Quarterly Report for Quarter Ending January 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, 2025 and in the audited consolidated financial statements and notes included therein (collectively, the "2025 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 2025 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

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

Marwynn Holdings, Inc. ("Marwynn" or the "Company") was incorporated in the state of Nevada, United States of America ("USA") on February 27, 2024. The Company is a holding company with no material operations of its own, Marwynn conducts substantially all its operations through its wholly-owned subsidiaries.

FuAn Enterprise, Inc ("FuAn"), a subsidiary of Marwynn, 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. With a focus on sourcing Asian foods and non-alcoholic beverages, FuAn aims at becoming a leading importer and distributor of premium Asian foods and non-alcoholic beverages to the U.S. markets.

On December 22, 2025, the Company completed the sale of all of its equity interests of Grand Forest Cabinetry Inc. ("Grand Forest") to a third-party buyer. Following the sale of Grand Forest, the Company is no longer indoor home improvement supply chain provider.

On November 19, 2025, the board of directors approved the formation of a wholly owned subsidiary to operate within the electronic waste supply chain business ("E-Waste Reverse Supply Chain Business"). The subsidiary, EcoLoopX Corporation, was incorporated in the state of California on November 25, 2025, and provides non-operational supply chain services. It does not engage in any physical processing, dismantling, recycling, or hazardous materials handling. Instead, its activities are limited to coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support. The Company believes that concentrating its resources in the food and beverage and expanding 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.

On February 10, 2026, we issued a press release announcing the signing of a non-binding Letter of Intent ("LOI") to acquire a 51% equity interest in DJ Mex Corp. ("DJ Mex"), a U.S.-based operator specializing in electronic-waste sourcing, logistics coordination, and recyclable materials trading. Following our due diligence, in March 2026, the Company decided not to pursue the acquisition of DJ Mex.

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, including on product imports from almost all countries and individualized higher tariffs on certain other countries, such as China. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses. 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. This shifting landscape remains characterized by a complex series of temporary surcharges, targeted exemptions, and ongoing litigation regarding importer refunds. Our current food and non-alcohol beverage business relies heavily on international supply chains and imported products. This dependence exposes us to risks associated with shifting global trade policies, tariffs, and geopolitical tensions, particularly in the Asia-Pacific region, and could negatively impact affect our business in multiple ways, including increased costs of our products. These tariffs have introduced additional volatility into our procurement and logistics operations and may increase our cost of goods sold.

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. While we have temporarily paused imports from China, future sourcing decisions may change depending on market conditions, supplier availability, and trade policies. In addition, trade-related disruptions-such as shipping delays, port congestion, or container shortages-can create further uncertainty and may require expedited shipping or last-minute procurement efforts at elevated cost. While these changes are intended to mitigate future exposure, they may result in near-term transitional costs, logistical inefficiencies, and supplier onboarding challenges. Diversifying our supply base can also increase production and transportation costs and introduce operational complexity. During the quarter ended January 31, 2026, we had two primary vendors located in Taiwan and New Zealand. As we continue 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. We are actively working with Costco and other retailers to introduce new products that are less sensitive to the tariff tensions between the U.S. and China. However, there can be no assurance that these efforts will be successful or that such measures will fully offset the challenges posed by current trade policies.

We continue monitoring the fluid nature of proposed tariffs and any impact they may have on our operations and will continue to monitor macroeconomic conditions and evaluate the financial and operational impact of ongoing trade policy shifts. These risks could intensify depending on future developments and we are actively incorporating these considerations into our future operation planning, including assessing pricing actions, cost-control measures, and long-term sourcing strategies.

If tariffs escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business performance. See "Risk Factors" discussed in our 2024 Annual Report, for additional information.

We are also entering the E-Waste Reverse Supply Chain Business, which focuses on coordination, sourcing, logistics management, documentation facilitation, vendor and partner engagement, and compliance support related to discarded electronic products. The Company will not engage in any physical processing, dismantling, recycling, or hazardous materials handling. Although we will not handle e-waste directly, this business line may still be subject to evolving environmental regulations, data security laws, and global commodity pricing pressures. We are actively evaluating operational and regulatory risks, and exploring long-term strategies for scalable and compliant growth in this area.

