Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] (2024)

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORM10-K

(MarkOne)

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Forthe fiscal year ended April 30, 2024

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Fortransition period from ______ to ______

Commission File Number: 001-41720

MaisonSolutions Inc.

(Exactname of registrant as specified in its charter)

Registrant’stelephone number, including area code: (626) 737-5888

Securitiesregistered pursuant to Section 12(b) of the Act:

Securitiesregistered pursuant to Section 12(g) of the Act: None.

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicateby check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files). Yes ☒ No ☐

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. ☐

Indicateby check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of itsinternal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered publicaccounting firm that prepared or issued its audit report. ☐

Ifsecurities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrantincluded in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicateby check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensationreceived by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒

As of October 31, 2023, the last business day of the registrant’smost recently completed second fiscal quarter, the aggregate market value of the common stock of the registrant heldby non-affiliates was approximately $14,896,000 based on the closing price of the registrant’s Class A common stock on that date.

As of August 6, 2024, the number of shares of the registrant’sClass A common stock, $0.0001 par value, outstanding was 17,450,476 shares.

Tableof Contents

i

PARTI

SPECIALNOTE REGARDING FORWARD-LOOKING STATEMENTS

ThisAnnual Report on Form 10-K contains “forward-looking statements” that involve substantial risks and uncertainties. All statementsother than statements of historical or current fact included in this Annual Report on Form 10-K are forward looking statements. Forward-lookingstatements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives,strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictlyto historical or current facts. These statements may include words such as “anticipate,” “assume,” “believe,”“can have,” “contemplate,” “continue,” “could,” “design,” “due,”“estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,”“may,” “might,” “objective,” “plan,” “predict,” “project,” “potential,”“seek,” “should,” “target,” “will,” “would” and other words and terms ofsimilar meaning in connection with any discussion of the timing or nature of future operational performance or other events. For example,all statements we make relating to our estimated and projected costs, expenditures, and growth rates, our plans and objectivesforfuture operations, growth, or initiatives, or strategies are forward-looking statements. All forward-looking statements are subject torisks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not undulyrely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressedor implied by these forward-looking statements include but are not limited to:

Wemake many of our forward-looking statements based on our operating budgets and forecasts, which are based upon detailed assumptions.While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, andit is impossible for us to anticipate all factors that could affect our actual results.

1

Seethe “Risk Factors” section and elsewhere in this Annual Report on Form 10-K for a more complete discussion of the risks anduncertainties mentioned above and for a discussion of other risks and uncertainties we face that could cause actual results to differmaterially from those expressed or implied by these forward-looking statements. All forward-looking statements attributable to us areexpressly qualified in their entirety by these cautionary statements as well as others made in this Annual Report on Form 10-K.

Wecaution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, theforward-looking statements included in this Annual Report on Form 10-K are made only as of the date hereof. We undertake no obligationto publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as requiredby law. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

RiskFactor Summary

Ourbusiness is subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors”in this Annual Report on Form10-K. Some of these principal risks include the following:

RisksRelated to Our Business

RisksRelated to Our Industry

2

RisksRelated to Regulatory Compliance and Legal Matters

RisksRelated to Ownership of Our Class A Common Stock

3

ITEM1. BUSINESS

As used in this Annual Report on Form 10-K, “we,”“us,” “our,” “Maison,” “the Company” or “our Company” refer to Maison SolutionsInc., a Delaware corporation, except where the context requires otherwise. Because our acquisition of Lee Lee (as defined below) was completedon April 8, 2024, shortly before our fiscal year-end, the description of our business throughout this Item 1 does not include a descriptionof Lee Lee unless specifically referenced herein.

OurCompany

Weare a fast-growing, specialty grocery retailer offering traditional Asian food and merchandise to modern U.S.consumers, in particularto the members of Asian-Americancommunities. We are committed to providing Asian fresh produce, meat, seafood, and other dailynecessities in a manner that caters to traditional Asian-Americanfamily values and cultural norms, while also accounting for thenew and faster-pacedlifestyle of younger generations and the diverse communities in which we operate. To achieve this, we are developinga center-satellitestores network. Since our formation in July2019, we have acquired equity interests in four traditionalAsian supermarkets in Los Angeles, California and three traditional Asian supermarkets in the greater Phoenix and Tucson, Arizona metroareas. We have been operating these seven supermarkets as center stores, which we define as a full service store, similar to a traditionalsupermarket or grocery store covering a metro area, but with its own storage space to be used as a warehouse to distribute products tothe satellite stores. The center stores target traditional Asian-Americanfamily-orientedcustomers with a variety of meat,fresh produce and other merchandise, while additionally stocking items which appeal to the broader community. Our management’sdeep cultural understanding of our consumers’ unique consumption habits drives the operation of these traditional supermarkets.

In addition to our traditional supermarkets, inDecember 2021, we acquired a 10% equity interest in a new grocery store in a young and active community in Alhambra, California (the “AlhambraStore”). We acquired our interest in the Alhambra Store from Grace Xu, the spouse of John Xu, our chief executive officer. We intendto acquire the remaining 90% equity interest in the Alhambra Store. Our intention is that the Alhambra Store will serve as our first satellitestore. The satellite stores in our network will be designed to penetrate local communities and neighborhoods with larger and growing concentrationsof younger customers.

Ourmerchandise includes fresh and unique produce, meats, seafood and other groceries that are not found in mainstream supermarkets, includinga variety of Asian vegetables and fruits such as Chinese broccoli, bitter melon, winter gourd, Shanghai baby bok choy, longan and lychee;a variety of live seafood such as shrimp, clams, lobster, geoduck, and Alaska king crab; and Chinese specialty groceries like soy sauce,sesame oil, oyster sauce, bean sprouts, Sriracha, tofu, noodles and dried fish. With an in-houselogistics team and strong relationshipswith local and regional farms, we are capable of offering high-qualityspecialty perishables at competitive prices.

Ourcustomers have diverse shopping habits based on, among other factors, their age and lifestyle. Along with creating an exciting and attractivein-storeshopping experience, customers can choose to place orders on a third-partymobile app “Freshdeals24”,and an applet integrated into WeChat for either home delivery or in-storepickups offering our customers the option of a 100% cashier-lessshoppingexperience. Our flexible shopping options are designed to provide customers with convenience and flexibility that best match their lifestylesand personal preferences. We are working closely with JD.com to improve and update our online apps to continue to specifically targetand attract a wider variety of our customer base.

Whileour main focus is on targeting Asian-Americancommunities and catering to both established Asian-Americanfamily values andthe shifting needs of the younger generations, we also plan to opportunistically address other demographics and populations.

Thesuccess of our business is supported by a strong core team that brings deep knowledge and experience in supermarket operations, supplychain, warehouse management and logistics as well as e-commerce. The core team members all come from leading market players such as Freshippo(known as “Hema Shengxian” in China), Yonghui Superstores, H-Martand other similar industry leading supermarket retailers.

Weare exploring multi-channelsolutions to customers by leveraging our strategic partnership with JD.com, a leading online retailbusiness in China. See “Multi-channelInitiatives” and “Partnership with JD.com” in this section.

4

MarketOpportunities

EmergingTrends in theAsian-AmericanGrocery Market

Whetherby using technology to streamline supply chains, unlocking the power of social media to influence shoppers, or adapting store designsto meet changing consumer behavior, the Asian-American grocery market is finding new ways to boost sales.

As grocers continue to battle for supremacy, cateringto a wide variety of customers and consumer demands will be a key area of focus. According to NewYork Times, from 1990 to 2020,the U.S.Asian population increased from 6.6million to 20million people, representing a 203% increase. Asians are nowthe fastest growingof the nation’s four largest racial and ethnic groups based on the U.S. Census Bureau, 2022 American CommunitySurvey (the “2022 Census”). In addition to the population increase, the median household income of people of Asian descentalso exceeds the overall U.S.population’s median household income according to the 2022 Census.

Accordingto Mordor Intelligence’s “ETHNIC FOODS MARKET—GROWTH, TRENDS, AND FORECASTS (2022 —2027)”,the presence of Asian Cuisine in the US Ethnic Food Marketspace is one of the key market trends. The forecast indicated that consumers’interest in Asian cuisines is increasing globally, and they seek bold flavors. This trend is driven by the increasing immigrant population,as well as robust demand from native populations.

Inthe past fewyears, many Asian-Americangrocery store chains have risen in popularity in the UnitedStates; for example,Korean chain H Mart has expanded to 66 locations across 12 states. Each store offers imported packaged goods as well as prepared foodsand general merchandise. According toastudy by LoyaltyOne,Asian-Americansand other consumers looking to cookAsian cuisineare not finding what they needat their local stores and are often turning to independent grocers for their shoppingtrips. Our principal competitors include 99 Ranch Market and HMart for traditional supermarkets and Weee! for online groceries.

Spiceof Life: As theAsian-AmericanPopulation Continues to Grow, Demand for Cultural Foods will Likely Increase

Theethnic supermarkets industry is composed of companies that sell foods geared toward ethnically diverse populations. Industry growth isstrongly supported by the quickly expanding population of Asian Americans, one of the largest market segments in the UnitedStates.As the population of Asian Americans continues to expand, we believe that the demand for stores like ours, which provide specialty productsthat cater to the Asian-Americancommunities, will be expanded as well.

PuttingHealth& Fresh Produce First

Asmodern Asian-Americanconsumers become more affluent, educated, and influenced by government campaigns, they are increasingly awareof the health benefits of food. Whether buying fresh produce or choosing packaged products with clear health labelling, we believe Asian-Americanconsumerswill pay a premium for healthy food.

ManyAsian-Americanretailers are offering a range of health-focusedproducts and adapting their marketing strategies to cater tohealth-consciousconsumers. According to freshfruitportal.com,fresh food and health& wellness products will featuremore prominently in-storein the future as retailers respond to changing shopping habits.

MakeFood Safer with Blockchain

ManyAsian retailers are leading the way to enhanced food safety with exciting developments in blockchain technologies, a trend which we believewill similarly be employed by U.S.retailers.

WalmartChina’straceability system uses state of the artblockchainand AI to track the movement of over 50% of all packagedfresh meat, 40% of packaged vegetables, and 12.5% of seafood at each stage of the supply chain.

Ascustomers are increasingly conscious of the sourcing of their food, investing in technologies which promote health and safety is a sure-firewayto build trust with customers and boost brand loyalty. In collaboration with our current partners, including JD.com, we plan to capitalizeon developments in blockchain technologies to meet the evolving needs of our customers.

5

Partnerwith Overseas Providers

Asian-Americanconsumersare prepared to look far and wide to obtain the products they want. Retailers are partnering with overseas suppliers, fellow retailers,and even technology companies to pull together resources and accelerate growth.

Partnershipsare helping brick and mortar retailers to “blur the line” between online and offline retail channels. We believe that ourexisting partnerships, including with JD.com, will help us to expand and strengthen both our online and offline presence.

Leadthe Charge with Online Sales

While e-commerceonly accounted for7.4%ofall U.S.grocery sales in 2020 according to the U.S. Food and Drug Administration, the Asian grocery market has been quick to makethe most of online retail channels.

According to a December15, 2021 report byNBC News, online grocery sales grew 54% in 2020, to $95.82billion. By 2026, online sales share is projected to account for 20% ofthe market. While Asian-Americanshoppers may prefer to handpick their favorite melon or cut of meat in-person, millions of customerssimply don’t have access to Asian supermarkets or neighborhood stores because they live in parts of the country that cannot sustainthem, making online shopping an attractive and necessary alternative.

Forinstance, Freshhippo uses an omni channel approach to offer customers a seamless transition between online shopping and in-storevisitsto promote online sales. Customers can switch between online and offline shopping and enjoy a consistent experience to put them in controlof how they want to shop.

OurHistory

Wewere founded in July2019 as Maison International, Inc., an Illinois corporation, with our principal place of business in California.Immediately upon formation, the Company acquired three retail Asian supermarkets in Los Angeles, California and subsequently rebrandedthem as “HK Good Fortune Supermarkets” or “HongKong Supermarkets.” In September2021, the Companywas reincorporated in the State of Delaware as a corporation registered under the laws of the State of Delaware and renamed “MaisonSolutions Inc.”

6

Maisonwas initially authorized to issue 500,000shares of common stock with a par value of $0.0001 per share. On September8, 2021,the total number of authorized shares of common stock was increased to 100,000,000 by way of a 200-for-1stock split, among which,the authorized shares were divided in to 92,000,000shares of ClassA common stock entitled to one (1)vote per shareand 3,000,000shares of ClassB common stock entitled to ten (10)votes per share and 5,000,000shares of preferredstock. All shares and per share amounts used herein and in the accompanying consolidated financial statements have been retroactivelyadjusted to reflect (i) the increase of share capital as if the change of share numbers became effective as of the beginning of the firstperiod presented for Maison Group and (ii)the reclassification of all outstanding shares of our common stock beneficially ownedby Golden Tree USA Inc. into ClassB common stock, which are collectively referred to as the “Reclassification”.

OurCenter-SatelliteStoresModel

Our seven traditional retail supermarkets are setup and operated as center stores. We intend to acquire the remaining 90% equity interest in the Alhambra Store, which we intend to haveserve as our first satellite store. The center stores mainly serve traditional family-orientedcustomers with a variety of freshproduce and daily necessities at competitive prices. The satellite stores in our Center-Satellitestore network will be designedto penetrate local communities and neighborhoods with larger populations of younger customers, such as “Millennials” and “GenerationZ.”

Whatis theCenter-SatelliteStore Model?

TheCenter-Satellitestore model utilizes a center store, which is a typical supermarket or grocery store in a metro area, as a centralhub to not only act as a regular supermarket but also provide logistics support to satellite/community stores in the surrounding area.This Center-Satellitestore network allows us to more easily and inexpensively expand the coverage as compared to traditional supermarketexpansion. The structure increases logistical efficiency and provides significant flexibility to serve all types of customer bases.

Acenter store will serve as the main warehouse to the surrounding community stores for grocery shopping. Groceries can usually be deliveredfrom the suppliers to the center store first, before needing to use outside suppliers allowing the center store to distribute to allthe community stores it covers, with allocations based on historical sales data provided by the community stores.

Thesatellite stores are typically smaller than the traditional supermarkets. The stores often are established in residential areas withlarge populations. The satellite stores offer a smaller, particularly selected selection of products designed to meet the needs and desiresof the community. For example, a satellite store in a neighborhood with a higher concentration of younger consumers may offer more convenientfood or social media trending products. A satellite store established in a neighborhood filled with young professionals may feature asa Meal Solution Supermarket (“MSSM”), where the consumers get their dinner almost instantly at a price point comparable tothe cost of preparing a meal at home and lower than dining out. We believe our satellite stores will significantly reduce the time spenton grocery shopping for customers because they will be conveniently located and offer a carefully cultivated selection of products atan attractive price point. We expect that such time efficiencies and price competitiveness will attract additional customers.

Expected advantages of the Center-Satellitestorenetwork:

7

Illustrationof Center-Satellite Store Layout

8

ShoppingPreference by Importance and Urgency

9

OurProducts

TraditionalSupermarkets/Center Stores

Allof our traditional supermarkets offer perishable and non-perishableitems. We put a significant focus on perishable product categorieswhich include vegetables, seafood, fruit and meat. In fiscal years 2024 and 2023, our perishable product categories contributed approximately54.0% and 56.5%, respectively, to our total net revenue in alignment with the space occupancy of perishables.

With respect to non-perishables, we have over 13,000grocery products on our shelves ranging from cooking utensils, canned foods, Chinese and Asian seasonings and spices, to domestic andimported snacks. Many of our imported groceries are sourced from China, Thailand and Taiwan to meet the diverse demand of not only ChineseAmericans but targeted customers originating from east and south-eastAsia. In the fiscal years ended on April30, 2024 and2023, the non-perishablegrocery category contributed approximately 45.97% and 43.52%, respectively, to our total net sales and realizeda markup of 35.13% and 35.09%, on average, respectively.

10

TheAlhambra Store

In December 2021, we acquired a 10% equity interestin a new grocery store in Alhambra, California from Grace Xu, spouse of John Xu, our chief executive officer (the “Alhambra Store”).We intend to purchase the remaining 90% equity interest in the Alhambra Store and have the Alhambra Store serve as our first satellitestore.

Webelieve, that as an MSSM, the Alhambra Store suits the lifestyle of young customers. MSSMs focus largely on ready-to-eatfood andready-to-cookgroceries. The Alhambra Store has a built-inkitchen which offers Asian hot foods under the house brand “ChiliPoint Land.” Ready-to-cookgroceries include frozen food as well as prewashed and pre-cutmeats and vegetables.

We believe that the Alhambra has the potentialto be a successful satellite store in the Alhambra neighborhood. The city of Alhambra has a population of approximately 83,000, approximately52% of which is comprised of Asian Americans, according to the 2020 U.S. Census Bureau. A large portion of the consumer base within athree-mile radius of the store is comprised of young students living in apartments and young professionals between the ages of 25 and44,with annual incomes between $36,000 and $120,000.

TheAlhambra store is currently designed to target the demographic of its neighborhood. The store is located in the heart of Alhambra’sMain Street, which is where young consumers spend significant time at the many restaurants and bars within walking distance of the store.

TheAlhambra Store also carries Asian food, snacks and other merchandise that are popular on social media to attract young customers interestedin trying out new and trendy products. The store aims to lead customers from shopping for needs to shopping for experience.

LeeLee Oriental Supermart, Inc.

OnApril 8, 2024, AZLL, LLC, a wholly-owned subsidiary of the Company (“AZLL”), acquired 100% of the equity interests inLee Lee Oriental Supermart, Inc. (“Lee Lee”) for an aggregate purchase price of approximately $22.2 million, consistingof: (i) $7.0 million in cash paid immediately at the closing of the transaction, and (ii) a senior secured note agreement with anoriginal principal amount of approximately $15.2 million (the “Lee Lee Acquisition”) pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”), dated April4, 2024, by and among AZLL, Meng Truong (“Meng Truong”) and Paulina Truong (“Paulina Truong” and, together withMeng Truong, the “Sellers”). Lee Lee is a three-store supermarket chain operating under the name LeeLee International Supermarkets in the greater Phoenix and Tucson, Arizona metro areas.

Through the acquisition of Lee Lee, the Companyexpanded its operations beyond California into the growing Arizona markets. We believe this strategic acquisition promotes further growthfor our brand, our mission and our commitment to serving the diverse Asian communities. The Lee Lee International Supermarket brand hascultivated a respected reputation over its nearly three-decade presence and operations in Arizona. With a strong foothold across threecities, Lee Lee has garnered a loyal following and has solidified its position as a trusted destination for diverse communities. We haveopted to retain Lee Lee’s brand name for the three acquired stores as a strategic move to maintain the existing, loyal customerbase.

