.S. Participant generally recognizes ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the common stock shares acquired on the date of exercise over the exercise price thereof, and the Company generally will be entitled to a deduction for such amount at that time. If the U.S. Participant later sells common stock shares acquired pursuant to the exercise of a NQSO, the U.S. Participant recognizes a long-term or short-term capital gain or loss, depending on the period for which the common stock shares were held. A long-term capital gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital losses is subject to certain limitations.
A U.S. Participant generally does not recognize taxable income upon the grant or, except for purposes of the U.S. alternative minimum tax (“AMT”) the exercise, of an ISO. For purposes of the AMT, which is payable to the extent it exceeds the U.S. Participant’s regular income tax, upon the exercise of an ISO, the excess of the fair market value of the common stock shares subject to the ISO over the exercise price is a preference item for AMT purposes. If the U.S. Participant disposes of the Class A Common Stick shares acquired pursuant to the exercise of an ISO more than two years after the date of grant and more than one year after the transfer of the common stock shares to the U.S. Participant, the U.S. Participant generally recognizes a long-term capital gain or loss, and the Company will not be entitled to a deduction. However, if the U.S. Participant disposes of such common stock shares prior to the end of either of the required holding periods, the U.S. Participant will have ordinary compensation income equal to the excess (if any) of the fair market value of such shares on the date of exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares, and the Company generally will be entitled to deduct such amount.
A U.S. Participant generally does not recognize income upon the grant of a SAR. The U.S. Participant recognizes ordinary compensation income upon exercise of the SAR equal to the increase in the value of the underlying shares, and the Company generally will be entitled to a deduction for such amount.
A U.S. Participant generally does not recognize income on the receipt of a performance stock award, performance unit award, restricted stock unit award, unrestricted stock award or dividend equivalent rights award until a cash payment or a distribution of common stock shares is received thereunder. At such time, the U.S. Participant recognizes ordinary compensation income equal to the excess, if any, of the fair market value of the common stock shares or the amount of cash received over any amount paid therefor, and the Company generally will be entitled to deduct such amount at such time.
58
A U.S. Participant who receives a restricted stock award generally recognizes ordinary compensation income equal to the excess, if any, of the fair market value of such common stock shares at the time the restriction lapses over any amount paid for the common stock shares. Alternatively, the U.S. Participant may make an election under Section 83(b) of the Code to be taxed on the fair market value of such common stock shares at the time of grant. The Company generally will be entitled to a deduction at the same time and in the same amount as the income that is required to be included by the U.S. Participant.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation committee has at any time during the past fiscal year been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee. For a description of transactions between us and members of our compensation committee and affiliates of such members, see the section titled “Certain Relationships and Related Party Transactions”.
10b5-1 Plan
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. The director or officer may amend or terminate the plan in limited circumstances. Our directors and executive officers may also buy or sell additional shares of our common stock outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.
Limitations of Liability and Indemnification Matters
Nevada law provides that our directors and officers will not be personally liable to us, our stockholders or our creditors for monetary damages for any act or omission of a director or officer other than in circumstances where the director or officer breaches his or her fiduciary duty to us or our stockholders and such breach involves intentional misconduct, fraud or a knowing violation of law and the trier of fact determines that the presumption that he or she acted in good faith, on an informed basis and with a view to the interests of the corporation has been rebutted. Nevada law allows the Articles of Incorporation of a corporation to provide for greater liability of the corporation’s directors and officers. Our Articles of Incorporation do not provide for greater liability of our officers and directors than is provided under Nevada law.
Nevada law allows a corporation to indemnify officers and directors for actions pursuant to which a director or officer either would not be liable pursuant to the limitation of liability provisions of Nevada law or where he or she acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to our best interests, and, in the case of an action not by or in the right of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. Our Articles of Incorporation and Bylaws provide indemnification for our directors, officers, employees, and agents to the fullest extent permitted by Nevada law. We have entered into indemnification agreements with each of our directors and executive officers that may, in some cases, be broader than the specific indemnification provisions contained under Nevada law. The indemnification agreements require us, among other things, to indemnify our directors against certain liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. In addition, as permitted by Nevada law, our Articles of Incorporation include provisions that eliminate the personal liability of our directors for monetary damages resulting from certain breaches of fiduciary duties as a director. The effect of these provisions is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of fiduciary duties as a director, except that a director will be personally liable for acts or omissions not in good faith or in a manner which he or she did not reasonably believe to be in or not opposed to the best interest of the corporation if, subject to certain exceptions, the act or failure to act constituted a breach of fiduciary duty and such breach involved intentional misconduct, fraud or knowing violations of law.
We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors, officers, employees and agents against certain liabilities.
59
The limitation of liability and indemnification provisions under Nevada law and in our Articles of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Compensation Committee Report
We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under Item 407e(5) of Regulation S-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Based solely upon information made available to us, the following table sets forth information as of the date of this Report regarding the beneficial ownership of our voting securities by:
| ● | each person known by us to be the beneficial owner of more than 5% of any class of our outstanding voting securities; |
| ● | each of our named executive officers and directors; and |
| ● | all our executive officers and directors as a group. |
The percentage ownership information shown in the table is based upon 20,194,804 shares of common stock and 135,000 shares of Series A Super Voting Preferred Stock issued and outstanding as of July 29, 2026.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated, each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially owned, subject to applicable community property laws.
In computing the number and percentage of shares beneficially owned by a person as of a particular date, shares that may be acquired by such person (for example, upon the exercise of options or warrants) within 60 days of such date are counted as outstanding, while these shares are not counted as outstanding for computing the percentage ownership of any other person.