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

The supply chain industry is highly competitive, with a wide range of players offering various services such as logistics, transportation, warehousing, and distribution. Competitors range from large multinational corporations to small and medium-sized enterprises, each with their own strengths and capabilities. Supply chain disruptions often occur due to natural disasters or geopolitical events. We see talent shortage and skills gap in supply chain management. We also face regulatory compliance and trade restrictions. Security and data privacy are also concerns in global trade as well as fluctuations in exchange rates and raw material prices.

Competition for sale of food and beverages varies and includes market demand, supplier relationships, logistics and distribution, regulatory compliance and expanding into new markets. Satisfying diverse consumer preferences and staying ahead of trends are imperative.

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 quarter ended January 31, 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.

Three Months Ended January 31, 2026 compared to Three Months Ended January 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. 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 January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	340,192				24.58	%		$	579,960				92.99	%		$	(239,768	)			(41.34	)%
Consulting Services			43,749				3.16	%			43,749				7.01	%			-				-
Sale of recyclable e-waste materials			1,000,000				72.26	%			-				-	%			1,000,000				100.00	%
Total Revenues		$	1,383,941				100	%		$	623,709				100.00	%		$	760,232				121.89	%

Sales of food and beverage

There were $340,192 and $579,960 from sales of food and beverage accounted for the three months ended January 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.

We also plan to increase our revenue by diversifying our markets from major mass market channels to ethnic supermarkets chains. In addition, we already finished the setup process to become a vendor to some major food distributors. Our 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.

Consulting services

There were $43,749 and $43,749 from consulting services accounted for 3.16% and 7.01% of total revenues for the three months ended January 31, 2026 and 2025, respectively. Revenue from consulting services remained relatively consistent for the three months ended January 31, 2026 compared to the three months ended January 31, 2025. 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 e-waste materials

There were $1,000,000 from sales of recyclable e-waste materials for the three months ended January 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, (ii) consulting services, and (iii) sale of recyclable e-waste materials.

		For the three months ended January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	270,666				20.81	%		$	328,181				86.57	%		$	(57,515	)			(17.53	)%
Consulting Services			58,746				4.52	%			50,900				13.43	%			7,846				15.41	%
Sale of recyclable e-waste materials			970,874				74.67	%							%				970,874				100.00	%
Total Cost of Revenues		$	1,300,286				100.00	%		$	379,081				100.00	%		$	921,205				243.01	%

Cost of revenues from sale of food and beverage was $270,666 and $328,182 for the three months ended January 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 revenue from consulting service was $58,746 and $50,900 for the three months ended January 31, 2026 and 2025, respectively. Cost of revenues associated with our consulting services was immaterial and primarily consisted of labor costs.

Cost of revenue from sale of recyclable e-waste materials was $970,874 for the three months ended January 31, 2026. Our cost of revenues from sale of recyclable materials primarily consisted of purchasing recyclable materials.

Results of Operations

Comparison of the three months ended January 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 January 31,
		2026				% of Revenues				2025				% of Revenues				Dollar Increase (Decrease)				Percent Increase (Decrease)
Revenues, net		$	1,383,941				100.00	%		$	623,709				100.00	%		$	760,232				121.89	%
Cost of revenues			(1,300,286	)			(93.96	)%			(379,081	)			(60.78	)%			(921,205	)			243.01	%
Gross profit			83,655				6.04	%			244,628				39.22	%			(160,973	)			(65.80	)%
Selling expenses			(14	)			(0.001	)%			(25,722	)			(4.12	)%			25,708				(99.95	)%
General and administrative expenses			(635,248	)			(45.90	)%			(134,823	)			(21.62	)%			(500,425	)			371.17	%
Total operating expenses			(635,262	)			(45.90	)%			(160,545	)			(25.74	)%			(474,717	)			295.69	%
Income (loss) from operations			(551,607	)			(39.86	)%			84,083				13.48	%			(635,690	)			(756.03	)%
Total other income(expense),net			15,489				1.12	%			(2,283	)			(0.37	)%			17,772				(778.45	)%
Income (loss) before income tax provision			(536,118	)			(38.74	)%			81,800				13.12	%			(617,918	)			(755.40	)%
Income tax provision			(12,218	)			(0.88	)%			(1,574	)			(0.25	)%			(10,644	)			676.24	%
Net income (loss) to the Company from continuing operations			(548,336	)			(39.62	)%			80,226				12.86	%			(628,562	)			(783.49	)%
Net income (loss) to the Company from discontinued operations, net of tax			-				-	%			(56,808	)			(9.11	)%			56,808				(100.00	)%
Net income (loss)		$	(548,336	)			(39.62	)%		$	23,418				3.75	%		$	(571,754	)			(2,441.52	)%