With the addition of Lee Lee’s three profitablestore locations, our store portfolio was expanded from four to now seven operating stores.We believe the Lee Lee acquisition offersevident synergies, as the three Lee Lee stores cater to the same target demographic and offer similar product lines as our four HongKong Good Fortune stores. We intend to implement certain operational improvements, including the enhancement of store operations andsupply chain centralization.

For more information on the Lee Lee Acquisition,please see Note 10 — “Note Payable” and Note 18 — “Acquisition of subsidiary” in theNotes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

11

StoreRenovation Program

Fromtime to time, we conduct maintenance and rennovations on our stores to enhance customer shopping experiences and optimize store designs.

In January 2024, we began renovating our HK Good Fortune supermarket in El Monte, California. The renovations to the El Monte store includeexterior and interior upgrades as well as product offering adjustments. Additionally, the store will use updated logos and banners, whichwill be used throughout Maison’s store network, for enhanced brand awareness and consistency. We plan to leverage and deploy ourrecently purchased software suite for the optimization of store design, layout and shelf display. The software system will also monitorshelf performance to better analyze the popularity and pricing of the store's product offerings. Once the renovations are complete, theEl Monte store also will serve as a warehouse-like store with discounts for large and bulk purchases, which we believe will further improvethe store's performance.

The El Monte store has remained open for business during these renovations, which are expected to be completed by the end of 2024. Weintend to continue to upgrade our stores to provide a more meaningful shopping experience for our customers.

OurVertical Supply and Distribution Chain

Ourbusiness model features a vertically integrated structure covering upstream supply and downstream retail supermarkets. In December2021,we acquired a 10% equity interest in Dai Cheong, a wholesale business owned by our Chairman and Chief Executive Officer, John Xu, whichmainly supplies foods and groceries imported from Asia. Dai Cheong was founded in 1979 and has been working with major suppliers in Asiafor over 20years and has extensive experience in sourcing products through a well-establishedsourcing system. To supportit* import trading business, Dai Cheong has an integrated ecosystem of import, customs clearance and wholesale services. Dai Cheong ownsthree warehouses and maintains a team of professionals selling more than 2,000 individual products. Dai Cheong primarily sells food productsfrom all over Asia, including well-knownAsian brands such as Garden (HongKong), Prima Taste (Singapore), Ng Fung (MainlandChina), Royal Family (Taiwan), Gold Kili (Singapore), and other well-knownAsian brands. Currently Dai Cheong supplies quality productsto more than 2,000 ethnically diverse supermarkets and wholesalers in all 50 states. Our initial investment in Dai Cheong, and our planto acquire the remaining equity interest, is the first step toward creating a vertically integrated supply-retailstructure. Havingan importer as a part of our portfolio allows us the opportunity to offer a wider variety of products and to reap the benefits of preferredwholesale pricing

We work with three primary suppliers. Theseprimary suppliers accounted for approximately 48.0% and 51.5% of our total purchases in fiscal years 2024 and 2023, respectively. Wealso have established, long-termrelationships with local and regional farms which grow Asian specialty vegetables and fruitand supply the most popular yet hard-to-sourcevegetables and fruits directly to our supermarkets. Working with our vendors, weare able to provide fresh seasonal vegetables and fruits. Produce, live seafood and groceries are delivered to our supermarkets on adaily basis from our farm partners and external vendors as directed by our in-houselogistics system. With four retailsupermarkets located in San Gabriel, Monrovia, El Monte and Monterey Park, in the Los Angeles, California metropolitan area, andthree retail supermarkets located in the Phoenix and Tucson, Arizona metro areas, we hadover 1.79million annual transactions in the year ended April 30, 2024. In addition, our initial investment in the Alhambra Store is a key factor in ourgoal to reach out to the younger community, and expand into a large market for young customers, including students.

Our in-houselogistics team is committed tofast and reliable delivery for customers who place online orders for delivery. Our center-satellitestore network gives us the abilityto set up in-store, mini-warehousesto achieve fast order fulfillment and speedy delivery. We are able to provide same-daydeliveryfor orders placed before noon within a five miles radius of the closest store.

IntegratedOnline and Offline Services

We started a series of online initiatives soonafter we acquired our first supermarket in 2019. Customers can choose to place orders online through a third-partymobile app, “Freshdeals24”,and an applet integrated into WeChat for the option of a 100% cashier-lessshopping experience. We undertook this initiative anddesigned these apps based on our awareness of the predominance of WeChat in both the Chinese Americanand broader Asian-Americancommunitiesand extensive research into the habits of the younger generation of customers. We are working closely with JD.com to improve and updateour online apps to continue to specifically target and attract a wider variety of our customer base.

Weintegrate our online and offline retail capabilities and use our center stores as warehouses to fulfill online orders. By managing inventoryand offline resources effectively, our stores satisfy consumers’ demands in-storeas well as online. We offer multiple shoppingchannels through integrated online and offline operations. Customers can place orders through the third-partymobile app and appletand for either home delivery or in-storepickups. Our flexible shopping options are aimed to provide customers with convenienceand flexibility that best match their lifestyles and personal preferences.

Currently JD.com is developing a new mobile appfor our future stores. For more information, please see “Partnership with JD.com” below.

12

PricingStrategy

Ingeneral, our pricing strategy is to provide premium products at reasonable prices. We believe pricing should be based on the qualityof products and the shopping experience, rather than promotional pricing, to drive sales. Our goal is to deliver a sense of value toand foster a relationship of trust with our target and loyal customers.

Weadopt different pricing strategies for different food categories. For best sellers such as seafood and core produce like swimming shrimpand live crawfish, we price competitively and aim to attract consumer traffic. For groceries department items which are usually importedand have a long shelf life, we price at a premium (with an average markup of 35%). Due to changes in market conditions and seasonal supplies,our pricing for seafood and produce are more volatile compared with the pricing of other categories.

Marketingand Advertising

Webelieve our unique offerings, competitive prices on popular produce, and word-of-mouth are major drivers of store sales. In additionto word-of-mouth, we advertise our brand using in-storetastings, in-storeweekly promotion signage, cooking demonstrationsand product sampling. We also promote our stores on our official website and an electronic newsletter, and/or inserts and sales flyersin local Chinese newspapers, magazines and local radio stations on a monthly or weekly basis. Our business is also marketed mainly onour official website, a third-partyMobile App “Freshdeals24”, and an applet integrated into WeChat. For the fiscalyearsended April30, 2024 and 2023, we recognized $208,000 and $73,678 for marketing and advertising expenses, respectively. Overall,we have utilized mixed marketing and advertising strategies to enhance our brand recognition, to regularly communicate with our targetcustomers, and to strengthen our ability to market new and differentiated products.

Aswe intend to establish more satellite stores and with our new mobile app being developed, we foresee a significant increase in advertisingin the future, with a focus on social media promotion. With the younger generation being a key focus, we plan on advertising both oursatellite stores and mobile app via TikTok, YouTube and Instagram, in addition to WeChat. We also plan to invite selected Internet influencersto cover our stores, products, and offerings.

Competition

Foodretail is a large and highly competitive industry. Although the Asian supermarket industry is a niche market, market participants stillremain highly fragmented and unsophisticated, and we face competition from smaller or dispersed competitors. However, with the rapid growthof the Chinese and other Asian populations in the UnitedStates and their consumption power, other competitors may begin operatingin this market in the future. Those competitors include: (i)national conventional supermarkets, (ii)regional supermarkets,(iii)national superstores, (iv)alternative food retailers, (v)local foods stores, (vi)small specialty stores,(vii)farmers’ markets, and (viii)e-commerce/ online-onlygrocery stores.

Thenational and regional supermarket chains have strong experiences in operating multiple store locations and expansion management and havegreater marketing or financial resources than we do. Even though they currently offer only a limited selection of Chinese and Asian specialtyfoods, they may be able to devote greater resources to sourcing, promoting and selling Chinese and other Asian products if they choose.The local food stores and markets are small in size with a deep understanding of local preferences. Their lack of scale results in highrisk and limited growth potential. In addition, there are online Asian grocery platforms, such as Weee!, which have longer operatinghistories and more established reputation for online Asian grocery shopping. However, the lack of their own offline store presence leadsto a higher cost to the customers. Online-onlygrocery stores rely on working with local supermarkets for supplies and that exposesthem to the risk of not being able to always fulfill customer demands when the supply is low. In addition, online-onlygrocery stores,by their nature, are not able to offer in-storeshopping experience, such as trying new food or cooked products in store, and in-storepickup. We believe our business model, when compared with the online-onlygrocery stores, brings a more comprehensive and holistic shoppingexperience to the customers while maintaining a competitive price point.

13

OurCompetitive Strengths

StrongManagement and Operations Team

Ourcore operations team has extensive experience in and knowledge of supermarket operations, supply chain, logistics and warehouse managementas well as e-commerce. Since the acquisition of our four original center stores in California, we have hired experienced operations andmanagement team members both locally in the UnitedStates and from China, including: Tao Han, who serves as our Chief OperatingOfficer and has more than 20years of experience in the retail industry with Yonghui Superstores, one of the largest chain supermarketsin China, and Freshippo (known as “Hema Shengxian” in China), the online and offline retail platform under the Alibaba Group;and the store manager for the Alhambra Store who has 16years of experience in retail industry including extensive familiarity withprocess management practices in convenience store chains, which transfers directly to our satellite store concept. We strategically deployour team members in positions that best match their experience and specialized skills.

Weestablished a new performance-basedbonus system. If a store meets or exceeds the pre-setKey Performance Indicator (“KPI”),the employees of that store will receive cash bonuses. Each department needs to provide weekly performance reports, which the managementteams will review. If the department meets or exceeds the pre-set KPI, the management teams will distribute monthly cash bonuses amountingto 1% of gross revenue to the department’s staff for achievement of such performance goals.

CostEfficient Supply Chain

Unlikemany of our direct competitors which are family-ownedsingle stores, we have seven retail supermarkets with an average size of 36,000square feet. We place orders mainly through two primary wholesale agents which purchase products on our behalf from various vendors.Due to their large quantity purchase position, these two wholesale agents are able to get competitive prices for a wide range of items.Similarly, due to our large purchasing power and long-term business relationships with the two wholesale agents, even with price markups,we benefit from competitive pricing. The price we pay to the wholesale agents is lower than the prices we would pay to each vendor directly.In addition, by dealing with only two wholesale agents instead of approaching various vendors individually, we are saving time and costs.

Additionally, in order to begin the process ofestablishing a vertically integrated supply and distribution change, we acquired a 10% equity interest in a wholesale company, Dai Cheong,which has been in the business of importing and exporting Chinese and Asian specialty food and groceries for over 20years. Dai Cheong,which is owned by our Chairman and Chief Executive Officer, John Xu, specializes in identifying products that are popular among Asian-Americanconsumersbut rarely found in mainstream stores. Furthermore, Dai Cheong has a well-establishedsourcing system and has formed an ecosystemthat integrates import, customs clearance and wholesale services. Without multi-layerintermediates, our retail supermarkets areable to set such products at competitive prices, not only securing the supply of popular products, but boosting our operation profitabilityas well.

SuperiorCustomer Propositions

14

TargetingPopular Product Trends

Withour relationships with reputable suppliers and distribution agents, we consistently update our product offerings to ensureour catalog stays competitive in the market and to reduce unnecessary redundancy. In collaboration with our suppliers and distributionagents we consistently monitor social media and assess store data to identify and subsequently offer products which are popular withour target consumers.

Employees

Asof April 30, 2024, we had approximately 355 employees. Our employees are not unionized nor, to our knowledge, are there any plans forthem to unionize. We have never experienced a strike or significant work stoppage. We consider our employee relations to be good. Minimumwage rates in some states have recently increased. For example, in Los Angeles, the minimum wage rose from $13 to $14 per hour from 2020to 2021 and increased to $15.50 per hour in 2023. Our payroll and payroll tax expenses were $7.4 million and $6.2 million for the yearended April 30, 2024 and 2023, respectively.

OurGrowth Strategy

ContinueBuilding Center Satellite Stores Network

Operation of Center Stores—Wehave a successful record of operating our existing retail supermarkets and have been able to quickly turn distressed stores into profitableassets. Based on our understanding of the retail grocery market and our history of successfully investing in and operating our existingretail supermarkets, we have quickly identified what we believe to be the key weaknesses of acquired stores and have taken specific actionsdesigned to achieve profitability, such as reducing redundant product offerings, managing fresh produce, meat and seafood inventory toreduce waste and tailoring inventory and product selection to more accurately match the needs of the population that shop at each of ourstores. We plan to acquire additional supermarkets to expand our footprint to both the West Coast and the East Coast.

Opening Satellite Stores—Wecurrently own a 10% equity interest in the Alhambra Store, which we purchased from Grace Xu, spouse of John Xu, our chief executive officer.We intend to acquire the remaining 90% interest in the Alhambra Store and operate the Alhambra Store as our first satellite store. Sinceits opening, our management team has been involved with the operations and management of the Alhambra Store, utilizing our experiencein supermarkets. The Alhambra store is situated in a community with a large population of younger customers and will serve as an importantstep in our targeting of this demographic as well as our plans to expand our center-satellitestore model. We plan to open our satellitestores to penetrate local communities and neighborhoods with larger populations of younger and diverse customers. When selecting locations,we will also consider college towns and university neighborhoods in which there is a large Asian-Americanstudent population. Thesatellite stores will serve as “community retail stores”, offering ready-to-eatand ready-to-cookfoods and groceries.

Multi-ChannelInitiatives

We are exploring our multi-channelinitiativesincluding improving our in-storeshopping experience, increasing and enhancing our mobile ordering with at-homedelivery andin-storepickup and broadening our social media presence. In addition, multi-channelsolutions can help realize the user’sintegration, price integration, inventory integration, price integration, marketing integration and orders integration:

15

OurMulti-Channel and Consumer Coverage

16

Partnershipwith JD.com

InApril2021, we entered into a series of agreements with JD E-commerceAmerica Limited (“JD US”), the U.S.subsidiaryof JD.com, including the Collaboration Agreement and Intellectual Property License Agreement (each as further described below).

Overall,we believe the collaboration with JD.com will help us improve our business in the following areas:

Storelayouts will also be updated based on the thorough analysis performed by JD.com throughyears of massive data collection and analysis.The purpose is to design the store in a scientific way, including section arrangement, self-checkoutPOS locations, and shelf locationdeployment to optimize the in-storetraffic route and to improve the shopping experience.

Thenew mobile app will support year-roundpromotions based on events, holidays and products. With target customers in mind, the appis designed not only to be used as a shopping app, but also a social platform for people to share their unique experience. The socialelements include top-ranked/ popular items, gourmet sharing, review and tasting, store exploration, and product unbox reviews.

17

CollaborationAgreement

OnApril19, 2021,JD E-commerceAmerica Limited (“JD US”), the U.S. subsidiary of JD.com, and Maison enteredinto a Collaboration Agreement (the “Collaboration Agreement”). Under the Collaboration Agreement, JD US has agreed to providethe following services to us for fees:

IntellectualProperty License Agreement

Simultaneously with the effectiveness of the CollaborationAgreement, JD US and Maison entered into an Intellectual Property License Agreement (the “Intellectual Property License”)outlining certain trademarks, logos and designs, and other intellectual property rights used in connection with the retail supermarketoperations outlined in the Collaboration Agreement. Under the Intellectual Property License, JD US granted us a ten-yearlimited,non-exclusive, non-transferable, non-sublicensablelicense in the State of California to:

Trademarks

“HK GOOD FORTUNE SUPERMARKET”and the stylized wording of “GOOD FORTUNE” is our self-ownedtrademark and was registered with the UnitedStatesPatent and Trademark Office on December 20, 2022. Such trademark is currently the brand of our four retail supermarkets located in Californiaand may also cover other supermarkets that we acquire in the future. We consider our trademark to be a valuable asset that diversifiescustomer’s value alternatives, a useful strategy to enhance profit margins and an important way to establish and protect our brandin a competitive environment. We are not currently in any trademark disputes with any third party.

Insurance

Weuse a combination of insurance and self-insuranceto provide coverage for potential liability for worker’s compensation, automobileand general liability, product liability, employee health care benefits and other casualty and property risks. Changes in legal trendsand interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes dueto changes in applicable laws, insolvency or insurance carriers, and changes in discount rates could all affect ultimate settlementsof claims. We evaluate our insurance requirements on an ongoing basis to ensure that our insurance programs maintain adequate levelsof coverage.

18

Regulation

Asa supermarket retailer, we are subject to numerous health and safety laws and regulations. Our suppliers are also subject to such lawsand regulations. These laws and regulations apply to many aspects of our business, including the manufacturing, packaging, labeling,distribution, advertising, sale, quality and safety of products we sell, as well as the health and safety of our team members and theprotection of the environment. We are subject to regulation by various government agencies, including the U.S. Food and Drug Administration(the “FDA”), the U.S. Department of Agriculture (the “USDA”), the Federal Trade Commission (the “FTC”),the Occupational Safety and Health Administration (“OSHA”), the Consumer Product Safety Commission (the “CPSC”),the Environmental Protection Agency (the “EPA”), as well as various state and local agencies.

Newor revised government laws and regulations, as well as increased enforcement by government agencies, could result in additional compliancecosts and civil remedies. An example is the FDA Food Safety Modernization Act (referred to as “FSMA”), passed in January2011, which grants the FDA greater authority over the safety of the national food supply. Specifically, the FSMA requires the FDA toissue regulations mandating that risk-basedpreventive controls be observed by the majority of food producers. This authority appliesto all domestic food facilities and, by way of imported food supplier verification requirements, to all foreign facilities that supplyfood products. In addition, the FSMA requires the FDA to establish science-basedminimum standards for the safe production and harvestingof produce, requires the FDA to identify “high risk” foods and “high risk” facilities, and instructs the FDAto set goals for the frequency of FDA inspections of such high risk facilities as well as non-highrisk facilities and foreign facilitiesfrom which food is imported into the United States.

Withrespect to both food and dietary supplements, the FSMA meaningfully augments the FDA’s ability to access producer’s and supplier’srecords. This increased access could permit the FDA to identify areas of concern it had not previously considered to be problematic eitherfor us, our producers or our suppliers. The FSMA is also likely to result in enhanced tracking and tracing of food requirements and,as a result, added recordkeeping burdens upon our producers and suppliers. In addition, under the FSMA, the FDA has the authority toinspect certifications and therefore evaluate whether foods and ingredients from our producers and suppliers are compliant with the FDA’sregulatory requirements. Such inspections may delay the supply of certain products or result in certain products being unavailable tous for sale in our stores.

TheFDA has broad authority to enforce the provisions of the Federal Food, Drug and Cosmetic Act applicable to the safety, labeling, manufacturingand promotion of foods, including powers to issue a public warning letter to a company, publicize information about illegal products,institute an administrative detention of food, request or order a recall of illegal products from the market, and request the Departmentof Justice to initiate a seizure action, an injunction action or a criminal prosecution in the U.S. courts. Pursuant to the FSMA, theFDA also has the power to refuse the import of any food that is not appropriately verified as in compliance with all FDA laws and regulations.Moreover, the FDA has the authority to administratively suspend the registration of any facility producing food, including supplements,deemed to present a reasonable probability of causing serious adverse health consequences.