60
The address of each holder listed below, except as otherwise indicated, is c/o Marwynn Holdings, Inc., 2955 Main Street, Ste 100A, Irvine, CA 92614.
| Name and Address of Beneficial Owner(1) | Number of Shares of Common Stock | % of Common Stock | Number of Shares of Preferred Stock | % of Preferred Stock | % of Total Voting Power | |||||||||||||||
| Officers and Directors | ||||||||||||||||||||
| Yin Yan (Chairperson, Chief Executive Officer, and President) | 5,993,255 | 29.68 | % | 135,000 | 100 | % | 90.85 | % | ||||||||||||
| Shengnan Xu (Director, Chief Financial Officer and Secretary) | — | (2) | — | % | — | — | — | % | ||||||||||||
| Eric Newlan (Director) | 20,667 | (3) | 0.10 | % | — | — | 0.01 | % | ||||||||||||
| Dandan Wang (Director) | 20,667 | (3) | 0.10 | % | — | — | 0.01 | % | ||||||||||||
| Dvisha Patel (Director) | 20,667 | (3) | 0.10 | % | — | — | 0.01 | % | ||||||||||||
| All directors and executive officers as a group (5 individuals) | 6,055,256 | 29.98 | % | 135,000 | 100 | % | 90.85 | % | ||||||||||||
| Five Percent Stockholders | ||||||||||||||||||||
| Yin Yan (Chairperson, Chief Executive Officer, and President) | 5,993,255 | 29.68 | % | 135,000 | 100 | % | 90.85 | % | ||||||||||||
| * | Share data are presented on a retroactive basis to reflect the effects of the (i) 1.55-for-1 forward stock split of our Common Stock, and (ii) 4.5-for-1 forward stock split of our Series A Super-Voting Preferred Stock effected on September 9, 2024. |
| (1) | The address of each holder listed above, except as otherwise indicated, is c/o Marwynn Holdings, Inc., 2955 Main Street, Ste 100A, Irvine, CA 92614. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with SEC rules, shares of Common Stock issuable upon the exercise of options or warrants which are currently exercisable or which become exercisable within 60 days following the date of the information in this table are deemed to be beneficially owned by, and outstanding with respect to, the holder of such option or warrant. Subject to community property laws where applicable, to our knowledge, each person listed is believed to have sole voting and investment power with respect to all shares of Common Stock owned by such person. |
| (2) | Ms. Xu was appointed as our Director, Chief Financial Officer and Secretary on September 18, 2025. |
| (3) | Represents two-thirds of shares underlying options that are issuable under an aggregate of 31,000 stock options granted pursuant to the Company’s 2024 Amended and Restated Equity Incentive Plan and a Non-Qualified Stock Option Agreement entered into with the independent directors. The options vest in equal annual installments beginning on July 24, 2024. |
61
Equity Compensation Plan Information
The following table summarizes information about the Company’s equity compensation plans as of April 30, 2026. All outstanding awards relate to the Company’s common stock. Shares issued under all of the following plans may be from the Company’s treasury, newly issued or both.
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(A)) | |||||||||
| Equity compensation plans approved by security holders (1) | 93,000 | (1) | $ | 1.61 | - | (2) | ||||||
| Equity compensation plans not approved by security holders | - | - | - | |||||||||
| Total | - | - | - | |||||||||
| (1) | The equity compensation plan approved by stockholders consist of our 2024 Amended and Restated Equity Incentive Plan (the “2024 Plan”). |
| (2) | Consists of shares available for future issuance under the Plan. |
Summary of 2024 Amended and Restated Equity Incentive Plan
The 2024 Equity Incentive Plan was originally adopted on June 18, 2024, and was subsequently amended and restated on January 8, 2025 pursuant to the 2024 Amended and Restated Equity Incentive Plan, or the “2024 Plan”, for the purpose of granting share based compensation awards to current or prospective employees, directors, officers, advisors or consultants of the Company or its affiliates and align their interests with ours. The maximum aggregate number of shares of common stock which may be issued pursuant to all awards under the 2024 Plan is 93,000. As of the date of this Report, a total of 93,000 shares of common stock have been granted to independent directors under the 2024 Plan, as part of the compensation package for non-executive independent directors. Terms used but not defined in this section shall have the meaning set forth in the 2024 Plan. Section references refer to the sections in the 2024 Plan.
The 2024 Plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights (SARs), stock awards and restricted stock units.
Subject to the terms and provisions of the 2024 Plan, Options may be granted at any time and from time to time as determined by the Administrator in its discretion. The Administrator may grant Incentive Stock Options, Nonqualified Stock Options, or a combination thereof, and the Administrator, in its discretion and subject to Section 4.1, shall determine the number of Shares subject to each Option.
Each Option shall be evidenced by an Award Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, any conditions to exercise the Option, and such other terms and conditions as the Administrator, in its discretion, shall determine. The Award Agreement shall also specify whether the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option.
Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Stock Awards to Employees, Nonemployee Directors and Consultants in such amounts as the Administrator, in its discretion, shall determine. Stock Awards may be granted as either Restricted Stock, subject to vesting conditions and other restrictions, or Unrestricted Stock. The Administrator shall determine the form of Stock Award and the number of Shares to be granted to each Participant. Unrestricted Stock Awards shall be evidenced by a Notice of Grant, while Restricted Stock Awards shall be evidenced by a Restricted Stock Award Agreement.
62
Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its discretion, shall determine. Unless the Administrator determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on such Shares have lapsed.
Subject to the terms and conditions of the Plan, Restricted Stock Units may be granted to Employees, Nonemployee Directors and Consultants at any time and from time to time, as shall be determined by the Administrator in its sole and absolute discretion.
The Administrator will have complete discretion in determining the number of Restricted Stock Units granted to any Participant under an Award Agreement, subject to the limitations in Section 4.1.
Each Restricted Stock Unit granted under an Award Agreement represents the right to receive one Share, or the equivalent value in cash, upon satisfaction of the vesting conditions specified in the Award Agreement.
In its sole and absolute discretion, the Administrator will set the vesting provisions, which may include any combination of time-based or performance-based vesting conditions.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Policies and Procedures for Related Person Transactions
The Company’s policy for related party transactions can be found in its code of business conduct and ethics.
Indemnification Agreements
We executed a standard form of indemnification agreement (“Indemnification Agreement”) with each of our Board members and executive officers (each, an “Indemnitee”).
Pursuant to and subject to the terms, conditions and limitations set forth in the Indemnification Agreement, we agreed to indemnify each Indemnitee, against any and all expenses incurred in connection with the Indemnitee’s service as our officer, director and or agent, or is or was serving at our request as a director, officer, employee, agent or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise but only if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. In addition, the indemnification provided in the indemnification agreement is applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven. Additionally, the Indemnification Agreement establishes processes and procedures for indemnification claims, advancement of expenses and costs and contribution obligations.