Revenues from continuing operations

Revenues for the three months ended January 31, 2026 and 2025 were $1,383,941 and $623,709, respectively, an increase of $760,232 or 121.89%. The increase of revenue was primarily attributed to increased sale of recyclable e-waste materials by $1,000,000, partially offset by decreased sale of food imports and distribution by $239,768.

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 three months ended January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	270,666				20.81	%		$	328,181				86.57	%		$	(57,515	)			(17.53	)%
Consulting Services			58,746				4.52	%			50,900				13.43	%			7,846				15.41	%
Sale of recyclable e-waste materials			970,874				74.67	%								%			970,874				100.00	%
Total Cost of Revenues		$	1,300,286				100.00	%		$	379,081				100.00	%		$	921,205				243.01	%

Cost of revenues for the three months ended January 31, 2026, and 2025 was $1,300,286 and $379,081, respectively. The increase in cost of revenues was primarily attributable to higher costs associated with the Company's new operating segment of recyclable e-waste materials, which commenced operations in January 2026.

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 January 31,
		2026								2025
		Gross profit				Profit Margin to Total Revenues				Gross profit				Profit Margin to Total Revenues
Sale of Food and Beverage		$	69,526				5.02	%		$	251,779				40.37	%
Consulting Services			(14,997	)			(1.08	)%			(7,151	)			(1.15	)%
Sale of recyclable e-waste materials			29,126				2.10	%			-				-	%
Gross Profit and Gross Margin		$	83,655				6.04	%		$	244,628				39.22	%

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

		For the three months ended January 31,
		2026				2025
Sale of food and beverage			20.44	%			43.41	%
Consulting services			(34.28	)%			(16.34	)%
Sale of recyclable e-waste materials			2.91	%			-	%

The gross profit for the three months ended January 31, 2026 and 2025 was $83,655 and $244,628, respectively, a decrease of $160,973 or 65.80%. The blended gross profit margin was 6.04% for the three months ended January 31, 2026 compared with 39.22% for the same period in 2025. Gross profit for sale of food and beverage decreased by 72.39% for the three months ended January 31, 2026 due to no sales to Costco. Gross profit for consulting services decreased by 109.74% for the three months ended January 31, 2026. Gross profit from the sale of recyclable e-waste materials increased by 100.0% for the three months ended January 31, 2026, primarily driven by new business that commenced in January 2026.

Selling expenses associated with continuing operations

Our selling expenses were $14 for the three months ended January 31, 2026, as compared to $25,722 for the three months ended January 31, 2025, representing an decrease of $25,708, or 99.95%. The decrease in the selling expenses was mainly due to (1) decreased payroll expenses of $25,000, or 100.00% due to decreased number of salespersons, and (2) slightly decreased postage and shipping expenses of $708, or 98.06% as compared to the same period in 2025 resulting from decreased shipping costs incurred for sending product samples for exploring new products for customers. Selling expenses accounted for 0.001% and 4.12% of our total revenues for the three months ended January 31, 2026 and 2025, respectively.

General and administrative expenses associated with continuing operations

Our general and administrative expenses were $635,248 for the three months ended January 31, 2026, as compared to $134,823 for the three months ended January 31, 2025, reflecting an increase of $500,425 or 371.17%. The increase in general and administrative expenses was mainly due to increased professional fee by $340,941 or 608.88% as compared to the same period of 2025, resulting from increased consulting expenses for business development and financial advisory services, increased bad debt expense by $43,749 or 100.00% as compare to the same period of 2025, increased rent expense by $24,186, or 169.95% as compare to the same period of 2025, resulting from new office lease of Marwynn, increased insurance expenses by $24,643, or 100.00% as compared to the same period in 2025, which was mainly due to increased director and officer insurance expenses and increased director compensation expense for our directors and officers by $59,291 or 100% as compared to the same period in 2025.