Inconnection with the marketing and advertisem*nt of products we sell, we could be the target of claims relating to false or deceptiveadvertising, including under the auspices of the FTC and the consumer protection statutes of some states. These events could interruptthe marketing and sales of products in our stores, severely damage our brand reputation and public image, increase the cost of productsin our stores, result in product recalls or litigation, and impede our ability to deliver merchandise in sufficient quantities or qualityto our stores, which could result in a material adverse effect on our business, financial condition and results of operations.

Weare also subject to laws and regulations more generally applicable to retailers, including labor and employment, taxation, zoning andland use, environmental protection, workplace safety, public health, community right-to-knowand alcoholic beverage sales. Certainlocal regulations may limit our ability to sell alcoholic beverages at certain times. Our stores are subject to unscheduled inspectionson a regular basis, which, if violations are found, could result in the assessment of fines, suspension of one or more needed licensesand, in the case of repeated “critical” violations, closure of the store until a re-inspectiondemonstrates that wehave remediated the problem. The buildings in which some stores are located are old and therefore require greater maintenance expendituresby us in order to maintain them in compliance with applicable building codes. If we are unable to maintain these stores in compliancewith applicable building codes, we could be required by the building department to close them. Additionally, a number of federal, stateand local laws impose requirements or restrictions on business owners with respect to access by disabled persons. Our compliance withthese laws may result in modifications to our properties, or prevent us from performing certain further renovations Furthermore, ournew store openings could be delayed or prevented or our existing stores could be impacted by difficulties or failures in our abilityto obtain or maintain required approvals or licenses.

19

Inaddition, we are subject to environmental laws pursuant to which we could be held responsible for all of the costs relating to any contaminationat our or our predecessors’ past or present facilities and at third-partywaste disposal sites, regardless of our knowledgeof, or responsibility for, such contamination. We are also subject to laws governing our relationship with employees, including minimumwage requirements, overtime, working conditions, immigration, and work permit requirements.

Asis common in our industry, we rely on our suppliers and contract manufacturers to ensure that the products they manufacture and sellto us comply with all applicable regulatory and legislative requirements. In general, we seek certifications of compliance, representationsand warranties, indemnification and/or insurance from our suppliers and contract manufacturers. However, even with adequate insuranceand indemnification, any claims of non-compliancecould significantly damage our reputation and consumer confidence in our products.In order to comply with applicable statutes and regulations, our suppliers and contract manufacturers have from time to time reformulated,eliminated or relabeled certain aspects of their products and we have revised certain provisions of our sales and marketing program.

Wecannot predict the nature of future laws, regulations, interpretations or applications, or determine what effect either additional governmentregulations or administrative orders, when and if promulgated, or disparate federal, state and local regulatory schemes would have onour business in the future. They could, however, increase our costs or require the reformulation of certain products to meet new standards,recall or discontinue certain products not able to be reformulated, impose additional recordkeeping, expand documentation of the propertiesof certain products, expand or require different labeling based on scientific substantiation.

CorporateInformation

Wewere founded in July 2019 as Maison International, Inc., an Illinois corporation, with our principal place of business in California.Immediately upon formation, the Company acquired three retail Asian supermarkets in Los Angeles, California and subsequently rebrandedthem as “HK Good Fortune Supermarkets” or “Hong Kong Supermarkets.” In September 2021, the Company was reincorporatedin the State of Delaware as a corporation registered under the laws of the State of Delaware and renamed “Maison Solutions Inc.”

Ourcorporate headquarters are located in Monterey Park, California. Maison has seven retail supermarkets in San Gabriel, California, Monrovia,California, El Monte, California, Monterey Park, California, Chandler, Arizona, Peoria, Arizona and Tucson, Arizona.

Weare a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or (the “ExchangeAct”), and have elected to take advantage of certain aspects of the scaled disclosure available for smaller reporting companies.

AvailableInformation

OurInternet website is www.maisonsolutionsinc.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reportson Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available, freeof charge, under the Investor Relations tab of our website as soon as reasonably practicable after we electronically file such materialwith, or furnish it to, the SEC. Additionally, the SEC maintains a website located at www.sec.gov that contains the informationwe file or furnish electronically with the SEC.

20

ITEM 1A. RISK FACTORS

Investingin our Class A common stock involves a high degree of risk. Investors should carefully consider the risks described below and all ofthe other information set forth in this Annual Report on Form 10-K, including our financial statements and related notes and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our Class A common stock.If any of the events or developments described below occur, our business, financial condition, or results of operations could be materiallyor adversely affected. As a result, the market price of our Class A common stock could decline, and investors could lose all or partof their investment.

RisksRelated to Our Business

Thereis no guarantee that ourcenter-satellitemodel will succeed.

We currently manage and operate seven traditionalAsian supermarkets, which will be the center stores in our center-satellitebusiness model. We currently own a 10% equity interestin the Alhambra Store and intend to acquire the remaining 90% of the equity interest. We intend to operate the Alhambra Store as our firstsatellite store. Our center-satellitestore network model is new, and we cannot guarantee that our intended center-satellitemodelwill succeed.

Wemay not be able to successfully implement our growth strategy on a timely basis or at all. Additionally, new stores may place a greaterburden on our existing resources and adversely affect our existing business.

Ourcontinued growth depends, in large part, on our ability to open new stores and to operate those stores successfully. Successful implementationof this strategy depends upon, among other things:

We,or our third-party vendors, may not be able to adapt our distribution, management information and other operating systems to adequatelysupply products to new stores at competitive prices so that we can operate the stores in a successful and profitable manner. We cannotassure you that we will continue to grow through new store openings. Additionally, our proposed expansion will place increased demandson our operational, managerial and administrative resources. These increased demands could cause us to operate our existing businessless effectively, which in turn could cause deterioration in the financial performance of our existing stores. Further, new store openingsin markets where we have existing stores may result in reduced sales volumes at our existing stores in those markets. If we experiencea decline in performance, we may slow or discontinue store openings, or we may decide to close stores that we are unable to operate ina profitable manner. If we fail to successfully implement our growth strategy, including by opening new stores, our business and financialcondition and operating results may be adversely affected.

21

Theterms of our debt financing arrangements may restrict our current and future operations, which could adversely affect our ability torespond to changes in our business and to manage our operations.

Weare a borrower under certain bank loans and loans from the U.S. Small Business Administration (the “SBA”) in the aggregateamount of approximately $2.56 million as of April30, 2024. These debt financing arrangements contain, and any additionaldebt financing we may incur would likely contain, covenants that restrict our ability to, among other things: grant liens; incur additionaldebt; pay dividends on our Class A common stock; redeem our Class A common stock; make certain investments; engage in certain merger,consolidation or asset sale transactions; entering into certain type of transactions with affiliates; pay subordinated debt; purchasingor carrying margin stock; make changes in nature of business; make certain dispositions; guarantee the debts of others; and form jointventures or partnerships.

Further,failure to comply with the covenants under our debt financing arrangements may have a material adverse impact on our operations. If wefail to comply with any of the covenants under our indebtedness, and are unable to obtain a waiver or amendment, such failure may resultin an event of default under our indebtedness.

Thereis no guarantee that our partnership with JD US will be successful.

InApril2021, we entered into a series of agreements with JD US.Under these agreements, we and JD US agreed that JD US willassist us in upgrading our store management system and improving our product inventory with JD.com’s first tier product sourcingcapacity in China. We also expect to benefit from JD.com’s brand name by co-brandingour new stores. However, our partnershipwith JD US is at a very early stage and our success will depend on the long term cooperation with JD US.There is no guarantee thatJD US will not terminate its cooperation with us before our business cooperation comes to fruition and there is no guarantee that ourbusiness cooperation will come to a successful fruition. Pursuant to our Collaboration Agreement with JD US (the “CollaborationAgreement”), either party may terminate the Collaboration Agreement by giving notice in writing to the other party if the otherparty commits a material breach of agreement or the other party suffers an Insolvency Event (as defined in the Collaboration Agreement).

Ournew store base, or stores opened or acquired in the future, may negatively impact our financial results in theshort-term, and maynot achieve sales and operating levels consistent with our mature store base on a timely basis or at all and may negatively impact ourbusiness and financial results.

Wehave actively pursued new store growth in existing and new markets and plan to continue doing so in the future. Our growth continuesto depend, in part, on our ability to open and operate new stores successfully. New stores may not achieve sustained sales and operatinglevels consistent with our mature store base on a timely basis or at all. This may have an adverse effect on our financial conditionand operating results. In addition, if we acquire stores in the future, we may not be able to successfully integrate those stores intoour existing store base and those stores may not be profitable or as profitable as our existing stores.

Wecannot assure you that our new store openings will be successful or result in greater sales and profitability for the Company. New storesbuild their sales volume and their customer base over time and, as a result, generally have lower gross margins and higher operatingexpenses as a percentage of net sales than our more mature stores. There may be a negative impact on our results from a lower contributionof new stores, along with the impact of related pre-openingand applicable store management relocation costs. Further, we have experiencedin the past, and expect to experience in the future, some sales volume transfer from our existing stores to our new stores as some ofour existing customers switch to new, closer locations. Any failure to successfully open and operate new stores in the time frames andat the costs estimated by us could result in an adverse effect on our business and financial condition, operating results and a declineof the price of our ClassA common stock.

Becausewe have entered into a significant number of related party transactions through the course of our routine business operations, thereis a risk of conflicts of interest involving our management, and that such transactions may not reflect terms that would be availablefrom unaffiliated third parties.

Inthe course of our normal business, we have engaged in certain transactions with our related parties which are affiliated with our Chairmanand Chief Executive Officer, John Xu, and his wife Grace Xu. In all related party transactions, there is a risk that even if the Companypersonnel negotiating on behalf of the Company with the related party are striving to ensure that the terms of the transaction are arms-length,the related party’s influence may be such that the transaction terms could be viewed as favorable to that related party. We arelikely to continue to engage in these transactions as a result of existing relationships and may enter into new transactions with relatedparties. It is possible that we could have received more favorable terms had these agreements been entered into with third parties. See“Certain Relationships and Related Party Transactions” for specific information about our related party transactions.

22

Securityincidents and attacks on our information technology systems could lead to significant costs and disruptions that could harm our business,financial results, and reputation.

Werely extensively on information technology systems to conduct our business, some of which are managed by third-party service providers.Information technology supports several aspects of our business, including among others, product sourcing, pricing, customer service,transaction processing, financial reporting, collections and cost management. Our ability to operate effectively on a day-to-day basisand accurately report our results depends on a solid technological infrastructure, which is inherently susceptible to internal and externalthreats. We are vulnerable to interruption by power loss, telecommunication failures, internet failures, security breaches and othercatastrophic events. Exposure to various types of cyber-attacks such as malware, computer viruses, worms or other malicious acts, aswell as human error, could also potentially disrupt our operations or result in a significant interruption in the delivery of our goodsand services.

RisksRelated to Our Industry

Weface competition in our industry, and our failure to compete successfully may have an adverse effect on our profitability and operatingresults.

Foodretail is a competitive industry. Our competition varies and includes national, regional and local conventional supermarkets, nationalsuperstores, alternative food retailers, natural foods stores, smaller specialty stores, farmers’ markets, supercenters, onlineretailers, mass or discount retailers and membership warehouse clubs. Our principal competitors include 99 Ranch Market and HMart fortraditional supermarkets and Weee! for online groceries. Each of these stores competes with us on the basis of product selection, productquality, customer service, price, store format, and location, or a combination of these factors. In addition, some competitors are aggressivelyexpanding their number of stores or their product offerings. Many of these competitors may have been in business longer or may have moreexperience operating multiple store locations or may have greater financial or marketing resources than we do and may be able to devotegreater resources to sourcing, promoting and selling their products. As competition in certain areas intensifies or competitors openstores within close proximity to one of our stores, our results of operations may be negatively impacted through a loss of sales, decreasein market share, reduction in margin from competitive price changes or greater operating costs. In addition, other established food retailerscould enter our markets, increasing competition for market share.

Ourinability to maintain or improve levels of comparable store sales could cause our stock price to decline.

Wemay not be able to maintain or improve the levels of comparable store sales that we have experienced in the recent past. As a result,our operating results may decline resulting in a corresponding decline in the market price of our ClassA common stock. Our storesales may fluctuate and a variety of factors affect comparable store sales, including:

23

Increasedcommodity prices and availability may impact profitability.

Manyproducts we sell include ingredients such as wheat, corn, oils, milk, sugar, cocoa and other commodities. Commodity prices worldwidehave been increasing due to supply chain disruptions, the war in Ukraine or otherwise. Any increase in commodity prices may cause ourvendors to seek price increases from us. We cannot assure you that we will be able to mitigate vendor efforts to increase our costs,either in whole, or in part. In the event we are unable to continue mitigating potential vendor price increases, we may, in turn, considerraising our prices, and our customers may be deterred by any such price increases. Our profitability may be impacted through increasedcosts to us which may impact gross margins, or through reduced revenue as a result of a decline in the number and average size of customertransactions.

Economicconditions that impact consumer spending could materially affect our business.

Ourresults of operations may be materially affected by changes in overall economic conditions that impact consumer confidence and spending,including discretionary spending. This risk may be exacerbated if customers choose lower-costalternatives in response to economicconditions. Current and/or future economic conditions affecting disposable consumer income such as employment levels, business conditions,changes in housing market conditions, the availability of credit, interest rates, tax rates, fuel and energy costs and other matterscould reduce consumer spending. In addition, increases in utility, fuel and commodity prices could affect our cost of doing businessby increasing the cost of illuminating and operating our stores and the transportation costs borne by our third-partyservice providers,which they may seek to recover through increased prices charged to us. We may not be able to recover these rising costs through increasedprices charged to our customers and these increased prices may exacerbate the risk of customers choosing lower-costalternatives.In addition, recent increases in inflation have directly impacted our purchase costs, occupancy costs and payroll costs leading us toincrease prices to offset these inflationary pressures. Continued increase in inflationary pressures, combined with reduced consumerspending, could reduce gross profit margins. As a result, our business, financial condition and results of operations could be materiallyand adversely affected.

Ourinability to maintain or increase our operating margins could adversely affect the price of our ClassA common stock.

Weintend to continue to increase our operating margins through scale efficiencies, improved systems, continued cost discipline and enhancementsto our merchandise offerings. If we are unable to successfully manage the potential difficulties associated with store growth, we maynot be able to capture the scale efficiencies that we expect from expansion. If we are not able to continue to capture scale efficiencies,improve our systems, continue our cost discipline, maintain appropriate store labor level and disciplined product selection, and enhanceour merchandise offerings, we may not be able to achieve our goals with respect to operating margins. In addition, if we do not adequatelyrefine and improve our various ordering, tracking and allocation systems, we may not be able to increase sales and reduce inventory shrinkage.As a result, our operating margins may remain flat or decline, which could materially and adversely affect business, financial condition,results of operations and, in turn, the price of our ClassA common stock.

Wemay be unable to protect or maintain our intellectual property, including HK Good Fortune, which could result in customer confusion andadversely affect our business.

Werely on a combination of trademark, trade secret, copy right and domain name law and internal procedures and nondisclosure agreementsto protect our intellectual property. We believe that our intellectual property has substantial value and has contributed significantlyto the success of our business. In particular, our trademarks, including our registered trade name “HK GOOD FORTUNE SUPERMARKET”and registered trademarks consisting of the stylized wording of “GOOD FORTUNE”, and our domain names, includinghttps://maisonsolutionsinc.com/,are valuable assets that reinforce our customers’ favorable perception of our stores. However, there can be no assurance that ourintellectual property rights will be sufficient to distinguish our products and services from those of our competitors and to provideus with a competitive advantage.

24

Oursuccess depends upon our ability to source and market new products to meet our high standards and customer preferences and our abilityto offer our customers an aesthetically pleasing shopping environment.

Oursuccess depends on our ability to source and market new products that both meet our standards for quality and appeal to customers’preferences. A small number of our employees, including our in-housemerchants, are primarily responsible for both sourcing productsthat meet our high specifications and identifying and responding to changing customer preferences. Failure to source and market suchproducts, or to accurately forecast changing customer preferences, could lead to a decrease in the number of customer transactions atour stores and a decrease in the amount customers spend when they visit our stores. In addition, the sourcing of our products is dependent,in part, on our relationships with our vendors. If we are unable to maintain these relationships we may not be able to continue to sourceproducts at competitive prices that both meet our standards and appeal to our customers. We also attempt to create a pleasant and aestheticallyappealing shopping experience. If we are not successful in creating a pleasant and appealing shopping experience we may lose customersto our competitors. If we do not succeed in maintaining good relationships with our vendors, introducing and sourcing new products thatconsumers want to buy or if we are unable to provide a pleasant and appealing shopping environment or maintain our level of customerservice, our sales, operating margins and market share may decrease, resulting in reduced profitability, which could materially and adverselyaffect our business, financial condition and results of operations.

Ifwe are unable to successfully identify market trends and react to changing consumer preferences in a timely manner, our sales may decrease.

Webelieve our success depends, in substantial part, on our ability to:

Ifwe are unable to anticipate and satisfy consumer preferences in the regions where we operate, our sales may decrease, which could havea material adverse effect on our business, financial condition and results of operations and, in turn, the price of our ClassAcommon stock.

Ourstores rely heavily on sales of perishable products, and product supply disruptions may have an adverse effect on our profitability andoperating results.

Wehave a significant focus on perishable products. Sales of perishable products accounted for approximately 54.0% and 56.5% of our totalsales in fiscalyears 2024 and 2023, respectively. We rely on various suppliers and vendors to provide and deliver our perishableproduct inventory on a continuous basis. We could suffer significant product inventory losses in the event of the loss of a major supplieror vendor, disruptions of our distribution network, extended power outages, natural disasters such as floods, droughts, frosts, earthquakes,hurricanes and pestilences or other catastrophic occurrences. Adverse weather conditions and natural disasters can lower crop yieldsand reduce crop size and quality, which in turn could reduce the available supply of, or increase the price of, fresh produce. We haveimplemented certain systems to ensure our ordering is in line with demand. We cannot assure you, however, that our ordering system willalways work efficiently, in particular in connection with the opening of new stores, which have no, or a limited, ordering history. Ifwe were to over-order, which could result in inventory losses, or otherwise were not able to maintain inventory suitable for our businessneeds, it would materially and negatively impact our operating results.

25

Productswe sell could cause unexpected side effects, illness, injury or death that could result in their discontinuance or expose us to lawsuits,either of which could result in unexpected costs and damage to our reputation.

