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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 001-41930

Perfect Moment Ltd.

(Exact name of registrant as specified in its charter)

Delaware |  | 86-1437114
State or other jurisdiction of |  | (I.R.S. Employer
incorporation or organization |  | Identification No.)

244 5th Ave Ste 1219 New York, NY 10001
(Address of principal executive offices)

315-615-6156

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock, $0.0001 par value |  | PMNT |  | NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act

Large accelerated filer | ☐ | Accelerated filer | ☐
Non-accelerated filer | ☒ | Smaller reporting company | ☒
| Emerging growth company | ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the common equity held by non-affiliates of the registrant on April 28, 2025 was approximately $11,915,999. Such market value was computed by reference to the closing price of the common stock as reported on the Nasdaq Global Select Market on April 28, 2025. For purposes of determining this amount only, the registrant has defined affiliates as including the executive officers, directors and owners of 10% or more of the outstanding voting stock of the registrant on June 30, 2024.

As of June 30, 2025, there were 31,083,694 shares of common stock, $0.0001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

PART I | 1
ITEM 1. BUSINESS | 1
ITEM 1A. RISK FACTORS | 8
ITEM 1B. UNRESOLVED STAFF COMMENTS | 29
ITEM 1C. CYBERSECURITY | 29
ITEM 2. PROPERTIES | 29
ITEM 3. LEGAL PROCEEDINGS | 29
ITEM 4. MINE SAFETY DISCLOSURES | 29
PART II | 30
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 30
ITEM 6. [RESERVED] | 30
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 30
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 40
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 40
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 40
ITEM 9A. CONTROLS AND PROCEDURES | 40
ITEM 9B. OTHER INFORMATION | 41
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 41
PART III | 41
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 41
ITEM 11. EXECUTIVE COMPENSATION | 47
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 57
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 59
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES | 61
PART IV | 61
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 61
ITEM 16. FORM 10-K SUMMARY | 61

| ii |

CAUTIONARY NOTE REGARDING Forward-Looking Statements

This Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (this “Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements are subject to considerable risks and uncertainties. These forward-looking statements are not historical facts but rather are plans and predictions based on current expectations, estimates, and projections about our industry, our beliefs, and assumptions.

Forward-looking statements relate to matters such as our industry, business plans and strategies, material contracts, key relationships, consumer behavior, revenue, expenses, margins, profitability, capital expenditures, liquidity, capital resources and other operating information, and can be identified by words such as “may,” “will,” “could,” “should,” “anticipate,” “expect,” “intend,” “project,” “plan,” “believe,” “seek,” “assume,” and variations of these words and similar expressions. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from those that we are currently expecting, and are subject to considerable risks and uncertainties, including without limitation:

| ● | our expectations regarding our revenue, expenses, profitability and other operating results;
| ● | the growth rates of the markets in which we compete;
| ● | the costs and effectiveness of our marketing efforts, as well as our ability to promote our brand;
| ● | our ability to provide quality products that are acceptable to our customers;
| ● | our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;
| ● | our ability to effectively manage our growth, including offering new product categories and any international expansion;
| ● | our ability to protect our intellectual property rights and avoid disputes in connection with the use of intellectual property rights of others;
| ● | our ability to protect our users’ information and comply with growing and evolving data privacy laws and regulations;
| ● | future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;
| ● | our ability to compete effectively with existing competitors and new market entrants; and
| ● | our success at managing the risks involved in the foregoing.

The forward-looking statements contained in this Annual Report are based on management’s current plans, estimates and expectations in light of information currently available to us, and they are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control, as well as the other factors described in the section entitled “Risk Factors” within this Annual Report and in the other reports we file with the Securities and Exchange Commission (“SEC”). These risks and uncertainties include those described in the section entitled “Risk Factors.”

You should not place undue reliance on these forward-looking statements. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which they were made. Additional factors or events that could cause our actual results to differ may also emerge from time to time, and it is not possible for us to predict all of them. Over time, our actual results, performance, or achievements may differ from those expressed or implied by our forward-looking statements, and such a difference might be significant and materially adverse to our security holders. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data. Except as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. We have identified some of the important factors that could cause future events to differ from our current expectations and they are described in this Annual Report under the captions “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in other documents that we may file with the SEC, all of which you should review carefully. We qualify all of our forward-looking statements by these disclaimers.

| iii |

PART I

ITEM 1. BUSINESS

Overview

Perfect Moment Ltd., a Delaware corporation (“Perfect Moment,” “we,” “our,” or “us”), is a high-performance, luxury skiwear and lifestyle brand that fuses technical excellence with fashion-led designs. We create apparel and products that feature what we believe is an unmatched combination of fashion, form, function and fun for women, men and children.

The idea for the Perfect Moment brand was born in Chamonix, France in 1984, when the professional skier and extreme sports filmmaker, Thierry Donard, began making apparel for his team of free-ride skiers and surfers. Donard used his experience to create designs that were characterized by quality, style and performance to enable his athletes to achieve their perfect ski-run or perfect wave-ride: that “perfect moment.” His designs – combining high performance materials with daring prints and colors – were inspired by his team of free-ride skiers and surfers.

Today, the brand continues to draw on its rich heritage of performance garments and statement designs. Retro-inspired vivid and bold color palates complement technical fabrics to deliver fashion, form and function for women, men and children. Initially known for its on-and-off the slopes skiwear, in 2016 we developed a summer range inspired by the island of Ibiza to bring its unique style to swimwear and activewear. We believe our bold fashion and technical proposition resonates with the modern fashion-conscious consumer that sees value in authentic European heritage and statement-design tailored for an active and healthy lifestyle at a compelling quality-to-value price point.

Our Industry

We operate at the intersection of the global luxury skiwear, outerwear, and active lifestyle markets, which are large, resilient, and undergoing structural growth. Our core addressable market segments benefit from rising demand for premium, functional fashion with a distinct brand identity.

Luxury Skiwear and Outerwear

The global luxury skiwear market was valued at $1.6 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 6.35%, reaching $2.4 billion by 2028, according to EIN Presswire. This market serves a niche yet affluent demographic, typically located near ski regions or with a strong interest in recreational winter sports. This consumer group prioritizes both fashion and technical performance and has demonstrated consistent demand for luxury offerings in alpine apparel.

The global luxury outerwear market, a larger and more geographically diverse category, was valued at $15.9 billion in 2022 and is expected to grow at a CAGR of 6.51%, reaching $23.2 billion by 2028 (Research Reports World). Within this segment, we believe consumers are increasingly seeking heritage-driven, functional outerwear that delivers both performance and aesthetic appeal, especially in urban and lifestyle contexts.

Lifestyle and Athleisure

In addition, Perfect Moment is also targeting the broader leisure markets for swimwear, activewear and lifestyle products. Both the global luxury ski wear market and global luxury outerwear market share some key consumer demographics and purchasing behavior with the broader leisure markets. We believe these markets stretch beyond skiing and winter sports to a range of healthy and athletic pursuits, with products increasingly being worn as part of a broader day-to-day lifestyle statement. We also believe the growth of this market goes hand-in-hand with broader cultural shifts, such as a greater emphasis on health, exercise and well-being, as well as a relaxation in dress codes at work and for social occasions. Based on the characteristics of these respective markets, we believe Perfect Moment has the right brand profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant share.

Market Trends

We believe that several macroeconomic and demographic shifts are shaping the future of the global luxury apparel industry. These trends support our growth strategy and validate our digital-first, lifestyle-oriented brand positioning:

| ● | Acceleration of Online Luxury Sales: The luxury industry has historically lagged behind other retail sectors in digital adoption; however, this dynamic is shifting rapidly. According to Bain & Company, online sales accounted for 22% of global luxury purchases in 2021 and are expected to represent between 32% and 34% by 2030. This channel expansion is being driven by evolving consumer preferences and increased digital investment by luxury brands. As a digitally native brand, we believe Perfect Moment is well-positioned to capitalize on this shift.
| ● | Generational Demographic Transition: The spending power of Generation Y, Generation Z, and Generation Alpha continues to increase. According to Bain, these generations accounted for all of the luxury market’s growth in 2022 and are expected to comprise 80% of total global luxury spending by 2030. These consumers demand authenticity, digital engagement, and values-driven branding—all core elements of our business model.
| ● | Geographic Expansion of Luxury Demand: Historically, the luxury market has been concentrated in North America and Europe; however, demand is shifting eastward. Mainland China is expected to become the world’s largest luxury market by 2030. In November 2024, we conducted a limited market entry in China through Tmall and are currently evaluating joint venture structures to support longer-term expansion in the region and capitalize on emerging consumer demand.

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Our Brand: Heritage and Evolution

Over the last 40 years, the Perfect Moment brand has evolved from its origins as a small business founded by Thierry Donard—producing apparel for his team of free-ride skiers and surfers—into a global luxury lifestyle brand. Built on a foundation of luxurious, distinctively designed, and high-performance ski apparel, we have continued to expand the brand into new categories and across multiple seasons while maintaining our heritage of technical excellence and bold aesthetics.

This foundation has enabled us to extend our product offering beyond core skiwear into surfwear, swimwear, activewear, lifestyle apparel, and accessories. We apply the same disciplined approach to design, product development, and merchandising across all categories, ensuring that each item aligns with our brand’s identity—fusing function with style, and performance with fashion.

In parallel, we have expanded our distribution beyond a network of regional distributors to include a curated group of premium multichannel retail partners and a growing direct-to-consumer (DTC) business. This strategic evolution in both product and channel mix has positioned Perfect Moment as a year-round brand with growing relevance across sport, leisure, and lifestyle use cases.

We remain committed to offering apparel that reflects the demands of alpine performance while meeting the expectations of today’s fashion-conscious global consumer—delivering a distinct brand experience that resonates on the slopes, in the city, and everywhere in between.

Competition

Perfect Moment competes in the global luxury apparel and outerwear market, which includes a range of premium lifestyle, sportswear, and heritage brands. Our direct competitors include both luxury skiwear specialists and broader luxury outerwear players.

Most competitors tend to specialize in either technical performance or high fashion. Perfect Moment is uniquely positioned at the intersection of these two pillars, offering products that combine elevated design with technical integrity. This dual positioning allows us to differentiate ourselves from heritage performance brands that prioritize function over form, and from fashion brands that lack alpine credibility.

Our brand also competes with emerging DTC brands focused on active lifestyles, as well as traditional wholesale-driven outerwear players. We believe our distinct heritage, design philosophy, and rapidly scaling digital footprint allow us to compete effectively across both luxury and performance categories.

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Our Strengths

| ● | Balanced Fashion and Performance Positioning. Perfect Moment’s affordable luxury brand positioning bridges the gap between pure fashion and high-performance apparel. Our products integrate technical design with elevated aesthetics, enabling both alpine functionality and everyday style. This dual focus differentiates us from many competitors who are more narrowly focused.
| ● | Heritage-Driven Brand Identity. Founded in Chamonix in 1984, our brand draws from over four decades of ski and surf heritage. This foundation underpins our credibility in luxury outerwear and appeals to a global consumer base seeking authenticity and timeless design.
| ● | Direct-to-Consumer and Selective Wholesale Distribution. We operate a digitally native, direct-to-consumer ecommerce platform that allows us to control the customer experience, optimize pricing, and drive margin expansion. Our wholesale partnerships are selective and aligned with our premium positioning, providing additional reach while preserving brand integrity. We complement these channels with short-term physical retail activations to test new markets and deepen engagement.
| ● | Scalable Operating Model. With in-house control over design and development and a flexible, asset-light manufacturing base, we are able to scale seasonally and geographically while maintaining margin discipline.
| ● | Experienced Leadership. Our senior team brings leadership experience from global apparel and lifestyle brands, guiding our disciplined growth strategy with an entrepreneurial approach.

| ● | Established Partner Relationships. As of March 31, 2025, we have two luxury marketplace partners, Farfetch and Amazon Luxury, and 160 wholesale partners, of which 16 are luxury department stores (including those we believe are the most sought-after and prestigious names in the fashion industry), 18 operate as exclusively online multi brand retailers and 90 are respected specialty stores with a focus on either sports or winter goods, which is key to our branding strategy.
| ● | Strategic Retail Expansion:. We are testing physical retail through short-term, low-risk formats such as pop-up stores and shop-in-shops, with plans to scale selectively based on performance.

Our Business Strategy and Product

Perfect Moment sits at the intersection of three large and growing markets (luxury ski apparel, premium outerwear and lifestyle). Based on the characteristics of these respective markets, we believe we have the right brand profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant market share. We believe we are also well-positioned to drive sustainable growth and profitability by executing on the following strategies:

Grow Brand Awareness and Attract New Customers

Expanding brand awareness and deepening customer engagement remain central to our growth strategy. While Perfect Moment has built strong loyalty among existing customers and achieved meaningful global traction, we continue to see significant opportunity in underpenetrated and emerging markets.

Rooted in our rich ski heritage, Perfect Moment appeals to a global audience that values both high-performance apparel and elevated design. Skiing’s association with affluence and lifestyle has enabled us to position the brand as aspirational, particularly on social media, where our visual identity and storytelling strongly resonate.