The increased general administrative expenses were partly offset by decreased subcontract labor cost by $9,000 or 100.00% as compared to the same period in 2025, the decrease was mainly from no contract labor in 2026.

General and administrative expenses accounted for 45.90% and 21.62% of our total revenues for the three months ended January 31, 2026 and 2025, respectively.

Other income (expenses), net

Other income was $15,489 for the three months ended January 31, 2026. Other expenses were $2,283 for the three months ended January 31, 2025.The increase in other income was mainly due to the increase of interest income.

Net income (loss) from continuing operations

We had a net loss from continuing operations of $548,336 for the three months ended January 31, 2026, compared to net income from continuing operations of $80,226 for the three months ended January 31, 2025, representing an increase net loss of $628,562, or 783.49%. The increase in our net loss from continuing operations was mainly due to increased operating expenses and decreased gross profit as described above.

Net loss from discontinued operations

We had a loss from discontinued operations of nil for the period from November 1, 2025 to the period ended December 31, 2025, compared to a loss from discontinued operations of $56,808 for the three months ended January 31, 2025, representing a decrease loss of $56,808, or 100.00%.

Net income (loss)

As a result of the above, we had a net loss of $548,336 for the three months ended January 31, 2026, compared to a net income of $23,418 for the three months ended January 31, 2025, an increase of net loss of $571,754 or 2,441.52%, which was mainly resulting from increased consulting fee, insurance expense and decreased gross profit.

Nine Months Ended January 31, 2026 compared to Nine Months Ended January 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. The following table presents our revenues by product and service types and as percentage of our total revenues for the periods presented.

		For the nine months ended January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	340,192				23.16	%		$	624,846				82.15	%		$	(284,654	)			(45.56	)%
Consulting Services			128,749				8.76	%			135,737				17.85	%			(6,988	)			(5.15	)%
Sale of recyclable e-waste materials			1,000,000				68.08	%			-				-	%			1,000,000				100.00	%
Total Revenues		$	1,468,941				100.00	%		$	760,583				100.00	%		$	708,358				93.13	%

Sales of food and beverage

Sales of food and beverage accounted for 23.16% and 82.15% of total sales for the nine months ended January 31, 2026 and 2025, respectively. Sales of food and beverage decreased by $284,654 or 45.56% from $624,846 for the nine months ended January 31, 2025 to $340,192 for the nine months ended January 31,2026. 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 8.76% and 17.85% of total revenues for the nine months ended January 31, 2026 and 2025, respectively. Revenue from consulting services decreased by $6,988, or 5.15% from $135,737 for the nine months ended January 31, 2025 to $128,749 for the nine months ended January 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

Revenue from sales of recyclable materials accounted for 68.08% and nil of total revenues for the nine months ended January 31, 2026 and 2025, respectively. Revenue from sales of recyclable materials increased by $1,000,000, or 100% from nil for the nine months ended January 31, 2025 to $1,000,000 for the nine months ended January 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. The following table presents our costs of revenues as percentage of its corresponding revenue for the periods presented.

		For the nine months ended January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	270,666				79.56	%		$	351,914				56.32	%		$	(81,248	)			(23.09	)%
Consulting Services			58,798				45.67	%			76,448				56.32	%			(17,650	)			(23.09	)%
Sale of recyclable e-waste materials			970,874				97.09	%			-				-	%			970,874				100.00	%
Total Cost of Revenues		$	1,300,338				88.52	%		$	428,362				56.32	%		$	871,976				(203.56	)%

Cost of revenues from sale of food and beverage decreased by $81,248, or 23.09% from $351,914 for the nine months ended January 31, 2025, to $270,666 for the nine months ended January 31, 2026. Our cost of revenues from sale of food and beverage primarily includes inventory costs, storage and freight costs. The decrease in our cost of revenues for sale of food and beverage was mainly due to decrease sale of food and beverage for the nine months ended January 31, 2026 and 2025.