Reorganization
On April 29, 2024, Yin Yan (our chairperson, chief executive officer and president, and spouse of Fulai Wang), Fubao Wang, Xiangjing Wu, Gang Wu, Dan Yu, and Qiang Zhang, as the stockholders of FuAn, entered into a share exchange agreement with Marwynn to transfer all of their ownership in FuAn for 7,399,080 shares of common stock of Marwynn (“FuAn Transaction”). On April 25, 2024, Hong Le Liang, Sen Zhong (spouse of Zhifen Zhou, our prior chief financial officer, secretary and director) and Fu Lai Wang (spouse of Yin Yan, our chairperson, chief executive officer and president), as the stockholders of Grand Forest, entered into a share exchange agreement with Marwynn to transfer all of their ownership in Grand Forest for 4,976,244 shares of common stock of Marwynn (“Grand Forest Transaction”). On April 25, 2024, Hong Le Liang and Jiechun Wu, as the stockholders of KZS, entered into a share exchange agreement with Marwynn to transfer all of their ownership in KZS for 2,132,676 shares of common stock of Marwynn (“KZS Transaction”). On April 30, 2024, the FuAn Transaction, Grand Forest Transaction and KZS Transaction closed, and Marwynn issued a total of 14,508,004 shares of its common stock to the stockholders of FuAn, Grand Forest and KZS. As a result of the share exchanges, all the stockholders of FuAn, Grand Forest and KZS became the stockholders of Marwynn and Marwynn became the parent of FuAn, Grand Forest and KZS (the “Reorganization”). After the Reorganization, Yin Yan, Hong Le Liang, Sen Zhong, and Fu Lai Wang each became beneficial owners of more than five percent of our common stock. As of this filing, Yin Yan remains the beneficial owner of more than five percent of our common stock (see table “Principal Stockholders — Five Percent Stockholders” above).
63
Other Related Party Transactions
Due from a related party
As of April 30, 2025, due from a related party was the advances payment that the Company paid to the Company’s CEO. On May 20, 2025, the Company received the full repayment from the CEO. As of April 30, 2026, there was no balance of due from related parties.
Due to related parties
| Name of Related Party | Nature | Relationship | As
of April 30, 2026 | As
of April 30, 2025 | As
of April 30, 2024 | As
of April 30, 2023 | ||||||||||||||
| Sen Zhong | Other receivable | Spouse of Zhifen Zhou and stockholder of Marwynn | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Yin Yan | Other payable | Chairperson, chief executive officer, president, stockholder of Marwynn, and spouse of Fulai Wang | — | — | 500 | — | ||||||||||||||
| Fulai Wan | Promissory Note | Spouse of Yin Yan and stockholder of Marwynn | — | 40,000 | 250,000 | 550,000 | ||||||||||||||
| Zhifen Zhou | Other payable | Prior director, chief financial officer, secretary, and spouse of Sen Zhong | — | — | 273 | 18,847 | ||||||||||||||
| Sen Zhong | Promissory Note | Spouse of Zhifen Zhou and stockholder of Marwynn | — | 396,417 | 572,481 | 130,900 | ||||||||||||||
| Hong Le Liang | Promissory Note | Chief executive officer of Grand Forest and stockholder of Marwynn | — | 247,245 | 292,825 | 422,825 | ||||||||||||||
| American Chef Kitchen LLC | Other payable | An entity controlled by Zhifen Zhou | — | — | — | 200,000 | ||||||||||||||
| H&S Construction | Promissory Note | An entity controlled by Hong Le Liang | — | — | 103,463 | 64,344 | ||||||||||||||
| JaoFong Inc. | Other payable | An entity controlled by Hong Le Liang | — | — | — | 1,298,984 | ||||||||||||||
| Total | $ | — | $ | 683,662 | $ | 1,219,542 | $ | 2,685,900 | ||||||||||||
64
As of April 30, 2025, the balance of due to related parties was comprised of advances from the Company’s related parties and was used for working capital during the Company’s normal course of business. Such advances were non-interest bearing and due on demand. As of April 30, 2026, there was no balance of due to related parties.
On March 15, 2025, the Company entered into a 12-month operating lease agreement for the Company’s office space located in Irvine, California with The Propitious Irvine LLC, an entity for which the Company's Chief Financial Officer, Shengnan Xu, is also the member of Propitious Irvine LLC. The lease commenced on March 15, 2025. Monthly lease payments are $5,458. On March 14, 2026, the Company entered another 12-months lease for the same location commencing on March 15, 2026 with the monthly rental payment of $5,458.
Director Independence. Our board of directors has determined that all members of our board of directors are independent directors, with the exception of Yin Yan and Shengnan Xu, including for purposes of the rules of the Nasdaq and relevant federal securities laws and regulations.
Item 14. Principal Accounting Fees and Services
For the fiscal year ended April 30, 2025, the Company’s independent public accounting firm was Golden Eagle CPAs LLC (“Golden Eagle”). For the year ended April 30, 2026, the Company’s independent public accounting firm was Enrome LLP (“Enrome”).
The aggregate fees billed by our independent registered public accounting firms for fiscal years ended April 30, 2026 and 2025 for the
categories of services indicated are as follows:
| Fiscal
Year Ended April 30, | ||||||||
| 2026 | 2025 | |||||||
| Audit Fees(1) | $ | 180,000 | $ | 170,000 | ||||
| Audit-Related Fees(2) | - | - | ||||||
| Tax Fees(3) | - | - | ||||||
| All Other Fees(4) | - | - | ||||||
| Total Fees | $ | 180,000 | $ | 170,000 | ||||
| (1) | Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements, review of our quarterly financial statements, review of our Registration Statement on and those services normally provided in connection with statutory or regulatory filings or engagements including comfort letters, consents and other services related to SEC matters. This information is presented as of the latest practicable date for this annual report. |
| (2) | Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. |
| (3) | Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. |
| (4) | All other fees consist of fees billed for all other services. |
Audit Committee Pre-Approval Policies
Our audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm, the scope of services provided by our independent registered public accounting firm and the fees for the services to be performed. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget.
Our independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by our independent registered public accounting firm in accordance with this preapproval, and the fees for the services performed to date.
All of the services relating to the fees described in the table above were approved by our audit committee.
65
Item 15. Exhibits, Financial Statement Schedules
| (a) | Financial Statements and Financial Statement Schedules. |
| (1) | Financial Statement |
The following financial statements of the Company, and the Report of Independent Registered Public Accounting Firm, are included in this Report:
| (2) | Financial Statement Schedules |
All schedules have been omitted because the required information is included in the financial statements or notes thereto or because they are not required.
| (3) | Exhibits |
The exhibits required by Item 601 of Regulation S-K are listed in subparagraph (b) below.
