Wednesday, 29 July 2026 09:35 AM
Company Update
MONTEREY PARK, CA / ACCESS Newswire / July 29, 2026 / Maison Solutions Inc. (Nasdaq:MSS) ("Maison Solutions" or the "Company"), a specialty grocery retailer offering traditional Asian food and merchandise to U.S. consumers, today issued the following letter to shareholders from John Xu, Chairman, President and Chief Executive Officer of Maison Solutions.
Dear Fellow Shareholders,
The past year has not been easy for our shareholders. Our stock price has experienced significant volatility, while the Company has faced underperforming store operations, pending stockholder derivative litigation, corporate governance matters, capital structure challenges and concerns regarding dilution and shareholder value.
We recognize that the Company has not yet delivered the results that our shareholders reasonably expect. We also understand that confidence cannot be rebuilt through announcements alone. It must be earned through completed transactions, stronger operating performance, financial discipline, improved governance and measurable progress.
At the same time, we believe the Company's current public equity valuation does not fully reflect the long-term potential of its continuing operations and strategic initiatives.
Resetting Our Operating Portfolio
One of the most important decisions we have made was to enter into an agreement to divest the assets and operations of our San Gabriel and Monrovia store locations for aggregate purchase consideration of $4.5 million, excluding inventory, which is to be purchased separately.
Not every part of our historical store portfolio performed as we expected. The San Gabriel and Monrovia stores had been operating at a loss and required continuing working capital and management resources. Continuing to support persistently loss-generating operations would not have been responsible. We therefore made the difficult but necessary decision to exit these locations and concentrate the Company's resources on the parts of the business that we believe have stronger operating fundamentals and greater long-term potential.
The transaction remains subject to the terms and closing conditions set forth in the applicable agreements. The $4.5 million represents gross contractual consideration payable to selling subsidiaries and should not be viewed as cash currently available to the Company, or a measure of expected net proceeds. Payment timing, closing conditions, liabilities, taxes, transaction expenses and collection risk must all be considered.
The Company expects the transaction to close on or before December 31, 2026, subject to the applicable terms and conditions.
We are not abandoning our operating roots. Maison Solutions continues to operate one supermarket in California and three Lee Lee International Supermarkets in Arizona. Our retail operations provide the Company with customer relationships, supplier networks, operating data, industry knowledge and real-world environments in which operational improvements and new technologies can be evaluated.
Recent Transactions Value
In April 2024, Maison Solutions acquired Lee Lee International Supermarkets, a three-store supermarket platform operating in the greater Phoenix and Tucson metropolitan areas, for aggregate consideration of approximately $22.2 million.
More recently, the contractual purchase consideration for the San Gabriel and Monrovia store operations was established at an aggregate of $4.5 million, excluding inventory. Based on the allocation under the transaction documents, this represents approximately $2.25 million of consideration for each location.
These recent transactions provide observable third-party reference points regarding the value of assets within our portfolio. While these transaction amounts are not appraisals of the Company or its assets and should not be viewed as measures of the Company's current equity value, enterprise value or expected net proceeds, we believe they provide relevant context regarding the Company's operating asset base and that the Company's current public equity valuation may not fully reflect the long-term potential of its continuing operations.
However, transaction values assigned to individual assets do not necessarily translate into value for the Company as a whole or its shareholders.. Management is therefore focused on improving cash flow, strengthening a healthier balance sheet and seeking to create more sustainable value for shareholders.
Addressing Pending Derivative Litigation and Governance Reforms
The parties have entered into a proposed settlement of the pending stockholder derivative litigation. The proposed settlement remains subject to final approval by the United States District Court for the Central District of California, with a settlement hearing currently scheduled for August 12, 2026.
We have denied and continue to deny the claims and allegations of wrongdoing asserted in the action.
Under the proposed settlement, the Company has agreed to adopt, implement and maintain certain corporate governance reforms for a period of five years. The Company's insurers have also agreed to fund the proposed $400,000 payment for plaintiffs' counsel's attorneys' fees and expenses, subject to court approval.
We are committed to cooperating fully with the judicial process and moving the matter toward final resolution as promptly as possible. We currently hope that the litigation can be brought to a final conclusion during 2026, although the timing and outcome remain subject to the Court's review, approval and any further proceedings.
Capital Structure, Dilution and Responsible Capital Allocation
We understand that the Company's capital structure and the potential for dilution are significant concerns for shareholders.
Access to capital may be necessary to support operations, satisfy obligations and pursue strategic opportunities. However, the ability to raise capital does not mean that capital should be raised without careful consideration of its cost and impact on existing shareholders.
We have heard clearly from shareholders who have encouraged the Company to repurchase its common stock.
Any repurchase must, however, be undertaken only when permitted under applicable securities laws and the Company's contractual obligations and any outstanding financing arrangements, and only after considering liquidity, operating requirements, existing liabilities and other relevant factors. The Board may evaluate whether a share repurchase program would be appropriate in the future.
We want to be clear about our intent: when we are in a position to repurchase its shares, the Company intends to do so.
Building a More Technology-Enabled Company
Maison Solutions recently signed a definitive agreement for the proposed establishment of Maison AI Limited, a majority-controlled technology platform focused on artificial intelligence applications for grocery retail, supply-chain management and enterprise operations.
Upon completion of the contemplated formation and capitalization, Maison Solutions, through its wholly owned subsidiary AZLL LLC, is expected to own approximately 90.09% of Maison AI, providing the Company with strategic and operational control of the platform.