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 $970,874 and nil for the nine months ended January 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 nine months ended January 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 nine months ended January 31,
		2026				% of Revenues				2025				% of Revenues				Dollar Increase (Decrease)				Percent Increase (Decrease)
Revenues, net		$	1,468,941				100.00	%		$	760,583				100.00	%		$	708,358				93.13	%
Cost of revenues			(1,300,338	)			(88.52	)%			(428,362	)			(56.32	)%			(871,976	)			203.56	%
Gross profit			168,603				11.48	%			332,221				43.68	%			(163,618	)			(49.25	)%
Selling expenses			(1,314,182	)			(89.46	)%			(86,338	)			(11.35	)%			(1,227,844	)			1,422.14	%
General and administrative expenses			(2,388,059	)			(162.57	)%			(942,574	)			(123.93	)%			(1,445,485	)			153.36	%
Total operating expenses			(3,702,241	)			(252.03	)%			(1,028,912	)			(135.28	)%			(2,673,329	)			259.82	%
Loss from operations			(3,533,638	)			(240.56	)%			(696,691	)			(91.60	)%			(2,836,947	)			407.20	%
Total other income (expense), net			31,319				2.13	%			(2,283	)			(0.30	)%			33,602				(1,471.84	)%
Loss before income tax provision			(3,502,319	)			(238.42	)%			(698,974	)			(91.90	)%			(2,803,345	)			401.07	%
Income tax provision			(15,401	)			(1.05	)%			(4,668	)			(0.61	)%			(10,733	)			229.93	%
Net loss from continuing operations			(3,517,720	)			(239.47	)%			(703,642	)			(92.51	)%			(2,814,078	)			399.93	%
Net income (loss) from discontinued operations, net of tax			(646,656	)			(44.02	)%			284,160				37.36	%			(930,816	)			(327.57	)%
Net loss		$	(4,164,376	)			(283.50	)%		$	(419,482	)			(55.15	)%		$	(3,744,894	)			892.74	%

Revenues from continuing operations

Revenues for the nine months ended January 31, 2026 and 2025 were $1,468,941 and $760,583, respectively, an increase of $708,358 or 93.13%. The increase of revenues was primarily attributed to increased sale of recyclable e-waste materials by $1,000,000, partially offset by decreased sale of food imports and distribution by $284,654, and decreased consulting services by $6,988.

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 nine months ended January 31,
		2026								2025								Variance
		USD				Percent				USD				Percent				Amount				Percent
Sale of Food and Beverage		$	270,666				79.56	%		$	351,914				56.32	%		$	(81,248	)			(23.09	)%
Consulting Services			58,798				45.67	%			76,448				56.32	%			(17,650	)			(23.09	)%
Sale of recyclable e-waste materials			970,874				97.09	%			-				-	%			970,874				100.00	%
Total Cost of Revenues		$	1,300,338				88.52	%		$	428,362				56.32	%		$	871,976				203.56	%

Cost of revenues for the nine months ended January 31, 2026, and 2025 was $1,300,338 and $428,362, respectively, an increase of $871,976 or 203.56%. The increase in cost of revenues in the same period of 2026 was primarily attributed to increased cost form sale of recyclable e-waste materials by $970,874, or 100.00%, partially offset by decreased cost from sale of food and beverage by $81,248, or 23.09% and decreased cost from consulting service by $17,650, or 23.09%. Cost of revenues for sale of food and beverage as a percentage of total revenues was 79.56% and 56.32%, respectively, for the nine months ended January 31, 2026 and 2025. Cost of revenues for consulting services as a percentage of total revenues was 45.67% and 56.32%, respectively, for the nine months ended January 31, 2026 and 2025. Cost of revenues for sale of recyclable e-waste materials as a percentage of total revenues was 97.09% and nil, respectively, for the nine months ended January 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 nine months ended January 31,
		2026								2025
		Gross profit				Profit Margin to Total Revenues				Gross profit				Profit Margin to Total Revenues
Sale of food and beverage		$	69,526				4.73	%		$	272,932				35.88	%
Consulting services			69,951				4.76				59,289				7.80
Sale of recyclable e-waste materials			29,126				1.98	%			-				-	%
Gross profit and gross margin		$	168,603				11.48	%		$	332,221				43.68	%