By combining our signature aesthetic with high-impact marketing, celebrity endorsements, influencer partnerships, editorial features, and collaborations, we have crafted a compelling brand narrative that aligns with the values of our target audience.

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This brand narrative has translated into meaningful global media presence. In FY2025, we achieved record-breaking brand visibility, with global media coverage and social traction significantly outpacing prior years. Notable achievements included:

Metric |  | FY2025 |  | FY2024 |  | YoY Change
Global UVPM (Unique Visitors per Month) |  | 16.6 billion |  | 8.0 billion |  | +108%
Total Social Audience (KOLs) |  | 934 million |  | 480 million |  | +95%
Social Audience During Ski Season (Q3–Q4) |  | 597.1 million |  | 297 million |  | +101%
Global Print Circulation |  | 25.6 million |  | 12.4 million |  | +106%
Celebrity/Influencer Posts |  | Multiple including Priyanka Chopra Jonas, Anitta, Miranda Kerr, and more |  | Similar tier but lower frequency |  | Significant increase
Key Media Features |  | Vogue, Harper’s BAZAAR, ELLE, WWD, Tatler |  | Vogue, WWD, GQ |  | Expanded global reach

The recent announcement of our strategic collaboration with Alpine generated additional momentum, reaching over 1.1 billion in global PR (UVPM) and delivering high-impact social media performance across both brand channels. These results reinforce our position at the intersection of luxury performance and lifestyle, and demonstrate the effectiveness of targeted collaborations in amplifying reach and engagement.

Customer Acquisition and Market Expansion Strategy

Attracting new customers while deepening engagement with existing ones remains a foundational pillar of our long-term growth strategy. Perfect Moment has built a loyal customer base and strong brand equity in core markets such as the United States, the United Kingdom, and the European Union, while still seeing significant untapped potential across emerging regions and underpenetrated demographics. In FY2025, we expanded outreach across continental Europe and initiated a market test in China via Tmall. We are actively exploring deeper market penetration opportunities, including potential joint ventures or partnerships, particularly in China where we seek to balance growth potential with local market complexities.

Our international growth strategy is closely integrated with our marketing and customer engagement approach. We leverage our brand’s unique heritage—rooted in performance-driven ski apparel with a distinctive retro-modern aesthetic—to connect with affluent, style-conscious consumers who engage deeply with lifestyle content. Skiing remains an aspirational category, and our ability to tell culturally relevant, visually compelling stories has been central to growing awareness in new markets.

To support customer acquisition and global reach, we execute a multi-channel marketing strategy that blends aspirational brand storytelling with data-driven performance marketing. This includes premium editorial placements, influencer activations, celebrity collaborations, and visibility in luxury destinations, as well as robust paid social, search engine marketing (SEM), SEO, programmatic media, and retargeting campaigns. Our proprietary data and customer insights allow us to refine targeting, optimize customer acquisition costs, and improve return on advertising spend (ROAS).

Looking ahead, we plan to further invest in digital community development by enhancing engagement across both core and emerging social platforms and scaling our network of social media ambassadors. In parallel, we are committed to offering a localized customer experience in priority markets through language-specific content, local currency pricing, and improved shipping and distribution capabilities.

Complementing our digital expansion, we are developing a selective network of Perfect Moment-owned retail locations in key global cities. These physical touchpoints are designed to serve as immersive brand destinations that foster loyalty and drive community engagement. This holistic, multi-channel approach—anchored by strong creative execution, performance discipline, and a globally resonant brand voice—remains central to our strategy for customer acquisition, market expansion, and long-term value creation.

Elevating Brand Equity and Market Positioning

We continue to enhance brand desirability by deepening strategic partnerships and cultivating cultural relevance through collaborations with globally resonant brands. These alliances are complemented by curated cultural touchpoints designed to reinforce the brand’s aspirational positioning.

To further strengthen brand exclusivity, we are expanding access to premium, invitation-only experiences, limited-edition product capsules, and bespoke VIP programs. These initiatives are designed to reinforce scarcity-driven value and deepen emotional affinity with our most engaged customer segments.

Our brand amplification strategy includes highly selective alignments with globally recognized influencers and tastemakers, as well as targeted celebrity endorsements. These efforts are bolstered by high-visibility editorial placements in tier-one publications.

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Enhancing Product Storytelling and Technical Credibility

We are investing in elevated storytelling formats to articulate our product innovation and craftsmanship. This includes the use of advanced content technologies, such as CGI and AI-powered educational tools, to bring our product narratives to life across digital channels.

We continue to validate the performance and functionality of our products through strategic endorsements by elite athletes, subject matter experts, and professionals in relevant fields. This expert-led validation reinforces product credibility and supports the brand’s premium technical positioning.

Accelerating Customer Retention and Lifetime Value

We are launching a high-touch VIP loyalty program designed to reward our most valuable customers with elevated services including personal styling, concierge shopping experiences, and curated ski retreats. This program aims to drive repeat engagement and strengthen brand loyalty.

In addition, we are deepening customer relationships through exclusive community engagement initiatives, which focus on fostering a sense of belonging and shared identity among our luxury consumer base. These efforts are designed to support long-term customer retention and maximize customer lifetime value.

Enhance Our Wholesale Network

Although in the next five (5) years we will be mainly focused on accelerating digital growth and our direct-to-consumer channel, we still intend to continue broadening customer access and strengthening our global foothold in new and existing markets by strategically expanding our wholesale network and deepening current relationships. In all of our markets, we have an opportunity to increase sales by adding new wholesale partners and increasing volume in existing retailers. Additionally, we are focused on strengthening relationships with our retail partners through broader offerings, exclusive products and shop-in-shop formats, which are dedicated spaces within another company’s retail store on a short-term rental basis. We believe our retail partners have a strong incentive to showcase our brand as our products drive customer traffic and consistent full-price sell-through in their stores.

Broaden Our Product Offerings

We continue to develop new product categories to engage customers across all seasons and expand our share of wallet. These include:

| ● | Fall/Winter Lifestyle: Less technical but equally premium outerwear, loungewear, and accessories.
| ● | Spring/Summer Expansion: Activewear, surfwear, swimwear, and transitional layering pieces.
| ● | Multi-Seasonal Lifestyle Collection: Launching a new lifestyle collection to complement our core skiwear line, designed to support year-round customer engagement.
| ● | Accessories Expansion: Investing in the growth of our accessories business, working with expert vendor partners to capture commercial uplift and enhance brand exposure.
| ● | Style Expansion: Increasing annual style count from approximately 75 styles to 220–240 styles.
| ● | Pricing Architecture: Establishing a Good / Better / Best pricing model to improve value perception, broaden customer access, and support luxury tier collaborations.

We believe this strategy supports year-round engagement, reduces seasonal revenue concentration, and enhances gross margin through full-price, high-margin items. FY2025 marked the launch of our first spring/summer capsule under this strategy, with additional lines planned based on customer response and inventory performance.

Establish Perfect Moment Owned Physical Retail

We are actively redefining the après-ski lifestyle as a distinct luxury category, transcending its traditional association with winter sports. Our product strategy includes broadening the après assortment to incorporate versatile knitwear, accessories, and transitional outerwear suited for both urban and alpine environments.

To support this repositioning, we are deploying high-impact experiential activations, including luxury pop-up stores and immersive brand experiences in strategic mountain and resort locations. These initiatives are designed to increase customer engagement, drive retail conversion, and extend our physical brand footprint in high-value markets.

In FY2024 and FY2025, we tested temporary physical retail spaces to evaluate customer response and operational learnings. In FY2026, we plan to open two concession locations in high-profile markets. Our physical retail rollout is focused on near-term milestones and aligned with our broader brand experience goals.

This approach is designed to strengthen customer touchpoints and deliver a consistent luxury retail experience across channels.

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Other Strategies to Improve Margin

We intend to focus on the following other strategies to improve our margin:

| ● | Shift towards direct-to-consumer revenue (such as ecommerce and physical retail). We expect that rebalancing from wholesale to direct-to-consumer, coupled with the other margin initiatives, would result in a double-digit percentage point improvement in our gross margin over time, driven by favorable channel mix.
| ● | Reducing product range within skiwear. We believe the current range offers too much choice, resulting in reduced economies of scale and higher levels of markdowns and discounts. Rationalizing the range is expected to improve both margin and sell-through.
| ● | Review and modify supplier base. We expect our supplier base to evolve as we source fabrics and trims more efficiently and introduce new finished goods suppliers with better commercial terms. This includes shifting production to regions with lower labor costs or more favorable duty rates, such as the EU, UK, or Vietnam.
| ● | Review and revise price positioning. We are introducing more structured pricing discipline and processes, with a focus on assessing margin by product, country of manufacture, and country of sale. We believe our industry and customer segment exhibit relatively inelastic demand, allowing for modest annual price increases in line with luxury market expectations. These pricing strategies will support margin expansion as we grow.
| ● | Focusing on reducing costs relating to crossing borders. As a global brand, Perfect Moment incurs significant costs from freight, duty, couriers, and other logistics fees. We are focused on improving cost efficiency by shifting more volume to sea freight from air freight, relocating production to lower-duty countries, and reducing broker and customs-related costs through improved planning and process.
| ● | Implementing a Good / Better / Best pricing model. This tiered structure enhances customer value perception and supports product and price accessibility across a broader consumer base. It also enables luxury-tier expansion for high-profile collaborations and licensed projects.

These margin enhancement initiatives are central to our efforts to increase profitability, streamline operations, and create a scalable business model that can support long-term growth and brand equity.

Operations and Supply Chain

Perfect Moment’s global supply chain strategy is designed to support premium quality, timely delivery, and scalable growth across all major product categories. We work with a curated network of manufacturing partners in Europe and Asia, selected based on their technical expertise, material sourcing capabilities, and alignment with our brand values.

We have implemented a hybrid sourcing model that balances high-performance technical partners for outerwear with more agile suppliers for lifestyle and accessory categories. This approach enables product differentiation while supporting cost-efficiency and flexibility.

Our supply chain is structured around regional fulfillment centers that serve North America, the UK, and continental Europe. We also produce a portion of our products in China, alongside our established manufacturing partnerships in Europe and broader Asia. This setup reduces lead times and supports localized customer experience. In fiscal 2025, we began implementing initiatives to improve margin by consolidating shipments, introducing duty optimization measures, and shifting a portion of logistics from air to sea freight. As part of these efforts, we have also begun assessing the impact of international tariffs on sourcing decisions, which will be further discussed in the Risk Factors section of this Annual Report.

Looking forward, we aim to further diversify our supplier base to reduce concentration risk, optimize raw material procurement, and improve inventory turnover through tighter integration between merchandising, production, and logistics planning.

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Technology

Technology is at the core of our business strategy, powering our operational capabilities and the sustainable scalability of our platform. We believe that continuous investment in our technology has given us a competitive advantage and enabled fast innovation. Our technology platform with MACH architecture is designed to provide Perfect Moment with longer term ease of integration, stability, performance, and scalability based on three main components:

| (1) | Service Oriented Architecture facilitates design and maintenance of partner integrations:

| ● | Key enabler of omni-channel
| ● | Able to cater to evolving business needs
| ● | Decreases Total Cost of Ownership and increases efficiency

| (2) | Cloud-focused strategy designed to:

| ● | Improve scalability and cost efficiency
| ● | Allow for better accessibility and performance in markets around the worlds

| (3) | Headless Architecture allows:

| ● | Rapid build of differentiating user experience without impact to the backend systems
| ● | Innovative new user experiences build on headless building blocks
| ● | Evolution of front-end over time to take advantage of new technologies and innovations

Trademarks and Other Intellectual Property

We protect our intellectual property through a combination of trademarks, domain names, copyrights, design rights/design patents and trade secrets, as well as contractual provisions and restrictions on access to our proprietary technology related to our ecommerce platform. Our principal trademark assets include the trademark “Perfect Moment,” which is registered in the United States and targeted foreign jurisdictions, as are our logos and taglines. We have applied to register or registered many of our trademarks in the United States and other jurisdictions in all classes relevant to our business, and we will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. We actively oppose and defend our position on the trademark registers and subscribe to a trademark watch service for our key assets. Further we subscribe to an online monitoring system to search for infringements of our intellectual property rights and, in addition, act on any reported to us by customers or employees.

We are the registered holder of multiple domestic and international domain names that include “perfect moment” and similar variations. We also hold domain registrations for many of our product names and other related trade names and slogans. We own or have control over relevant social media handles which contain our key assets. In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with our employees, consultants, contractors and business partners. Where appropriate we enter into relevant license agreements to allow others to use our Intellectual Property or where we need permission to use Intellectual Property of third parties. We further control the use of our proprietary technology and intellectual property through provisions in both our customer terms of use on our website and the terms and conditions governing our agreements with other third parties.

