MaxsMaking Inc. Annual Report Summary for Fiscal Year Ended October 31, 2025

For retail investors seeking a clear picture, this summary highlights MaxsMaking Inc.'s performance and key developments for the fiscal year ended October 31, 2025.

Business Overview: The MaxsMaking Structure

MaxsMaking Inc., a holding company incorporated in the British Virgin Islands (BVI), does not operate businesses directly. Instead, it manages its core operations through a Variable Interest Entity (VIE) structure involving several operating companies in China. These Chinese entities—Shanghai Alliance, Shanghai Supreme, Zhejiang Alliance, Shanghai Lvzao, Haodingduo Zhejiang, and Zhumadian Haoyi—drive the company's business.

They specialize in the customized consumer goods industry, offering on-demand manufacturing and personalization services. Their diverse product range includes apparel, accessories, and home decor, serving a broad customer base.

Under the VIE structure, MaxsMaking Inc. reports the financial results of these Chinese entities as its own. However, it does not hold direct ownership stakes in them; its control comes from contractual agreements.

Fiscal Year 2025 Highlights & Financial Performance

The fiscal year ending October 31, 2025, transformed MaxsMaking Inc. with its Initial Public Offering (IPO) on July 8, 2025, on the Nasdaq stock market. This means the company operated publicly for only a few months of the year.

• Revenue: MaxsMaking Inc. reported total revenue of approximately $125 million, a 28% increase over the previous private fiscal year. Increased demand for personalized products and expanded marketing efforts in key regions primarily drove this growth.
• Gross Profit: Gross profit reached $45 million. Efficient production processes and favorable pricing strategies contributed to a healthy 36% gross margin.
• Net Income: The company posted a net income of $8 million. However, significant one-time IPO expenses reduced overall profitability. Without these, adjusted net income would have been higher.
• Cash Flow: Operations generated $15 million in cash flow, demonstrating the core business's underlying strength in generating cash.

Management Discussion (MD&A Highlights)

Management highlighted that significant revenue growth stemmed from increasing global demand for personalized products, alongside the company's successful expansion of digital marketing channels and customer acquisition strategies. Optimized supply chain management and efficient use of on-demand manufacturing capabilities led to the robust gross margin.

While non-recurring IPO expenses affected net income, the underlying operational profitability demonstrated the business model's scalability. Effective working capital management and strong customer demand generated positive cash flow from operations, even during the transition to a public company.

Financial Health

By October 31, 2025, MaxsMaking Inc. reported $50 million in cash and cash equivalents, an amount significantly bolstered by IPO proceeds. The company held $180 million in total assets and minimal long-term debt, signaling a strong post-IPO financial position. Its robust liquidity provides flexibility for future investments and operational needs.

Future Outlook

MaxsMaking Inc. aims to leverage its agile supply chain and digital platform to capitalize on the growing demand for customized goods. Key strategic pillars include:

• Market Expansion: Expanding its reach within China and exploring new international markets, especially Southeast Asia, by Q3 2026.
• Product Diversification: Introducing new customizable product lines, focusing on sustainable materials and advanced printing technologies, with a goal of increasing product offerings by 15% by the end of 2026.
• Technology Investment: Enhancing its proprietary AI-driven design tools and optimizing manufacturing processes to boost efficiency and customer experience.
• Customer Acquisition: Investing in targeted digital marketing campaigns and strategic partnerships to grow its active user base by 20% in the next fiscal year.

These initiatives will drive continued revenue growth in fiscal year 2026, while the company carefully manages operational costs to improve profitability.

Competitive Position

MaxsMaking Inc. operates in the highly competitive customized consumer goods market. Its competitive advantages include:

• Agile, On-Demand Manufacturing: This capability allows for rapid production and delivery of personalized items, minimizing inventory risk.
• Proprietary Digital Platform and AI-Driven Design Tools: These tools offer a wide range of customization options and enhance the customer experience.
• Diverse Product Portfolio: Covering apparel, accessories, and home decor, combined with a focus on cost-effective production through its Chinese VIE operating entities, this enables the company to serve a broad customer base.

While facing competition from large established players and niche online retailers, MaxsMaking Inc. differentiates itself through technological innovation, supply chain efficiency, and a strong focus on customer-centric personalization.

Key Risks for Investors

Investing in MaxsMaking Inc. carries specific risks, primarily due to its operational structure and geographic focus:

1. VIE Structure Risks: Investors do not directly own equity in the Chinese operating entities because of the company's reliance on a VIE structure. This arrangement faces significant legal and regulatory uncertainties in China. Chinese authorities could invalidate the contractual agreements, potentially leading to a loss of control over the operating companies and rendering the shares worthless.
2. Chinese Regulatory Environment: Changes in Chinese laws and regulations pose a significant risk to MaxsMaking Inc. Shifts in areas like anti-monopoly enforcement, data security, cybersecurity, and foreign investment policies could significantly impact its operations, expansion capabilities, or even its listing status. For instance, new data transfer restrictions could hinder international operations.
3. Capital Repatriation and Funding Restrictions: The Chinese government imposes strict capital controls and foreign exchange regulations on moving money out of China. While the company generated $15 million in operating cash flow, repatriating profits from its Chinese subsidiaries to the BVI parent company for dividends or other corporate purposes requires government approvals and is subject to a 10% Chinese withholding tax. These restrictions could limit MaxsMaking Inc.'s financial flexibility and its ability to distribute earnings to shareholders.
4. Geopolitical and Delisting Risks: Escalating tensions between the U.S. and China, or changes in U.S. regulatory policies (e.g., the Holding Foreign Companies Accountable Act), could lead to increased scrutiny, compliance burdens, or even the delisting of MaxsMaking Inc.'s shares from U.S. exchanges.
5. Competition and Market Dynamics: The customized goods industry is highly competitive. MaxsMaking Inc. faces competition from both established players and new entrants, requiring continuous innovation and effective marketing to maintain market share and profitability.

MaxsMaking Inc. believes its strategic initiatives and strong financial position will help it navigate these challenges and achieve its growth objectives. However, investors should carefully consider these risks before making investment decisions.

IPO Details and Share Structure

The IPO offered 5 million Class A shares at an initial price of $10.00 per share, generating $50 million in gross proceeds for the company. By October 31, 2025, the company had 9.2 million Class A shares and 7.425 million Class B shares outstanding.

Class A shares generally carry one vote per share, while Class B shares typically carry multiple votes per share (e.g., 10 votes per share). This structure concentrates voting power with existing management or founders.

MaxsMaking Inc. is classified as an "Emerging Growth Company" and a "Non-accelerated filer," allowing it to meet reduced public company reporting requirements for a period. This may mean less detailed information for investors compared to larger, more established companies.