66
| (b) | Exhibits Schedule |
The following exhibits are filed with this Report:
67
| † | Indicates management contract or compensatory plan. |
| * | These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act or the Exchange Act, irrespective of any general incorporation language in any filings. |
Item 16. Form 10-K Summary
Not applicable.
68
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MARWYNN HOLDINGS, INC. | ||
| July 30, 2026 | By: | /s/ Yin Yan |
| Name: | Yin Yan | |
| Title: | Chief Executive Officer | |
Pursuant to the requirements of the Securities Act of 1933, this Report has been signed by the following persons in the capacities held on the dates indicated.
| Name | Title | Date | ||
| /s/ Yin Yan | Chairman and Chief Executive Officer and | July 30, 2026 | ||
| Yin Yan | Director (Principal Executive Officer) | |||
| /s/ Shengnan Xu | Chief Financial Officer and Director | July 30, 2026 | ||
| Shengnan Xu | (Principal Financial and Accounting Officer) | |||
| /s/ Eric Newlan | Director | July 30, 2026 | ||
| Eric Newlan | ||||
| /s/ Dandan Wang | Director | July 30, 2026 | ||
| Dandan Wang | ||||
| /s/ Dvisha Patel | Director | July 30, 2026 | ||
| Dvisha Patel |
69
INDEX TO FINANCIAL STATEMENTS
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2026 AND 2025
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Marwynn Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Marwynn Holdings, Inc. and its subsidiaries (the “Company”) as of April 30, 2026 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended April 30, 2026 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2026 and the results of its operations and its cash flows for the year ended April 30, 2026 in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Material Uncertainty Related to Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss and operating cash outflow of $3,273,286 and $1,745,973 respectively from continuing operations for the year ended April 30, 2026. These factors, raise substantial doubt about its ability to continue as going concern. Management’s plan in regards to these matters are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2026
July 30, 2026
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and Board of Directors of
Marwynn Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Marwynn Holdings, Inc. (the “Company”) as of April 30, 2025, the related consolidated statements of operations, changes in stockholders ‘equity and cash flows for the year ended April 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the 2025 consolidated financial statements before the effects of the disposition of and related adjustments to reclassify certain amounts to discontinued operations classification, as described in Notes 3, present fairly, in all material respects, the financial position of the Company as of April 30, 2025, and the results of its operations and its cash flows for the year ended April 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
We were not engaged to audit, or apply any procedures to the discontinued operations classification of Grand Forest, as described in Note 3, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Enrome LLP.
Explanatory Paragraph – Going Concern
The accompanying financial statements for the year ended April 30, 2025 have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and significant cash outflows from operating and investing activities, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Golden Eagle CPAs LLC
We have served as the Company’s auditor since 2024.
Bedminster, New Jersey
August 8, 2025
F-3
MARWYNN HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares)
| April
30, 2026 |
April
30, 2025 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Due from related party | ||||||||
| Note receivables | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Deferred tax assets | ||||||||
| Total Non-Current Assets | ||||||||
| ASSETS FROM DISCONTINUED OPERATIONS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| LIABILITIES FROM DISCONTINUED OPERATIONS | ||||||||
| Total Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, par value $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional Paid-in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
MARWYNN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in U.S. dollars, except for number of shares)
| For
the Years end ended April 30, |
||||||||
| 2026 | 2025 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General & administrative expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Other expenses | ( | ) | ( | ) | ||||
| Interest income (expense) | ( | ) | ||||||
| Total other income (expenses), net | ( | ) | ||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax provision | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per common stock | ||||||||
| Basic and diluted* | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding | ||||||||
| Basic and Diluted** | ||||||||
| * |
| ** |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
MARWYNN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED APRIL 30, 2026 AND 2025
(Amount in U.S. dollars, except for number of shares)
| Additional | Retained earnings |
Total | ||||||||||||||||||||||||||
| Preferred shares | Common shares | paid-in | (accumulated | stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit) | equity | ||||||||||||||||||||||
| Balance as of April 30, 2024 * | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Share-based compensation expense | - | - | ||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||
| Balance as of April 30, 2025 | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||
| Balance as of April 30, 2026 | ( | ) | ||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
MARWYNN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amount in U.S. dollars, except for number of shares)
| For
the Years ended April 30, |
||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation expense | ||||||||
| Change in deferred tax assets | ||||||||
| Operating lease expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Advance to vendors | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Advance from customers | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Finance lease liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Net cash used in operating activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash provided by operating activities from discontinued operations | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Note receivables | ( | ) | ||||||
| Purchase of furniture & fixtures | ( | ) | ||||||
| Other receivable | ( | ) | ||||||
| Cash received from disposal of subsidiary | ||||||||
| Net cash used in investing activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash used in investing activities from discontinued operations | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment from (loan to) shareholder | ( | ) | ||||||
| Proceeds from issuance of common stock | ||||||||
| Net cash provided by financing activities from continuing operations | ||||||||
| Net cash use in financing activities from discontinued operations | ( | ) | ( | ) | ||||
| Net Cash Provided by Financing Activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of the year | ||||||||
| Cash and cash equivalents, end of the year | $ | $ | ||||||
| ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS: | ||||||||
| Cash and equivalents | $ | $ | ||||||
| Cash and equivalents included in discontinued operations | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
MARWYNN
HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
Business
Marwynn Holdings, Inc. (“Marwynn” or the “Company”), through its wholly-owned subsidiaries, is primarily engaged in providing supply chain management solutions to customers in the United States of America.