Government Regulation

In the United States and the United Kingdom and in the other jurisdictions in which we operate, we are subject to labor and employment laws, laws governing advertising, privacy and data security laws, safety regulations and other laws, including consumer protection regulations that apply to retailers and/or the promotion and sale of merchandise and the operation of stores and warehouse facilities. Our products sold worldwide are subject to tariffs, treaties and various trade agreements as well as laws affecting the importation of consumer goods. We monitor changes in these laws, regulations, treaties and agreements, and believe that we are in material compliance with applicable laws.

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Licenses, Certificates and Approvals

The Company has obtained all licenses, certificates and approvals required for carrying on its business activities during the two fiscal years ended March 31, 2025 and 2024.

Employees and Human Capital Resources

As of March 31, 2025 and 2024, we had a total of 50 and 39 full-time employees, respectively, as well as a limited number of temporary employees and consultants. Our employees are neither unionized nor covered by collective bargaining agreements, and we consider our current employee relations to be good.

Website and Available Information

We file annual, quarterly and current reports; proxy and information statements and other information with the SEC. We also make our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all related amendments, available free of charge through our website at www.perfectmoment.com as soon as reasonably practical after they have been filed with the SEC. We also provide to anyone, without charge, copies of the documents upon written request. Requests should be directed to the attention of the Corporate Secretary at our address on the cover page of this Form 10-K. We are an electronic filer. The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, such as us, that file electronically with the SEC.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes thereto, before making a decision to invest in our common stock. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized.

Risk Factors Summary

Our business is subject to numerous risks and uncertainties. These risks include, but are not limited to, the following:

| ● | Our history of losses and the substantial doubt about our ability to continue as a going concern, which could cause our stockholders to lose some or all of their investment in us.
| ● | Our business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products, which would adversely affect our business.
| ● | Our business partially depends on our wholesale partners, and our failure to maintain and further develop our relationships with our wholesale partners could harm our business.
| ● | A downturn in the global economy will likely affect customer purchases of discretionary items, which could materially harm our sales, profitability and financial condition.
| ● | Our financial performance is subject to significant seasonality and variability, which could significantly impact our cash flow and cause the price of our common stock to decline.
| ● | We currently do not operate Perfect Moment owned physical retail stores. Our plans to open Perfect Moment owned physical retail stores are dependent on a variety of factors, including store locations being available for lease and the stores being economically viable to operate.

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| ● | Our limited operating experience and limited brand recognition in new international markets may limit our expansion and cause our business and growth to suffer.
| ● | Our success is substantially dependent on the service of certain members of our board of directors and senior management.
| ● | The fluctuating cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to suffer.
| ● | Our business is reliant on a limited number of third-party manufacturers and raw material suppliers.
| ● | Our ability to deliver our products to the market and to meet customer expectations could be harmed if we encounter problems with our distribution system.
| ● | Data security breaches and other cyber security events could result in disruption to our operations or financial losses and could negatively affect our reputation, credibility and business.
| ● | Our fabrics and manufacturing technology generally are not patented and can be imitated by our competitors. If our competitors sell products similar to ours at lower prices, our net revenue and profitability could suffer.
| ● | Our share price may be volatile, and you may be unable to sell your shares at or above the price at which you purchased them.

Risks Related to Our Business, Our Brand, Our Products and Our Industry

We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, our management has identified and our auditors reported that there is a substantial doubt about our ability to continue as a going concern.

For the fiscal years ended March 31, 2025 and 2024, our operating loss was $13,796, and $7,675, respectively. We intend to rely on debt and equity financing for working capital until positive cash flows from operations can be achieved, which may never occur. These matters raise substantial doubt about our ability to continue as a going concern. Based upon our current operating plan and assumptions, we expect that the net proceeds from the initial public offering and our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements, and the automatic conversion of the outstanding balance of the Notes upon the closing of the initial public offering will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e. timing of working capital). However, our operating plan may change, and our assumptions may prove to be wrong, as a result of many factors currently unknown to us, and we could use our available capital resources sooner than we expect. We may need to seek additional funds sooner than planned, through public or private equity or debt financings or other third-party funding or a combination of these approaches. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or based upon specific strategic considerations.

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Any additional capital-raising efforts may divert our management’s attention from the operation of our business. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we are unable to obtain sufficient amounts of additional capital, when and if we require it, we may be required to reduce the scope of our operations, which could harm our business, financial condition and results of operations. Our consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The report of our independent registered public accounting firm that accompanies our audited consolidated financial statements for the fiscal years ended March 31, 2025 and March 31, 2024 contains a going concern explanatory paragraph in which such firm stated that there is substantial doubt about our ability to continue as a going concern. Our consolidated financial statements contained in this report do not include any adjustments that might result if we are unable to continue as a going concern. If we are unable to continue as a going concern, holders of our securities might lose their entire investment. Although based upon our current operating plan and assumptions, we expect that our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e. timing of working capital), the doubts raised relating to our ability to continue as a going concern may make our shares an unattractive investment for potential investors. These factors, among others, may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.

Our financial performance is subject to significant seasonality and variability, which could cause the price of our common stock to decline.

Our business is affected by a number of factors common to our industry and by other factors specific to our business model, which drive seasonality and variability. Historically, key metrics, including those related to our growth, profitability and financial condition, have fluctuated significantly across fiscal periods. Consumer purchases of Women, Men and Kids skiwear and outerwear, which are the Perfect Moment core categories, are concentrated in the Fall/Winter season. As a result, a large proportion of our direct-to-consumer revenue is recognized in the third and fourth fiscal quarter. Our wholesale revenue is weighted earlier in the second and third fiscal quarters, when most orders are shipped to wholesale partners. At the consolidated level, our net revenue is concentrated in the second, third and fourth fiscal quarters, while our operating costs are more evenly distributed throughout the year. In the fiscal year ended March 31, 2025, the second, third and fourth fiscal quarters represented 76% of total net revenue. Working capital requirements typically increase throughout the first, second and early third quarters as overheads continue to be incurred and inventory builds to support our peak shipping and selling periods in the second and third quarters. Cash provided by operating activities is typically highest in the fourth quarter following the significant inflows associated with our peak selling season. Historical results, especially comparisons across fiscal quarters, should not be considered indicative of the results to be expected for any future periods. In addition to the seasonality of demand for our products, our financial performance is influenced by a number of factors which are difficult to predict and variable in nature. These include input cost volatility, the timing of consumer purchases and wholesale deliveries which very often shift between fiscal quarters, demand forecast accuracy, inventory availability and the evolution of our channel mix, as well as external trends in weather and discretionary consumer spending. A number of other factors which are difficult to predict could also affect the seasonality or variability of our financial performance. Therefore, you should not rely on the results of a single fiscal quarter as an indication of our annual results or future performance.

Our business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products, which would adversely affect our business.

The Perfect Moment name and brand image are integral to the growth of our business, and to the implementation of our strategies for expanding our business. We believe that the brand image we have developed has significantly contributed to the success of our business and is critical to maintaining and expanding our customer base. Maintaining and enhancing our brand will depend largely on the success of our marketing and merchandising efforts and our ability to provide a consistent, high-quality product and customer experience. Maintaining and enhancing our brand may require us to make substantial investments in areas such as product design, store openings and operations, marketing, ecommerce, community relations and employee training, and these investments may not be successful. We anticipate that, as our business continues to expand into new markets and new product categories and as the market becomes increasingly competitive, maintaining and enhancing our brand may become difficult and expensive. Conversely, as we penetrate these new markets and our brand becomes more widely available, it could potentially detract from the appeal stemming from the scarcity of our brand. Our brand may also be adversely affected if our public image or reputation is tarnished by negative publicity. In addition, ineffective marketing, product diversion to unauthorized distribution channels, product defects, counterfeit products, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish consumer confidence in us. Maintaining and enhancing our brand will depend largely on our ability to be a leader in affordable luxury skiwear, outerwear and activewear and to continue to offer a range of high-quality products to our customers, which we may not execute successfully. Any of these factors could harm our sales, profitability or financial condition. A key element of our growth strategy is the expansion of our product offerings into new product categories. We may be unsuccessful in designing products that meet our customers’ expectations for our brand or that are attractive to new customers. If we are unable to anticipate customer preferences or industry changes, or if we are unable to modify our products on a timely basis or expand effectively into new product categories, we may lose customers. As we expand into new geographic markets, consumers in these new markets may be less compelled by our brand image and may not be willing to pay a higher price to purchase our products as compared to traditional outerwear. More generally, our results of operations would suffer if our investments and innovations do not anticipate the needs of our customers, are not appropriately timed with market opportunities or are not effectively brought to market.

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We continue to focus on our direct-to-consumer channel, which may be costly and could materially harm our sales, profitability and financial condition.

Our business operates on a multi-channel distribution model, which includes distributing products on a wholesale basis for resale by others and online by us. Focusing on our ecommerce platform is essential to our future strategy. This strategy has and will continue to require significant investment in cross-functional operations and management focus, along with investment in supporting technologies. If we are unable to provide a convenient and consistent experience for our customers, our ability to compete and our results of operations could be adversely affected. In addition, if our ecommerce platform does not appeal to our customers, reliably function as designed, or maintain the privacy of customer data, or if we are unable to consistently meet our brand promise to our customers, we may experience a loss of customer confidence or lost sales, or be exposed to fraudulent purchases, which could adversely affect our reputation and results of operations.

A downturn in the global economy will likely affect customer purchases of discretionary items, which could materially impact our sales, profitability and financial condition.

Many factors affect the level of consumer spending for discretionary items including performance luxury outerwear. These factors include general economic conditions, interest and tax rates, the availability of consumer credit, disposable consumer income, unemployment and consumer confidence in future economic conditions. Consumer purchases of discretionary items, such as our performance luxury outerwear, tend to decline during recessionary periods when disposable income is lower. During our history, we have experienced recessionary periods, but we cannot predict the effect of future recessionary periods on our sales and profitability. A downturn in the economy in markets in which we sell our products may materially harm our sales, profitability and financial condition. If periods of decreased consumer spending persist, our sales could decrease, and our financial condition and results of operations could be adversely affected.

We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our revenue and profitability.

The market for premium outerwear is highly fragmented. We compete against a wide range of brands and retailers. Many of our competitors have significant competitive advantages, including larger and broader customer bases, more established relationships with a broader set of suppliers, greater brand recognition, greater financial resources, more established research and development processes, a longer history of store development, greater marketing resources, more established distribution processes, and other resources which we do not have. Our competitors may be able to achieve and maintain brand affinity and market share more quickly and effectively than we can. Many of our competitors have more established and diversified marketing programs, including with respect to promotion of their brands through traditional forms of advertising, such as print media and television commercials, and through celebrity endorsements, and have substantial resources to devote to such efforts. Our competitors may also create and maintain brand affinity using traditional forms of advertising more quickly than we can. Our competitors may also be able to increase sales in their new and existing markets faster than we can by emphasizing different distribution channels than we can, such as catalog sales or an extensive retail network, and many of our competitors have substantial resources to devote toward increasing sales in such ways.

Use of social media and influencers may adversely affect our reputation or subject us to fines or other penalties.

We use third-party social media platforms as, among other things, marketing tools. For example, we maintain Instagram, Facebook (Meta), Pinterest and TikTok accounts. We also maintain relationships with thousands of social media influencers and engage in collaborations. As existing ecommerce and social media platforms continue to rapidly evolve and new platforms develop, we must continue to maintain a presence on these platforms and establish presences on new or emerging social media platforms. If we are unable to cost-effectively use social media platforms as marketing tools or if the social media platforms we use change their policies or algorithms, we may not be able to fully optimize such platforms, and our ability to maintain and acquire consumers and our financial condition may suffer. Furthermore, as laws and regulations and public opinion rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices or otherwise could subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties and have an adverse effect on our business, financial condition, results of operations and prospects.

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In addition, an increase in the use of social media influencers for product promotion and marketing may cause an increase in the burden on us to monitor compliance of the content they post and increase the risk that such content could contain problematic product or marketing claims in violation of applicable laws and regulations. For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. We do not control the content that our influencers post, and if we were held responsible for any false, misleading or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary liabilities or forced to alter our practices, which could have an adverse impact on our business.

Negative commentary regarding us, our products or influencers and other third parties who are affiliated with us may also be posted on social media platforms and may be adverse to our reputation or business. Influencers with whom we maintain relationships could engage in behavior or use their platforms to communicate directly with our consumers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect us. It is not possible to prevent such behavior, and the precautions we take to detect this activity may not be effective in all cases. Our target consumers often value readily available information and often act on such information without further investigation and without regard to its accuracy. The harm may be immediate, without affording us an opportunity for redress or correction.

Our current and future products may experience quality problems from time to time that can result in negative publicity, litigation, product recalls and warranty claims, which could result in decreased revenue and operating margin, and harm to our brand.