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

		For the nine months ended January 31,
		2026				2025
Sale of food and beverage			20.44	%			43.68	%
Consulting services			54.33				43.68
Sale of recyclable e-waste materials			2.91	%			-	%

The gross profit for the nine months ended January 31, 2026 and 2025 was $168,603 and $332,221, respectively, a decrease of $163,618 or 49.25%. The blended gross profit margin was 11.48% for the nine months ended January 31, 2026 compared with 43.68% for the same period in 2025. Gross profit for sale of food and beverage decreased by 74.53% for the nine months ended January 31, 2026 due to no sales to Costco. Gross profit for consulting services increased by 17.98% for the nine months ended January 31, 2026. Gross profit from the sale of recyclable materials increased by 100.0% for the nine months ended January 31, 2026, primarily driven by new business that commenced in January 2026.

Selling expenses associated with continuing operations

Our selling expenses were $1,314,182 for the nine months ended January 31, 2026, compared to $86,338 for the nine months ended January 31, 2025, representing an increase of $1,227,844, or 1,422.14%. The increase in the selling expenses was mainly due to (1) increased advertising and marketing expenses of $1,239,500, or 11,804.76%. To attract new customers, increase our market share and improve operation efficiency, we entered into several consulting agreements for business development, market expansion, supply chain management, and strategic financial plan and support advisory services, (2) slightly increased shipping expenses of $844, or 100.72% as compared to the same period in 2025 resulting from shipping costs incurred for sending product samples for exploring new products for customers, which was partly offset by decreased payroll expenses of $12,500, or 16.67%. Selling expenses accounted for 89.46% and 11.35% of our total revenues for the nine months ended January 31, 2026 and 2025, respectively.

General and administrative expenses associated with continuing operations

Our general and administrative expenses were $2,388,059 for the nine months ended January 31, 2026, compared to $942,574 for the nine months ended January 31, 2025, reflecting an increase of $1,445,485 or 153.36%. The increase in general and administrative expenses was mainly due to increased professional fee by $1,269,719 or 220.44% as compared to the same period of 2025, resulting from increased consulting expenses for financial advisory services and increased legal expense related to disposal of subsidiary, increased rent expense by $70,926 or 100.00% as compared to the same period in 2025, resulting from new office lease of Marwynn, increased director compensation expense by $117,875 or 100.00% as compared to the same period in 2025, and increased insurance expenses by $97,112, or 100.00% as compared to the same period in 2025, which was mainly due to increased directors and officers insurance expenses. The increased general administrative expenses were partly offset by decreased payroll expenses by $50,380 or 36.07% as compared to the same period in 2025, the decrease was mainly from decreased gross pay of one of employees of FuAn, decreased subcontract labor cost by $27,000 or 100.00% as compared to the same period of 2025, and decreased meal and entertainment expenses by $34,874 or 99.95% as compared to the same period of 2025 for the purpose of saving the Company's operating costs.

General and administrative expenses accounted for 162.57% and 123.93% of our total revenues for the nine months ended January 31, 2026 and 2025, respectively.

Other income (expenses), net

Other income were $31,319 for the nine months ended January 31, 2026, compared to other expenses of $2,283 for the nine months ended January 31, 2025. For the nine months ended January 31, 2026, other income mainly consisted of other income of $2,803, and interest income of $36,347 which was partly offset with other expenses of $6,874, and interest expense of $957. For the nine months ended January 31, 2025, other expenses mainly consisted of other expenses of $2,168 and interest expense of $115.

Net loss from continuing operations

We had a net loss from continuing operations of $3,517,720 for the nine months ended January 31, 2026, compared to $703,642 for the nine months ended January 31, 2025, representing an increase of $2,814,078, or 399.93%. The increase in our net loss from continuing operations was mainly due to increased operating expenses and decreased gross profit as described above.

Income (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 income from discontinued operations of $284,160 for the nine months ended January 31, 2025, representing a decrease net income from discontinued operations of $930,816, or 327.57%.

