Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

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 unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. 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 under Part II - Item 1A Risk Factors of this Report, in the "Risk Factors" section of our annual report on Form 10-K for the fiscal year ended April 30, 2026 and in the audited consolidated financial statements and notes included therein (collectively, the "2026 Annual Report"), as well as in our unaudited condensed consolidated financial statements and the related notes included in this Report. Pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, we have presumed that readers have access to and have read the disclosure under the same heading contained in the 2026 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Use of Certain Defined Terms

Unless otherwise indicated or the context otherwise requires and for purposes of this report only, references to:

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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;

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"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;

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"EcoLoopX" means EcoLoopX Corporation, a California corporation incorporated on November 25, 2025, and a wholly-owned subsidiary of Marwynn; and

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"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 report 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.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings. References to "we", "us", "our," or the "Company" are to Marwynn Holdings, Inc. and its wholly-owned operating subsidiaries, except where the context requires otherwise.

Business Overview and Recent Development

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.

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.

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. As a part of this initiative, we intend to engage in the following:

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Deployment of enterprise-grade AI software applications and deep learning model processing services.

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Provisioning of IaaS and cloud storage optimized for high-density enterprise environments.

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Sourcing, land acquisition, and project development for high-density data centers.

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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.

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. The Company continues to operate its traditional international trading business; however, it has reallocated its strategic emphasis toward an energy-focused business.

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.

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.

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 July 31, 2026, we had one primary vendor located in the U.S. 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 our 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.

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

Uncertainty regarding tariffs on imported products and changes in U.S. trade policies may have an adverse effect on our operations. Tariffs may increase our procurement costs and disrupt our supply chain, particularly with respect to products sourced from China. We are seeking to mitigate these effects through alternative sourcing arrangements and other cost-saving measures, although these efforts may not fully offset the increased costs or supply disruptions. 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. During the quarter ended July 31, 2026, we added one new food-supply vendor from the U.S. However, if additional tariffs are adopted, we would incur additional tariff costs that could be material. We are actively evaluating changes in tariffs and our ability to mitigate their effects on our revenue and cost of revenues.

Three Months Ended July 31, 2026 compared to Three Months Ended July 31, 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 three months ended July 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	450,000				41.27	%		$	-				-	%		$	450,000				100.00	%
Consulting Services			70,000				6.42	%			41,250				100.00	%			28,750				69.70	%
Sale of Recyclable E-waste Materials			570,445				52.31	%			-				-	%			570,445				100.00	%
Total Revenues		$	1,090,445				100.00	%		$	41,250				100.00	%		$	1,049,195				2,543.50	%

Sales of food and beverage

Sales of food and beverage accounted for 41.27% and nil of total sales for the three months ended July 31, 2026 and 2025, respectively. 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 6.42% and 100.00% of total revenues for the three months ended July 31, 2026 and 2025, respectively. Revenue from consulting services increased by $28,750, or 69.70% from $41,250 for the three months ended July 31, 2025 to $70,000 for the three months ended July 31, 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-Waste Business)

Revenue from sales of recyclable materials accounted for 52.31% and nil of total revenues for the three months ended July 31, 2026 and 2025, respectively. Revenue from sales of recyclable materials increased by $570,445, from nil for the three months ended July 31, 2025 to $570,445 for the three months ended July 31, 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-Waste Business). The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.

		For the three months ended July 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	299,880				66.64	%		$	-				-	%		$	299,880				N/A
Consulting Services			13,300				19.00	%			52				0.13	%			13,248				25,476.92	%
Sale of Recyclable E-waste Materials			542,105				95.03	%			-				-	%			542,105				N/A
Total Cost of Revenues		$	855,285				78.43	%		$	52				0.13	%		$	855,233				1,644,678.85	%

Cost of revenues from sale of food and beverage was $299,880 and nil for the three months ended July 31, 2026 and 2025, respectively. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs.

Cost of revenues from consulting services was $13,300 and $52 for the three months ended July 31, 2026 and 2025, respectively. Cost of revenues associated with our consulting services was immaterial and primarily consisted of labor costs.

Our cost of revenue from sale of recyclable materials was $542,105 and nil for the three months ended July 31, 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 three months ended July 31, 2026 and 2025

The following table summarizes our unaudited condensed consolidated results of operations and as percentage of our total revenues for the period presented.