We have occasionally received, and may in the future receive, shipments of products that fail to comply with our technical specifications or that fail to conform to our quality control standards. We have also received, and may in the future receive, products that are otherwise unacceptable to us or our customers. Under these circumstances, unless we are able to obtain replacement products in a timely manner, we risk the loss of revenue resulting from the inability to sell those products and related increased administrative and shipping costs. Additionally, if the unacceptability of our products is not discovered until after such products are sold, our customers could lose confidence in our products or we could face a product recall and our results of operations could suffer and our business, reputation, and brand could be harmed. There can be no assurance we will be able to detect, prevent, or fix all defects that may affect our products. Failure to detect, prevent, or fix defects, or the occurrence of real or perceived quality, health or safety problems or material defects in our current and future products, could result in a variety of consequences, including a greater number of product returns than expected from customers and our wholesale partners, litigation, product recalls, and credit, warranty or other claims, among others, which could harm our brand, sales, profitability and financial condition. Each Perfect Moment clothing product has a warranty against defects with reasonable use, for two years from the date of purchase. Because of this comprehensive warranty, quality problems could lead to increased warranty costs, and divert the attention of our manufacturing facilities. Such problems could hurt our luxury brand image, which is critical to maintaining and expanding our business. Any negative publicity or lawsuits filed against us related to the perceived quality and safety of our products could harm our brand and decrease demand for our products.

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If we are unable to manage our operations at our current size or to manage any future growth effectively, our growth may be slowed.

We have expanded our operations for many years and plan to continue our expansion efforts. In order to support growth, of which there can be no assurance, we will be required to continue to expand our sales and marketing, product development, manufacturing and distribution functions, to upgrade our management information systems and other processes, and to obtain more space for our expanding administrative support and other personnel. Continued or fluctuating growth could strain our resources, and we could experience operating difficulties, including difficulties in hiring, training and managing an increasing number of employees and manufacturing capacity to produce our products, and delays in production and shipments. These difficulties may result in the erosion of our brand image, divert the attention of management and key employees and impact financial and results of operations. In order to continue to expand our direct-to-consumer channel, we expect to add selling, general and administrative expenses to our cost base. These costs, which include capital assets, lease commitments and headcount, could result in decreased margins if we are unable to drive commensurate direct-to-consumer revenue growth.

Our sales and profitability may decline as a result of increasing product costs and decreasing selling prices.

Our business is subject to significant pressure on costs and pricing caused by many factors, including intense competition, constrained sourcing capacity and related inflationary pressure, pressure from consumers to reduce the prices we charge for our products, and changes in consumer demand. These factors may cause us to experience increased costs, reduce our prices to consumers or experience reduced sales in response to increased prices, any of which could cause our operating margin to decline if we are unable to offset these factors with reductions in operating costs and could have a material adverse effect on our financial condition, results of operations and cash flows.

Our success depends on our ability to identify and originate product trends as well as to anticipate and react to changing consumer demands in a timely manner.

All of our products are subject to changing consumer preferences that cannot be predicted with certainty. If we are unable to introduce new products or novel technologies in a timely manner or our new products or technologies are not accepted by our customers, our competitors may introduce similar products in a timelier fashion, which could hurt our goal to be viewed as a leader in affordable luxury skiwear and activewear. Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of athletic apparel or away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond to these changes. If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative, and differentiated products, we may not be able to maintain or increase our sales and profitability. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability to develop and introduce innovative, high-quality products. Our failure to effectively introduce new products that are accepted by consumers could result in a decrease in net revenue and excess inventory levels, which could have a material adverse effect on our financial condition.

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Our business and results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products.

Our ability to forecast accurately has become increasingly important as we have expanded our direct-to-consumer channel globally and could be affected by many factors outside of our control, including an increase or decrease in consumer demand for our products or for products of our competitors, our failure to accurately forecast consumer acceptance of new products, product introductions by competitors, unanticipated changes in general market conditions and, therefore, consumer spending in the sector and weakening of economic conditions or consumer confidence in future economic conditions. In our wholesale channel, a majority of orders delivered in a given fiscal year are received in the prior fiscal year, enabling us to manufacture inventory relative to a defined order book. In the direct-to-consumer channel, we manufacture according to our forecasts of consumer demand. If we overestimate the demand for our products, we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would harm our gross margins and our brand management efforts. The impact of overestimation is expected to increase as a larger portion of our sales comes through our direct-to-consumer channel, and as we expand our product offerings. If we underestimate the demand for our products, we may not be able to produce products to meet our wholesale partner requirements, and this could result in delays in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and wholesale partner relationships. Overall, failures to accurately predict the level of demand for our products could harm our profitability and financial condition.

Our plans to improve and expand our product offerings may not be successful, and implementation of these plans may divert our operational, managerial and administrative resources, which could harm our competitive position and reduce our net revenue and profitability.

In addition to our global expansion plans, we are growing our business by expanding our product offerings outside performance luxury outerwear, including an expanded winter and summer collection, knitwear, activewear and accessories. The principal risks to our ability to successfully carry out our plans to expand our product offering include:

| ● | the success of new products and new product lines will depend on market demand and there is a risk that new products and new product lines will not deliver expected results, which could negatively impact our future sales and results of operations;
| ● | if our expanded product offerings fail to maintain and enhance our distinctive brand identity, our brand image may be diminished and our sales may decrease;
| ● | implementation of these plans may divert management’s attention from other aspects of our business and place a strain on our management, operational and financial resources, as well as our information systems; and
| ● | incorporation of novel materials or features into our products may not be accepted by our customers or may be considered inferior to similar products offered by our competitors.

We also may fail to create adequate brand awareness around new product offerings. In addition, our ability to successfully carry out our plans to expand our product offerings may be affected by economic and competitive conditions, changes in consumer spending patterns and changes in consumer preferences and styles. These plans could be abandoned, could cost more than anticipated and could divert resources from other areas of our business, any of which could negatively impact our competitive position and reduce our net revenue and profitability.

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We currently do not operate Perfect Moment owned physical retail stores. Our plans to open Perfect Moment owned physical retail stores are dependent on a variety of factors, including store locations being available for lease and the stores being economically viable to operate.

One of our growth strategies is to own and operate Perfect Moment owned physical retail stores. Our revenue and profit forecasts beginning with fiscal year ending March 31, 2027 include the opening of directly operated retail stores that will need to be leased, staffed, replenished with inventory and operated profitably. In addition, the stores will need to be furnished with the appropriate fittings. As this will be a new selling channel for Perfect Moment, sourcing locations introduces the risk that leases might not be available or be more expensive than our estimates. The initial capital expenditure and ongoing costs and complexities of operating a store, such as staffing and energy costs, could be higher than our forecasts, leading to lower profitability or losses. Brands often see a halo impact on their other revenue channels (for example, online channels) when operating physical stores. However, there is a risk that new stores will cannibalize sales from these channels, which could harm our future business and results of operations.

Our limited operating experience and limited brand recognition in new international markets may limit our expansion and cause our business and growth to suffer.

Our future growth partially depends on our geographical expansion, starting with establishing a presence in China. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in any new market. In connection with our expansion efforts we may encounter obstacles we did not face in our current markets, including cultural and linguistic differences, differences in regulatory environments, labor practices and market practices, difficulties in keeping abreast of market, business and technical developments, and foreign customer tastes and preferences. We may also encounter difficulty expanding into new international markets because of limited brand recognition leading to delayed acceptance of our luxury products by customers in these new international markets. Our failure to develop our business in new international markets or disappointing growth outside of existing markets could harm our future business and results of operations.

If we fail to attract new customers, we may not be able to increase sales.

Our success depends, in part, on our ability to attract new customers. In order to expand our customer base, we must appeal to and attract consumers who identify with our brand and products. We have made significant investments in enhancing our brand and attracting new customers. We expect to continue to make significant investments to promote our current products to new customers and new products to current and new customers, including through our ecommerce platform. Such marketing investments can be expensive and may not result in increased sales. Further, as our brand becomes more widely known, we may not attract new customers as we have in the past. If we are unable to attract new customers, we may not be able to increase our sales.

We partially depend on our wholesale partners to display and present our products to customers in their wholesale channel, and our failure to maintain and further develop our relationships with our wholesale partners could harm our business.

We sell our products in our wholesale channel either directly or indirectly, through distributors and to wholesale partners. Our wholesale partners service customers by stocking and displaying our products and explaining our product attributes. Our relationships with these partners are important to the authenticity of our brand and the marketing programs we continue to deploy. Our failure to maintain these relationships with our wholesale partners or financial difficulties experienced by these wholesale partners could harm our business. Our sales depend, in part, on wholesale partners effectively displaying our products, including providing attractive space in their online or physical stores or marketing campaigns, including shop-in-shops, and training their sales personnel to sell our products. If our wholesale partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower revenue and gross margins, which would harm our profitability and financial condition. If we lose any of our wholesale partners, or if they reduce their purchases of our existing or new products, or their number of stores or operations are reduced, or they promote products of our competitors over ours, or they suffer financial difficulty or insolvency, our sales would be harmed. Such conditions, among other things, have resulted, and in the future may result, in financial difficulties leading to restructurings, bankruptcies, liquidations and other unfavorable events for our wholesale partners and may cause such partners to reduce or discontinue orders of our products or be unable to pay us for products they have purchased from us. This has caused us to negotiate shortened payment terms and reduce credit limits in certain cases. If the overall retail environment continues to decline or if one or more of our wholesale partners is unable or unwilling to meet our payment terms, our business and results of operations could be harmed.

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We rely on payment cards to receive payments and are subject to payment-related risks.

For our direct-to-consumer sales, we accept a variety of payment methods, including credit cards, debit cards and mobile payment methods. Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements relating to payment card processing. This includes laws governing the collection, processing and storage of sensitive consumer information, as well as industry requirements such as the Payment Card Industry Data Security Standard (“PCI-DSS”). These laws and obligations may require us to implement enhanced authentication and payment processes that could result in increased costs and liability and reduce the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent service providers become unwilling or unable to provide these services to us or if the cost of using these providers increases, our business could be harmed. We are also subject to payment card association operating rules and agreements, including PCI-DSS, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or consumers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our consumers, or process electronic fund transfers or facilitate other types of payments. Any failure to comply could significantly harm our brand, reputation, business, and results of operations.

Our success is substantially dependent on the service of certain members of our board or directors and senior management.

The loss of the services of our senior management could make it more difficult to successfully operate our business and achieve our business goals. We also may be unable to retain existing management, or technical, sales and client support personnel that are critical to our success, which could result in harm to our customer and employee relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs. We have not obtained key man life insurance policies on any members of our senior management team. As a result, we would not be protected against the associated financial loss if we were to lose the services of members of our senior management team.

We face various risks related to health epidemics, pandemics and similar outbreaks, which may adversely affect our business.

Our global operations, and those of the third parties upon whom we rely, have been, and could be in the future, adversely affected by health epidemics, pandemics and similar outbreaks. Despite our efforts, and the efforts of third parties upon whom we rely, to manage these matters, their ultimate effects also depend on factors beyond our knowledge or control, including the duration, severity and recurrence of any outbreak and actions taken to contain its spread and mitigate its public health effects. Health epidemics, pandemics and similar outbreaks may adversely affect our business, including by resulting in (i) significant volatility in demand for our products and services, (ii) changes in consumer behavior and preferences, (iii) disruptions of our manufacturing and supply chain operations, (iv) limitations on our employees’ ability to work and travel and (v) changes to economic or political conditions in markets in which we operate.

We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.

Our operations are subject to many hazards and operational risks inherent to our business, including general business risks, product liability, product recall and damage to third parties. Our insurance coverage may be inadequate to cover our liabilities related to such hazards or operational risks. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and commercially justifiable, and insurance may not continue to be available on terms as favorable as our current arrangements. The occurrence of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained by us could harm our business, results of operations and financial condition.

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Risks Related to Our Supply Chain

We may be unable to source and sell our merchandise profitably or at all if new trade restrictions are imposed or existing restrictions become more burdensome.

The United States and the countries in which our products are produced or sold have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty, or tariff levels. The results of any audits or related disputes regarding these restrictions or regulations could have an adverse effect on our financial statements for the period or periods for which the applicable final determinations are made. Countries impose, modify, and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards, and customs restrictions, have and could result in a higher cost or restrictions on the importation of the products we sell. Although we have and may continue to look for alternative sourcing options, we may not be able to shift production in a timely or cost-effective manner, if at all, from various countries in which we manufacture our products to offset those costs or restrictions. Therefore, we may not be able to mitigate the entire increase to our cost resulting from tariffs and we may not be able to, or may choose not to, pass any cost increase onto consumers. Any increase in our prices could have an adverse impact on our direct sales to consumers, as well as sales by our wholesale customers. In addition, the uncertainty in the global trade environment may have adverse impacts on capital markets or consumer discretionary spending, which could lower demand for our products. Any adverse impact on our costs or on consumer demand could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on international trade agreements and regulations. The countries in which we produce and sell our products could impose or increase tariffs, duties, or other similar charges that could negatively affect our results of operations, financial position, or cash flows.

Adverse changes in, or withdrawal from, trade agreements or political relationships between the United States and the PRC, Europe, Canada, or other countries where we sell or source our products, could negatively impact our results of operations or cash flows. General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions, and changes in tariffs, including sanctions against the PRC, tariffs imposed by the United States and the PRC, and the possibility of additional tariffs or other trade restrictions, could adversely impact our business. It is possible that further tariffs may be introduced or increased. Such changes could adversely impact our business and could increase the costs of sourcing our products from the PRC as well as other countries, or could require us to source our products from different countries. The Uyghur Forced Labor Prevention Act and other similar legislation may lead to greater supply chain compliance costs and delays to us and to our vendors.

