| DISCONTINUED OPERATIONS |
NOTE 3 — DISCONTINUED OPERATIONS
On October 27, 2025, Marwynn entered into a Securities Purchase Agreement
with Reli Home Décor Inc., solely for the purposes of selling all of the shares it owns in its wholly owned subsidiary Grand Forest.
Pursuant to the Purchase Agreement, the Company has agreed to sell all 70,000 shares of common stock of Grand Forest that it
owns to the Buyer for an aggregate cash purchase price of $550,000. The transaction was closed on December 22, 2025. The Company
recorded $226,381 gain on disposal of the subsidiary, which was different between the selling price of $550,000 and the carrying value
of the net assets of $323,619 of the disposal entity. As of January 31, 2026, the Company received total payment of $250,000 and had a
receivable of $300,000 was recorded as other receivable at the unaudited condensed consolidated balance sheets.
The Condensed Unaudited Consolidated Balance Sheet and Condensed Unaudited
Consolidated Statements of Operations, and the notes to the Condensed Unaudited Consolidated Financial Statements, were retroactively
reclassified for all periods presented to reflect the discontinuation of Grand Forest in accordance with FASB ASC 205.
The following table summarizes the carrying value of the assets and
liabilities of the disposed group as of December 22, 2025 and April 30, 2025.
| | |
As of
December 22,
2025
(unaudited) | | |
As of
April 30,
2025
(unaudited) | |
| ASSETS | |
| | |
| |
| Cash and Cash Equivalents | |
$ | 195,324 | | |
$ | 390,865 | |
| Account receivables, net | |
| 858,242 | | |
| 873,431 | |
| Inventories, net | |
| 5,332,898 | | |
| 4,784,269 | |
| Prepaid expenses and other current assets | |
| 295,338 | | |
| 263,887 | |
| Total current assets | |
| 6,681,802 | | |
| 6,312,452 | |
| | |
| | | |
| | |
| Deferred tax assets, net | |
| 249,769 | | |
| 249,769 | |
| Property and equipment, net | |
| 187,222 | | |
| 252,809 | |
| Less: impairment allowance | |
| (22,843 | ) | |
| - | |
| Operating lease right-of-use assets, net | |
| 3,226,475 | | |
| 3,753,656 | |
| Less: impairment allowance | |
| (385,033 | ) | |
| - | |
| Finance lease right-of-use assets, net | |
| 47,404 | | |
| 54,253 | |
| Less: impairment allowance | |
| (5,636 | ) | |
| - | |
| | |
| | | |
| | |
| Total non-current assets | |
| 3,297,358 | | |
| 4,310,487 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 9,979,160 | | |
$ | 10,622,939 | |
| | |
| | | |
| | |
| LIABILITIES | |
| | | |
| | |
| Short-term loan payable | |
$ | 100,000 | | |
$ | 100,000 | |
| Account Payable | |
| 5,213,167 | | |
| 3,875,088 | |
| Accrued expenses and other current liabilities | |
| 679,840 | | |
| 883,369 | |
| Operating lease liabilities – current | |
| 997,311 | | |
| 922,247 | |
| Financing lease liability – current | |
| 10,465 | | |
| 12,249 | |
| Income tax payable | |
| 74,751 | | |
| 50,019 | |
| Auto loan payable - current | |
| 9,581 | | |
| 12,547 | |
| Due to related parties | |
| 4,698 | | |
| 683,662 | |
| Total current liabilities | |
| 7,089,813 | | |
| 6,539,181 | |
| | |
| | | |
| | |
| Operating lease liabilities – non-current | |
| 2,500,340 | | |
| 3,107,642 | |
| Finance lease liabilities – non-current | |
| 32,368 | | |
| 45,940 | |
| Auto loan payable - non-current | |
| 33,020 | | |
| 33,518 | |
| Total non-current liabilities | |
| 2,565,728 | | |
| 3,187,100 | |
| | |
| | | |
| | |
| TOTAL LIABILITIES | |
$ | 9,655,541 | | |
$ | 9,726,281 | |
The following table presents the components of discontinued operations
reported in the unaudited condensed consolidated statements of operations for the periods ended December 22, 2025 and the three months
and nine months ended January 31, 2025 (unaudited):
| | |
For the
period from
November 1,
2025
to
December 22,
2025 | | |
For the
three months
ended
January 31,
2025 | | |
For period
from
May 1,
2025
to
December 22,
2025 | | |
For the
nine months
ended
January 31,
2025 | |
| Revenue, net | |
$ | 1,449,720 | | |
$ | 2,081,051 | | |
$ | 6,702,808 | | |
$ | 7,437,980 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenue | |
| (1,161,296 | ) | |
| (1,207,904 | ) | |
| (4,437,066 | ) | |
| (3,995,249 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 288,424 | | |
| 873,147 | | |
| 2,265,742 | | |
| 3,442,731 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Selling expenses | |
| (28,168 | ) | |
| (139,157 | ) | |
| (544,246 | ) | |
| (396,200 | ) |
| General & administrative expenses | |
| (464,872 | ) | |
| (816,024 | ) | |
| (2,156,748 | ) | |
| (2,613,035 | ) |
| Total operating expenses | |
| (493,040 | ) | |
| (955,181 | ) | |
| (2,700,994 | ) | |
| (3,009,235 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| (Loss) income from operations | |
| (204,616 | ) | |
| (82,034 | ) | |
| (435,252 | ) | |
| 433,496 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other income (expenses): | |
| | | |
| | | |
| | | |
| | |
| Other income (expenses) | |
| (2,590 | ) | |
| 4,395 | | |
| (1,770 | ) | |
| 4,135 | |
| Impairment loss | |
| - | | |
| - | | |
| (413,512 | ) | |
| - | |
| Gain on disposal | |
| 226,381 | | |
| - | | |
| 226,381 | | |
| - | |
| Interest expense | |
| (812 | ) | |
| (1,640 | ) | |
| (4,140 | ) | |
| (32,104 | ) |
| Total other income (expenses), net | |
| 222,979 | | |
| 2,755 | | |
| (193,040 | ) | |
| (27,969 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| (Loss) income before income tax expense | |
| 18,363 | | |
| (79,279 | ) | |
| (628,293 | ) | |
| 405,527 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income tax provision | |
| (18,363 | ) | |
| 22,471 | | |
| (18,363 | ) | |
| (121,367 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net (loss) income from
discontinued operations, net of tax | |
$ | - | | |
$ | (56,808 | ) | |
$ | (646,656 | ) | |
$ | 284,160 | |
|