		For the three months ended July 31,
		2026				% of Revenues				2025				% of Revenues				Dollar Increase (Decrease)				Percent Increase (Decrease)
Revenues, net		$	1,090,445				100.00	%		$	41,250				100.00	%		$	1,049,195				2,543.50	%
Cost of revenues			(855,285	)			(78.43	)%			(52	)			(0.13	)%			(855,233	)			1,644,678.85	%
Gross profit			235,160				21.57	%			41,198				99.87	%			193,962				470.80	%
Selling expenses			-				-	%			(1,276,368	)			(3,094.23	)%			1,276,368				(100.00	)%
General and administrative expenses			(319,309	)			(29.28	)%			(1,398,075	)			(3,389.27	)%			1,078,766				(77.16	)%
Total operating expenses			(319,309	)			(29.28	)%			(2,674,443	)			(6,483.50	)%			2,355,134				(88.06	)%
Loss from operations			(84,149	)			(7.72	)%			(2,633,245	)			(6,383.62	)%			2,549,096				(96.80	)%
Total other income (expense), net			17,852				1.64	%			(3,860	)			(9.36	)%			21,712				562.49	%
Loss before income tax provision			(66,297	)			(6.08	)%			(2,637,105	)			(6,392.98	)%			2,570,808				(97.49	)%
Income tax provision			(42,630	)			(3.91	)%			(1,508	)			(3.66	)%			(41,122	)			2,726.92	%
Net loss from continuing operations			(108,927	)			(9.99	)%			(2,638,613	)			(6,396.64	)%			2,529,686				(95.87	)%
Net loss from discontinued operations, net of tax			-				-	%			(81,140	)			(196.70	)%			81,140				(100.00	)%
Net loss		$	(108,927	)			(9.99	)%		$	(2,719,753	)			(6,593.34	)%		$	2,610,826				(95.99	)%

Revenues from continuing operations

Revenues for the three months ended July 31, 2026 and 2025 were $1,090,445 and $41,250, respectively, an increase of $1,049,195 or 2,543.50%. The increase of revenues was primarily attributed to increased sale of recyclable e-waste materials by $570,445, increased sale of food imports and distribution by $450,000 and increased consulting services by $28,750.

Cost of revenues associated with continuing operations

The following table presents our costs of revenues by products and services provided as a percentage of total revenues for the periods presented.

		For the three months ended July 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	299,880				27.50	%		$	-				-	%		$	299,880				100.00	%
Consulting Services			13,300				1.22	%			52				0.13	%			13,248				25,476.92	%
Sale of Recyclable E-waste Materials			542,105				49.71	%			-				-	%			542,105				100.00	%
Total Cost of Revenues		$	855,285				78.43	%		$	52				0.13	%		$	855,233				1,644,678.85	%

Cost of revenues for the three months ended July 31, 2026 and 2025 was $855,285 and $52, respectively, an increase of $855,233 or 1,644,678.85%. 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 $542,105,increased cost in sale of food and beverage by $299,880, and increased cost in consulting service by $13,248, or 25,476.92%. Cost of revenues for sale of food and beverage as a percentage of total revenues was 27.50% and nil, respectively, for the three months ended July 31, 2026 and 2025. Cost of revenues for consulting services as a percentage of total revenues was 1.22% and 0.13%, respectively, for the three months ended July 31, 2026 and 2025. Cost of revenues for sale of recyclable e-waste materials as a percentage of total revenues was 49.71% and nil, respectively, for the three months ended July 31, 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 three months ended July 31,
		2026								2025
		Gross profit				Profit Margin to Total Revenues				Gross profit				Profit Margin to Total Revenues
Sale of Food and Beverage		$	150,120				13.77	%		$	-				-	%
Consulting Services			56,700				5.20	%			41,198				99.87	%
Sale of Recyclable E-waste Materials			28,340				2.60	%			-				-	%
Gross Profit and Gross Margin		$	235,160				21.57	%		$	41,198				99.87	%

The following table presents our gross margin by products and services provided as a percentage of its corresponding categories.