We rely on a limited number of third-party suppliers to provide high quality raw materials.

Our products require high quality raw materials, including down, softshell, wool, neoprene, and cotton. We do not manufacture our products or the raw materials for them and rely instead on suppliers. Many of the specialty fabrics used in our products are technically advanced textile products developed and manufactured by third parties and may be available, in the short-term, from only one or a limited number of sources. We have no long-term contracts with any of our suppliers or manufacturers for the production and supply of our raw materials and products, and we compete with other companies for fabrics, other raw materials, and production.

We work with a group of approximately 18 vendors that manufacture our products, 17 of which produced products in the fiscal year ended March 31, 2025. During the fiscal year ended March 31, 2025, the largest single manufacturer, produced approximately 39% of our products and substantially all of our products were manufactured in China. We work with a group of approximately 8 suppliers to provide the fabrics for our products. For the fiscal year ended March 31, 2025, the largest single supplier produced approximately 46% of the fabric for our products. During the fiscal year ended March 31, 2025, approximately 62% of our fabrics originated from China and 37% from Japan. We also source other raw materials which are used in our products, including items such as content labels, elastics, buttons, clasps and drawcords from suppliers located predominantly in the Asia Pacific region.

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The price of raw materials depends on a wide variety of factors largely beyond the control of the Company. A shortage, delay or interruption of supply for any reason, could negatively impact our ability to fulfill orders and have an adverse impact on our financial results. In addition, while our suppliers, in turn, source from a number of sub-suppliers, we rely on a very small number of direct suppliers for certain raw materials. As a result, any disruption to these relationships could have an adverse effect on our business. Events that adversely affect our suppliers could impair our ability to obtain inventory in the quantities and at the quality that we require. Such events include difficulties or problems with our suppliers’ businesses, finances, labor relations, ability to import raw materials, costs, production, insurance and reputation, as well as natural disasters, public health emergencies or other catastrophic occurrences. A significant slowdown in the retail industry as a whole may also result in bankruptcies or permanent closures of some of our suppliers and third-party vendors. Furthermore, there can be no assurance that our suppliers will continue to provide fabrics and raw materials or provide products that are consistent with our standards. More generally, if we need to replace an existing supplier, additional supplies or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, and any new supplier may not meet our strict quality requirements. In the event we are required to find new sources of supply, we may encounter delays in production, inconsistencies in quality and added costs as a result of the time it takes to train our suppliers and manufacturers in our methods, products and quality control standards. Any delays, interruption or increased costs in the supply of our raw materials could have an adverse effect on our ability to meet customer demand for our products and result in lower revenue and profitability both in the short and long-term.

If our independent manufacturers or our suppliers fail to use ethical business practices and fail to comply with changing laws and regulations or our applicable guidelines, our brand image could be harmed due to negative publicity.

Our core values, which include developing the highest quality products while operating with integrity, are an important component of our brand image, which makes our reputation sensitive to allegations of unethical or improper business practices, whether real or perceived. We do not control our suppliers and manufacturers or their business practices. Accordingly, we cannot guarantee their compliance with our guidelines or the law. A lack of compliance could lead to reduced sales or recalls or damage to our brand or cause us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations. In addition, many of our products include materials that are heavily regulated in many jurisdictions. Certain jurisdictions in which we sell have various regulations related to manufacturing processes and the chemical content of our products, including their component parts. Monitoring compliance by our manufacturers and suppliers is complicated, and we are reliant on their compliance reporting in order to comply with regulations applicable to our products. This is further complicated by the fact that expectations of ethical business practices continually evolve and may be substantially more demanding than applicable legal requirements. Ethical business practices are also driven in part by legal developments and by diverse groups active in publicizing and organizing public responses to perceived ethical shortcomings. Accordingly, we cannot predict how such regulations or expectations might develop in the future and cannot be certain that our guidelines or current practices would satisfy all parties who are active in monitoring our products or other business practices worldwide.

Labor-related matters, including labor disputes, relating to our suppliers may adversely affect our operations.

Potential labor disputes at independent factories where our goods are produced, shipping ports, or transportation carriers create risks for our business, particularly if a dispute results in work slowdowns, lockouts, strikes or other disruptions during our peak manufacturing, shipping and selling seasons. Any potential labor dispute could materially affect our costs, decrease our sales, harm our reputation or otherwise negatively affect our sales, profitability or financial condition. Further, the risks to our business due to a pandemic or other public health emergency, include risks to worker health and safety, prolonged restrictive measures put in place in order to control the crisis and limitations on travel, which may result in temporary shortages of staff or unavailability of certain workers with key expertise or knowledge of our business and, impact on productivity.

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The operations of many of our suppliers are subject to additional risks that are beyond our control.

Almost all of our suppliers are located outside of North America and the United Kingdom, and as a result, we are subject to risks associated with doing business outside of these regions, including:

| ● | the impact of health conditions, and related government and private sector responsive actions, and other changes in local economic conditions in countries where our suppliers or manufacturers are located;
| ● | political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;
| ● | fluctuations in foreign currency exchange rates;
| ● | the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;
| ● | reduced protection for intellectual property rights, including trademark protection, in some countries, particularly in the PRC; and
| ● | disruptions or delays in shipments whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, natural disasters or health pandemics, or other transportation disruptions.

These and other factors beyond our control could interrupt our suppliers’ production in offshore facilities, influence the ability of our suppliers to export our products cost-effectively or at all and inhibit our suppliers’ ability to procure certain materials, any of which could harm our business, financial condition, and results of operations.

The fluctuating cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to suffer.

The fabrics used to make our products include synthetic fabrics whose raw materials include petroleum-based products. Our products also include silver and natural fibers, including cotton. Our costs for raw materials are affected by, among other things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries, and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials, including petroleum or the prices we pay for silver and our cotton yarn and cotton-based textiles, could have a material adverse effect on our cost of goods sold, results of operations, financial condition, and cash flows.

Additionally, increasing costs of labor, freight and energy could increase our and our suppliers’ cost of goods. If our suppliers are affected by increases in their costs of labor, freight and energy, they may attempt to pass these cost increases on to us. If we pay such increases, we may not be able to offset them through increases in our pricing, which could adversely affect our results of operations and financial condition.

If we encounter problems with our distribution system, our ability to deliver our products to the market and to meet customer expectations could be harmed.

We rely on our distribution facilities for substantially all of our product distribution. Our distribution facilities include computer controlled and automated equipment, which means their operations may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, electronic or power interruptions, or other system failures. In addition, our operations could also be interrupted by labor difficulties, extreme or severe weather conditions or by floods, fires, or other natural disasters near our distribution centers. If we encounter problems with our distribution system, our ability to meet customer expectations, manage inventory, complete sales, and achieve objectives for operating efficiencies could be harmed.

Increasing labor costs and other factors associated with the production of our products in China could increase the costs to produce our products.

Substantially all of our products are produced in China and increases in the costs of labor and other costs of doing business in the countries in this area could significantly increase our costs to produce our products and could have a negative impact on our operations and earnings. Factors that could negatively affect our business include labor shortages and increases in labor costs, difficulties and additional costs in transporting products manufactured from these countries to our distribution centers and significant revaluation of the currencies used in these countries, which may result in an increase in the cost of producing products. Also, the imposition of trade sanctions or other regulations against products imported by us from, or the loss of “normal trade relations” status with any country in which our products are manufactured, could significantly increase our cost of products and harm our business.

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Risks Related to Information Security and Technology

Our marketing programs, ecommerce initiatives and use of customer information are governed by an evolving set of laws and enforcement trends and unfavorable changes in those laws or trends, or our failure to comply with existing or future laws, could substantially harm our business and results of operations.

We collect, process, maintain and use data, including sensitive information on individuals, available to us through online activities and other customer interactions in our business. Our current and future marketing programs may depend on our ability to collect, maintain and use this information, and our ability to do so is subject to evolving and increasingly demanding international, U.S., U.K., European and other laws and enforcement trends. We are subject to laws and regulations such as the European Union’s General Data Privacy Regulation (“GDPR”), the United Kingdom’s General Data Privacy Regulation (“UK-GDPR”) and the California Consumer Privacy Act (“CCPA”). These regulations require companies to satisfy new requirements regarding the handling of personal and sensitive data, including its use, protection, and the ability of persons whose data is stored to correct or delete such data about themselves. Failure to comply with GDPR and UK-GDPR requirements could result in penalties of up to four percent of worldwide revenue. The GDPR, UK-GDPR, CCPA, and other similar laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines, negative publicity, or demands or orders that we modify or cease existing business practices. We strive to comply with all applicable laws and other legal obligations relating to privacy, data protection and customer protection, including those relating to the use of data for marketing purposes. It is possible, however, that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another, may conflict with other rules, may conflict with our practices or fail to be observed by our employees or business partners. If so, we may suffer damage to our reputation and be subject to proceedings or actions against us by governmental entities or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts to defend our practices, distract our management or otherwise have an adverse effect on our business. Certain of our marketing practices rely upon e-mail to communicate with consumers on our behalf. We may face risk if our use of e-mail is found to violate the applicable law. We post our privacy policy and practices concerning the use and disclosure of user data on our websites. Any failure by us to comply with our posted privacy policy or other privacy-related laws and regulations could result in proceedings which could potentially harm our business. In addition, as data privacy and marketing laws change, we may incur additional costs to ensure we remain in compliance. If applicable data privacy and marketing laws become more restrictive at the international, federal or state levels, our compliance costs may increase, our ability to effectively engage customers via personalized marketing may decrease, our investment in our ecommerce platform may not be fully realized, our opportunities for growth may be curtailed by our compliance burden and our potential reputational harm or liability for security breaches may increase.

Disruption of our information technology systems or unexpected network interruption could disrupt our business.

Many of our customers shop with us through our ecommerce website. Increasingly, customers are using tablets and smart phones to shop online with us and with our competitors and to do comparison shopping. We are increasingly using social media and proprietary mobile apps to interact with our customers and as a means to enhance their shopping experience. Any failure on our part to provide attractive, effective, reliable, user-friendly ecommerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place us at a competitive disadvantage, result in the loss of ecommerce and other sales, harm our reputation with customers, have a material adverse impact on the growth of our ecommerce business globally and could have a material adverse impact on our business and results of operations.

We are increasingly dependent on information technology systems and third-parties to operate our ecommerce websites, process transactions, process and handle inventory, producing, selling and shipping goods on a timely basis and maintain cost-efficient operations. We rely on a number of third parties to help us effectively manage these systems. The failure of our information technology systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in integrating new systems, could adversely affect our business. In addition, we have a global ecommerce website, with the ability to localize content internationally. Our information technology systems, website and operations of third parties on whom we rely may encounter damage or disruption or slowdown caused by a failure to successfully upgrade systems, system failures, viruses, computer “hackers”, natural disasters or other causes. These could cause information, including data related to customer orders, to be lost or delayed which could, especially if the disruption or slowdown occurred during the holiday season, result in delays in the delivery of products to our customers or lost sales, which could reduce demand for our products and cause our sales to decline. For example, we implemented a work-from-home policy due to the COVID-19 pandemic for our workforce. This increase in working remotely could increase our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations. In addition, if changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to handle our growth, we could lose customers. We have limited back-up systems and redundancies, and our information technology systems and websites have experienced system failures and electrical outages in the past which have disrupted our operations. Any significant disruption in our information technology systems or websites could harm our reputation and credibility and could have a material adverse effect on our business, financial condition and results of operations.

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Data security breaches and other cyber security events could result in disruption to our operations or financial losses and could negatively affect our reputation, credibility and business.

As with other companies, we are subject to risks associated with data security breaches and other cyber security events. We collect, process, maintain and use personal information relating to our customers, employees and job-applicants and rely on third parties for the operation of our ecommerce site and for the various social media tools and websites we use as part of our marketing strategy. Any attempted or actual unauthorized disclosure of personally identifiable information regarding our employees, customers or website visitors could harm our reputation and credibility, reduce our ecommerce sales, impair our ability to attract website visitors, reduce our ability to attract and retain customers and could result in litigation against us or the imposition of significant fines or penalties. Attacks may be targeted at us, our vendors or customers, or others who have entrusted us with information. Our on-line activities, including our ecommerce websites, also may be subject to denial of service or other forms of cyber-attacks. While we have taken measures we believe are reasonable to protect against those types of attacks, those measures may not adequately protect our on-line activities from such attacks. If a denial-of-service attack or other cyber event were to affect our ecommerce sites or other information technology systems, our business could be disrupted, we may lose sales or valuable data, and our reputation may be adversely affected. Additionally, new and evolving data protection legislation such as the GDPR impose new requirements such as shorter notification timeframes that could increase the risks associated with data security breaches. We have procedures and technology in place designed to safeguard our customers’ debit and credit cards and our customers’ and employees’ other personal information, and we continue to devote significant resources to network security, backup and disaster recovery, and other security measures. Nevertheless, these security measures cannot provide absolute security or guarantee that we will be successful in preventing or responding to every such breach or disruption. Recently, data security breaches suffered by well-known companies and institutions have attracted a substantial amount of media attention, prompting new foreign, federal, provincial and state laws and legislative proposals addressing data privacy and security, as well as increased data protection obligations imposed on merchants by credit card issuers. As a result, we may become subject to more extensive requirements to protect the customer information that we process in connection with the purchase of our products, resulting in increased compliance costs. Actual or anticipated attacks may cause us to incur increasing costs including costs to deploy additional personnel and protection technologies, train employees and engage third party experts and consultants. Advances in computer capabilities, new technological discoveries or other developments may result in the technology used by us to protect transaction or other data being breached or compromised. Measures we implement to protect against cyber-attacks may also have the potential to impact our customers’ shopping experience or decrease activity on our websites by making them more difficult to use. Data and security breaches can also occur as a result of non-technical issues including intentional or inadvertent breach by employees or persons with whom we have commercial relationships that result in the unauthorized release of personal or confidential information. Any compromise or breach of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure and damage to our brand and reputation or other harm to our business.