Net loss

As a result of the above, we had a net loss of $4,164,376 for the nine months ended January 31, 2026, compared to a net loss of $419,482 for the nine months ended January 31, 2025, representing an increase of net loss of $3,744,894 or 892.74%. The increase was mainly resulting from increased legal and consulting fee, and insurance expense and decreased 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 approximately $0.30 million as of January 31, 2026. We also had accounts receivable, net balance of approximately $0.22 million as of January 31, 2026, among which approximately none has been collected as of the date of this report.

Our working capital amounted to approximately $2.15 million as of January 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 $3.52 million for the nine months ended January 31, 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 $1.30 million for the nine months ended January 31, 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 unaudited condensed consolidated financial statements.

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

		Nine Months Ended January 31
		2026				2025
Net cash used in operating activities for continuing operations		$	(1,302,397	)		$	(1,048,122	)
Net cash provided by operating activities for discontinued operations			198,788				767,410
Net cash used in operating activities			(1,103,609	)			(280,712	)
Net cash used in investing activities for continuing operations			(880,000	)			-
Net cash used in investing activities for discontinued operations			(11,900	)			(56,722	)
Net cash used in investing activities			(891,900	)			(56,722	)
Net cash provided by (used in) financing activities for continuing operations			1,607,213				(14,289	)
Net cash used in financing activities for discontinued operations			(382,428	)			(756,961	)
Net cash provided by (used in) financing activities			1,224,785				(771,250	)
Decrease in cash			(770,724	)			(1,108,734	)
Cash, beginning of the period			1,261,874				1,364,780
Cash, end of the period		$	491,150			$	256,046

Net cash used in operating activities

Net cash outflow from operating activities from continuing operations increased by $254,275 for the nine months ended January 31, 2026 comparing with the nine months ended January 31, 2025, mainly resulting from (a) increased net loss from continued operations of $2,814,78 with adding back of non-cash adjustments to net loss by 150,630, (b) increased cash outflow on advance to vendors by $501,382, (c) increased outstanding accounts receivable by $862,885, and (d) decreased cash inflow on accounts payable by $71,550, which was partly offset by (a) decreased cash outflow on prepaid expenses and other current assets by $2,739,771, (b) decreased payment on deferred IPO costs by $697,750, (c) decreased cash outflow on accrued expense and other current liabilities by $246,561, (d) decreased cash outflow on income tax payable by $111,900, and (e) decreased cash outflow on deferred revenue by $50,385.

Net cash provided by operating activities from discontinued operations was $198,788 and $767,410 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.

Net cash used in investing activities

Net cash used in investing activities from continuing operations was $880,000 for the nine months ended January 31, 2026, compared to nil for the same period in 2025. The net cash used in investing activities 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 $250,000.

Net cash used in investing activities from discontinued operations was $11,900 and $56,772 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.

Net cash used in financing activities

Net cash provided by financing activities from continuing operations was $1,607,213 for the nine months ended January 31, 2025, compared to net cash used in financing activities of $14,289 for the nine months ended January 31, 2025. The net cash provided by financing activities 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 used in financing activities in 2025 mainly consisted of loan to shareholder of $38,501 but offset with changes in bank overdraft of $24,212.

Net cash used in financing activities from discontinued operations was $382,428 and $756,961 for the period ended December 22, 2025 and nine months ended January 31, 2025, respectively.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of January 31, 2026 and April 30, 2025.

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. 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 January 31, 2026 and April 30, 2025, the allowance for credit losses related to continuing operations were $43,749 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.

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 January 31, 2026 and April 30, 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.

On November 4, 2024, the FASB issued an ASU No. 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03") to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions (such as cost of sales; selling, general, and administrative expenses; and research and development). The amendments in the ASU require disclosure in the notes to financial statements of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)-(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same tabular disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4) Disclose the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.

In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB's intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the adoption of this standard to determine its impact on its disclosures.

In March 2025, the FASB issued ASU 2025-02-Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adoption of this standard to its unaudited condensed consolidated financial statements and 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 unaudited condensed financial statement presentation or disclosures.