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Loan Payables
 9 Months Ended
Jan. 31, 2024
Loan Payables [Abstract]  
Loan payables

11. Loan payables

 

A summary of the Company’s loans was listed as follows:

 

Lender  Due date  January 31,
2024		   April 30,
2023		 
            
American First National Bank  March 2, 2024  $57,369   $307,798 
U.S. Small Business Administration  June 15, 2050   2,577,247    2,624,329 
Total loan payables      2,634,616    2,932,127 
Current portion of loan payables      (121,942)   (370,828)
Non-current loan payables     $2,512,674   $2,561,299 

 

American First National Bank — a National Banking Association

 

On March 2, 2017, Maison Monrovia entered into a $1.0 million Business Loan Agreement with American First National Bank, a National Banking Association (“American First National Bank”), at a 4.5% annual interest rate with a maturity date on March 2, 2024 (the “Monrovia AFNB Loan”). On March 2, 2017, Maison San Gabriel, entered into a $1.0 million Business Loan Agreement with American First National Bank at a 4.5% annual interest rate with a maturity date on March 2, 2024 (the “San Gabriel AFNB Loan,” and, together with the Monrovia AFNB Loan, the “AFNB Loans”). The covenant of the AFNB Loans required that, so long as the loan agreements remains in effect, borrower will maintain a ratio of debt service coverage within 1.300 to 1.000. This coverage ratio was evaluated as of the end of each fiscal year. The interest rate for the AFNB Loans is subject to change from time to time based on changes in an independent index which is the Wall Street Journal US prime as published in the Wall Street Journal Money Rate Section. The annual interest rate for the AFNB Loans was ranging from 4.5% to 7.75% for the nine months ended January 31, 2023, and was 7.75% for the nine months ended January 31, 2024.

 

The collateral for the AFNB Loans is personally guaranteed by Mr. Wu, who is the prior owner and applicant for the bank loan, and each store’s assets including inventory, fixture, equipment, etc. At the same time, the Company maintained a minimum of $1.0 million in general liability insurance to cover the collateral business assets located at 935 W. Duarte Dr. Monrovia, CA 91016. As of April 30, 2022, the coverage ratio for Maison Monrovia was 1.01 and the coverage ratio for Maison San Gabriel was 2.00. The Company reported this situation to American First National Bank and there was no change on the term up to the date the Company issued these consolidated financial statements. The interest expense for the loan was $2,229 and $10,146 for the three months ended January 31, 2024 and 2023, respectively. The interest expense for the loan was $11,361 and $22,708 for the nine months ended January 31, 2024 and 2023, respectively.

 

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

 

Borrower  Due date  January 31,
2024		   April 30,
2023		 
            
Maison Monrovia  June 15, 2050  $145,957   $148,574 
Maison San Gabriel  June 15, 2050   1,945,371    1,980,725 
Maison El Monte  June 15, 2050   485,919    495,030 
Total SBA loan payables     $2,577,247   $2,624,329 

  

On June 15, 2020, Maison Monrovia entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and a maturity date on June 15, 2050. On June 15, 2020, Maison San Gabriel entered into a $150,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and a maturity date on June 15, 2050. On June 15, 2020, Maison El Monte entered into a $150,000 Business Loan Agreement with SBA at 3.75% annual interest rate and a maturity date on June 15, 2050.

 

On January 12, 2022, Maison San Gabriel entered into an additional $1,850,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and a maturity date on June 15, 2050.

 

On January 6, 2022, Maison El Monte, Inc. entered into an additional $350,000 Business Loan Agreement with the SBA at 3.75% annual interest rate and a maturity date on June 15, 2050.

 

Per the SBA loan agreement, all interest payments on these three loans were deferred to December 2022. As of January 31, 2024 and April 30, 2023, the Company’s aggregate balance on the three SBA loans was $2,577,247 and $2,624,329, respectively. Interest expenses were $23,210 and $23,709 for the three months ended January 31, 2024 and 2023, respectively. Interest expenses were $70,008 and $71,494 for the nine months ended January 31, 2024 and 2023, respectively. During the nine months ended January 31, 2024, the Company made repayment of $117,090 (which includes principal of $47,082 and interest expense of $70,008). During the nine months ended January 31, 2023, the Company made repayment of $13,010 (which includes principal of $5,107 and interest expense of $7,903).

 

As of January 31, 2024, the future minimum principal amount of loan payments to be paid by year were as follows:

 

Year Ending January 31,  Amount 
2025  $64,573 
2026   66,699 
2027   68,906 
2028   71,197 
2029   73,576 
Thereafter   2,232,296 
Total  $2,577,247