Risks Related to Environmental, Social and Governance Issues

Climate change, and related legislative and regulatory responses to climate change, may adversely impact our business.

There is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe, an increase in the frequency, severity and duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality. A significant portion of our business is highly dependent on cold-weather seasons and patterns to generate consumer demand for our products. Consumer demand for our products may be negatively affected to the extent global weather patterns trend warmer, reducing typical patterns of cold-weather events or increasing weather volatility, which could have an adverse effect on our financial condition, results of operations or cash flows.

These events could also adversely impact the cultivation of cotton, which is a key resource in the production of our products, disrupt the operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints and impact the types of apparel products that consumers purchase.

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These events could also compound adverse economic conditions and impact consumer confidence and discretionary spending. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. In many countries, governmental bodies are enacting new or additional legislation and regulations to reduce or mitigate the potential impacts of climate change. If we, our suppliers or our contract manufacturers are required to comply with these laws and regulations, or if we choose to take voluntary steps to reduce or mitigate our impact on climate change, we may experience increases in energy, production, transportation and raw material costs, capital expenditures or insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential impact of future climate change legislation, regulations or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change in the countries in which we operate.

Increased scrutiny from investors and others regarding our environmental, social, governance or sustainability responsibilities could result in additional costs or risks and adversely impact our reputation, employee retention and willingness of customers and suppliers to do business with us.

Investor advocacy groups, certain institutional investors, investment funds, other market participants, stockholders and customers have focused increasingly on the environmental, social and governance (“ESG”) or “sustainability” practices of companies. These parties have placed increased importance on the implications of the social cost of their investments. If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively impacted based on an assessment of our ESG practices. Any sustainability report that we publish or other sustainability disclosure we make may include our policies and practices on a variety of social and ethical matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management, product quality, supply chain management and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption. We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices. Also, our failure, or perceived failure, to meet the standards included in any sustainability disclosure could negatively impact our reputation, employee retention and the willingness of our customers and suppliers to do business with us.

Risks Related to Global Economic, Political and Regulatory Conditions

Our financial results and ability to grow our business may be negatively impacted by global events beyond our control.

We operate distribution and warehousing facilities and offices around the world and substantially all of our manufacturers are located outside of the United States. We are subject to numerous risks and global events beyond our control which could negatively impact consumer spending or our own operations or operations of our customers or business partners, and therefore our results of operations, including: changes in diplomatic and trade relationships, trade policy or actions of foreign or U.S. governmental authorities impacting trade and foreign investment; inflation; military conflict; political or labor unrest; terrorism; public health crises, disease epidemics or pandemics; natural disasters and extreme weather conditions, which may increase in frequency and severity due to climate change; economic instability resulting in the disruption of trade from foreign countries; the imposition of new laws, regulations and rules, including those relating to sustainability and climate change, data privacy, labor conditions, minimum wage, quality and safety standards and disease epidemics or other public health concerns; and changes in local economic conditions in countries where our stores, customers, manufacturers and suppliers are located.

These risks could hamper our ability to sell products, negatively affect the ability of our manufacturers to produce or deliver our products or procure materials and increase our cost of doing business generally, any of which could have an adverse effect on our results of operations, profitability, cash flows and financial condition. In the event that one or more of these factors make it undesirable or impractical for us to conduct business in a particular country, our business could be adversely affected.

An economic recession, depression, downturn or economic or political uncertainty in our key markets may adversely affect consumer discretionary spending and demand for our products.

Many of our products may be considered discretionary items for consumers. Uncertain or challenging global economic and political conditions could impact our performance, including our ability to successfully expand internationally. Some of the factors that may influence consumer spending on discretionary items include general economic conditions (particularly those in North America), high levels of unemployment, health pandemics, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and reductions in home values, fluctuating interest and foreign currency rates and credit availability, government austerity measures, fluctuating fuel and other energy costs, fluctuating commodity prices, tax rates and general uncertainty regarding the overall future economic environment. Political unrest could also negatively impact our customers and employees, reduce consumer spending and adversely impact our business and results of operations. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to reductions due to credit constraints and uncertainties about the future. Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products. Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets, particularly in North America. China is a target growth market for us, although consumer demand for our products there may also be impacted by unfavorable economic conditions in China. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.

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Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.

We are subject to the income tax laws of the United States, the United Kingdom and several other foreign jurisdictions. Our effective income tax rates could be unfavorably impacted by a number of factors, including changes in the mix of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, new tax interpretations and guidance, the outcome of income tax audits in various jurisdictions around the world and any repatriation of unremitted earnings for which we have not previously accrued applicable U.S. income taxes and foreign withholding taxes.

We and our subsidiaries engage in a number of intercompany transactions across multiple tax jurisdictions and the profit allocation and transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact our mix of earnings in countries with differing statutory tax rates.

Current economic and political conditions make tax rules in any jurisdiction, including the United States and the United Kingdom, subject to significant change. Changes in applicable U.S., U.K. or other foreign tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our income tax expense and profitability.

Our failure to comply with trade and other regulations could lead to investigations or actions by government regulators and negative publicity.

The labeling, distribution, importation, marketing and sale of our products are subject to extensive regulation by various federal agencies, including the Federal Trade Commission, Consumer Product Safety Commission and state attorneys general in the United States, as well as by various other federal, state, local and international regulatory authorities in the countries in which our products are distributed or sold. If we fail to comply with any of these regulations, we could become subject to enforcement actions or the imposition of significant penalties or claims, which could harm our results of operations or our ability to conduct our business. In addition, any audits and inspections by governmental agencies related to these matters could result in significant settlement amounts, damages, fines or other penalties, divert financial and management resources and result in significant legal fees. An unfavorable outcome of any particular proceeding could have an adverse impact on our business, financial condition and results of operations. In addition, the adoption of new regulations or changes in the interpretation of existing regulations may result in significant compliance costs or discontinuation of product sales and could impair the marketing of our products, resulting in significant loss of net revenue.

Our international operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other anti-bribery laws applicable to our operations. In many countries, particularly in those with developing economies, it may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other U.S. and international laws and regulations applicable to us. Although we have implemented procedures designed to ensure compliance with the FCPA and similar laws, some of our employees, agents or other partners, as well as those companies to which we outsource certain of our business operations, could take actions in violation of our policies. Any such violation could have a material and adverse effect on our business.

Because a significant portion of our net revenue and expenses are generated in countries other than the United States, fluctuations in foreign currency exchange rates have affected our results of operations and may continue to do so in the future.

The functional currency of our foreign subsidiaries is generally the applicable local currency. Our consolidated financial statements are presented in U.S. dollars. Therefore, the net revenue, expenses, assets and liabilities of our foreign subsidiaries are translated from their functional currencies into U.S. dollars. Fluctuations in the value of the U.S. dollar affect the reported amounts of net revenue, expenses, assets and liabilities. Foreign exchange differences which arise on translation of our foreign subsidiaries’ balance sheets into U.S. dollars are recorded as a foreign currency translation adjustment in accumulated other comprehensive income or loss within stockholders’ equity. We also have exposure to changes in foreign exchange rates associated with transactions which are undertaken by our subsidiaries in currencies other than their functional currency. Such transactions include intercompany transactions and inventory purchases denominated in currencies other than the functional currency of the purchasing entity. As a result, we have been impacted by changes in exchange rates and may be impacted for the foreseeable future. The potential impact of currency fluctuation increases as our international expansion increases. We are exposed to credit-related losses in the event of nonperformance by the counterparties to forward currency contracts used in our hedging strategies.

Risks Related to Intellectual Property

Our fabrics and manufacturing technology generally are not patented and can be imitated by our competitors. If our competitors sell products similar to ours at lower prices, our net revenue and profitability could suffer.

The intellectual property rights in the technology, fabrics and processes used to manufacture our products generally are owned or controlled by our suppliers and are generally not unique to us. Our ability to obtain intellectual property protection for our products is therefore limited and we do not generally own patents or hold exclusive intellectual property rights in the technology, fabrics or processes underlying our products. As a result, our current and future competitors are able to manufacture and sell products with performance characteristics, fabrics and styling similar to our products. Because many of our competitors have significantly greater financial, distribution, marketing and other resources than we do, they may be able to manufacture and sell products based on our fabrics and manufacturing technology at lower prices than we can. If our competitors sell products similar to ours at lower prices, our net revenue and profitability could suffer.

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If we are unable to establish and protect our trademarks and other intellectual property rights, counterfeiters may produce copies of our products and such counterfeit products could damage our brand image.

We currently rely on a combination of copyright, trademark, trade dress and unfair competition laws, as well as confidentiality procedures and licensing arrangements, to establish and protect our intellectual property rights. The steps we take to protect our intellectual property rights may not be adequate to prevent infringement of these rights by others, including imitation of our products and misappropriation of our brand. In addition, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States, and it may be more difficult for us to successfully challenge the use of our intellectual property rights by other parties in these countries. We expect that there is a high likelihood that counterfeit products or other products infringing on our intellectual property rights will continue to emerge, seeking to benefit from the consumer demand for Perfect Moment products. These counterfeit products do not provide the functionality of our products and we believe they are of substantially lower quality, and if customers are not able to differentiate between our products and counterfeit products, this could damage our brand image. In order to protect our brand, we devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. We actively pursue entities involved in the trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. In spite of our efforts, counterfeiting still occurs and, if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright or other intellectual property rights, this could adversely affect our future sales, financial condition and results of operations. We cannot guarantee that the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future or that we will be able to identify and pursue all counterfeiters who may seek to benefit from our brand.

Our trademarks and other proprietary rights could potentially conflict with the rights of others and we may be prevented from selling some of our products.

Our success depends in large part on our brand image. We believe that our trademarks and other proprietary rights have significant value and are important to identifying and differentiating our products from those of our competitors and creating and sustaining demand for our products. We have applied for and obtained some United States, United Kingdom and foreign trademark registrations, and will continue to evaluate the registration of additional trademarks as appropriate. However, some or all of these pending trademark applications may not be approved by the applicable governmental authorities. Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge these registrations. Additionally, we may face obstacles as we expand our product line and the geographic scope of our sales and marketing. Third parties may assert intellectual property claims against us, particularly as we expand our business and the number of products we offer. Our defense of any claim, regardless of its merit, could be expensive and time consuming and could divert management resources. Successful infringement claims against us could result in significant monetary liability or prevent us from selling some of our products. In addition, resolution of claims may require us to redesign our products, license rights from third parties, or cease using those rights altogether. Any of these events could harm our business and cause our results of operations, liquidity and financial condition to suffer.

Risks Related to Legal and Governance Matters

We are subject to periodic claims, litigation, legal proceedings and audits that could result in unexpected expenses and could ultimately be resolved against us.

Our business requires compliance with many laws and regulations, including labor and employment, sales and other taxes, customs and consumer protection laws and ordinances that regulate retailers generally and/or govern the importation, promotion and sale of merchandise, and the operation of stores and warehouse facilities. Failure to comply with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines and penalties. The outcome of some of these legal proceedings, audits and other contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition.

In addition, from time to time, we are involved in litigation and other proceedings, including matters related to product liability claims, stockholder class action and derivative claims, commercial disputes and intellectual property, as well as trade, regulatory, employment and other claims related to our business. See Note 14 of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

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We have in the past and may become involved in legal proceedings or audits, including government and agency investigations, and consumer, employment, tort and other litigation. Any of these proceedings could result in significant settlement amounts, damages, fines or other penalties, divert financial and management resources and result in significant legal fees. An unfavorable outcome of any particular proceeding could exceed the limits of our insurance policies or the carriers may decline to fund such final settlements and/or judgments and could have an adverse impact on our business, financial condition and results of operations. In addition, any proceeding could negatively impact our reputation among our customers and our brand image.

Our business could be negatively affected as a result of actions of activist stockholders or others.