		For the three months ended July 31,
		2026				2025
Sale of Food and Beverage			33.36	%			-	%
Consulting Services			81.00	%			99.87	%
Sale of Recyclable E-waste Materials			4.97	%			-	%

The gross profit for the three months ended July 31, 2026 and 2025 was $235,160 and $41,198, respectively, an increase of $193,962 or 470.80%. The blended gross profit margin was 21.57% for the three months ended July 31, 2026 compared with 99.87% for the same period in 2025, the decreased blended gross profit margin was due to lower profit margin from our food and beverage sector and E-waste materials sector. Gross profit for sale of food and beverage increased by 100.00% for the three months ended July 31, 2026. Gross profit for consulting services increased by 37.63% for the three months ended July 31, 2026. Gross profit from the sale of recyclable materials increased by 100.00% for the three months ended July 31, 2026, primarily driven by new business that commenced in January 2026.

Selling expenses associated with continuing operations

Our selling expenses were nil for the three months ended July 31, 2026, compared to $1,276,368 for the three months ended July 31, 2025, representing a decrease of $1,276,368, or 100.00%. The decrease in the selling expenses was mainly due to (1) decreased payroll expenses of $25,000, or 100.00%, (2) decreased shipping expenses of $1,368, or 100.00%, and (3) decrease in advertising and marketing expenses of $1,250,000, or 100.00%. The decrease was primarily due to the Company's reduced selling and marketing activities during the three months ended July 31, 2026, as the Company focused on other business priorities and did not incur significant expenses related to advertising, marketing, shipping, or sales personnel during the period. Selling expenses accounted for nil and 3,094.23% of our total revenues for the three months ended July 31, 2026 and 2025, respectively.

General and administrative expenses associated with continuing operations

Our general and administrative expenses were $319,309 for the three months ended July 31, 2026, compared to $1,398,075 for the three months ended July 31, 2025, reflecting a decrease of $1,078,766 or 77.16%. The decrease in general and administrative expenses was mainly due to decreased professional fee by $1,018,990 or 82.52% as compared to the same period of 2025, resulting from decreased consulting expenses for financial advisory services, decreased insurance expense by $25,473 or 70.30%, which was mainly due to decreased directors and officers insurance expenses, decreased rent expense by $16,553 or 58.79%, decreased payroll expense by $11,005 or 36.68%, decreased depreciation and amortization expense by $3,480 or 21.20%, decreased office expense by $5,710 or 50.78%, and decreased other general and administrative expenses by $6,958 or 58.79%. The decreased general administrative expenses were partly offset by increased director compensation expense by $7,500 or 100.00%, increased travel expense by $1,180 or 100.00%, and increased bank service fee by $723 or 1,013.82%. General and administrative expenses accounted for 29.28% and 3,389.27% of our total revenues for the three months ended July 31, 2026 and 2025, respectively.

Other income (expenses), net

Other income were $17,852 for the three months ended July 31, 2026, compared to other expenses of $3,860 for the three months ended July 31, 2025. For the three months ended July 31, 2026, other income mainly consisted of interest income of $25,364, which was partly offset with other expenses of $4,012, and interest expense of $3,500. For the three months ended July 31, 2025, other expenses mainly consisted of other expenses of $3,807 and interest expense of $53.

Net loss from continuing operations

We had a net loss from continuing operations of $108,927 for the three months ended July 31, 2026, compared to $2,638,613 for the three months ended July 31, 2025, representing a decrease of $2,529,686, or 95.87%. The decrease 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 nil for the three months ended July 31, 2026, compared to a net loss from discontinued operations of $81,140 for the three months ended July 31, 2025, representing a decrease in net loss from discontinued operations of $81,140, or 100.00%.

Net loss

As a result of the above, we had a net loss of $108,927 for the three months ended July 31, 2026, compared to a net loss of $2,719,753 for the three months ended July 31, 2025, representing a decrease of net loss of $2,610,826 or 95.99%. The decrease was mainly resulting from decreased operating expenses and increased gross profit.

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 unaudited condensed consolidated financial statements, we had cash balance of $3,541 as of July 31, 2026. We also had accounts receivable, net balance of $1,310,880 as of July 31, 2026, among which $126,318 has been collected as of the date of this report.