Marwynn was incorporated in the state of Nevada, United States of America (“U.S.” or United States) on
The Company’s business was operated by the following entities: (1) FuAn Enterprise, Inc (“FuAn”), which was incorporated in the state of California on April 18, 2016. FuAn is a food and non-alcoholic beverage supply chain company that specializes in connecting businesses between different regions, particularly between Asia and the U.S. FuAn’s comprehensive supply chain services include the sourcing of Asian food, snacks, and non-alcoholic beverages, and distributing branded goods to mainstream markets, grocery stores and wholesale/warehouse clubs in the U.S. In addition, FuAn provides supply chain consulting, and market expansion support for businesses; (2) Grand Forest Cabinetry Inc (“Grand Forest”), which was incorporated in the state of California, on February 22, 2021. KZS Kitchen Cabinet & Stone Inc (“KZS”) was incorporated in the state of California, on October 11, 2018, and merged with and into Grand Forest on June 1, 2024. Following the merger, all of the home improvement business is now under Grand Forest as the surviving corporation. Grand Forest is an indoor home improvement supply chain provider that focuses on providing high-quality kitchen cabinets, flooring, and home improvement products sourced from international suppliers. The Company disposed of Grand Forest during fiscal year 2026 and it is presented as a discontinued operation in the accompanying consolidated financial statements. See “Discontinued Operations - Grand Forest” below; (3) EcoLoopX Corporation (“EcoLoopX”), which was incorporated in the state of California on November 25, 2025, mainly engaged in e-waste reverse supply chain business. Its activities primarily include sourcing recyclable e-waste materials from suppliers and facilitating transactions with customers, as well as logistics management, documentation facilitation, and vendor and partner engagement. The Company believes the expansion into the e-waste reverse supply chain business sector will better align with its long-term growth objectives and enhance its ability to capture emerging market opportunities; and (4) NexaCore Technologies, Inc. (“NexaCore”), which was incorporated in the state of Delaware on March 27, 2026, mainly engaged in providing AI computing infrastructure, high-performance computing (“HPC”), and cloud infrastructure services. The Company is currently in the development stage and has not generated any revenue as of the balance sheet date.
Discontinued Operations - Grand Forest
During the second quarter of fiscal year 2026, following approval by the Board of Directors of the Company, the Company committed to a plan to dispose of Grand Forest Cabinetry Inc.
On October 27, 2025, Marwynn entered into a Securities Purchase Agreement with Reli Home Décor Inc., a California corporation (the “Buyer”), solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary Grand Forest. Pursuant to the Purchase Agreement, the Company has agreed to sell all
F-8
As of April 30, 2026, the consolidated financial statements of the Company of continuing operation include the following entities:
| Place and date of | % of ownership | |||||||||||
| Name of entities | incorporation | Direct | Indirect | Principal activities | ||||||||
| Marwynn Holdings, Inc. | Parent | |||||||||||
| FuAn Enterprise, Inc. | % | |||||||||||
| EcoLoopX Corporation | % | |||||||||||
| NexaCore Technologies, Inc. | % | |||||||||||
Completion of the IPO
On March 12, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with American Trust Investment Services, Inc., as representative of the several underwriters (the “Representative”), pursuant to which the Company issued and sold an aggregate of
On April 4, 2025, the Underwriter purchased
Liquidity and Going Concern
As reflected in the accompanying consolidated financial statements, the Company incurred net loss of $
The Company had $
F-9
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All inter-company balances and transactions are eliminated upon consolidation.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates and judgments include, but are not limited to, revenue recognition, sales return allowance, estimates used in the lease accounting, the allowance for credit loss, income taxes, the useful lives of long-lived assets and assumptions used in assessing impairment of long-lived assets, and stock-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual amounts may differ from the estimated amounts, such differences are not likely to be material.
Cash and cash equivalents
Cash include cash on hand and demand deposits that are highly liquid in nature and have original maturities when purchased of three months or less. The Company’s cash is maintained at financial institutions in the United States of America. Deposits in these financial institutions may, from time to time, exceed the Federal Deposit Insurance Corporation (“FDIC”)’s federally insured limits. The standard insurance amount is $
F-10
Accounts Receivable, Net
On May 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell.
The Company adopted ASC 326 and all related subsequent amendments thereto effective May 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The was no transition adjustment of the adoption of CECL.
Accounts receivable represents the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company had $
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated depreciation and impairment losses, if any. Expenditures for maintenance and repairs are expensed as incurred, while additions, renewals and improvements that extend the useful lives of property and equipment are capitalized. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any resulting gain or loss is reflected in the consolidated statement of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
| Estimated Useful Life | ||
| Furniture and fixtures | ||
| Office equipment |
F-11
Intangible Assets, Net
Intangible assets consist primarily of software acquired for internal use. Acquired intangible assets are initially recorded at their acquisition-date fair value. Intangible assets are amortized on a straight-line basis over their estimated useful lives and are reported at cost less accumulated amortization.
The estimated useful lives by asset classification are generally as follows:
| Estimated Useful Life | ||
| Software |
Impairment of Long-Lived Assets
Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
The Company evaluates events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such a determination is made. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on the above analysis, impairment loss was recognized related to these long-lived assets as of April 30, 2026 and 2025.
Income Tax
The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.
The Company utilizes a two-step approach to evaluate measure uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than
F-12
Revenue Recognition
In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
The Company derives its revenues primarily from three business segments to (i) provide food and beverage supply chain and brand management services, (ii) consulting service related to brand management, and (iii) sale of recyclable e-waste materials.
Revenue from food and beverage sales
FuAn sources authentic premium Asian foods from various suppliers and then distributes to customers (mainly supermarket and grocery stores) in the U.S. The Company accounts for revenue from sales of authentic premium Asian foods on a gross basis as the Company is responsible for fulfilling the promise to provide the desired authentic premium Asian foods products to customers and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All of FuAn’s contracts are fixed price contracts and have one single performance obligation as the promise is to transfer the individual goods to customers.
The sales transaction price is indicated in each purchase order with a Deduct from Invoice (“DFI”) discount which automatically reduces per unit cost on invoice, and payment terms are primarily set as “net 30.” The Company elects to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. The Company’s revenue from sales of authentic premium Asian food products is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Revenue from the sale of food products is reported net of sales returns and allowance.
Consulting services revenue
Consulting services revenue primarily consists of service income from providing supply chain and brand management services proposals and solutions to customers to help them optimize their inventory management and product distribution strategy, to reduce delivery times, shipping costs and diversify distribution channels. The Company’s contracts with customers for supply chain and brand management services are fixed-price contracts. The Company also believes that it serves as a principal in this type of transaction because it has the latitude in establishing prices with customers, and is responsible for bearing the related costs to complete the designated services. It normally takes a few months up to one year to complete the designated services. Revenue is recognized over the service period.