We may be subject to actions or proposals from stockholders or others that may not align with our business strategies or the interests of our other stockholders. Responding to such actions can be costly and time-consuming, disrupt our business and operations and divert the attention of our board of directors, management and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan. Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential customers, and may affect our relationships with current customers, vendors, investors and other third parties. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

Anti-takeover provisions in our charter documents and under the General Corporation Law of the State of Delaware could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management.

Provisions in our amended and restated certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our management. These provisions impact the ability of the board of directors to issue preferred stock without stockholder approval. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired more than 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Although we believe these provisions collectively will provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove then-current management by making it more difficult for stockholders to replace members of the board of directors, which is responsible for appointing the members of management.

Anti-takeover provisions in our charter documents could discourage, delay or prevent a change in control of us and may affect the trading price of our common stock.

Our corporate documents and the DGCL contain provisions that may enable our board of directors to resist a change in control of us even if a change in control were to be considered favorable by our stockholders. These provisions:

| ● | require a 66 and 2/3% stockholder vote to remove directors, who may only be removed for cause;
| ● | authorize our board of directors to issue “blank check” preferred stock and to determine the rights and preferences of those shares, which may be senior to our common stock, without prior stockholder approval;
| ● | establish advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholders’ meetings;

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| ● | prohibit our stockholders from calling a special meeting and prohibit stockholders from acting by written consent;
| ● | require a 66 and 2/3% stockholder vote to effect certain amendments to our certificate of incorporation and bylaws; and
| ● | prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates.

These provisions could discourage, delay or prevent a transaction involving a change in control. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and cause us to take other corporate actions our stockholders desire.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction. Our amended and restated certificate of incorporation provides that state and federal courts will have concurrent jurisdiction for actions arising under the Securities Act of 1933, as amended (the “Securities Act”), and the exclusive forum provision will not apply to suits brought to enforce duties and liabilities created by the Exchange Act or any other claims for which the federal courts have exclusive jurisdiction. Any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate of incorporation. This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Alternatively, if a court were to find this provision of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

Risks Related to Ownership of Our Common Stock

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

For as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

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We will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter after we have been a reporting company in the United States for at least 12 months, (ii) the end of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which we issue more than $1 billion in non-convertible debt in a three-year period or (iv) February 7, 2029.

If we are unable to implement and maintain effective internal control over financial reporting investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a public company, we will be required to maintain internal control over financial reporting for the year ending March 31, 2025 and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, beginning with our annual report for the fiscal year ending March 31, 2025, provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm to the extent we decide not to avail ourselves of the exemption provided to an emerging growth company, as defined by the Jumpstart Our Business Startups Act. If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if we are unable to assert that our internal control over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation of our common stock, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future financing agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be an investor’s sole source of gain for the foreseeable future.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

On February 12, 2024, we consummated the initial public offering of our common stock for aggregate approximate net proceeds of $6,009, after deducting underwriting discounts and commissions and estimated offering expenses. Based upon our current operating plan and assumptions, we expect that the net proceeds from the initial public offering and our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements, and the automatic conversion of the outstanding balance of the Notes upon the closing of the initial public offering will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e. timing of working capital). However, our operating plan may change, and our assumptions may prove to be wrong, as a result of many factors currently unknown to us, and we could use our available capital resources sooner than we expect. We may need to seek additional funds sooner than planned, through public or private equity or debt financings or other third-party funding or a combination of these approaches. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or based upon specific strategic considerations.

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Any additional capital-raising efforts may divert our management’s attention from the operation of our business. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we are unable to obtain sufficient amounts of additional capital, when and if we require it, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and results of operations.

If we raise additional capital through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when and if we require it, our ability to continue to support our business growth, and to respond to business challenges could be significantly impaired.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could result in additional dilution of the percentage ownership of our stockholders.

We expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of common stock or common stock-related securities, together with the exercise of outstanding options and any additional shares issued in connection with acquisitions, if any, may result in material dilution to our investors. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to those of holders of our common stock.

Pursuant to the 2021 Plan, the plan administrator is authorized to grant equity-based incentive awards to our directors, executive officers and other employees and service providers. As of June 30, 2025, there were 31,083,694 shares of common stock reserved for issuance in connection with outstanding awards granted under the 2021 Plan and 2,527,944 shares of common stock were available for future issuance under the 2021 Plan. Future equity incentive grants and issuances of common stock under awards outstanding under the 2021 Plan may result in dilution to our stockholders.

We will incur increased costs as a result of being a public company.

We will face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as new rules and regulations subsequently implemented by the SEC and the Public Company Accounting Oversight Board impose additional reporting and other obligations on public companies. We expect that compliance with these public company requirements will increase our costs and make some activities more time-consuming. A number of those requirements will require us to carry out activities we have not done previously. For example, we will adopt new internal controls and disclosure controls and procedures. In addition, we will incur additional expense associated with our SEC reporting requirements. Furthermore, if we identify an issue in complying with those requirements (for example, if we or our accountants identify a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us. We also expect that it will be difficult and expensive to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and train qualified people to serve on our board of directors or as executive officers. Advocacy efforts by stockholders and third parties may also prompt even more changes in corporate governance and reporting requirements. We expect that the additional reporting and other obligations imposed on us by these rules and regulations will increase our legal and financial compliance costs and administrative fees significantly. These increased costs will require us to divert a significant amount of money that we could otherwise use to expand our business and achieve our strategic objectives.

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If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.

The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us, our business, our market or our competitors. If any of the analysts who cover us or may cover us in the future change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. If any analyst who covers us or may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price or trading volume of our common stock to decline.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Item 1C. Cybersecurity

Risk management and strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team works closely with our IT department to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.

Oversee Third-party Risk

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports (or international equivalent) of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.

Governance

Cybersecurity risk management is an integral part of the Company’s enterprise risk management framework and is overseen at both the Board and management levels.

Board Oversight

The Company’s Board of Directors maintains ultimate oversight of cybersecurity risks. The Audit Committee, which is composed entirely of independent directors, has primary responsibility for overseeing cybersecurity risk as part of its broader oversight of information technology and risk management. The Audit Committee receives regular briefings—at least quarterly—from management on cybersecurity matters.

The full Board is also periodically briefed on material cybersecurity risks, incident response preparedness, and significant security incidents, if any.

Management Oversight

Day-to-day responsibility for assessing, managing, and mitigating cybersecurity risk lies with the Company’s Chief Financial Officer and Chief Operating Officer (the CFOO), who reports to the President and has a dotted-line reporting relationship to the Audit Committee.

As of the date of this filing, the Company has not experienced a cybersecurity incident that has materially affected, or is reasonably likely to materially affect, its business, financial condition, or results of operations.

ITEM 2. PROPERTIES

Our corporate headquarters is located in London, England where we lease office space under a lease that expires in April 2026. In addition to our corporate headquarters, we have an office in Hong Kong, where we lease office space that expires in February 2026.

ITEM 3. LEGAL PROCEEDINGS

For a discussion of our legal proceedings, refer to Note 14 “Commitments and Contingencies,” in the notes to our audited consolidated financial statements of this Annual Report.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on The New York Stock Exchange (“NYSE”) under the symbol “PMNT.”

Holders of Common Stock

As of June 30, 2025, there were approximately 214 holders of record of our common stock. These holders of record include depositories that hold shares of stock for brokerage firms which, in turn, hold shares of stock for numerous beneficial owners.

Dividends

We have never declared or paid dividends on our common stock and do not intend to pay cash dividends on our common stock for the foreseeable future. Other than with respect to the payment of dividends on our Series AA Preferred Stock as described below, we intend to retain any future earnings to fund the development and growth of our business. The payment of dividends, if any, on our common stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors.

Commencing in April 2025, we will pay monthly dividends on our Series AA Convertible Preferred Stock at the rate of 12% per annum. Accordingly, we may not be able to declare a dividend on our common stock unless full cumulative dividends on the Series AA Preferred Stock have been or contemporaneously are declared and paid.

Recent Sales of Unregistered Securities

On March 28, 2025, we issued 924,921 shares of Series AA Convertible Preferred Stock valued at $5.8005 per share and convertible into shares of common stock at a conversion price of $5.00 per share in accordance with executed securities purchase agreements. We also issued 56,676 warrants to purchase shares of common stock with an exercise price of $1.45 per share to the placement agent as part of the fees associated with this offering. Pursuant to the said offering, the Company received gross proceeds of $5,365,000 before fees and other expenses associated with the transaction

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2025 and 2024, should be read in conjunction with our consolidated financial statements and the related notes and the other financial information that are included elsewhere in this Annual Report. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to those differences in our actual results include, but are not limited to, those discussed below and those discussed elsewhere within this Annual Report, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and the Item entitled “Risk Factors.” Unless otherwise indicated, all dollar amounts are in thousands.

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Overview

Perfect Moment is a luxury lifestyle brand offering high-performance skiwear and complementary apparel categories that merge technical functionality with fashion-led design. We develop collections for women, men, and children that reflect a combination of technical integrity, elevated aesthetics, and versatility across seasons and use cases.

We design all products in-house and rely on a network of manufacturing partners across Europe and Asia, including China. Our merchandise is sold in over 60 countries through a combination of direct-to-consumer ecommerce, wholesale partnerships with premium retailers, select concession formats, and licensed international wholesalers.

We are focused on generating long-term, brand-right growth and improving profitability. During the fiscal year ended March 31, 2025, we continued to scale our direct-to-consumer business, launched a new spring/summer capsule, and increased our annual style count from approximately 75 to over 200. We also implemented a tiered pricing architecture across key categories to support value perception and drive margin enhancement.

We intend to grow our business over time by expanding our digital and retail footprint, diversifying our product portfolio, enhancing international reach, and pursuing selective collaborations. Our marketing efforts—both brand-building and performance-driven—are designed to increase awareness, strengthen customer engagement, and support customer acquisition and retention.

Recent Developments

In May 2025 we entered two agreements with lenders in which we borrowed gross proceeds of $1,900, $500 of which were pursuant to a note with an entity controlled by the Chairman of our board of directors. Refer to Note 17 to our consolidated financial statements included in Item 8 of this Form 10-K.

On June 30, 2025, the Company closed a public offering of 10,000,000 shares of its common stock at an offering price of $0.30 per share (the “Offering”), pursuant to its registration statement on Form S-3 (File No. 333-285612). The Offering generated gross proceeds of $3.0 million. After underwriting discounts, non-accountable expenses, legal expense reimbursement, and other offering-related costs, the Company received net proceeds of approximately $2,686,850.

In connection with the Offering, the Company issued to ThinkEquity LLC, the representative of the underwriters, warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.38 per share. These warrants are exercisable beginning on the date of issuance and expire five years thereafter. The underwriters were also granted a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or pre-funded warrants to cover over-allotments, if any. As of the date of this filing, the over-allotment option has not been exercised.

Concurrently with the closing off the Offering, the May 2025 Note was extinguished through the issuance of 1,692,694 shares of the Company’s common stock at a per share price of $0.30.

Comparability of Financial Information

Our historical operations and statements of assets and liabilities may not be comparable to our operations and statements of assets and liabilities as a result of completing our IPO in February 2024 and becoming a public company.

Results of Operations

The following table sets forth our results of operations for the years ended March 31, 2025 and 2024.

|  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |  |  | Change |
Revenue, net |  | $ | 21,501 |  |  | $ | 24,443 |  |  | $ | (2,942 | )
Cost of goods sold |  |  | 11,072 |  |  |  | 12,001 |  |  |  | (929 | )
Gross profit |  |  | 10,429 |  |  |  | 12,442 |  |  |  | (2,013 | )
Gross margin (1) |  |  | 48.5 | % |  |  | 50.9 | % |  |  |  |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  | 20,685 |  |  |  | 15,333 |  |  |  | 5,352 |
Marketing and advertising expenses |  |  | 3,540 |  |  |  | 4,784 |  |  |  | (1,244 | )
Total operating expenses |  |  | 24,225 |  |  |  | 20,117 |  |  |  | 4,108 |
Loss from operations |  |  | (13,796 | ) |  |  | (7,675 | ) |  |  | (6,121 | )
Total other expense, net |  |  | (2,143 | ) |  |  | (1,047 | ) |  |  | (1,096 | )
Net Loss |  | $ | (15,939 | ) |  | $ | (8,722 | ) |  | $ | (7,217 | )
Other comprehensive (losses) gains |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation (losses) gains |  |  | 62 |  |  |  | (288 | ) |  |  | 350 |
Comprehensive loss |  | $ | (15,877 | ) |  | $ | (9,010 | ) |  | $ | (6,867 | )

(1) | Gross margin is defined as gross profit as a percentage of total net revenue.

