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Leases

9 Months Ended

Jan. 31, 2024

13. Leases

The Company accounted for leases in accordance with ASU No. 2016-02, Leases (Topic 842) for all periods presented. The Company leases certain supermarkets and office facilities from third parties. Some of the Company’s leases include one or more options to renew, which are typically at the Company’s sole discretion. The Company evaluates the renewal options, and when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in re-measurement of the right of use (“ROU”) assets and lease liabilities. Operating ROU assets and lease liabilities are recognized at the lease commencement date, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments in a similar economic environment and over a similar term.

The Company’s leases mainly consist of store rent and copier rent. The store lease detail information is listed below:

Store		Lease Term Due
Maison Monrovia *		August 31, 2055 (with extension)
Maison San Gabriel		November 30, 2030
Maison El Monte		July 14, 2028
Maison Monterey Park		May 1, 2028

On April 1, 2023, the Company renewed lease of Maison Monrovia for additional five years with new monthly based rent of $40,000 for first year and 3% increase for each of the next four years. On July 6, 2023, the Company and the lessor entered an amendment to lease, pursuant to which the lessor will provide monthly basic rent abatement of $5,000 from August 1, 2023 through March 31, 2024, $2,500 from April 1, 2024 through March 31, 2025, and $1,000 from April 1, 2025 through March 31, 2026. As a result of increased monthly base rent, the Company remeasured the lease and determined the ROU and lease liability of this lease increased by $3.62 million for each.

As of January 31, 2024, the average remaining term of the supermarkets’ store lease was 9.47 years.

In June and November 2022, the Company entered three leases for three copiers with terms of 63 months for each. As of January 31, 2024, the average remaining term of the copier lease was 3.78 years.

The copier lease detail information was listed below:

Store		Lease Term Due
Maison Monrovia		January 1, 2028
Maison San Gabriel		January 1, 2028
Maison Monterey Park		August 1, 2027

The Company’s total lease expenses under ASC 842 are $0.85 million and $0.76 million for the three months ended January 31, 2024 and 2023, respectively. The Company’s total lease expenses under ASC 842 are $2.33 million and $1.99 million for the nine months ended January 31, 2024 and 2023 , respectively. The Company’s ROU assets and lease liabilities are recognized using an effective interest rate of range from 4.5% to 6.25%, which was determined using the Company’s incremental borrowing rate.

The Company’s operating ROU assets and lease liabilities were as follows:

	January 31, 2024		April 30, 2023

Operating ROU:
ROU assets – supermarket leases	$	20,980,731	$	22,517,925
ROU assets – copier leases		24,033		27,265
Total operating ROU assets	$	21,004,764	$	22,545,190

	January 31, 2024		April 30, 2023

Operating lease obligations:
Current operating lease liabilities	$	1,850,310	$	1,761,182
Non-current operating lease liabilities		21,309,934		22,711,760
Total lease liabilities	$	23,160,244	$	24,472,942

As of January 31, 2024, the five-year maturity of the Company’s operating lease liabilities was as follow:

Twelve Months Ended January 31,	Operating lease liabilities
2025	$	2,835,070
2026		2,897,055
2027		2,955,250
2028		3,002,423
2020		2,029,711
Thereafter		23,549,256
Total future undiscounted lease payments		37,268,765
Less: interest		(14,108,521	)
Present value of lease liabilities	$	23,160,244