Thereis increasing governmental scrutiny of and public awareness regarding food safety. Unexpected side effects, illness, injury, or deathcaused by products we sell could result in the discontinuance of sales of these products or prevent us from achieving market acceptanceof the affected products. Such side effects, illnesses, injuries and death could also expose us to product liability or negligence lawsuitsfor which we do not have adequate insurance coverage. Any claims brought against us may exceed our existing or future insurance policycoverage or limits. Any judgment against us that is in excess of our policy limits would have to be paid from our cash reserves, whichwould reduce our capital resources. The real or perceived sale of contaminated or harmful products would cause negative publicity regardingour company, brand, or products, which could in turn harm our reputation and net sales, and could have a material adverse effect on ourbusiness, results of operations or financial condition and, in turn, the price of our ClassA common stock.

Wemay experience negative effects to our reputation from real or perceived quality or health issues with our food products, which couldhave an adverse effect on our operating results.

Wecould be materially and adversely affected if consumers lose confidence in the safety and quality of products we sell. Concerns regardingthe safety of our food products or the safety and quality of our food supply chain could cause shoppers to avoid purchasing certain productsfrom us, or to seek alternative sources of food, even if the basis for the concern is outside of our control. In addition, adverse publicityabout these concerns, whether or not ultimately based on fact, and whether or not involving products sold at our stores, could discourageconsumers from buying our products and have an adverse effect on our operating results. Furthermore, the sale of food products entailsan inherent risk of product liability claims, product recall and the resulting negative publicity. Food products containing contaminantscould be inadvertently distributed by us and, if processing at the consumer level does not eliminate them, these contaminants could resultin illness or death. We cannot assure you that product liability claims will not be asserted against us or that we will not be obligatedto perform product recalls in the future.

Anylost confidence on the part of our customers would be difficult and costly to re-establish. Any such adverse effect could be exacerbatedby our position in the market as a purveyor of fresh, high-qualityfood products and could significantly reduce our brand value.Issues regarding the safety of any food items sold by us, regardless of the cause, could have a substantial and materially adverse effecton our sales and operating results.

Thecurrent geographic concentration of our stores creates an exposure to local economies, regional downturns or severe weather or catastrophicoccurrences that may materially and adversely affect our financial condition and results of operations.

We currently operate four of our stores in theLos Angeles, California metropolitan area and three of our stores in the greater Phoenix and Tucson, Arizona metro areas. As a result,our business is currently more susceptible to regional conditions than the operations of more geographically diversified competitors,and we are vulnerable to economic downturns in those regions. Any unforeseen events or circ*mstances that negatively affect these areascould materially and adversely affect our revenues and profitability. These factors include, among other things, changes in demographics,population and employee bases, wage increases, and changes in economic conditions.

Severeweather conditions and other catastrophic occurrences such as earthquakes and fires in areas in which we have stores or from which weobtain products may materially and adversely affect our results of operations. Such conditions may result in reduced customer trafficand spending in our stores, physical damage to our stores, loss of inventory, closure of one or more of our stores, inadequate work forcein our markets, temporary disruption in the supply of products, delays in the delivery of goods to our stores and a reduction in theavailability of products in our stores. Any of these factors may disrupt our business and materially and adversely affect our businessand financial condition and result of operations.

26

Energycosts are an increasingly significant component of our operating expenses and increasing energy costs, unless offset by more efficientusage or other operational responses, may impact our profitability.

Weutilize natural gas, water, sewer and electricity in our stores and gasoline and diesel are used in trucks that deliver products to ourstores. We may also be required to pay certain adjustments or other amounts pursuant to our supply and delivery contracts in connectionwith increases in fuel prices. Increases in energy costs, whether driven by increased demand, decreased or disrupted supply or an anticipationof any such events will increase the costs of operating our stores. Our shipping costs have also increased recently due to rising fueland freight prices, and these costs may continue to increase. We may not be able to recover these rising costs through increased pricescharged to our customers, and any increased prices may exacerbate the risk of customers choosing lower-costalternatives. In addition,if we are unsuccessful in attempts to protect against these increases in energy costs through long-termenergy contracts, improvedenergy procurement, improved efficiency and other operational improvements, the overall costs of operating our stores will increase,which would impact our profitability, financial condition and results of operations.

Ourbusiness could be harmed by a failure of our information technology, administrative or outsourcing systems.

Werely on our information technology, administrative and outsourcing systems to effectively manage our business data, communications, supplychain, order entry and fulfillment and other business processes. The failure of our information technology, administrative or outsourcingsystems to perform as we anticipate could disrupt our business and result in transaction errors, processing inefficiencies and the lossof sales and customers, causing our business to suffer. In addition, our information technology and administrative and outsourcing systemsmay be vulnerable to damage or interruption from circ*mstances beyond our control, including fire, natural disasters, systems failures,viruses and security breaches, including breaches of our transaction processing or other systems that could result in the compromiseof confidential customer data. Any such damage or interruption could have a material adverse effect on our business, cause us to facesignificant fines, customer notice obligations or costly litigation, harm our reputation with our customers, require us to expend significanttime and expense developing, maintaining or upgrading our information technology, administrative or outsourcing systems or prevent usfrom paying our suppliers or employees, receiving payments from our customers or performing other information technology, administrativeor outsourcing services on a timely basis. Any material interruption in our information systems may have a material adverse effect onour business, financial condition and operating results.

Ifwe experience a data security breach and confidential customer information is disclosed, we may be subject to penalties and experiencenegative publicity, which could affect our customer relationships and have a material adverse effect on our business.

Weand our customers could suffer harm if customer information were accessed by third parties due to a security failure in our systems.The collection of data and processing of transactions require us to receive, transmit and store a large amount of personally identifiableand transaction related data. This type of data is subject to legislation and regulation in various jurisdictions. Recently, data securitybreaches suffered by well-knowncompanies and institutions have attracted a substantial amount of media attention, prompting stateand federal legislative proposals addressing data privacy and security. If some of the current proposals are adopted, we may be subjectto more extensive requirements to protect the customer information that we process in connection with the purchases of our products.We may become exposed to potential liabilities with respect to the data that we collect, manage and process, and may incur legal costsif our information security policies and procedures are not effective or if we are required to defend our methods of collection, processingand storage of personal data. Future investigations, lawsuits or adverse publicity relating to our methods of handling personal datacould adversely affect our business, results of operations, financial condition and cash flows due to the costs and negative market reactionrelating to such developments. Additionally, if we suffer data breaches one or more of the credit card processing companies that we relyon may refuse to allow us to continue to participate in their network, which would limit our ability to accept credit cards at our storesand could adversely affect our business and financial condition and results of operations.

Disruptionof any significant supplier relationship could negatively affect our business.

Wework with three primary suppliers. These primary suppliers accounted for approximately 48.0% and 51.5% of our total purchases infiscal years 2024 and 2023, respectively. Due to this concentration of purchases from these primary suppliers, the cancellation of oursupply arrangement with any of them or the disruption, delay or inability of any of them to deliver products to our stores may materiallyand adversely affect our operating results while we attempt to establish alternative distribution channels. If our suppliers fail tocomply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. In addition,we also do not have agreements in writing with these suppliers, and we may not be able to contract with them on acceptable terms or atall. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms if at all. The price mayincrease in doing business through these suppliers which could adversely affect our business, financial condition and results of operations.

27

Our reliance on relatively few vendorsfor the majority of our inventory could adversely affect our ability to operate.

We currently rely on a relativelysmallnumberofvendorstoprovide us with the majority of our inventory, with three of our vendors providing approximately 34% of our total inventory in the yearended April 30, 2024 and three of our vendors providing approximately 33% of our total inventory in the year ended April 30, 2023. Thesethird-partyvendorsare not our employees, and except for remedies available to us under our agreements with suchthird-party, we have limited abilityto control the amount or timing of resources that any suchthird-partywill devote to manufacturing our supplies. If thesethird-partyvendorsdo not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our inventory may not be sufficient to meetthe needs of our customers and we may lose revenue. The third parties we rely on for these services may also have relationships with otherentities, some of which may be our competitors. We often use vendors selectively for quality and cost reasons. Significant price increases,or disruptions in the ability to obtain inventory from existing vendors, may force us to increase our prices (which we may be unable todo) or reduce our margins, which would force us to use alternative vendors. As such, our reliance on relatively few vendors could havean adverse effect on our business, results of operations, financial condition and prospects.

If any of our relationships with these third partiesterminate, we may not be able to enter into arrangements with alternative third parties or do so on commercially reasonable terms. Anychange in the existing vendors we use could cause delays in the delivery of products and possible losses in revenue, which could adverselyaffect our business, financial condition, and results of operations. In addition, alternative vendors may not be available, or may notprovide their products and services at similar or favorable prices. If we cannot obtain the inventory, or alternatives at similar or favorableprices, our ability to serve our customers may be severely impacted, which could have an adverse effect on our business, financial condition,and results of operations.

Supply chain risks may affect our businessplans.

The products we sell are sourced from a wide varietyof domestic and international vendors. Continued supply chain disruptions or the inability to find qualified vendors and access productsthat meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. Failure to adequatelysource and timely ship our products to customers could lead to lost potential revenue, failure to meet customer demand, strained relationshipswith customers, and diminished brand loyalty. Additionally, if the supply chain disruptions caused by the COVID-19pandemic and/orthe war in Ukraine continue to occur, we may experience continued supply chain disruption which could result in delays in new store openings.We expect to still be impacted by global logistics challenges in the fiscal year ending April30, 2025.

Our high level of fixed lease obligationscould adversely affect our financial performance.

Our high level of fixed lease obligations willrequire us to use a significant portion of cash generated by our operations to satisfy these obligations, and could adversely impact ourability to obtain future financing to support our growth or other operational investments. We require substantial cash flows from operationsto make our payments under our operating leases, all of which provide for periodic increases in rent. If we are not able to make the requiredpayments under our store leases, the lenders or owners of the relevant stores could, among other things, repossess those assets, whichcould adversely affect our ability to conduct our operations. Our failure to make payments under our operating leases could trigger defaultsunder other leases or under agreements governing our indebtedness, which could cause the counterparties under those agreements to acceleratethe obligations due thereunder.

If we are unable to renew or replacecurrent store leases or if we are unable to enter into leases for additional stores on favorable terms, or if one or more of our currentleases is terminated prior to expiration of its stated term, and we cannot find suitable alternate locations, our growth and profitabilitycould be negatively impacted.

We currently lease all of our store locations.Many of our current leases provide a unilateral option to renew for several additional rental periods at specific rental rates. Our abilityto re-negotiatefavorable terms on an expiring lease or to negotiate favorable terms for a suitable alternate location, and our abilityto negotiate favorable lease terms for additional store locations, could depend on conditions in the real estate market, competition fordesirable properties, its relationships with current and prospective landlords, or other factors that are not within our control. Anyor all of these factors and conditions could negatively impact our growth and profitability.

28

Legal proceedings could materially impactour business, financial condition and results of operations.

Our operations, which are characterized by a highvolume of customer traffic and by transactions involving a wide variety of product selections, carry a higher exposure to consumer litigationrisk when compared to the operations of companies operating in some other industries. Consequently, we may be a party to individual personalinjury, product liability, intellectual property, employment-relatedand other legal actions in the ordinary course of our business,including litigation arising from food-relatedillness. The outcome of litigation, particularly class action lawsuits, is difficultto assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitudeof the potential loss relating to such lawsuits may remain unknown for substantial periods of time. While we maintain insurance, insurancecoverage may not be adequate, and the cost to defend against future litigation may be significant. There may also be adverse publicityassociated with litigation that may decrease consumer confidence in our business, regardless of whether the allegations are valid or whetherwe are ultimately found liable. As a result, litigation may materially and adversely affect our business, financial condition, and resultsof operations.

We are currently subject to certain class action and derivativelitigation and may be subject to other litigation in the future.

The Company, its directors, and certain officers are currently subjectto certain litigation, including securities class actions and shareholder derivative actions, asfurther described in Note 17 — “Commitments and Contingencies” to the consolidated financial statements includedelsewhere in this Annual Report on Form 10-K. In the future, especially following periods of volatility in the market price of our shares,additional purported class action or derivative complaints may be filed against us. The outcome of any pending and potential future litigationis difficult to predict and quantify and the defense of such claims or actions can be costly. In addition to diverting financial and managementresources and general business disruption, we may suffer from adverse publicity that could harm our brand or reputation, regardless ofwhether the allegations are valid or whether we are ultimately held liable. A judgment or settlement that is not covered by or is significantlyin excess of our insurance coverage for any claims, or our obligations to indemnify the underwriters and the individual defendants, couldmaterially and adversely affect our financial condition, results of operations and cash flows.

Claims under our insurance plans maydiffer from our estimates, which could materially impact our results of operations.

We use a combination of insurance and self-insuranceplansto provide for the potential liabilities for workers’ compensation, general liability (including, in connection with legal proceedingsdescribed under “—Legal proceedings could materially impact our business, financial condition and results of operations”above), property insurance, director and officers’ liability insurance, vehicle liability and team member health-carebenefits.Liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience, demographicfactors, severity factors and other actuarial assumptions. Our results could be materially impacted by claims and other expenses relatedto such plans if future occurrences and claims differ from these assumptions and historical trends.

Failure to sustain customer growth orfailure to maintain customer relationships could materially and adversely affect our business and operating results.

Customer loyalty and growth are essential to ourbusiness. Damage to our reputation or failure to anticipate the needs of our customers could diminish customer loyalty and reduce customeractivity in stores and on our e-commerceplatform, which could cause our revenue income to decline and negatively impact our profitability.In addition, if our existing and new business opportunities fail to retain our existing customers or attract new customers on a sustainedbasis, then our operating results could be adversely affected.

Failure to retain our senior managementand other key personnel could negatively affect our business.

We are dependent upon John Xu, our Chief ExecutiveOfficer, and a number of other senior management executives and other key personnel, who have experience in our industry and are familiarwith our business, systems and processes. These executives have been primarily responsible for determining the strategic direction ofour business and for executing our growth strategy and are integral to our brand, culture, and the reputation we enjoy with suppliersand consumers. The loss of services of one or more of these executives or other key employees could have a material adverse effect onour business and financial condition and results of operations. In addition, any such departure could be viewed in a negative light byinvestors and analysts, which may cause our stock price to decline. We do not maintain key person insurance on any employee. In addition,none of our key employees are subject to non-competitionor non-solicitationobligations.

29

If we are unable to attract, train andretain employees, we may not be able to grow or successfully operate our business.

The supermarket retail industry is labor intensive,and our success depends, in part, upon our ability to attract, train and retain a sufficient number of employees who understand and appreciateour culture and are able to represent our brand effectively and establish credibility with our business partners and consumers. Our abilityto meet our labor needs, while controlling wage and labor-relatedcosts, is subject to numerous external factors, including the availabilityof a sufficient number of qualified persons in the work force in the markets in which we are located, unemployment levels within thosemarkets, unionization of the available work force, prevailing wage rates, changing demographics, health and other insurance costs andchanges in employment legislation. In the event of increasing wage rates, if we fail to increase our wages competitively, the qualityof our workforce could decline, causing our customer service to suffer, while increasing our wages could cause our earnings to decrease.If we are unable to hire and retain employees capable of meeting our business needs and expectations, our business and brand image maybe impaired. Any failure to meet our staffing needs or any material increase in turnover rates of our employees may adversely affect ourbusiness, financial condition and results of operations.

Prolonged labor disputes with employeesand increases in labor costs could adversely affect our business.

Changes in federal and state minimum wage lawsand other laws relating to employee benefits, pension plans, including the Patient Protection and Affordable Care Act, could cause usto incur additional wage and benefit costs. Increased labor costs would increase our expenses and have an adverse impact on our profitability.In addition, any work stoppages or labor disturbances as a result of employees’ dissatisfaction of their current employment termscould have a material adverse effect on our financial condition, results of operations and cash flows. We also expect that in the eventof a work stoppage or labor disturbance, we could incur additional costs and face increased competition.

As we grow, we may face organized labordisputes or work stoppages, which could have an adverse impact on our operations and financial results.

Currently, none of our employees are subject toa collective bargaining agreement. However, as we grow and the number of employees continues to increase, it is possible that our employeesmay want to negotiate collective bargaining agreements with us. If this occurs and if we are unable to negotiate acceptable contractswith labor unions, it could result in strikes by the affected workers and thereby significantly disrupt our operations. As part of anycollective bargaining agreements, we may need to fund additional pension contributions, which would negatively impact our free cash flow.Further, if we are unable to control health care and pension costs provided for in the collective bargaining agreements, we may experienceincreased operating costs which could adversely impact on our financial results.

We will require significant additionalcapital to fund our expanding business, which may not be available to us on satisfactory terms or at all, and even if it is available,failure to use our capital efficiently could have an adverse effect on our profitability.

To support our expanding business and pursue ourgrowth strategy, we will utilize significant amounts of cash generated by our operations to pay our lease obligations, build out new storespace, purchase inventory, pay personnel, further invest in our infrastructure and facilities, and pay for the increased costs associatedwith operating as a public company. We primarily depend on cash flow from operations and borrowings under our credit facility to fundour business and growth plans. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory,and other factors that are beyond our control. If our business does not generate sufficient cash flow from operations to fund these activities,and sufficient funds are not otherwise available to us under our revolving credit facility, we may need additional equity or debt financing.If such financing is not available to us, or is not available to us on satisfactory terms, our ability to operate and expand our businessor to respond to competitive pressures would be limited and we could be required to delay, significantly curtail or eliminate plannedstore openings or operations or other elements of our growth strategy.

30

We may incur additional indebtednessin the future, which could adversely affect our financial health and our ability to react to changes to our business.

We may incur additional indebtedness in the future.Any increase in the amount of our indebtedness could require us to divert funds identified for other purposes for debt service and impairour liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance all ora portion of our indebtedness on or before maturity, sell assets, delay capital expenditures, curtail growth plans or scale back operations,or seek additional equity investment. We do not know whether we will be able to take any of such actions on a timely basis, on terms satisfactoryto us or at all.

Our level of indebtedness has important consequencesto you and your investment in our ClassA common stock. For example, our level of indebtedness may:

We cannot assure you that our business will generatesufficient cash flow from operations or that future borrowings will be available to us in amounts sufficient to enable us to make paymentson our indebtedness or to fund our operations.

We are dependent on third-party e-commerceplatforms and on third-party networks.

Our success depends on our ability to attract andretain new customers and expand our customer base. A substantial portion of our customer traffic comes from links shared by members throughour social networks and via third-partyonline e-commerceplatforms. Any interruption to or discontinuation of our relationshipswith major social network operators may severely and negatively impact our ability to continue growing our user base, thereby producinga material adverse effect on our business. In addition, we rely on our suppliers and contract manufacturers to ensure that the productsthey manufacture and sell to us are in compliance with applicable regulatory and legal requirements. While we seek representations andwarranties, indemnifications and/or insurance from our suppliers and contract manufacturers, any claims of non-compliancecould significantlydamage our reputation and consumer confidence in products we sell.