If formed and capitalized as contemplated, Maison AI is intended to bring together the Company's grocery retail experience, existing software assets and AI-enabled technologies within a focused platform.
We believe this strategy is directly connected to the operational experience of Maison Solutions. Grocery retailers, wholesalers and distributors frequently rely on fragmented systems, manual workflows and incomplete operating data. Maison Solutions has direct experience with these challenges through its stores, purchasing activities, supplier relationships and day-to-day operations. Our objective is to develop and deploy technology within real operating environments, rather than pursuing technology based solely on theoretical assumptions about the industry provided that the transaction is completed on the contemplated terms or timing, however, there can be no assurance.
We are still at an early stage, and we do not intend to overstate what has been achieved. Signing a definitive agreement and agreeing on a proposed corporate structure are important steps, but they are not the final measure of success. The real test will be whether we complete the formation and capitalization of Maison AI, integrate the relevant software assets, deploy useful products and convert those capabilities into measurable operational and commercial value.
Our Near-Term Priorities
Over the coming quarters, management intends to focus on a defined set of priorities:
Completing the divestiture of the San Gabriel and Monrovia store operations in accordance with the applicable agreements and closing conditions;
Improving the profitability and cash-flow profile of the Company's continuing grocery business;
Working toward final resolution of the stockholder derivative litigation, subject to court approval;
Implementing stronger corporate governance and internal-control processes;
Completing the contemplated formation and capitalization of Maison AI;
Advancing practical technology deployment and commercialization efforts; and
Evaluating potential share repurchases when legally, contractually and financially appropriate.
Progress should ultimately be measured not by the number of announcements we issue, but by the transactions we complete, the operating improvements we achieve and the value we create.
A Direct Message to Our Shareholders
To those shareholders who have stayed with us, I want you to know that your concerns are heard, your frustration is understood, and your support is not taken for granted.
There is no single announcement, transaction or financing that will resolve every challenge facing the Company. Restoring Maison Solutions will require a series of difficult decisions, consistent execution and greater financial discipline. It will also take time.
We are not asking shareholders to rely on promises alone. We are asking for the opportunity to demonstrate, through completed transactions, improved operations, stronger governance and responsible capital allocation, that this Company can move forward.
On behalf of the Board and management team, I sincerely thank our employees, customers, suppliers and shareholders who have continued to support Maison Solutions during this difficult period.
Sincerely,
John Xu
Chairman, President and Chief Executive Officer
Maison Solutions Inc.
About Maison Solutions Inc.
Maison Solutions Inc. is a U.S.-based specialty grocery retailer offering traditional Asian food and merchandise, particularly to members of Asian American communities. The Company is committed to providing Asian fresh produce, meat, seafood and other daily necessities in a manner that caters to traditional Asian American family values and cultural norms, while also accounting for the faster-paced lifestyle of younger generations and the diverse makeup of the communities in which the Company operates. The Company's grocery retail operations are located in Southern California and Arizona under the HK Good Fortune and Lee Lee International brands. For more information about Maison Solutions, please visit www.maisonsolutionsinc.com. Follow the Company on LinkedIn and X.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We caution readers that forward-looking statements are predictions based on our current expectations about future events. Forward-looking statements may include, but are not limited to, statements related to the anticipated timing, completion, terms and effects of the divestiture of the San Gabriel and Monrovia store operations; the Company's expected continuing store footprint; the receipt, collectability and use of transaction proceeds; expected improvements in profitability, cash flow, the balance sheet, governance, internal controls and shareholder value; the approval, timing and effects of the proposed settlement of the pending stockholder derivative litigation; the possible evaluation, authorization or implementation of a share repurchase program; the proposed formation, capitalization, ownership, operation and strategic direction of Maison AI Limited; the contribution, integration, development, deployment and commercialization of software and other technologies; the Company's capital needs, strategic priorities and ability to maintain compliance with Nasdaq's continued listing requirements, as well as statements, other than historical facts, that address activities, events or developments that the Company intends, expects, projects, plans, believes or anticipates will or may occur in the future. These forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict, including the risks that the contemplated store closing may be delayed or may not occur; required third-party approvals, consents, releases or financing may not be obtained; contractual consideration may not be paid when due or collected in full; net proceeds may be materially less than stated contractual consideration; the proposed litigation settlement may not receive final court approval or may not conclude the litigation on the anticipated terms or timing; the Company's outstanding financing arrangements may restrict share repurchases and the Board may not authorize any repurchase program; the Company may lack sufficient liquidity to repurchase shares or implement its plans; Maison AI may not be formed, capitalized or closed as contemplated; contemplated software contributions may require additional consents or releases; planned technologies may not be successfully integrated, developed, deployed or commercialized or produce anticipated benefits; the Company may need additional financing that could result in dilution; and the Company may not achieve anticipated improvements in operating performance, cash flow, governance, internal controls, shareholder value or Nasdaq compliance. The Company's actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including the risks discussed under the caption "Item 1A. Risk Factors" in Part I of our most recent Annual Report on Form 10-K and any updates thereto under the caption "Item 1A. Risk Factors" in Part II of our Quarterly Reports on Form 10-Q and in our other filings with the SEC, copies of which are available on the SEC's website at www.sec.gov. Additionally, new risk factors emerge from time to time, and it is not possible for us to predict all such risk factors or to assess the impact such risk factors might have on our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, that occur after the date of this release, except as required by law.
Investor Relations Contact: Maison Solutions Inc. | Email: [email protected]
SOURCE: Maison Solutions, Inc.