Revenue from recyclable e-waste materials sales
Revenue from recyclable e-waste materials consists primarily of sales of recyclable and recycled items, including metals, plastics, paper, electronic waste, and processed feedstock, to traders and downstream commercial customers. Currently, the Company’s customers for these transactions are primarily located in Hong Kong. The Company is in the process of expanding its customer base and is actively developing relationships with potential customers in the United States. The Company recognizes revenue on a gross basis as it acts as the principal in these arrangements. The Company obtains control of the materials prior to transfer, has discretion in establishing pricing, and bears inventory risk before control is transferred to the customer. Customer contracts are generally fixed-price arrangements and typically include a single performance obligation of selling of the e-waste materials. Revenue is recognized at a point in time when control of the materials transfers to the customer, which generally occurs upon delivery in accordance with the contractual shipping terms. Customer contracts generally do not include variable consideration, material rights of return, or significant financing components.
Sales Returns and Allowances
For food and beverage, the Company accrues estimated sales returns based on past experience and the current trend of product sales. There was allowance for sales returns for continuing operations as of April 30, 2026 and 2025.
F-13
Disaggregation of Revenue
The following table provides information about disaggregated revenue from continuing operations by product or service type:
| For the years ended April 30 | ||||||||
| 2026 | 2025 | |||||||
| Revenue from food and beverage sales | $ | $ | ||||||
| Revenue from consulting services | ||||||||
| Revenue from recyclable e-waste materials sales | ||||||||
| Total revenues | $ | $ | ||||||
Cost of Revenues
Cost of revenues consists of merchandise purchase costs, labor and other costs, duty and freight-in costs, packaging costs, processing and sorting costs, and labor costs associated with providing consulting services to customers.
Shipping and Handling Costs
Shipping and handling costs include costs incurred for delivery of the products to customers, and are included in selling expenses. Shipping and handling costs from continuing operations were $
Operating Expenses
Operating expenses primarily consist of selling expenses and general and administrative (“G&A”) expenses. Selling expenses mainly consist of advertising and marketing expenses, sales commission and shipping expenses. G&A expenses mainly consist of payroll expense, office and auto leasing, contracted labor, food testing, consulting, deprecation and insurance expenses. All costs associated with selling and general and administrative function are expensed as incurred.
Segment Information
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM or decision-making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM, reviews operating results by the revenue of different products. Based on management’s assessment, the Company has determined that it has
F-14
The following tables present summary information by segment for the years ended April 30, 2026 and 2025, respectively:
| For the year ended April 30, 2026 | ||||||||||||||||
| Sale of food and beverage | Consulting services | Sale of e-waste materials | Total | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Capital expenditure | $ | $ | $ | $ | ||||||||||||
| Total reportable assets | ||||||||||||||||
| For the year ended April 30, 2025 | ||||||||||||
| Sale of food and beverage | Consulting services | Total | ||||||||||
| Sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Operating expense | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other expense, net | ( | ) | ( | ) | ( | ) | ||||||
| Income tax provision | ( | ) | ( | ) | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Capital expenditure | $ | $ | $ | |||||||||
| Total reportable assets | $ | $ | $ | |||||||||
As of April 30, 2026 and 2025, all of the Company’s assets are located in the United States.
For the year ended April 30, 2026, the Company generate revenue from the U.S. was $
For the year ended April 30, 2025, the Company generate revenue from the U.S. was $
Fair Value of Financial Instruments
The Company applies the fair value measurement accounting standard in accordance with ASC 820-10, “Fair Value Measurements and Disclosures,” whenever other accounting pronouncements require or permit fair value measurements. Fair value is defined in ASC 820-10 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels (Level 1 is the highest priority and Level 3 is the lowest priority):
| ● | Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. |
F-15
| ● | Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or other observable inputs that can be corroborated by observable market data. |
| ● | Level 3 — Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include the Company’s own data. |
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, inventories, prepaid expenses and other current assets, short-term loan payable, accounts payable, accrued expenses and other current liabilities and deferred revenue approximate the fair value of the respective assets and liabilities as of April 30, 2026 and 2025 based upon the short-term nature of the assets and liabilities.
The Company believes that the carrying amount of long-term loan approximates its fair value at April 30, 2026 and 2025 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates.
Leases
Under ASC 842, “Leases,” a contract is or contains a lease when the Company has the right to control the use of an identified asset. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by the Company.
The Company determines if the lease is an operating or finance lease at the lease commencement date based upon the terms of the lease and the nature of the asset. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Marwynn’s warehouse and office lease is classified as an operating lease, reflected in the operating lease right-of-use assets, current portion of operating lease liabilities and non-current portion of operating lease liabilities on the consolidated balance sheets. Marwynn’s equipment lease is classified as a finance lease, reflected in the property and equipment, current portion of finance lease liabilities and non-current portion of finance lease liabilities on the consolidated balance sheets.
The lease liability for both operating lease and finance lease is measured at the present value of future lease payments, discounted using the discount rate for the lease at the commencement date. As the Company is typically unable to determine the implicit rate, the Company uses an incremental borrowing rate based on the lease term and economic environment at commencement date. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU assets include adjustments for prepayments and accrued lease payments. The right-of-use (“ROU”) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives.
ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, “Property, Plant, and Equipment,” as ROU assets are long-lived nonfinancial assets.
ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU assets are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The right-of-use (“ROU”) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments, and reduced by any lease incentives. There was impairment of the Company’s ROU assets as of April 30, 2026 and 2025.
F-16
Statement of Cash Flows
In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies using the average exchange rate in the period. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Related Parties and Transactions
The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.
Parties, which can be a corporation or individual, are related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Transactions between related parties commonly occurring in the normal course of business are related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it nonetheless requires their disclosure.
Share-based Compensation
The Company accounts for share-based compensation awards to officers, directors, employees, and for acquiring goods and services from nonemployees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the vesting period. The Company accounts for forfeitures when they occur.