Risks Related to Regulatory Compliance and LegalMatters

Changes in U.S. trade policies couldhave a material adverse impact on our business.

Changes in U.S. trade policies, such as the impositionof tariffs on various goods and a potential resulting trade war in China and other countries, could have a material adverse impact onour business. Some of our products are produced in China and other foreign countries, making the price and availability of our productssusceptible to international trade risks and other international conditions. We are unable to predict future trade policy of the UnitedStates, China, or of any foreign countries from which we purchase goods, or the terms of any renegotiated trade agreements, or their impacton our business. Recent trade tensions between the United States and China could directly impact the import of our products and couldhave a significant adverse impact on the cost of our goods and the prices at which we offer them for sale. The adoption or expansion oftrade restrictions and tariffs, a trade war, or other governmental action related to tariffs may adversely affect our business as it mayimpact the cost of and demand for our products, our overall costs, our customers, our supplies, and the world economy, which in turn couldhave a material adverse effect on our business, operational results, financial position and cash flows.

31

Changes in and enforcement of immigrationlaws could increase our costs and adversely affect our ability to attract and retain qualified store-level employees.

Federal and state governments from time to timeimplement laws, regulations or programs that regulate our ability to attract or retain qualified employees. Some of these changes mayincrease our obligations for compliance and oversight, which could subject us to additional costs and make our hiring process more cumbersomeor reduce the availability of potential employees. Although we have implemented, and are in the process of enhancing, procedures to ensureour compliance with the employment eligibility verification requirements, there can be no assurance that these procedures are adequateand some of our employees may, without our knowledge, be unauthorized workers. The employment of unauthorized workers may subject us tofines or civil or criminal penalties, and if any of our workers are found to be unauthorized, we could experience adverse publicity thatnegatively impacts our brand and makes it more difficult to hire and keep qualified employees. There can be no assurance that any futureaudit will not require us to terminate employees and pay fines or other penalties. The termination of a significant number of employeesmay disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in additional adverse publicity.Our operating results could be materially harmed as a result of any of these factors.

We, as well as our vendors, are subject to numerous federal,and local laws and regulations and our compliance with these laws and regulations, as they currently exist or as modified in the future,may increase our costs, limit or eliminate our ability to sell certain products, raise regulatory enforcement risks that were not presentedin the past, or otherwise adversely affect our business, results of operations and financial condition.

As a supermarket retailer, we are subject to numeroushealth and safety laws and regulations. Our suppliers are also subject to such laws and regulations. These laws and regulations applyto many aspects of our business, including the manufacturing, packaging, labeling, distribution, advertising, sale, quality and safetyof products we sell, as well as the health and safety of our team members and the protection of the environment. We are subject to regulationby various government agencies, including the U.S.Food and Drug Administration (the “FDA”), the U.S.Departmentof Agriculture (the “USDA”), the Federal Trade Commission (the “FTC”), the Occupational Safety and Health Administration(“OSHA”), the Consumer Product Safety Commission (the “CPSC”), the Environmental Protection Agency (the “EPA”),as well as various state and local agencies.

New or revised government laws and regulations,such as the FDA Food Safety Modernization Act (referred to as “FSMA”) passed in January2011, which grants the FDA greaterauthority over the safety of the national food supply as well as increased enforcement by government agencies, could result in additionalcompliance costs and civil remedies. Specifically, the FSMA requires the FDA to issue regulations mandating that risk-basedpreventivecontrols be observed by the majority of food producers. This authority applies to all domestic food facilities and, by way of importedfood supplier verification requirements, to all foreign facilities that supply food products. In addition, the FSMA requires the FDA toestablish science-basedminimum standards for the safe production and harvesting of produce, requires the FDA to identify “highrisk” foods and “high risk” facilities and instructs the FDA to set goals for the frequency of FDA inspections of suchhigh risk facilities as well as non-highrisk facilities and foreign facilities from which food is imported into the UnitedStates.

With respect to both food and dietary supplements,the FSMA meaningfully augments the FDA’s ability to access producer’s and supplier’s records. This increased accesscould permit the FDA to identify areas of concern it had not previously considered to be problematic either for us, our producers or oursuppliers. The FSMA is also likely to result in enhanced tracking and tracing of food requirements and, as a result, added recordkeepingburdens upon our producers and suppliers. In addition, under the FSMA, the FDA has the authority to inspect certifications and thereforeevaluate whether foods and ingredients from our producers and suppliers are compliant with the FDA’s regulatory requirements. Suchinspections may delay the supply of certain products or result in certain products being unavailable to us for sale in our stores.

The FDA has broad authority to enforce the provisionsof the Federal Food, Drug and Cosmetic Act applicable to the safety, labeling, manufacturing and promotion of foods, including powersto issue a public warning letter to a company, publicize information about illegal products, institute an administrative detention offood, request or order a recall of illegal products from the market, and request the Department of Justice to initiate a seizure action,an injunction action or a criminal prosecution in the U.S.courts. Pursuant to the FSMA, the FDA also has the power to refuse theimport of any food that is not appropriately verified as in compliance with all FDA laws and regulations. Moreover, the FDA has the authorityto administratively suspend the registration of any facility producing food, including supplements, deemed to present a reasonable probabilityof causing serious adverse health consequences.

32

In connection with the marketing and advertisem*ntof products we sell, we could be the target of claims relating to false or deceptive advertising, including under the auspices of theFTC and the consumer protection statutes of some states. These events could interrupt the marketing and sales of products in our stores,severely damage our brand reputation and public image, increase the cost of products in our stores, result in product recalls or litigation,and impede our ability to deliver merchandise in sufficient quantities or quality to our stores, which could result in a material adverseeffect on our business, financial condition and results of operations.

We are also subject to laws and regulations moregenerally applicable to retailers, including labor and employment, taxation, zoning and land use, environmental protection, workplacesafety, public health, community right-to-knowand alcoholic beverage sales. Certain local regulations may limit our ability to sellalcoholic beverages at certain times. Our stores are subject to unscheduled inspections on a regular basis, which, if violations are found,could result in the assessment of fines, suspension of one or more needed licenses and, in the case of repeated “critical”violations, closure of the store until a re-inspectiondemonstrates that we have remediated the problem. The buildings in which somestores are located are old and therefore require greater maintenance expenditures by us in order to maintain them in compliance with applicablebuilding codes. If we are unable to maintain these stores in compliance with applicable building codes, we could be required by the buildingdepartment to close them. Additionally, a number of federal, state and local laws impose requirements or restrictions on business ownerswith respect to access by disabled persons. Our compliance with these laws may result in modifications to our properties, or prevent usfrom performing certain further renovations Furthermore, our new store openings could be delayed or prevented, or our existing storescould be impacted by difficulties or failures in our ability to obtain or maintain required approvals or licenses.

In addition, we are subject to environmental lawspursuant to which we could be held responsible for all of the costs relating to any contamination at our or our predecessors’ pastor present facilities and at third-partywaste disposal sites, regardless of our knowledge of, or responsibility for, such contamination.We are also subject to laws governing our relationship with employees, including minimum wage requirements, overtime, working conditions,immigration, and work permit requirements.

As is common in our industry, we rely on our suppliersand contract manufacturers to ensure that the products they manufacture and sell to us comply with all applicable regulatory and legislativerequirements. In general, we seek certifications of compliance, representations and warranties, indemnification and/or insurance fromour suppliers and contract manufacturers. However, even with adequate insurance and indemnification, any claims of non-compliancecouldsignificantly damage our reputation and consumer confidence in our products. In order to comply with applicable statutes and regulations,our suppliers and contract manufacturers have from time to time reformulated, eliminated or relabeled certain aspects of their productsand we have revised certain provisions of our sales and marketing program.

We cannot predict the nature of future laws, regulations,interpretations or applications, or determine what effect either additional government regulations or administrative orders, when andif promulgated, or disparate federal, state and local regulatory schemes would have on our business in the future. They could, however,increase our costs or require the reformulation of certain products to meet new standards, the recall or discontinuance of certain productsnot able to be reformulated, additional recordkeeping, expanded documentation of the properties of certain products, expanded or differentlabeling and/or scientific substantiation. Any or all of such requirements could have a material adverse effect on our business, financialcondition and results of operations.

The effects of global climate changecould present risks to our business.

The long-termeffects of global climate changemay present both physical and transition risks. Changes in extreme weather conditions or changes in technology are expected to producewidespread and unexpected results. These changes may impact our ability to obtain goods and services required for the success of our business.Additionally, we face the risk of physical damage to stores and distribution or fulfillment centers due to the physical risks associatedwith climate change. The transition to alternative energy sources, versus using natural gas, diesel fuel, or gasoline, may increase ourcosts. The impact of these events can adversely affect our operations, financial condition, and results of operations or cash flows.

33

Risks Related to Ownership of Our Class A CommonStock

The market for our Class A common stockis new, and we cannot assure you that an active trading market will develop for our Class A common stock.

We completed our initial public offering in October2023. Therefore, the market for our Class A common stock is relatively new and may experience periods of inactivity as well as significantvolatility. We cannot assure you that an orderly and liquid trading market for our Class A common stock will develop, or if it does develop,it may not be maintained. If an active market does not develop, you may have difficulty selling your shares of our Class A common stock.You may not be able to sell your Class A common stock quickly or at the market price if trading in our securities is not active.

If our stock price declines, you could lose a significant partof your investment, and we may be sued in a securities class action.

The trading price of our ClassA common stockis likely to be volatile and will fluctuate due to broad market and industry factors including the performance and fluctuation in themarket prices or the underperformance of companies in our industry. Furthermore, securities markets may, from time to time, experiencesignificant price and volume fluctuations that are not reflective of our operating performance.

The market price of our stock may be influencedby many factors, some of which are beyond our control, including those described above in“—Risks Related toOur Business” and the following:

34

Furthermore, the stock markets have experiencedextreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These and other factorsmay cause the market price and demand for our ClassA common stock to fluctuate substantially, which may limit or prevent investorsfrom readily selling their shares of ClassA common stock and may otherwise negatively affect the price or liquidity of our ClassAcommon stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes institutedsecurities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit againstus, we could incur substantial costs defending the lawsuit or paying for settlements or damages. Such a lawsuit could also divert thetime and attention of our management from our business.

As a result of these factors, investors in ourClassA common stock may not be able to resell their shares at or above the price they purchased the shares for or may not be ableto resell them at all. These broad market and industry factors may materially reduce the market price of our ClassA common stock,regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our ClassAcommon stock is low.

Future sales, or the perception of futuresales, of our ClassA common stock may depress the price of our ClassA common stock.

The market price of our ClassA common stockcould decline significantly as a result of sales of a large number of shares of our ClassA common stock in the market. The sales,or the perception that these sales might occur, could depress the market price. These sales, or the possibility that these sales may occur,also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

In connection with our initial public offering,the Company, our directors and executive officers and non-affiliateholders of 5% or greater of our ClassA common stock eachagreed to lock-uprestrictions, meaning that we and they and their permitted transferees are not be permitted to sell any sharesof our ClassA common stock for twelve (12)months after the closing of our initial public offering, subject to certain exceptions,without the prior joint consent of Joseph Stone Capital, LLC, the representative of the underwriters of our initial public offering (“JSC”).Although we have been advised that there is no present intention, JSC may, in its sole discretion, release all or any portion of the sharesof our ClassA common stock from the restrictions in any of the lock-upagreements described above.

35

Also, in the future, we may issue shares of ourClassA common stock in connection with investments or acquisitions. The amount of shares of our ClassA common stock issuedin connection with an investment or acquisition could constitute a material portion of our then outstanding shares of Class A common stock.

We will continue to incur increased costsas a result of operating as a public company, and our management will be required to devote substantial time to complying with publiccompany regulations.

We historically have operated our business as aprivate company. We completed our initial public offering on October 10, 2023. As a public company, we will incur additional legal, accounting,compliance and other expenses that we did not incur as a private company. As a public company, we are obligated to file with the SEC annualand quarterly information and other reports that are specified in Section13 and Proxy Statements under Section14 and othersections of the Securities ExchangeActof1934, as amended (the “ExchangeAct”). In addition, we alsoare subject to other reporting and corporate governance requirements, including certain requirements of Nasdaq, and certain provisionsof the Sarbanes-OxleyAct and the regulations promulgated thereunder, which impose significant compliance obligations upon us. Asa public company, we will need to institute a comprehensive compliance function; establish internal policies; ensure that we have theability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis; design, establish,evaluate and maintain a system of internal controls over financial reporting in compliance with the Sarbanes-OxleyAct; involve andretain outside counsel and accountants in the above activities and establish an investor relations function.

The Sarbanes-OxleyAct, as well as rules subsequentlyimplemented by the SEC and Nasdaq, have imposed increased regulation and disclosure and required enhanced corporate governance practicesof public companies. Our efforts to comply with evolving laws, regulations and standards in this regard are likely to result in increasedadministrative expenses and a diversion of management’s time and attention from revenue-generatingactivities to complianceactivities. These changes will require a significant commitment of additional resources. We may not be successful in implementing theserequirements and implementing them could materially and adversely affect our business, results of operations and financial condition.In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to reportour operating results on a timely and accurate basis could be impaired. If we do not implement such requirements in a timely manner orwith adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC or Nasdaq. Anysuch action could harm our reputation and the confidence of investors and customers in our Company and could materially and adverselyaffect our business and result in the delisting of our ClassA common stock with both Nasdaq and the SEC.

Our management has limited experiencemanaging a public company and our current resources may not be sufficient to fulfill our public company obligations.

As a public company, we are subject to variousregulatory requirements, including those of the SEC and Nasdaq. These requirements include record keeping, financial reporting and corporategovernance rules and regulations. Our management team has limited experience in managing a public company and, historically, has not hadthe resources typically found in a public company. Our internal infrastructure may not be adequate to support our increased reportingobligations and we may be unable to hire, train or retain necessary staff and may be reliant on engaging outside consultants or professionalsto overcome our lack of experience or employees. Our business could be adversely affected if our internal infrastructure is inadequate,we are unable to engage outside consultants or are otherwise unable to fulfill our public company obligations.

Our CEO, John Xu, has substantial controlover us and has the ability to control the election of directors and other matters submitted to stockholders for approval, which willlimit your ability to influence corporate matters and may result in actions that you do not believe to be in our interests or your interests.

John Xu, our Chief Executive Officer, beneficiallyowns, in the aggregate, approximately 77.93% of our outstanding Class A common stock. In addition, John Xu beneficially owns 2,240,000shares of our Class B common stock, which carries ten votes per share. In the aggregate, John Xu beneficially owns approximately 90.34%voting power of our outstanding common stock, including both Class A common stock and Class B common stock. As a result, John Xu is ableto exert actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors,a merger, consolidation or sale of all or substantially all of our assets and any other significant transaction.

This concentrated control limits your ability asa stockholder to influence corporate matters, and the interests of John Xu may not coincide with our interests or your interests. As aresult, he may take actions that you do not believe to be in our interests or your interests and that could depress the price of our ClassAcommon stock.

36

We do not intend to pay cash dividendson our ClassA common stock and, as a result, your only opportunity to achieve a return on your investment is if the price of ourClassA common stock appreciates.

We currently expect to retain future earnings,if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends on our Class A common stock.In addition, our ability to declare and pay cash dividends is restricted by our revolving credit facility. The declaration and paymentof future cash dividends to holders of our ClassA common stock will be at the discretion of our board of directors and will dependupon many factors, including our financial condition, earnings, legal requirements, and restrictions in our debt agreements and otherfactors our board of directors deems relevant. As a result, capital appreciation, if any, of our ClassA common stock will be yoursole source of potential gain for the foreseeable future. The market price for our ClassA common stock might not exceed the pricethat you originally paid for our ClassA common stock.

If securities or industry analysts donot publish or cease publishing research or reports about our business or our market, or if they adversely change their recommendationsregarding our ClassA common stock, or if our operating results do not meet their expectations, the stock price and/or trading volumeof our Class A common stock could decline.

The trading market for our ClassA commonstock will be influenced by the research and reports that industry or securities analysts, if any, may publish about us, our businessor our competitors. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we couldlose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one ormore of the analysts who cover our Company downgrades our stock or if our operating results do not meet their expectations or providemore favorable relative recommendations about our competitors, our stock price could decline.

Our amended and restated Certificateof Incorporation containsanti-takeoverprovisions that could discourage a third party from acquiring us, which could limitour shareholders’ opportunity to sell their shares of Class A common stock at a premium.

Our amended and restated Certificate of Incorporationcontains provisions to limit the ability of others to acquire control of our Company or cause us to engage in change-of-controltransactions.These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailingmarket prices by discouraging third parties from seeking to obtain control of our Company in a tender offer or similar transaction. Forexample, our board of directors has the authority, without further action by our shareholders, to issue shares of preferred stock in oneor more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rightsand the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemptionand liquidation preferences, any or all of which may be greater than the rights associated with our ClassA common stock. Sharesof preferred stock could be issued quickly with terms calculated on a delay to prevent a change in control of our Company or make removalof management more difficult. If our board of directors decides to issue shares of preferred stock, the price of our Class A common stockmay fall and the voting and other rights of the holders of our Class A common stock may be materially and adversely affected. In addition,our amended and restated Certificate of Incorporation contains other provisions that could limit the ability of third parties to acquirecontrol of our Company or cause us to engage in a transaction resulting in a change of control.

Our bylaws designate the Court of Chanceryof the State of Delaware as the sole and exclusive forum for certain actions, which could limit a stockholder’s ability to bringa claim in a judicial forum that it finds favorable for disputes with the Company and its directors, officers, or other employees andmay discourage lawsuits with respect to such claims.

Unless we consent in writing to the selection ofan alternative forum, the sole and exclusive forum for (i)any derivative action or proceeding brought against or on behalf of theCompany, (ii)any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employeeor stockholder of the Company to the Company or the Company’s stockholders, (iii)any action asserting a claim arising pursuantto any provision of the Delaware General Corporation Law (the “DGCL”), (iv)any action as to which the DGCL confers jurisdictionupon the Court of Chancery of the State of Delaware, or (v)any action asserting a claim governed by the internal affairs doctrineshall, to the fullest extent permitted by law, be the Court of Chancery of the State of Delaware (or, only if the Court of Chancery ofthe State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court located within the State ofDelaware). However, Section27 of the ExchangeAct creates exclusive federal jurisdiction over all suits brought to enforceany duty or liability created by the ExchangeAct or the rules and regulations thereunder, and as such, the exclusive jurisdictionclauses set forth above would not apply to such suits. Furthermore, Section22 of the Securities Act provides for concurrent jurisdictionfor federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulationsthereunder, and as such, the exclusive jurisdiction clauses set forth above would not apply to such suits.

37

Although we believe the exclusive forum provisionbenefits us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings,this provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes withthe Company and its directors, officers, or other employees and may discourage lawsuits with respect to such claims.

