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Acquisition of subsidiary

12 Months Ended

Apr. 30, 2023

18. Acquisition of subsidiary

On June 30, 2022, the Company purchased 100% equity interest in GF Supermarket of MP, Inc (“Maison Monterey Park”), the legal entity holding a supermarket in Monterey Park. Mrs. Grace Xu (spouse of Mr. John Xu, the Company’s chief executive officer) is the selling shareholder of GF Supermarket of MP Inc. with 49% ownership percentage. Another selling shareholder of GF Supermarket of MP Inc. is DNL Management Inc with 51% ownership percentage, who is not a related party of the Company. The purchase consideration was $1.5 million. On February 21, 2023, the Company and the selling shareholders renegotiated and entered into an Amended Stock Purchase Agreement with an effective date on October 31, 2022, to amend the purchase price to $2.5 million, which both parties believed reflected the true fair value of Maison Monterey Park.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition. Goodwill as a result of the acquisition of Maison Monterey Park is calculated as follows:

Total purchase considerations	$	2,500,000
Fair value of tangible assets acquired:
Accounts receivable		79,651
Due from related party		25,000
Property and equipment		448,932
Security deposit		161,945
Inventory		872,084
Deferred tax asset		10,545
Operating lease right-of-use assets		4,680,216
Intangible assets (trademark) acquired		194,000
Total identifiable assets acquired		6,472,373

Fair value of liabilities assumed:
Bank overdraft		(281,940	)
Accounts payable		(865,769	)
Contract liabilities		(10,369	)
Income tax payable		(183,262	)
Accrued liability and other payable		(85,789	)
Tenant Security deposit		(32,200	)
Operating lease liabilities		(4,680,967	)
Deferred tax liability		(54,288	)
Total liabilities assumed		(6,194,584	)
Net identifiable assets acquired		277,789
Goodwill as a result of the acquisition	$	2,222,211

The following condensed unaudited pro forma consolidated results of operations for the Company for the years ended April 30, 2023 and 2022 present the results of operations of the Company and Maison Monterey Park as if the acquisitions occurred on May 1, 2022 and 2021, respectively.

The pro forma results are not necessarily indicative of the actual results that would have occurred had the acquisitions been completed as of the beginning of the periods presented, nor are they necessarily indicative of future consolidated results.

	For the Year Ended April 30, 2023
	(Unaudited)
Revenue	$	58,222,292
Operating costs and expenses		57,707,072
Income from operations		515,220
Other income		1,931,990
Income tax expense		(336,486	)
Net income	$	2,110,724

	For the Year Ended April 30, 2022
	(Unaudited)
Revenue	$	55,822,617
Operating costs and expenses		56,843,320
Loss from operations		(1,020,703	)
Other income		389,358
Income tax expense		(28,538	)
Net loss	$	(659,883	)