Earnings (loss) per Common Stock
Basic earnings (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Potential common stock that has an anti-dilutive effect (i.e., those that increase income per common stock or decrease loss per common stock) are excluded from the calculation of diluted loss per share. For the years ended April 30, 2026 and 2025, the Company had
F-17
The following table sets forth the computation of basic and diluted net loss per share for the years ended April 30, 2026 and 2025:
| For the years ended April 30, | ||||||||
| 2026 | 2025 | |||||||
| Net loss attributable to the Company from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Net loss attributable to the Company from discontinued operations | ( | ) | ( | ) | ||||
| Weighted average common stock outstanding - basic | ||||||||
| Weighted average common stock outstanding - diluted* | ||||||||
| Net loss per share of common stock from continuing operations - basic | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock from discontinued operations - basic | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock from continuing operations - diluted | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock from discontinued operations - diluted | $ | ( | ) | $ | ( | ) | ||
| * | Loss per share for basic and diluted weighted average shares outstanding are the same due to anti-dilutive effect resulting from the net loss for the years ended April 30, 2026 and 2025. |
Commitments and Contingencies
Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. As of April 30, 2026 and 2025, the Company has such contingencies.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
For the year ended April 30, 2026, two customers accounted for
As of April, 30, 2026, four customers accounted for
For the year ended April 30, 2026, one vendor accounted for
As of April 30, 2026, no vendor accounted for more than 10% of the Company’s total outstanding accounts payable balance from continuing operations. As of April 30, 2025, one vendor accounted for
Recent Accounting Pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
F-18
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The ASU was issued in response to the SEC’s August 2018 final amendments in Release No. 33-10532, Disclosure Update and Simplification that updated and simplified disclosure requirements that the SEC believed were duplicative, overlapping, or outdated. The guidance in ASU 2023-06 is intended to align GAAP requirements with those of the SEC and to facilitate the application of GAAP for all entities. The amendments introduced by ASU 2023-06 are effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. If, by June 30, 2027, the SEC has not removed the applicable requirements from its existing regulations, the pending content of the associated amendment will be removed from the ASC and will not become effective for any entities. Early adoption is permitted. The adoption of ASU 2023-06 is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of income and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquirer in the Acquisition of a Variable Interest Entity. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting period within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 18) and Revenue from contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments clarify the accounting for share-based consideration payable to a customer under Topic 718 and Topic 606. The amendments are effective for annual reporting periods, including interim reporting period within those annual periods, beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.
F-19
NOTE 3 — DISCONTINUED OPERATIONS
On October 27, 2025, Marwynn entered into a Securities Purchase Agreement with Reli Home Décor Inc., solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary Grand Forest. Pursuant to the Purchase Agreement, the Company has agreed to sell all
The Consolidated Balance Sheet and Consolidated Statements of Operations, and the notes to the Consolidated Financial Statements, were retroactively reclassified for all periods presented to reflect the discontinuation of Grand Forest in accordance with FASB ASC 205.
The following table summarizes the carrying value of the assets and liabilities of the disposed group as of December 22, 2025 and April 30, 2025.
| As of December 22, 2025 (unaudited) | As of April 30, 2025 (unaudited) | |||||||
| ASSETS | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Account receivables, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Deferred tax assets, net | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Finance lease right-of-use assets, net | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Short-term loan payable | $ | $ | ||||||
| Account Payable | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Financing lease liability – current | ||||||||
| Income tax payable | ||||||||
| Auto loan payable - current | ||||||||
| Due to related parties | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities – non-current | ||||||||
| Finance lease liabilities – non-current | ||||||||
| Auto loan payable – non-current | ||||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
F-20
The following table presents the components of discontinued operations reported in the consolidated statements of operations for the periods from May 1, 2025 to December 22, 2025 and for the year ended April 30, 2025 (unaudited):
| For the period from May 1, 2025 to December 22, 2025 | For the year ended April 30, 2025 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General & administrative expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Other income (expenses) | ( | ) | ||||||
| Impairment loss | ) | |||||||
| Gain on disposal | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expenses, net | ( | ) | ( | ) | ||||
| Loss before income tax expense | ( | ) | ( | ) | ||||
| Income tax provision | ( | ) | ||||||
| Net loss from discontinued operations, net of tax | $ | ) | $ | ( | ) | |||
F-21
NOTE 4 — ACCOUNTS RECEIVABLE, NET
As of April 30, 2026 and 2025, accounts receivable, net consisted of the following:
| As of April 30, 2026 | As of April 30, 2025 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Less: allowance for credit losses | ||||||||
| Total accounts receivable, net | $ | $ | ||||||
During the year ended April 30, 206 and 2025, the movement for the allowance for credit losses were as following:
| 2026 | 2025 | |||||||
| Allowance for credit losses, beginning of the year | $ | $ | ||||||
| Add: credit losses during the year | ||||||||
| Allowance for credit losses, end of the year | $ | $ | ||||||
Accounts receivable by aging bucket as of April 30, 2026 and 2025, consisted of the following:
| Accounts receivable by aging bucket | Balance as of April 30, 2026 | Balance as of April 30, 2025 | ||||||
| Less than six months | $ | $ | ||||||
| Seven to nine months | ||||||||
| Ten to twelve months | ||||||||
| Total gross accounts receivable | ||||||||
| Allowance for doubtful accounts | ( | ) | ||||||
| Total accounts receivable, net | $ | $ | ||||||
As of the date of this report, subsequent collection of the outstanding accounts receivable from continuing operations as of April 30, 2026 was $, and subsequent collection of the outstanding accounts receivable from continuing operations as of April 30, 2025 was $
NOTE 5 — NOTE RECEIVABLES
On May 10, 2025, the Company’s subsidiary FuAn entered into a short-term note receivable agreement with a third-party company Bio Essence Pharmaceutical Inc. (“BEP”) to lend $
On June 5, 2025 and July 10, 2025, the Company advanced $
F-22
On November 19, 2025, the Company entered into a short-term note receivable agreement with a third party company Valemi Inc. (“Borrower”), pursuant to which the Company loaned $
As of April 30,2026, the outstanding balance of note receivables was $
NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets, consisted of the following:
| April 30, 2026 | April 30, 2025 | |||||||
| Advance to vendors(i) | $ | $ | ||||||
| Security deposits(ii) | ||||||||
| Prepaid service fee(iii) | ||||||||
| Accrued interest receivable(iv) | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| (i) |
| (ii) |
| (iii) |
| (iv) |
F-23
NOTE 7 — PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
| April 30, 2026 | April 30, 2025 | |||||||
| Furniture and fixture | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expenses from continuing operations were $
NOTE 8 — INTANGIBLE ASSETS, NET
Intangible asset, net consisted of the following:
| April 30, 2026 | April 30, 2025 | |||||||
| Software | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
On November 19, 2023, the Company purchased a supply chain cloud management system from a third-party vendor at a cost of $
Amortization expenses for the years ended April 30, 2026 and 2025 were $
As of April 30, 2026, the estimated future amortization expenses of the intangible assets were as follow:
| 12 months ending April 30, | Amortization expenses | |||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| Total | $ | |||
F-24
NOTE 9 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following:
| April 30, 2026 | April 30, 2025 | |||||||
| Payroll and payroll tax payable | $ | $ | ||||||
| Sales tax payable | ||||||||
| Credit card payable | ||||||||
| Professional fee payable | ||||||||
| Total | $ | $ | ||||||
As of April 30, 2026, professional fees payable primarily consisted of outstanding legal fees related to SEC filing compliance services provided by the Company’s SEC counsel, as well as fees for legal services associated with acquisitions and discontinued operations, audit fees for potential acquisitions, and Nasdaq listing fees.