Our future operating results may fluctuate significantly, andour current operating results may not be a good indication of our future performance. Fluctuations in our quarterly financial resultscould affect our stock price in the future.

Our operating results have historically variedfrom period-to-period, and we expect that they will continue to as a result of a number of factors, many of which are outside of our control.If our quarterly financial results or our forecasts of future financial results fail to meet the expectations of securities analysts andinvestors, our ClassA common stock price could be negatively affected. Any volatility in our quarterly financial results may makeit more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our stock. Our operating resultsfor prior periods may not be effective predictors of our future performance.

We may incur significant fluctuations in our quarterlyfinancial and other operating results, including fluctuations in our key metrics. This variability and unpredictability could result inour failing to meet our internal operating plan or the expectations of securities analysts or investors for any period. If we fail tomeet or exceed such expectations for these or any other reasons, the market price of our shares could fall substantially and we couldface costly lawsuits, including securities class action suits. In addition, a significant percentage of our operating expenses are fixedin nature and based on forecasted revenue trends. Accordingly, in the event of revenue shortfalls, we are generally unable to mitigatethe negative impact on margins in the short term.

Limitation of liability and indemnificationof officers and directors could adversely impact investors’ ability to bring claims against them.

Our officers and directors are required to exercisegood faith and high integrity in the management of our affairs. Our Certificate of Incorporation provides, however, that our officersand directors shall have no personal liability to us or our stockholders for damages for any breach of duty owed to us or our stockholders,unless they breached their duty of loyalty, did not act in good faith, knowingly violated a law, or received an improper personal benefit.Our Certificate of Incorporation and By-lawsalso provide for the indemnification by us of our officers and directors against anylosses or liabilities they may incur by reason of their serving in such capacities, provided that they do not breach their duty of loyalty,act in good faith, do not knowingly violate a law, and do not receive an improper personal benefit. Additionally, we have entered intoemployment agreements with our officers, which specify the indemnification provisions provided by the By-lawsand provide, amongother things, that to the fullest extent permitted by applicable law, the Company will indemnify such officer against any and all losses,expenses and liabilities arising out of such officer’s service as an officer of the Company.

Insofar as indemnification for liabilities underthe Securities Act may be permitted to directors, officers or persons controlling us under the above provisions, we have been informedthat in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Sales, or the perception of sales, ofshares of our ClassA common stock by us or our existing stockholders in the public market could adversely affect the market priceof our ClassA common stock and our ability to raise additional equity capital.

As of April 30, 2024, there were 17,450,476sharesof ClassA common stock issued and outstanding. The sale of substantial amounts of shares of our Class A common stock in the publicmarket, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. Thesesales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the futureat a time and at a price that we deem appropriate.

If our stockholders sell substantial amounts ofour ClassA common stock in the public market upon the expiration of any statutory holding period under Rule144, any lock-upagreementor shares issued upon the exercise of outstanding options, warrants, or restricted stock awards could create a circ*mstance commonly referredto as an “overhang” and, in anticipation of which, the market price of our Class A common stock could fall. The existenceof an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financingthrough the sale of equity or equity-relatedsecurities in the future at a time and price that we deem reasonable or appropriate.

38

If we are unable to continue to meet the NasdaqCapital Market rules for continued listing, our Class A common stock could be delisted.

We may be unable to meet the Nasdaq Capital Marketrules for continued listing of our Class A common stock on the Nasdaq Capital Market, notably, the minimum bid price and the stockholders’equity minimum requirements. If we fail to meet the Nasdaq Capital Market’s ongoing listing criteria, our Class A common stock couldbe delisted. If our Class A common stock is delisted by the Nasdaq Capital Market, our Class A common stock may be eligible for quotationon an over-the-counter quotation system or on the pink sheets. Upon any such delisting, our Class A common stock would become subjectto the regulations of the SEC relating to the market for penny stocks. A penny stock is any equity security not traded on the Nasdaq CapitalMarket that has a market price of less than $5.00 per share. The regulations applicable to penny stocks may severely affect the marketliquidity for our Class A common stock and could limit the ability of stockholders to sell such securities in the secondary market. Insuch a case, an investor may find it more difficult to dispose of or obtain accurate quotations as to the market value of our Class Acommon stock, and there can be no assurance that our Class A common stock will be eligible for trading or quotation on any alternativeexchanges or markets.

Delisting from the Nasdaq Capital Market couldadversely affect our ability to raise additional financing through public or private sales of equity securities, would significantly affectthe ability of investors to trade our securities and would negatively affect the value and liquidity of our Class A common stock. Delistingcould also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interestand fewer business development opportunities.

We may become subject to “pennystock” rules, which could damage our reputation and the ability of investors to sell their shares of Class A common stock.

Stockholders should be aware that, according tothe Securities and Exchange Commission Release No.34-29093, the market for penny stocks has suffered in recentyears from patternsof fraud and abuse. These patterns include: control of the market for the security by one or a few broker-dealersthat are oftenrelated to the promoter or issuer; manipulation of prices through prearranged matching of purchases and sales and false and misleadingpress releases; “boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperiencedsales persons; excessive and undisclosed bid-askdifferentials and markups by selling broker-dealers; and the wholesale dumping ofthe same securities by promoters and broker-dealersafter prices have been manipulated to a desired level, along with the inevitablecollapse of those prices with consequent investor losses.

Furthermore, the penny stock designation may adverselyaffect the development of any public market for our shares of Class A common stock or, if such a market develops, its continuation. Broker-dealersarerequired to personally determine whether an investment in penny stock is suitable for customers. Penny stocks are securities (i)witha price of less than five dollars ($5.00) per share; (ii)that are not traded on a “recognized” national exchange; and(iii)of an issuer with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least threeyears)or $5,000,000 (if in continuous operation for less than threeyears) or with average annual revenues of less than $6,000,000 forthe last threeyears. Section15(g)of the ExchangeAct and Rule15g-2of the SEC require broker-dealersdealingin penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed anddated written receipt of the document before effecting any transaction in a penny stock for the investor’s account. Potential investorsin our Class A common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to bepenny stock. Rule15g-9of the SEC requires broker-dealersin penny stocks to approve the account of any investor for transactionsin such stocks before selling any penny stock to that investor.

This procedure requires the broker-dealerto(i)obtain from the investor information concerning his financial situation, investment experience and investment objectives; (ii)reasonablydetermine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficientknowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii)provide the investorwith a written statement setting forth the basis on which the broker-dealermade the determination in (ii)above; and (iv)receivea signed and dated copy of such statement from the investor confirming that it accurately reflects the investor’s financial situation,investment experience and investment objectives. Compliance with these requirements may make it more difficult for the Company’sstockholders to resell their shares of Class A common stock to third parties or to otherwise dispose of them.

39

The financial and operational projectionsthat we may make from time to time are subject to inherent risks.

The projections that our management may providefrom time to time (including, but not limited to, financial or operational matters) reflect numerous assumptions made by management, includingassumptions with respect to our specific as well as general business, economic, market and financial conditions and other matters, allof which are difficult to predict and many of which are beyond our control. Accordingly, there is a risk that the assumptions made inpreparing the projections, or the projections themselves, will prove inaccurate. There will be differences between actual and projectedresults, and actual results may be materially different from those contained in the projections. The inclusion of the projections in (orincorporated by reference in) this Annual Report on Form 10-K should not be regarded as an indication that we or our management or representativesconsidered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon assuch.

If we were to dissolve, the holders of our securities may loseall or substantial amounts of their investments.

If we were to dissolve as a corporation, as partof ceasing to do business or otherwise, we may be required to pay all amounts owed to any creditors and/or preferred stockholders beforedistributing any assets to the investors and/or preferred stockholders. There is a risk that, in the event of such a dissolution, therewill be insufficient funds to repay amounts owed to holders of any of our indebtedness and insufficient assets to distribute to our otherinvestors, in which case investors could lose their entire investment.

An investment in our Company may involve tax implications, andyou are encouraged to consult your own tax and other advisors as neither we nor any related party is offering any tax assurances or guidanceregarding our Company or your investment.

An investment in our Company generally involvescomplex federal, state and local income tax considerations. Neither the Internal Revenue Service nor any state or local taxing authorityhas reviewed the transactions described herein and may take different positions than the ones contemplated by management. You are stronglyurged to consult your own tax and other advisors prior to investing, as neither we nor any of our officers, directors, or related partiesare offering you tax or similar advice, nor are any such persons making any representations and warranties regarding such matters.

We have identified a material weakness in our internal controlover financial reporting and may identify additional material weaknesses in the future. If we fail to remediate this material weaknessor otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accuratelyand timely report our financial results and may adversely affect investor confidence and business operations.

A material weakness is a deficiency, or a combinationof deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatementof our annual or interim financial statements will not be prevented or detected on a timely basis.

We and our independent registered public accountingfirm identified certain material weaknesses in our internal control over financial reporting in connection with the audited consolidatedfinancial statements for the years ended April 30, 2024 and 2023. The material weaknesses identified relate to (i) insufficient full-timeemployees with the necessary levels of accounting expertise and knowledge to compile and analyze consolidated financial statements andrelated disclosures in accordance with U.S. GAAP and address complex accounting issues under U.S. GAAP; (ii) the lack of timely relatedparty transaction monitoring and the failure to keep a related party list and keep records of related party transactions on a regularbasis; (iii) the failure to keep an up-to-date perpetual inventory control system or timely perform company-wide inventory count at ornear its fiscal year-end date. Specifically, maintaining records for inbound warehouse purchases or have specialized personnel to scangoods into the warehouse on a timely basis; (iv) the lack of adequate policies and procedures in control environment and control activitiesto ensure that the Company’s policies and procedures have been carried out as planned; ;(v) information technology general controlin the areas of: (1) Risk and Vulnerability Assessment; (2) Selection and Management/Monitoring of Critical Vendors; (3) System Developmentand Change Management; (4) Backup Management; (5) System Security & Access: Deficiency in the Area of Audit Trail Record Control,Password Management, Vulnerability Scanning or Penetration Testing; (6) Segregation of Duties, Privileged Access, and Monitoring Controls;and (7) System Monitoring and Incident Management; and (vi) accounting personnel have the ability in the accounting system to prepare,review, and post the same accounting journal entry.

40

Although we continue to remediate our materialweakness, we may be unable to remediate it in a timely manner, or at all, and additional weaknesses in our disclosure controls and internalcontrols over financial reporting may be discovered in the future. Any failure to remediate the material weakness or otherwise developor maintain effective controls or any difficulties encountered in their implementation or improvement could limit our ability to preventor detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financialstatements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodicreports in addition to the maintenance requirements of Nasdaq. As a result, investors may lose confidence in our financial reporting andour stock price may decline as a result.

Additionally, when we cease to be an “emerginggrowth company” under the federal securities laws, our independent registered public accounting firm may be required to expressan opinion on the effectiveness of our internal controls. If we are unable to confirm that our internal control over financial reportingis effective or if our independent registered public accounting firm is unable to express an unqualified opinion on the effectivenessof our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which could causethe price of our Class A common stock to decline. Additionally, ineffective internal control over financial reporting could expose usto increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list,regulatory investigations, and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

If we do not appropriately maintain effective internal controlover financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, we may be unable to accurately report our financialresults and the market price of our securities may be adversely affected.

We are subject to reporting obligations under theU.S. securities laws. The SEC, as required under Section 404 of the Sarbanes-OxleyAct, adopted rules requiring every public companyto include a management report on such company’s internal control over financial reporting in its annual report, which containsmanagement’s assessment of the effectiveness of the company’s internal control over financial reporting.

However, if we fail to maintain effective internalcontrol over financial reporting in the future, our management may not be able to conclude that we have effective internal control overfinancial reporting at a reasonable assurance level. This could, in turn, result in the loss of investor confidence in the reliabilityof our financial statements and negatively impact the trading price of our securities.

We are a “Controlled Company” within the meaningof the Nasdaq Stock Market Rules and, as a result, may, and intend to, rely on exemptions from certain corporate governance requirementsthat provide protection to shareholders of other companies.

We are, and will remain, a “Controlled Company”as defined under the Nasdaq Stock Market Rules because, and as long as, our CEO, John Xu, holds more than 50% of the Company’s votingpower, he will exercise control over the management and affairs of the company and matters requiring stockholder approval, including theelection of the Company’s directors and the acquisition of us by a third party. For so long as we remain a controlled company underthat definition, we are permitted, and intend, to elect to rely on certain exemptions from corporate governance rules, including:

41

As a result, you will not have the same protectionafforded to shareholders of companies that are subject to these corporate governance requirements, including that a majority of the membersof our board of directors may not be independent directors, and our nominating and corporate governance and compensation committees maynot consist entirely of independent directors. Additionally, in the event that a third party were to seek to acquire us, there can beno guarantee, even if that third party’s offer were considered beneficial, that such a transaction would be contemplated resultingin your ability to obtain a premium for your shares being limited.

The dual class structure of our common stock will have the effectof concentrating voting power with our CEO John Xu and his affiliates, which may depress the market value of the Class A common stockand will limit a stockholder or a new investor’s ability to influence the outcome of important transactions, including a changein control.

While the economic rights of our common stock arethe same, the Class A common stock has one (1) vote per share, while Class B common stock has ten (10) votes per share. As of April 30,2024, our Class B common stockholders represent approximately 56.2% of our voting power. Given the 10:1 voting ratio, even a significantissuance of Class A common stock and/or a transaction involving Class A common stock as consideration, may not impact Mr.Xu’ssignificant majority voting position in us.

We have enacted a dual class voting structure toensure the continuity of voting control in us for the foreseeable future. As a result, for the foreseeable future, Mr.Xu and hisaffiliates will be able to control matters submitted to stockholders for approval, including the election of directors, amendments ofour organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.

Mr.Xu and his affiliates may have intereststhat differ from other stockholders and may vote their ClassB common stock in a way with which other stockholders may disagree orwhich may be adverse to such other stockholders’ interests. In addition, this concentrated control will have the effect of delaying,preventing or deterring a change in control of Maison, could deprive our stockholders of an opportunity to receive a premium for theircapital stock as part of a sale of Maison, and might have a negative effect on the market price of shares of our ClassA common stock.

We are an “emerging growth company” and the reduceddisclosure requirements applicable to emerging growth companies may make our securities less attractive to investors.

We are an “emerging growth company”as defined in the JOBS Act. We may remain an emerging growth company until the fiscal year ended April30, 2028. However, if ourannual gross revenue hits $1.235billion or our non-convertibledebt issued within a three-yearperiod or revenues exceeds$1billion or the market value of the shares of our Class A common stock that are held by non-affiliatesexceeds $700millionon the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the followingfiscal year. As an emerging growth company, we are not required to comply with the auditor attestation requirements of Section 404 ofthe Sarbanes-OxleyAct, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxystatements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approvalof any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoptionof new or revised accounting standards that have different effective dates for public and private companies until those standards applyto private companies. As such, our financial statements may not be comparable to companies that comply with public company effectivedates. As a result, potential investors may be less likely to invest in our securities.

42

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

Risk management and strategy

We rely on our informationtechnology to operate our business. We have policies and processes designed to protect our information technology systems, some of whichare managed by third parties, and resolve issues in a timely manner in the event of a cybersecurity threat or incident. We seek to mitigatecybersecurity risks through a combination of monitoring and detection activities, use of anti-malware applications, employee training,quality audits and communication and reporting structures, among other processes. We plan to engage a third-party consultant to assistus with designing controls and our cybersecurity risk management framework. We have not encountered cybersecurity threats or incidentsthat have had a material impact on our business.

Governance

Our Board of Directors hasspecific oversight responsibility for cybersecurity, which also oversees our general risk management. The Board of Directors reviews anddiscusses with management our policies, practices and risks related to information security and cybersecurity. Our chief financial officerhas primary responsibility for assessing, monitoring and managing cybersecurity risks. Our chief financial officer provides an updateto the Board of Directors on any risks related to cybersecurity on a quarterly basis. Our incident response plan includes notifying theBoard of Directors of any material threats or incidents that arise.

ITEM 2. PROPERTIES

The Company leases its current executive office,which is located at 127 N. Garfield Avenue, Monterey Park, California 91732, and is also the location of the Maison Monterey Park store.All of our retail supermarkets lease operating space from various third parties with which we maintain long-termleases.

The list below details the information relatedto our leases:

We believe that our facilities are sufficient forour current needs and operations. For more information on the Company’s leases, please refer to Note13 — “Leases”in the notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

ITEM 3. LEGAL PROCEEDINGS

Information regarding our legal proceedings canbe found in Note 17 — “Commitments and Contingencies” to the consolidated financial statements included in thisAnnual Report on Form 10-K and is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

43

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our Class A common stock is listed on the NasdaqStock Market LLC under the trading symbol “MSS.”

Stockholders

As of August 6, 2024, we had six stockholders ofrecord of our Class A common stock.

Dividend Policy

We have never declared or paid cash dividends onour capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declareor pay any cash dividends on our Class A common stock in the foreseeable future. Any further determination to pay dividends on our capitalstock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, resultsof operations, cash flows, capital requirements, general business conditions, and other factors that our board of directors considersrelevant.

Recent Sales of Unregistered Securities

There were no sales of unregistered securitiesduring fiscal year 2024 other than those transactions previously reported to the SEC on our Quarterly Reports on Form 10-Q and CurrentReports on Form 8-K.

Issuer Purchases of Equity Securities

The Company did not repurchase any of its outstandingshares of Class A common stock during the fourth quarter of the fiscal year ended April 30, 2024.

ITEM 6. [RESERVED]

44

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysisof financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. See “SpecialNote Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with those statements.You should read the following discussion in conjunction with our audited consolidated financial statements and related notes which areincluded elsewhere in this Annual Report on Form 10-K. Our actual results may differ materially from those discussed in the forward-lookingstatements as a result of various factors, including, but not limited to, those described under “Risk Factors”, and includedin other portions of this Annual Report on Form 10-K.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K includes forward-lookingstatements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-lookingstatements are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels ofactivity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievementsexpressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology suchas “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,”“believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factorsthat might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and ExchangeCommission (“SEC”) filings. References to “we,”, “us,” “our,” “Maison” orthe “Company” are to Maison Solutions Inc., except where the context requires otherwise.