Our working capital amounted to approximately $2.38 million as of July 31, 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 unaudited condensed consolidated financial statements, the Company had net loss from continuing operations of approximately $108,927 for the three months ended July 31, 2026 and cash outflow from operating activities from continuing operations of approximately $327,612 for the three months ended July 31, 2026. 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. In addition, the Company started the e-waste reverse supply chain business through its new subsidiary EcoLoopX during fiscal year 2026, to better align with its long-term growth objectives and enhance its ability to capture emerging market opportunities. The Company also recently incorporated NexaCore on March 27, 2026, focusing on providing AI computing infrastructure, high-performance computing ("HPC"), and cloud infrastructure services.

The Company has historically funded its working capital needs primarily from operations and shareholder loans. 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 unaudited condensed consolidated financial statements.

The following table summarizes our cash flows for the three months ended July 31,2026 and 2025, respectively.

		Three Months Ended July 31
		2026				2025
Net cash used in operating activities for continuing operations		$	(327,612	)		$	(90,651	)
Net cash used in operating activities for discontinued operations			-				(4,498	)
Net cash used in operating activities			(327,612	)			(95,149	)
Net cash provided by (used in) investing activities for continuing operations			28,903				(690,000	)
Net cash used in investing activities for discontinued operations			-				-
Net cash provided by (used in) investing activities			28,903				(690,000	)
Net cash provided by financing activities for continuing operations			150,000				209,641
Net cash used in financing activities for discontinued operations			-				(456,607	)
Net cash provided by (used in) financing activities			150,000				(246,966	)
Decrease in cash			(148,709	)			(1,032,115	)
Cash, beginning of the period			152,250				1,261,874
Cash, end of the period		$	3,541			$	229,759

Net cash used in operating activities

Net cash outflow from operating activities from continuing operations increased by $236,961 for the three months ended July 31, 2026 comparing with the three months ended July 31, 2025, mainly resulting from (a) decreased net loss from continuing operations of $2,529,686 with a decrease in non-cash adjustments to net loss of $15,243, (b) decreased cash inflow on accounts receivable of $550,068, (c) decreased cash inflow on prepaid expenses and other current assets by $2,008,071, (d) decreased cash inflow on accounts payable by $167,729, (e) decreased cash inflow on accrued expense and other current liabilities by $75,735, which was partly offset by (f) increased cash inflow on income tax payable by $38,285 and (g) decreased cash outflow on operating lease liabilities by $11,914.

Net cash used in operating activities from discontinued operations was nil and $4,498 for the three months ended July 31, 2026 and 2025.

Net cash provided by (used in) investing activities

Net cash provided by investing activities from continuing operations was $28,903 for the three months ended July 31, 2026, compared to net cash used in investing activities from continuing operations of $690,000 for the same period in 2025. The net cash provided by investing activities from continuing operations in the current period mainly consisted of $30,000 collections on note receivables, which was partly offset by purchase of furniture and fixtures of $1,097. The net cash used in investing activities from continuing operations in the same period of prior year mainly consisted of loans made to a third-party company Bio Essence Pharmaceutical Inc. ("BEP") totaling $690,000, comprising a $500,000 interest-bearing loan and a $190,000 non-interest-bearing advance.

There was no cash used in investing activities from discontinued operations for the three months ended July 31, 2026 and 2025.

Net cash provided by (used in) financing activities

Net cash provided by financing activities from continuing operations was $150,000 for the three months ended July 31, 2026, compared to net cash provided by financing activities from continuing operations of $209,641 for the three months ended July 31, 2025. The net cash provided by financing activities from continuing operations in the current period mainly consisted of loan from others of $200,000, which was partly offset by repayment of this loan of $50,000. The net cash provided by financing activities from continuing operations in the same period of prior year mainly consisted of repayment of loan from shareholder of $193,853 and bank overdraft of $15,788.

Net cash used in financing activities from discontinued operations was nil and $456,607 for the three months ended July 31, 2026 and 2025.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of July 31, 2026 and April 30, 2026.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed 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 unaudited condensed 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 unaudited condensed 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.

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our unaudited condensed consolidated financial statements:

Critical Accounting Estimates

The preparation of the Unaudited Condensed 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 unaudited condensed 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. There 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 July 31, 2026 and April 30, 2026, the allowance for credit losses related to continuing operations were $47,935 and $47,935, 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.

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

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 July 31,2026 and April 30, 2026. 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 recognize and 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 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.

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 718) 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.