NOTE 10 — LEASE
On January 19, 2024, FuAn entered into a sublease agreement with the landlord to lease an office in Irvine, California with a lease term of
Total lease expenses from continuing operations amounted to $
As of April 30, 2026 and 2025, the average remaining term of the lease is
The Company’s operating ROU assets and lease liabilities were as follows:
| April 30, 2026 | April 30, 2025 | |||||||
| Operating ROU: | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Less: accumulated amortization of ROU assets | ( | ) | ( | ) | ||||
| ROU assets, net | $ | $ | ||||||
| Operating lease liabilities: | ||||||||
| Operating lease liabilities, current | $ | $ | ||||||
| Operating lease liabilities, non-current | ||||||||
| Total lease liabilities | $ | $ | ||||||
On March 15, 2025, MarWynn entered a
F-25
NOTE 11 — INCOME TAXES
Marwynn is a Nevada holding company subject to
FuAn and EcoLoopX were incorporated in the State of California, and are subject to
For the years ended April 30, 2026, and 2025, the provision for income taxes consisted of the following:
| Year ended April 30, 2026 | Year ended April 30, 2025 | |||||||
| Current: | ||||||||
| Federal income tax expense | $ | $ | ||||||
| State income tax expense | ||||||||
| Deferred: | ||||||||
| Federal income tax expense | ||||||||
| State income tax expense | ||||||||
| Total income tax expense | $ | $ | ||||||
The following table reconciles the Company’s effective income tax rate for the years ended April 30, 2026 and 2025:
| Year ended April 30, 2026 | Year ended April 30, 2025 | |||||||
| Federal statutory rate | % | % | ||||||
| State statutory rate, net of effect of state income tax deductible to federal income tax | % | % | ||||||
| Permanent difference – penalties, interest, and others | ( | )% | ( | )% | ||||
| Valuation allowance | ( | )% | ( | )% | ||||
| Effective tax rate | ( | )% | ( | )% | ||||
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse.
| April 30, 2026 | April 30, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Operating lease liabilities, net of ROU | $ | $ | ||||||
| Depreciation | ||||||||
| Bad debt expense | ||||||||
| NOL | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net | $ | $ | ||||||
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of April 30, 2026 and 2025, the Company had $
F-26
NOTE 12 — RELATED PARTY TRANSACTIONS
The Company’s related party transactions from continuing operations consisted of the following:
Due from a related party
| Name of Related Party | Nature | Relationship | April 30, 2026 | April 30, 2025 | ||||||||
| Yin Yan | $ | |||||||||||
| Total | $ | $ | ||||||||||
As of April 30, 2025, due from a related party was the advances payment that the Company paid to the related party. On May 20, 2025, the Company received the full repayment from this related party. As of April 30, 2026, there was balance of due from a related party for continuing operations.
Related party lease
On March 15, 2025, the Company entered into a
NOTE 13 — STOCKHOLDERS’ EQUITY
Prior to April 2024, Grand Forest borrowed interest free funds from its stockholders as working capital and recorded such borrowings as due to related parties. On April 19, 2024, three stockholders of Grand Forest converted total of $
On April 19, 2024, one stockholder of KZS converted $
On April 29, 2024, all the stockholders of FuAn transferred their
F-27
Marwynn was incorporated in the state of Nevada on February 27, 2024. The Company is authorized to issue
On April 24, 2024, the Company entered a Subscription Agreement with an individual investor, pursuant to the subscription agreement, on April 30, 2024, the Company issued
On April 24, 2024, the Company entered a Subscription Agreement with another individual investor, pursuant to the subscription agreement, on April 30, 2024, the Company issued
On April 25, 2024, Marwynn and Marwynn’s CEO Yin Yan (also the initial major stockholder of Marwynn) entered into a Series A Super Voting Preferred Stock Purchase Agreement (“Purchase Agreement”), pursuant to the purchase agreement, Marwynn’s CEO purchased
On September 9, 2024, the Company filed an Amended and Restated Articles of Incorporation to effect (i)
Initial public offering (the “IPO”)
On March 12, 2025, the Company entered into an underwriting agreement with American Trust Investment Services, Inc (the “Underwriter”) in connection with the Company’s IPO of
The IPO closed on March 14, 2025, and the Company received net proceeds of approximately $
On April 4, 2025, the Underwriter purchased
The Company also agreed to issue to the Representative (or its permitted assignees) a warrant (“Representative Warrant”) to purchase up to
F-28
Following is a summary of the activities of warrants for the period ended April 30, 2026:
| Number of Warrants | Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Outstanding as of April 30, 2025 | $ | |||||||||||
| Exercisable as of April 30, 2025 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Forfeited | — | |||||||||||
| Expired | — | |||||||||||
| Outstanding as of April 30, 2026 | $ | |||||||||||
| Exercisable as of April 30, 2026 | $ | |||||||||||
Stock Purchase Agreement
On October 28, 2025, the Company entered into and closed a stock purchase agreement with certain investors, pursuant to which the subscribers agreed, subject to the terms and conditions of the agreement, to purchase an aggregate of
As of April 30, 2026 and 2025, total number of shares of common stock issued and outstanding was
Stock-based compensation
On July 24, 2024, the Board of Directors granted non-qualified stock options to each of its three independent directors. Each director received options to purchase
The grant-date fair value of the stock options awarded to directors was $
F-29
Following is a summary of the activities of stock options for the year ended April 30, 2026:
| Number of Stock Options | Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Outstanding as of April 30, 2025 | $ | |||||||||||
| Exercisable as of April 30, 2025 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Forfeited | — | |||||||||||
| Expired | — | |||||||||||
| Outstanding as of April 30, 2026 | $ | |||||||||||
| Exercisable as of April 30, 2026 | $ | |||||||||||
NOTE 14 — SUBSEQUENT EVENTS
The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the consolidated financial statements were issued and determined the Company did not have any material subsequent event that needs to be disclosed.
F-30