Overview

We are a fast-growing, specialty grocery retaileroffering traditional Asian food and merchandise to modern U.S.consumers, in particular to members of Asian-Americancommunities.We are committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-Americanfamilyvalues and cultural norms, while also accounting for the new and faster-pacedlifestyle of younger generations and the diverse makeupof the communities in which we operate. To achieve this, we are developing a center-satellitestores network. Since our formationin July2019, we have acquired equity interests in four (4)traditional Asian supermarkets in Los Angeles, California. SinceApril30, 2022, we have been operating these supermarkets as center stores. The center stores target traditional Asian-American,family-orientedcustomers with a variety of meat, fresh produce and other merchandise, while additionally stocking items which appealto the broader community. We are operating these traditional Asian-American, family-orientedsupermarkets with our management’sdeep cultural understanding of our consumers’ unique consumption habits. In addition to the traditional supermarkets, on December31,2021, we acquired a 10% equity interest in a new grocery store located in Alhambra, California, a young and active community (the “AlhambraStore”) from Mrs.Grace Xu, the spouse of Mr.John Xu, our chief executive officer (“CEO”), Chairman and President.Our intention is to acquire the remaining 90% equity interest in the Alhambra Store and operate it as our first satellite store. The investmentin the Alhambra Store is considered a related party transaction because Mrs.Xu is the spouse of Mr.Xu, our CEO, Chairman andPresident.Please refer to “Certain Relationships and Related Party Transactions” for further explanation. In May 2021,the Company acquired 10% of the equity interests in Dai Cheong, a wholesale business which mainly supplies foods and groceries importedfrom Asia, which is owned by John Xu, our CEO, Chairman and President. We intend to acquire the controlling ownership of Dai Cheong. Byadding Dai Cheong to our portfolio, we will take the first step toward creating a vertically integrated supply-retailstructure.Having an importer as a part of our portfolio will allow us the opportunity to offer a wider variety of products and to reap the benefitsof preferred wholesale pricing. On June 27, 2023, we invested $1,440,000 for 40% equity interest in HKGF Market of Arcadia, LLC (“HKGFArcadia”), a supermarket in the city of Arcadia, California, to further expands our footprint to new neighborhood. On December 6,2023, we invested additional $360,000 for another 10% equity interest in HKGF Arcadia. On February 1, 2024, the Company and JC BusinessGuys, Inc., the only other member of HKGF Arcadia (“JC Business Guys”), entered into a third amendment to the operating agreementof HKGF Arcadia to decrease our percentage equity interest in HKGF Arcadia to 49% and increase JC Business Guy’s percentage equityinterest to 51%. On November 3, 2023, we incorporated a wholly-owned subsidiary AZLL LLC (“AZLL”)in Arizona. On April 8, 2024, AZLL closed an acquisition transaction and purchased 100% of the equity interests in Lee Lee Oriental Supermart,Inc (“Lee Lee”) for an aggregate purchase price of approximately $22.2 million, consisting of: (i) $7.0 million in cash paidimmediately at the closing of the Transaction, and (ii) a senior secured note agreement with an original principal amount of approximately$15.2 million. Lee Lee holds three supermarkets specializing on South-East groceries in Arizona.

45

Collaboration with JD.com

On April19, 2021,JD E-commerceAmericaLimited (“JD US”), the U.S. subsidiary of JD.com, and Maison entered into a Collaboration Agreement (the “CollaborationAgreement”) pursuant to which JD.com will provide services to Maison focused on updating in store technology through the developmentof a new mobile app, the updating of new in-storetechnology, and revising store layouts to promote efficiency. The agreement includeda consultancy and initialization fee of $220,000, 40% of which was payable within three (3)days of effectiveness and which has beenpaid, 40% of which is due within three (3)days of the completion and delivery of initialization services as outlined in the CollaborationAgreement, and the remaining 20% is payable within three (3)days of the completion and delivery of the implementation services,as outlined in the Collaboration Agreement. The Collaboration Agreement also included certain additional storage and implementation feesto be determined by the parties and royalty fees, following the commercial launch of the platform developed by JD.com, of 1.2% of grossmerchandise value based on information generated by the platform. For each additional store requiring consultancy and initialization service,an additional $50,000 will be charged for preparing the feasibility plan for such additional store. The Collaboration Agreement has aninitial term of 10years and customary termination and indemnification provisions. Simultaneously with the effectiveness of the CollaborationAgreement, JD US and Maison entered into an Intellectual Property License Agreement (the “IP Agreement”) outlining certaintrademarks, logos and designs and other intellectual property rights used in connection with the retail supermarket operations outlinedin the Collaboration Agreement, which includes an initial term of 10years and customary termination provisions.

Key Factors that Affect Operating Results

Inflation

The inflation rate for the UnitedStates was3.4% for the year ended April 30, 2024, 4.9% for the year ended April 30, 2023 and 8.3% for the year ended April 30, 2022 according toBureau of Labor Statistics. Inflation increased our purchase costs, occupancy costs, and payroll costs.

Operating Cost Increase After InitialPublic Offering

We historically have operated our business as aprivate company. We completed our initial public offering on October 10, 2023. As a public company, we are subject to increased operatingcosts related to our listing on Nasdaq, including increased costs related to our compliance with Securities Act and Exchange Act periodicreporting, annual audit expenses, legal service expenses, and related consulting service expenses.

Competition

Food retail is a competitive industry. Our competitionvaries and includes national, regional, and local conventional supermarkets, national superstores, alternative food retailers, naturalfoods stores, smaller specialty stores, farmers’ markets, supercenters, online retailers, mass or discount retailers and membershipwarehouse clubs. Our principal competitors include 99 Ranch Market and H-Martfor conventional supermarkets and Weee! for onlinegroceries. Each of these stores competes with us based on product selection, product quality, customer service, price, store format, location,or a combination of these factors. In addition, some competitors are aggressively expanding their number of stores or their product offerings.Some of these competitors may have been in business longer, may have more experience operating multiple store locations, or may have greaterfinancial or marketing resources than us.

As competition in certain areas intensifies orcompetitors open stores within proximity to our stores, our results of operations may be negatively impacted through a loss of sales,decrease in market share, reduction in margin from competitive price changes, or greater operating costs. In addition, other establishedfood retailers could enter our markets, increasing competition for market share.

Payroll

As of April 30, 2024, we had approximately 355employees including employees from our newly acquired subsidiary Lee Lee. Our employees are not unionized nor, to our knowledge, are thereany plans for them to unionize. We have never experienced a strike or significant work stoppage. We consider our employee relations tobe good. Minimum wage rates in some states have recently increased. For example, in California, the minimum wage was $15.50 per hour in2023, and increased to $16 per hour starting from January 1, 2024. Our payroll and payroll tax expenses were $7.4million and$6.2 million for the years ended April 30, 2024 and 2023, respectively.

46

Vendor and Supply Management

Maison believes that acentralized and efficient vendor and supply management system is the key to profitability. Maison has major vendors, including ONCO FoodCorp., GF Distribution, Inc., and XHJC Holding Inc. For the year ended April 30, 2024, these three suppliers accounted for 15%, 7% and26% of the Company’s total purchases, respectively. For the year ended April 30, 2023, three suppliers accounted for 20%, 14%, and18% of the Company’s total purchases, respectively. Maison believes that its centralized vendor management enhances its negotiatingpower and improves its ability to manage vendor payables.

Store Maintenance and Renovation

From time to time, Maisonconducts maintenance on the fixtures and equipment for its stores. Any maintenance or renovations could interrupt the operation of ourstores and result in a decline in customer volume. Significant maintenance or renovation would affect our operations and operating results.Meanwhile, improving the store environment can also attract more customers and lead to an increase in sales. Maison focused on improvingand renovating our stores for the years ended April 30, 2024 and 2023. We spent $201,608 for the year ended April 30, 2024 for repairsand maintenance and supermarket renovation, a decrease of $71,797 compared to $273,405 for the year ended April 30, 2023.

Going concern

The accompanyingconsolidated financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity ofoperations, realization of assets, and liquidation of liabilities in the normal course of business. For the year ended April 30, 2024,the Company had a net loss of approximately $3.34 million. The Company had an accumulated deficit of approximately $2.82 million as ofApril 30, 2024, and negative cash flow from operating activities of approximately $3.50 million for the year ended April 30, 2024. Thehistorical operating results including recurring losses from operations raise substantial doubt about the Company’s ability to continueas a going concern.

The Companyplans to increase its revenue by strengthening its sales force, providing attractive sales incentive programs, recruiting experiencedindustry-related managerial personnel, increasing marketing and promotion activities, seeking suppliers with competitive price and goodquality products, opening or acquiring additional specialty supermarkets in the locations that have less-competition.If deemed necessary,management could also seek to raise additional funds by way of admitting strategic investors, or private or public offerings, or by seekingto obtain loans from banks or others, to support the Company’s daily operation. While management of the Company believes in theviability of its strategy to generate sufficient revenues and its ability to raise additional funds on reasonable terms and conditions,there can be no assurances to that effect. The ability of the Company to continue as a going concern depends upon the Company’sability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds. There is noassurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that theamount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. If the Companyis unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay, reduce or cease itsoperations.

CriticalAccounting Policy

Related Parties

The Company identifiesrelated parties, and accounts for, and discloses related party transactions in accordance with ASC Topic850 “Related PartyDisclosures” and other relevant ASC standards. Parties are considered to be related to the Company if the parties, directly or indirectly,through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also includeprincipal owners of the Company, its management, members of the immediate families of principal owners of the Company and its managementand other parties with which the Company may deal with if one party controls or can significantly influence the management or operatingpolicies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

47

Use of Estimates

The preparation of consolidatedfinancial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statementsand the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates are used for, but notlimited to, useful lives of property and equipment, commitments and contingencies, inventory reserve, allowance for estimated uncollectableaccounts receivables and other receivables, impairment of long-livedassets, contract liabilities, and valuation of deferred taxassets. Given the global economic climate and additional or unforeseen effects from the COVID-19pandemic, these estimates have becomemore challenging, and actual results could differ materially from these estimates.

Inventories

Inventories, consistingof products available for sale, are primarily accounted for using the first-in, first-outmethod, and are valued at the lower ofcost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likelymethod of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverablevalues of each disposition category. The Company records inventory shrinkage based on historical data and management’s estimatesand provided a reserve for inventory shrinkage for thefiscal years ended April30,2024 and 2023.

Revenue Recognition

The Company adopted ASCTopic 606, Revenue from Contracts with Customers (“ASC Topic 606”), from May1, 2020 using the modified retrospectivetransition approach to all contracts that did not have an impact on the beginning retained earnings on May1, 2020. The Group’srevenue recognition policies effective on the adoption date of ASC Topic 606 are presented as below.

In accordance with ASCTopic 606, the Company’s performance obligation is satisfied upon the transfer of goods to the customer, which occurs at the pointof sale. Revenues are recorded net of discounts, sales taxes, and returns and allowances.

The Company sells Companygift cards to customers. There are no administrative fees on unused gift cards and the gift cards do not have an expiration date. Giftcard sales are recorded as contract liability when sold and are recognized as revenue when either the gift card is redeemed or the likelihoodof the gift card being redeemed is remote (“gift card breakage”). The Company’s gift card breakage rate is based uponhistorical redemption patterns and it recognizes breakage revenue utilizing the redemption recognition method. The Company also offersdiscounts on the gift cards sold to its customers. The discounts are recorded as sales discount when gift card been redeemed.

The Company’s contractliability related to gift cards was $965,696 and $449,334 as of April 30, 2024 and 2023, respectively.

Leases

The Company determinesif an arrangement contains a lease at the inception of a contract under ASC Topic 842. At the commencement of each lease, management determinesits classification as an operating or finance lease. For leases that qualify as operating leases, ROU assets and liabilities are recognizedat the commencement date based on the present value of any remaining lease payments over the lease term. For this purpose, the Companyconsiders only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicitrate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the presentvalue of lease payments. The ROU assets include adjustments for accrued lease payments.

ROU assets also includeany lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms mayinclude options to extend or terminate the lease when it is reasonably certain that it will exercise such options.

48

A short-termleaseis defined as a lease that, at the commencement date, has a lease term of 12months or less and does not include an option to purchasethe underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-termlease,the Company evaluates the lease term and the purchase option. Hence, the Company does not recognize any operating lease ROU assets andoperating lease liabilities for short-termleases.

The Company evaluatesthe carrying value of ROU assets if there are indicators of impairment and review the recoverability of the related asset group. If thecarrying value of the asset group is determined to not be recoverable and is in excess of the estimated fair value, the Company will recordan impairment loss in other expenses in the consolidated statements of operations.

The Company also subleasescertain mini stores that are within the supermarket to other parties. The Company collects security deposits and rent from these sub-leasetenants.The rent income collected from sub-leasetenants recognized as rental income and deducted occupancy cost.

Recently Issued Accounting Pronouncements

Please refer to Note2— “Summary of significant accounting policies” for details.

How to Assess Our Performance

In assessing performance,management considers a variety of performance and financial measures, including principal growth in net revenue, gross profit and selling,and general and administrative expenses. The key measures that we use to evaluate the performance of our business are set forth below.

NetRevenue

Our net revenues comprisegross revenues net of returns and discounts. We do not record sales taxes as a component of retail revenues as it is considered a pass-throughconduitfor collecting and remitting sales taxes.

Gross Profit

We calculate gross profitas net revenues less cost of revenues and occupancy costs. Gross margin represents gross profit as a percentage of net revenues. Occupancycosts include store rental costs. The components of our cost of revenues and occupancy costs may not be identical to those of our competitors.As a result, our gross profit and gross margin may not be comparable to similar data made available by our competitors.

Cost of revenue includesthe purchase price of consumer products, inbound and outbound shipping costs, including costs related to our sorting and delivery center,which is the warehouse attached to the El Monte store, and where we are the transportation service provider. Shipping costs to receiveproducts from our suppliers are included in our inventory and recognized in cost of revenues upon sale of products to our customers.

Selling, General and AdministrativeExpenses

Selling, general, andadministrative expenses primarily consist of retail operational expenses, administrative salaries and benefits costs, marketing costs,advertising costs, and corporate overhead.

Selling expenses mainlyconsist of advertising costs, promotion expenses, and payroll and related expenses for personnel engaged in selling and marketing activities.

General and administrativeexpenses primarily consist of costs for corporate functions, including payroll and related expenses; facilities and equipment expenses,such as depreciation and amortization expense and rent; and professional fees and litigation costs.

49

Results of Operations for the Years EndedApril 30, 2024 and 2023

Revenues

Our net revenues wereapproximately $58.0 million for the year ended April 30, 2024, an increase of approximately $2,644,049 or 4.8%, from approximately $55.4million for the year ended April 30, 2023. The increase in net revenues was driven by the inclusion of revenues from our newly acquiredsubsidiary (acquired in April 2024) Lee Lee of $4.6 million, and increased sales of Maison Monterey Park supermarket (acquired in July2023) by $4.4 million, which was partly offset by decreased sales of Maison San Gabriel by $3.3 million, decreased sales of Maison Monroviaby $1.6 million and decreased sales of Maison El Monte by $1.5 million, as compared to the year ended April 30, 2023. Our existing four(4) supermarkets contributed $53.4 million in revenue during the year ended April 30, 2024, a decrease of approximately $2.0 million,as compared to the year ended April 30, 2023. The $2.0 million decrease was mainly due to increased competition from newly opened Asiansupermarkets near Maison San Gabriel, effect from ending of certain Covid-9 pandemic-era relief programs in fall 2023 such as losing accessto foods stamps due to resume of work requirement for food stamps, as well as temporary slow-down of Maison El Monte store due to renovation.

Cost of Revenues

50

Cost of revenues includescost of supermarket product sales and occupancy costs, which are store rent expense, depreciation for store property and equipment, inventoryshrinkage costs and store supplies. The depreciation expense comes from machinery & equipment, such as refrigerators, water heaters,forklifts, and freezers and furniture & fixtures, such as metal shelves, shopping carts, and LED lights. Shrinkage costs are differentfor different types of products. For example, fruits and vegetables have a high allowance rate during the receiving and display process.The seafood and meat departments have a low allowance rate because the non-freshproducts can freeze and sell for the same priceor even higher price after being cut. The cost of revenues increased by $3.5 million, from $42.9 million for the year ended April 30,2023, to approximately $46.4 million for the year ended April 30, 2024. The increase in cost of revenues was mainly due to increase inour revenue, increase in inventory shrinkage costs by $0.6 million due to write-off inventory from Lee Lee after we took over, and increasedoccupancy cost by $0.9 million due to increased monthly rent of our existing supermarkets and occupancy costs from Lee Lee.

Gross Profit and Gross Margin

Gross profit was approximately$11.6 million and $12.5 million for the years ended April 30, 2024 and 2023, respectively. Gross margin was 20.0% and 22.5% for the yearsended April 30, 2024 and 2023, respectively. Our supermarkets’ sales profit margins decreased by 2.5% for the year ended April 30,2024 compared to the year ended April 30, 2023. The decrease in our gross profit was mainly due to the increase in inventory write-offand increase in supermarkets rent as described above.

Total Operating Expenses

Total operating expenseswere approximately $14.3 million for the year ended April 30, 2024, an increase of approximately $1.9million, compared to approximately$12.4 million for the year ended April 30, 2023. Total operating expenses as a percentage of revenues were 24.7% and 22.3% for the yearsended April 30, 2024 and 2023, respectively. The increase in operating expenses was primarily attributable to the increase in sellingexpenses, which included the increase in payroll expense, utility expense, advertising and promotion expense, postage & delivery expenseand merchant service charges. Payroll expense increased by $1.2 million in the year ended April 30, 2024, as compared to the year endedApril 30, 2023 due to the increase of hourly rate and increased number of employees due to the acquisition of Lee Lee. Utility expenseincreased by $0.2 million in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Advertising and promotion expenseincreased by $79,971 in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Postage and delivery expenses increasedby $55,884 in the year ended April 30, 2024, as compared to the year ended April 30, 2023. Merchant eservice charges increased by $0.1million in the year ended April 30, 2024, as compared to the year ended April 30, 2023 due to increased sales as describe above.

The increase in generaland administrative expenses during the year ended April 30, 2024 was primarily due to increased office expenses of approximately $459,270,increased professional fee by $231,645 and increased amortization expense of $156,475 due to the new trademark acquired through the acquisitionof Lee Lee, which was partly offset by decreased bad debt expenses by $359,035, decreased insurance expense by $31,609, decreased repairand maintenance expense by $71,797, and decrease other miscellaneous expenses by $103,611.

51

Other Income (Expenses), Net

Other expenses was $118,201for the year ended April 30, 2024 compare to other income of $1,849,534 for the year ended April 30, 2023. For the year ended April 30,2024, other expenses mainly consisted of investment loss from equity method investment of $538,542, which was partly offset by $383,161employee retention credit (“ERC”) received in 2024 and other income of $37,180. For the year ended April 30, 2023, other incomemainly consisted of $1.9 million ERC received for the year ended April 30,2023. The ERC is a refundable tax credit for businesses thatcontinued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020to December 31, 2021.

Interest Income (Expense), Net

Interest expense was $124,260for the year ended April 30, 2024, an increase of $166,866, from interest income of $42,606 for the year ended April 30, 2023. For theyear ended April 30, 2024, the interest expense was for the SBA Loans and the AFNB Loans. The interest income for the year ended April30, 2023 was from the loan receivables from Drop in the Ocean, Inc, which was repaid in full as of April 30, 2023.

Income Taxes Provisions

Income tax expense was$440,562 for the year ended April 30, 2024, an increase of $104,076, from income taxes expense of $336,486 for the year ended April 30,2023. The increase was mainly due to increased taxable income from our stores for the year ended April 30, 2024 compared to the year endedApril 30, 2023, despite we had significant taxable loss for our parent company.

Net Income (Loss)

Net loss attributableto the Company was $3,340,206 for the year ended April 30, 2024, an increase of $4,592,009, or 366.8%, from a $1,251,803 net income attributableto the Company for the year ended April 30, 2023. This was mainly attributable to the reasons discussed above, which included a decreasein gross profit by $830,063, decreased other income by $1,429,193, increased investment loss from equity method investment by $538,542,increased operating expenses by $1,957,590 and increased income tax expense by $104,076, which was partly offset by increased net lossattribute to noncontrolling interest by $434,321.

Liquidity and Capital Resources

Cash Flows for the Year Ended April30, 2024 Compared to the Year Ended April 30, 2023

As of April 30, 2024,we had cash, cash equivalents and restricted cash of approximately $1,101. We had net loss attributable to us of $3,340,206 for the yearended April 30, 2024, and had a working capital deficit of approximately $16.9 million as of April 30, 2024. As of April 30, 2024, theCompany had outstanding loan facilities of approximately $2.56million SBA loan and $15.1 million secured senior note payable dueto acquisition of Lee Lee.

In assessing its liquidity,management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, andits operating and capital expenditure commitments. We have funded our working capital, operations and other capital requirements in thepast primarily by equity contributions from shareholders, cash flow from operations, government grants, and bank loans. Cash is requiredto pay purchase costs for inventory, rental expenses, salaries, income taxes, other operating expenses and to repay debts. Our abilityto repay our current expenses and obligations will depend on the future realization of our current assets. Management has considered thehistorical experience, the economy, trends in the retail grocery industry, the expected collectability of our accounts receivable andthe realization of the inventories as ofApril 30, 2024 and 2023. Our ability to continue to fund these items may be affected bygeneral economic, competitive, and other factors, many of which are outside of our control.

52

On October 4, 2023, weentered into an Underwriting Agreement with Joseph Stone Capital, LLC in connection with the Company’s initial public offering (the“IPO”) of 2,500,000 shares of Class A common stock, par value $0.0001, at a price of $4.00 per share, less underwriting discountsand commissions. The IPO closed on October 10, 2023, and the Company received net proceeds of approximately $8.72 million, after deductingunderwriting discounts and commissions and estimated IPO offering expenses payable by the Company.

On November 22, 2023,we entered into certain securities purchase agreements (the “Securities Purchase Agreements”) with certain investors (the“Investors”). Pursuant to the Securities Purchase Agreements, we sold an aggregate of 1,190,476 shares of the Company’sClass A common stock, par value $0.0001 per share, to the Investors at a per share purchase price of $4.20 (the “PIPE Offering”).The PIPE Offering closed on November 22, 2023. We received net proceeds of approximately $4.60 million, after deducting investment banker’sdiscounts and commissions and offering expenses payable by the Company.

We plan to acquire andopen additional supermarkets with a portion of the proceeds of our IPO and the PIPE Offering to expand our footprint to both the WestCoast and the East Coast. This includes completing the acquisition of the remaining 90% equity interests in both the Alhambra Store andDai Cheong; opening new satellite stores in both Southern and Northern California in 2024 or 2025; acquiring up to five (5) center storesin 2024 and 2025 as part of our East Coast expansion; and establishing a new warehouse in New York City to serve the East Coast by theend of 2025.

To accomplish such expansionplan, we estimate the total related capital investment and expenditures to be approximately $35million to $40million, amongwhich approximately $13million to $16million will be required within the next 12months to support our preparation andopening of new stores in Southern and Northern California and acquiring additional supermarkets on the East Coast. This is based on management’sbest estimate as of the date of this Report.

We used part of the proceedsfrom our IPO to support our business expansion described above. We may also seek additional financing, to the extent needed, and therecan be no assurance that such financing will be available on favorable terms, or at all. Such financing may include the use of additionaldebt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertibleinto equity securities could result in immediate and possibly significant dilution to our existing shareholders. If it is determined thatthe cash requirements exceed the Company’s amounts of cash on hand, the Company may also seek to issue additional debt or obtainfinancial support from shareholders.

All of our business expansionendeavors involve risks and will require significant management, human resources, and capital expenditures. There is no assurance thatthe investment to be made by us as contemplated under our future expansion plans will be successful and generate the expected return.If we are not able to manage our growth or execute our strategies effectively, or at all, our business, results of operations, and prospectsmay be materially and adversely affected.

The following table summarizesour cash flow data for the years ended April 30, 2024 and 2023.

Operating Activities

Net cash used by operatingactivities was approximately $3.5 million for the year ended April 30, 2024, which mainly comprised of net loss of $3,387,029, add-backof non-cash adjustment to net loss including depreciation expense of $461,868, and investment loss from 49% equity investee HKGF Arcadiastore of $538,542. In addition, for the year ended April 30, 2024, we had cash outflow from 1) increased outstanding accounts receivablefrom related parties of $271,461, 2) increased prepayment to vendors of $1,716,468, 3) increased outstanding other receivables and othercurrent assets of $474,943, 4) increased cash outflow on security deposit of $488,717, 5) payment for accounts payable of $59,633, and6) payment of income tax payable of $518,516.

53

However, our net cashused in operating activities for the year ended April 30, 2024 was mainly offset by subtracting a non-cash adjustment from net loss forreversal of bad debt of $60,000, and increased cash inflow from 1) payment collected from accounts receivable of $203,481, 2) decreaseof inventories of $0.9million, 3) anincrease of accounts payable to related parties of $106,725, 4) an increase of operatinglease liabilities of $400,913, 5) an increase of accrued expenses and other payables of $342,592, 6) an increase of contract liabilitiesof $503,326 and 7) an increase of other long-term payables of $19,477.

Net cash provided by operating activities was approximately$0.5million for the year ended April 30, 2023andwas mainly comprised of net income of approximately $1.6million,add-backof non-cash adjustments to net income including depreciation and amortization expense of approximately $0.4million,and bad debt expense of $0.2 million. Our cash inflow increase from our operating activities was also due to payment collected from accountsreceivable from related parties of $0.2 million,decrease of inventories of approximately $0.3million,increase from changeof operating lease liabilities of approximately $0.2 million, and an increase of outstanding taxes payable of approximately $0.3million.

However, our net cash provided by operating activitiesfor the year ended April 30, 2023 was mainly offset by subtracting a non-cash adjustment from net income for reversal of inventory reserveof $0.1 million, a decreased cash inflow from our operating activities due to anincrease of outstanding accounts receivable of approximately$0.3million, an increaseofoutstanding other receivables and other current assets of approximately $0.5 million, an increaseof prepayment of approximately of $0.8 million, an increase of payment for accounts payable of $0.6 million, an increase of payment foraccounts payable to related parties of $0.2 million, and an increased payment for accrued liability and other payables of $0.5million.

We had a net loss of $3,387,029for the year ended April 30, 2024, an increase of $5,026,330 compared with a net income of $1,639,301 for the year ended April 30, 2023.Our cash outflow of $3,503,146 for the year ended April 30, 2024 represented an increase of $3,987,337 cash outflow, compared with a $484,191cash inflow in the year ended April 30, 2023. The increased net cash outflow for the year ended April 30, 2024 was mainly due to increasedcash outflow from net loss by $5,026,330 with change of non-cash adjustments by $458,470, increased prepaid payment to vendors by $896,876,increased security deposits by $494,371, increased income tax paid by $853,138, which was partly offset by increased collection from accountsreceivable by $461,790, increased cash inflow from inventories by $570,843, decreased cash outflow on accounts payable by $530,018, decreasedcash outflow on accrued expenses and other payables by $845,930, and increased payment from contract liabilities by $435,289.

Investing Activities

Net cash used in investingactivities was approximately $12.2million for the year ended April 30, 2024, which mainly consisted of store renovation and purchaseof equipment of $382,132, payment of intangible assets of $2.95 million,payment for investment into TMA Liquor Inc of $75,000,paymentfor 49% investment into Good Fortune Arcadia supermarket of approximately $1.8million, and payment for acquisition of subsidiaryLee Lee of $7,000,000.

Net cash provided by investing activities was approximately$1.9million for the year ended April 30, 2023, which mainly consisted of loan repayment from third parties of approximately $4.4million.This was partially offset with the purchase of equipment of $49,388andpayment for acquisition of subsidiary Maison MontereyPark of $2.5million.

Financing Activities

Net cash provided by financingactivities was approximately $13.1 million for the year ended April 30, 2024, which mainly consisted of net proceeds from issuance ofcommon stock of approximately $13.3 million, bank overdraft of $97,445 and borrowing from related parties $250,000, which was partiallyoffset by repayment on loans payable of approximately $370,825 million, and repayment for a note payable of $150,000.

Net cash used in financing activities was approximately$0.7million for the year ended April 30, 2023, which mainly consisted of bank overdrafts of $281,941, repayment on loans payableof $362,731, and repayment to related parties of $101,965.

54

Debt

U.S.Small Business Administration(the “SBA”)

On June15, 2020,Maison Monrovia entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and the maturity date on June15,2050. On June15, 2020, Maison San Gabriel entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interestrate and the maturity date on June15, 2050. On June15, 2020, Maison El Monte, entered into a $150,000 Business Loan Agreementwith the SBA at 3.75% annual interest rate and the maturity date on June15, 2050. Per the SBA loan agreement, all these three loans’interest payments were deferred to December2022.

On January12, 2022,Maison San Gabriel received an extra $1,850,000 fund from the SBA at 3.75% annual interest rate and the maturity date on June15,2050. Maison El Monte received an extra $350,000 from the SBA at 3.75% annual interest rate and the maturity date on June15, 2050.

Asof April 30, 2024 and 2023, the Company’s aggregate balance on the three SBA loans was $2,561,299and $2,624,329, respectively.

Senior Secured Note Payable

On April 8, 2024, AZLLclosed an acquisition transaction and purchased 100% of the equity interests in Lee Lee for an aggregate purchase price of approximately$22.2 million, consisting of: (i) $7.0 million in cash paid immediately at the closing of the Transaction, and (ii) a senior secured noteagreement with an original principal amount of approximately $15.2 million entered on April 8, 2024.

Under the senior securednote agreement, the Secured Note will accrue interest on the outstanding principal amount at an annual interest rate of five percent (5%).The payment schedule of the principal amount of the secured note is as follows: (i) $2.5 million due and immediately payable on each ofMay 8, 2024 and June 8, 2024; (ii) $1.5 million due and immediately payable on each of September 8, 2024, October 8, 2024 and November8, 2024; (iii) $1.0 million due and immediately payable on December 8, 2024; and (iv) approximately $4.7 million due and immediately payableon February 8, 2025. Additionally, pursuant to the terms and conditions of the senior secured note agreement, the principal amount maybe adjusted to include certain Premium Guarantees (as defined in the senior secured note agreement) if certain conditions, as set forthin the senior secured note agreement and the purchase agreement, are not met.

Upon an “Event ofDefault” under the senior secured note agreement, the holders of the secured note will have certain rights, including the rightto (i) declare all of the obligations, as defined in the senior secured note agreement to be immediately due and payable, and (ii) resumedaily operational control of Lee Lee’s operations until such time as the obligations, as defined in the senior secured note agreement,have been satisfied. Additionally, if an “Event of Default” occurs, the outstanding principal amount will bear interest atthe simple interest rate of 10 percent (10%) per annum, from the date of such Event of Default until all such sum are fully paid.

As of April30, 2024, the Company had an outstanding note payable of $15,126,065 to the sellers of Lee Lee with an annual interest rate of 5%, theCompany is required to repay the full amount before February 8, 2025 as described above.

On April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Stock Purchase Agreement,AZLL entered into a guarantee (the “Purchaser Guarantee”) to and for the benefit of the Sellers, pursuant to which AZLL unconditionallyguarantees the payment by Lee Lee of the Principal Amount, as adjusted pursuant to the Secured Note and the faithful and prompt performanceby Lee Lee of the conditions and covenants of the Secured Note.

Also on April 8, 2024, in connection with the execution of the Senior Secured Note Agreement, and pursuant to the Purchase Agreement,John Jun Xu, Chairman, Chief Executive Officer and controlling stockholder of the Company, and Grace Xu, spouse of John Jun Xu (togetherwith John Jun Xu, the “Xu Guarantors”), entered into a guarantee (the “Xu Guarantee” and, together with the PurchaserGuarantee, the “Guarantees”) to and for the benefit of the Sellers, pursuant to which the Xu Guarantors unconditionally guaranteethe payment by Lee Lee of the Principal Amount, as adjusted pursuant to the Secured Note and the faithful and prompt performance by LeeLee of the conditions and covenants of the Secured Note.

Commitments and Contractual Obligations

The following table presentsthe Company’s material contractual obligations as of April 30, 2024:

55

Contingencies

The Company is otherwiseperiodically involved in various legal proceedings that are incidental to the conduct of its business, including, but not limited to,employment discrimination claims, customer injury claims, and investigations. When the potential liability from a matter can be estimatedand the loss is considered probable, the Company records the estimated loss. Due to uncertainties related to the resolution of lawsuits,investigations, and claims, the ultimate outcome may differ from the estimates. Although the Company cannot predict with certainty theultimate resolution of any lawsuits, investigations, and claims asserted against it, management does not believe any currently pendinglegal proceeding to which the Company is a party will have a material adverse effect on its financial statements.

On January 2, 2024, theCompany and our executive officers and directors, as well as Joseph Stone Capital LLC, and AC Sunshine Securities LLC, the underwritersin the Company’s initial public offering (together, the “Defendants”), were named in a class action complaint filedin the Supreme Court of the State of New York alleging violations of Sections 11 and 15 of the Securities Act of 1933, as amended (IlsanKim v. Maison Solutions Inc., et. al, Index No. 150024/2024). As relief, the plaintiffs are seeking, among other things, compensatorydamages. On or about April 17, 2024, the parties agreed to stay the action in favor of the Rick Green matter described immediately below.

On January 4, 2024, theDefendants were named in a class action complaint filed in the United States District Court for the Central District of California allegingviolations of Sections 11 and 15 of the Securities Act of 1933, as amended, as well as violations of Sections 10(b) and 20(a) of the SecuritiesExchange Act of 1934, as amended (Rick Green and Evgenia Nikitina v. Maison Solutions Inc., et. al., Case No. 2:24-cv-00063). Asrelief, the plaintiffs are seeking, among other things, compensatory damages.

The Company and Defendantsbelieve the allegations in both complaints are without merit and intend to defend each suit vigorously.Itis reasonably possible that a loss may be incurred; however, the possible range of losses is not reasonably estimable given the pendingstatus of both cases.

On April 9, 2024, a shareholderderivative action was brought by Shah Azad derivatively on behalf of the Company against John Xu, Tao Han, Alexandria Lopez, Bin Wang,Mark Willis, and Xiaoxia Zhang, and the Company itself as a nominal defendant. The complaint was filed in the United States District Courtfor the Central District of California, Case No. 2:24-cv-02897. On April 12, 2024, another derivative complaint was filed by Arnab Baralin the United States District Court Central District of California, Case No. 2:24-cv-03018. The two cases have since been consolidated,with the Azad case taking lead. The lawsuits allege breaches of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement,waste of corporate assets, and contribution under Section 11(f) of the Securities Act and Section 21D of the Exchange Act. The claimsarise from the allegations underlying the class action securities lawsuits. On July 19, 2024, the Court ordered the Azad case stayed untila motion to dismiss is heard in the class action securities action.

In May2020,Maison El Monte was named as a co-defendantin a complaint filed by a consumer advocacy group alleging violations of a Californiahealth and safety regulation. The case is pending in the Superior Court of the State of California.It is reasonably possible thata loss may be incurred; however, the possible range of losses is not reasonably estimable given the pending status of the case.Assuch, the Company has not made any accruals of possible loss for the year ended April 30, 2023 and 2024 related to this case.

In June2022, MaisonSan Gabriel entered into a confidential settlement agreement with the plaintiff in connection with a California employment law case wherebyMaison San Gabriel agreed to pay $245,000to plaintiff in full settlement of all claims in the case. As a result of the settlementagreement, the Company accrued $245,000as a loss relating to the case as of April 30, 2024.

On September8, 2023, a complaint was filed by former employee against Maison San Gabriel for wrongful termination and labor law violation. MaisonSan Gabriel filed a genal denial in November 2023, and case management conference is scheduled for November 21, 2024.

Off-BalanceSheet Arrangements

The Company has guaranteedall of the loans described above, and Mr.John Xu, the Company’s CEO, Chairman and President, has personally guaranteed theloans with the SBA. The Company does not have any other off-balancesheet arrangements that either have, or are reasonably likelyto have, a current or future material effect on its financial condition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined by Rule12b-2 of the Exchange Act, we are not required to provide the information required under this item.

56

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MAISON SOLUTIONSINC.
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

F-1

Report of Independent RegisteredPublic Accounting Firm

To the Board of Directors and Shareholders

Maison Solutions Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidatedbalance sheets of Maison Solutions Inc. (the “Company”) as of April 30, 2024 and 2023, and the related consolidated statementsof operations, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referredto as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the financial position of the Company as of April 30, 2024 and 2023, and the results of its operations and its cashflows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statementshave been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the consolidated financialstatements, the Company has a negative working capital of approximately $16.8 million, accumulated deficit of approximately $2.8 millionand incurred net loss of $3.3 million for the year ended April 30, 2024. These conditions raise substantial doubt about the Company’sability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidatedfinancial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

Basis for Opinion

These consolidated financial statements are theresponsibility of the company’s management. Our responsibility is to express an opinion on the company’s financial statementsbased on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicablerules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with thestandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understandingof internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the company’sinternal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assessthe risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing proceduresthat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit providesa reasonable basis for our opinion.

/s/ Kreit & Chiu CPA LLP

We have served as the Company's auditor since 2022.

Los Angeles, California

August 13, 2024

PCAOB Firm ID: 6651

F-2

MAISON SOLUTIONSINC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

The accompanying notes to the consolidated financialstatements are an integral part of these statements.

F-3

MAISON SOLUTIONSINC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSOF INCOME

The accompanying notes to the consolidated financialstatements are an integral part of these statements.

F-4

MAISON SOLUTIONSINC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSOF STOCKHOLDERS’ EQUITY

The accompanying notes to the consolidated financialstatements are an integral part of these statements.

F-5

MAISON SOLUTIONSINC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTSOF CASH FLOWS

The accompanying notes to the consolidated financialstatements are an integral part of these statements.

F-6

MAISON SOLUTIONSINC.

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

APRIL 30, 2024 AND2023

F-7

F-8

F-9

F-10

F-11

F-12

F-13

F-14

F-15

F-16

F-17

F-18

F-19

F-20

F-21

F-22

F-23