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Non-GAAP Measures

We analyze operational and financial data to evaluate our business, allocate our resources, and assess our performance. In addition to total net sales, net loss, and other results under GAAP, the following information includes key operating metrics and non-GAAP financial measures that we use to evaluate our business. We believe that these measures are useful for period-to-period comparisons of the Company’s performance. We have included these non-GAAP financial measures in this Annual Report because they are key measures management uses to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating to operating expenses and the allocation of our resources. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

Adjusted EBITDA

|  | For the Year Ended March 31, 2025 |  |  | For the Year Ended March 31, 2024 |
Net loss, as reported |  | $ | (15,939 | ) |  | $ | (8,722 | )
Adjustments: |  |  |  |  |  |  |  |
Interest expense |  |  | 2,046 |  |  |  | 1,311 |
Stock compensation expense |  |  | 1,334 |  |  |  | 739 |
Amortization of stock-based marketing services |  |  | 910 |  |  |  | 185 |
Depreciation and amortization |  |  | 342 |  |  |  | 555 |
Adjusted EBITDA |  | $ | (11,307 | ) |  | $ | (5,932 | )

Adjusted EBITDA is a non-GAAP financial measure that displays our net loss from continuing operations, adjusted to eliminate the effect of certain items as described below. We define Adjusted EBITDA as net loss excluding interest expense, income tax benefit (expense), depreciation and amortization and stock-based compensation expense. Adjusted EBITDA is a measure that is not defined in US GAAP. We believe that it is useful to exclude these expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations in that period. We present adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA in developing our internal budgets, forecasts, and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; and in making compensation decisions and in communications with our board of directors concerning our financial performance.

The $5,375 decrease in Adjusted EBITDA for the year ended March 31, 2025 compared to the same period in 2024 was primarily driven by a $2,013 decline in gross profit, reflecting lower revenue and a reduction in gross margin from 50.9% to 48.5%. Additionally, selling, general and administrative expenses increased by $5,352, including higher stock-based compensation expense of $595, amortization of prepaid stock-based marketing services of $910, legal fees of $1,510, and labor costs of $698 to support growth and public company readiness. Further cost increases included retail store expenses of $497, travel of $192, audit fees of $189, information technology of $170, insurance of $170, and postage of $121. These impacts were partially offset by a $1,244 reduction in marketing and advertising expenses, primarily due to lower agency fees and event-related costs.

Non-GAAP financial measures have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

| ● | employee stock awards and common stock purchase options expense has been, and will continue to be for the foreseeable future, a significant recurring expense for the Company and an important part of our compensation strategy;
| ● | the assets being depreciated or amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments;
| ● | non GAAP measures do not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
| ● | non-GAAP measures do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
| ● | non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs; and
| ● | other companies, including companies in our industry, may calculate their non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including our net loss and our other financial results presented in accordance with GAAP. You are encouraged to evaluate the above adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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Revenue

Total revenue for the year ended March 31, 2025, was $21,501 compared to $24,443 for the year ended March 31, 2024, a decrease of $2,942 or 12.1%. The decrease is primarily attributed to the termination of a collaboration with Hugo Boss during the year ended March 31, 2024 totaling $3,169. The remaining increase of $227 is attributed to retail revenue of $775 from our New York and London pop-up locations, plus $555 in revenue from our collaborations entered into during the year ended March 31, 2025, offset by $780 lower wholesale revenue and $323 lower ecommerce revenue.

Cost of goods sold

Cost of goods sold for the year ended March 31, 2025 was $11,072 compared to $12,001 for the year ended March 31, 2024, a decrease of $929 or 7.8%. The change in cost of goods sold is primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain.

Gross profit and gross margin

Our gross profit for the year ended March 31, 2025 was $10,429 compared to $12,442 for the year ended March 31, 2024, a decrease of $2,013 or 16.2%.

Our gross margins were 48.5% compared to 50.9% achieved in the prior year. The decrease was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain, offset by a decrease in collaboration revenue.

Selling, general and administrative expenses (“SG&A”)

SG&A expenses consist of personnel related expenses, stock compensation expense, legal and professional fees, depreciation and amortization and other selling, general and administrative expenses, including information technology, property related expenses, travel and product sample costs.

SG&A expenses for the year ended March 31, 2025 were $20,685 compared to $15,333 for the year ended March 31, 2024, an increase of $5,352 or 34.9%. The increase was primarily driven by higher stock-based compensation expense of $595, amortization of prepaid stock-based marketing services of $910, legal fees of $1,510, and labor costs of $698 to support growth. Additional increases included retail store expenses of $497, travel of $192, audit fees of $189, information technology of $170, insurance of $170, and postage of $121.

Marketing and advertising expense

Marketing and advertising expense consist of agency, contractor and consulting expense, content production, promotional operating expense, and advertising costs. Marketing is an important driver of growth and we intend to continue to make significant investments in our marketing organization.

Marketing and advertising expenses for the year ended March 31, 2025 were $3,540 compared to $4,784 for the year ended March 31, 2024, a decrease of $1,244 or 26.0%. The decrease was primarily due to reductions in agency expenses of $920 and event costs of $400, partially offset by investments of $200 in brand awareness initiatives aimed at driving eCommerce revenue and sell-through, including advertising, photoshoots, and digital marketing.

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Seasonality and Quarterly Trends

Our business is seasonal with revenue concentrated in northern hemisphere countries. Revenue is elevated in the quarters ending September 30, December 31 and March 31 driven by sales of ski and outerwear through the fall and winter months. In the quarter ending June 30 sales are driven by swimwear and activewear. Our growth rate fluctuates quarter-on-quarter as a result of the seasonality of our business. We expect this fluctuation to continue. In addition to seasonality, quarter-on-quarter results are expected to be impacted by the timing of goods production and delivery, promotional activities and the addition of new products and geographies as the business grows. The business is also subject to the impact of economic cycles that influence retail apparel trends.

Liquidity and Capital Resources

As of March 31, 2025, we had cash and cash equivalents of $7,509, including restricted cash of $1,350 and an accumulated deficit of $64,916. Historically, Perfect Moment has generated negative cash flows from operations and has primarily financed its operations through private sales of equity securities, debt and working capital finance.

We expect operating losses and negative cash flows from operations to continue into the foreseeable future as we continue to invest in growing our business and expanding our infrastructure. Our primary uses of cash include personnel and marketing expenditures, inventory, capital investment and expenditures in technology and incremental expenses arising from distribution center operating costs to support our operations and our growth.

As a result of the seasonality of our business, we typically draw down on our trade finance facilities during summer, fall and early winter to meet a large proportion of the cost of goods associated with the manufacture of our fall/winter collection. Trade finance and debt factoring facilities support our working capital cycle through to the late fall/winter season when wholesale receivables are paid and ecommerce revenues increase.

Our ability to fund inventory purchases, capital expenditures, and growth will depend on our ability to generate cash in the future. Our future ability to generate cash from operations is, to a certain extent, subject to general economic, financial, competitive, regulatory and other conditions. Based on our current level of operations, we believe our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements, will be sufficient to meet our operating requirements for at least the next 12 months, excluding financing to support production (i.e. timing of working capital). We may seek additional or alternative debt and equity financing to that set out above. If we raise equity financing, our shareholders may experience significant dilution of their ownership interests. If we conduct additional debt financing, the terms of such debt financing may be similar or more restrictive that the terms of our current financing arrangements and we would have additional debt service obligations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be harmed. See the sections below titled “Risk Factors – Risks Related to Ownership of Our Common Stock – Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could result in additional dilution of the percentage ownership of our stockholders” and “Risk Factors – Risks Related to Our Business, Our Brand, Our Products and Our Industry – We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, our management has identified and our auditors reported that there is a substantial doubt about our ability to continue as a going concern.”

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Cash Flow Activities

The following table shows summary consolidated cash flow information for the periods presented:

|  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
Consolidated statement of cash flow data: |  |  |  |  |  |  |  |
Net cash used in operating activities |  | $ | (9,861 | ) |  | $ | (4,453 | )
Net cash used in investing activities |  | $ | (302 | ) |  | $ | (211 | )
Net cash provided by financing activities |  | $ | 9,692 |  |  | $ | 8,162 |

Cash Flows from Operating Activities

During the year ended March 31, 2025, operating activities used $9,861 in cash and cash equivalents primarily resulting from a net loss of $15,939, offset by non-cash charges of $6,062 and a net cash inflow from changes in operating assets and liabilities of $16.

The changes in operating assets and liabilities during the year ended March 31, 2025 consisted primarily of a $1,536 increase in accrued expenses, a $903 increase in trade payables, $937 increase in inventories, $1,493 increases in prepaid expenses and other current assets and, offset by a $155 decrease in unearned revenue and a $160 decrease in accounts receivable.

During the year ended March 31, 2024, operating activities used $4,453 in cash and cash equivalents primarily resulting from a net loss of $8,722, offset by non-cash charges of $2,442 and a net cash inflow from changes in operating assets and liabilities of $1,827.

The changes in operating assets and liabilities during the year ended March 31, 2024 consisted primarily of a $2,029 increase in accrued expenses, a $295 increase in trade payables, and a $240 increase in unearned revenue, offset by a $349 increase in inventory, a $238 increase in accounts receivable, a $219 increase in prepaid expense and other current assets, and a $106 decrease in operating leases.

Cash Flows from Investing Activities

Cash used in investing activities was $302 in the year ended March 31, 2025 and $211 in the year ended March 31, 2024, an increase of $91. The increase primarily reflects continued investment in our website infrastructure to enhance the customer experience and support our digital growth initiatives.

Cash Flows from Financing Activities

Net cash obtained from financing activities during the year ended March 31, 2025 was $9,692, resulting from $5,148 in net proceeds from the issuance of preference shares, $2,000 in net proceeds from the issuance of a convertible note, $5,792 in net proceeds from short-term borrowing and $2,845 in net proceeds from trade finance facilities, offset by $5,742 in repayment of short-term borrowings and $351 in repayment of trade finance facilities.

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Net cash obtained from financing activities during the year ended March 31, 2024 was $8,162, resulting from $6,009 in net proceeds from our initial public offering, $2,179 in net proceeds from the issuance of common shares and $1,847 in net proceeds from trade finance facilities, offset by $1,873 in repayment of trade finance facilities.

Sources of Liquidity

Cash and cash equivalents and restricted cash

As of March 31, 2025, we had cash and cash equivalents of $6,159 and restricted cash of $1,350, compared to $7,910 and $nil as of March 31, 2024.

Trade finance facility

As of March 31, 2025, we had an available secured, committed revolving trade finance facility, which provides for borrowings up to $2,700. We were in compliance with all associated covenants and there was an outstanding balance of $2,495 under the facility as of March 31, 2025 which was due June 2025. Refer to Note 8 in Part II, Item 8 of this Form 10-K for further information regarding our trade finance facility.

Capital Requirements

Our expected short-term and long-term cash needs are primarily for working capital, including deposits with our suppliers. We expect to meet these short-term and long-term cash needs primarily with cash flows from operations and, if needed, borrowings from our existing credit facilities. As of March 31, 2025, we have $6,728 of minimum purchase obligations with our suppliers for our product lines that will be sold during the year ended March 31, 2026.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of significant judgment. Actual results may vary from our estimates in amounts that may be material to the financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements.

Our critical accounting policies, estimates, and judgements are as follows, and see Note 2. Summary of Significant Accounting Policies included in Item 8 of Part II for additional information:

Revenue reserves

The amount of consideration we receive and recognize as revenue, net across both wholesale and DTC channels varies with changes in sales returns and other accommodations and incentives we offer to our customers. When we give our customers the right to return products or provide other accommodations such as chargebacks and markdowns, we estimate the expected sales returns and miscellaneous claims from customers and record sales reserves to reduce revenue, net.

As of March 31, 2025, our sales-related reserves were $0.6 million compared to $0.3 million as of March 31, 2024. The most significant variable affecting these reserve balances is sales levels. As a percentage of Net sales, the sales reserves balances were 2.8% as of March 31, 2025 compared to 1.3% as of March 31, 2024. The reserve for returns from customers is the component of our sales-related reserves most susceptible to estimation uncertainty. These estimates are based on 1) historical rates of product returns and claims; and 2) events and circumstances that indicate changes to such historical rates are warranted, such as our customers’ inventory positions and their anticipated sell-through rates. However, actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates. As a result, we adjust our estimates of revenue at the earlier of when the most likely amount of consideration we expect to receive changes or when the amount of consideration becomes fixed. If actual or expected future returns and claims are significantly different than the sales reserves established, we record an adjustment to Net sales in the period in which such determination was made.

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Accounts Receivable and Credit Losses

We make ongoing estimates relating to the collectability of accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the reserve, we consider historical levels of credit losses and significant economic developments within the retail environment that could impact the ability of our customers to pay outstanding balances and make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Because we cannot predict future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from estimates. If the financial condition of customers were to deteriorate, resulting in their inability to make payments, a larger reserve might be required. In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expenses in the period in which such a determination was made.

Inventory Reserves

The Company periodically reviews its inventory for potential excess, obsolescence, or slow-moving items and records reserves as necessary to reflect inventory at the lower of cost or net realizable value. This assessment is inherently judgmental and considers multiple factors including current inventory levels, historical and projected sales trends, seasonality, planned markdowns, and liquidation history. Management places particular focus on unsold units from prior seasons and styles that have been carried forward, taking into account their performance over time and expected sell-through.

Inventory is tracked at the SKU level, and the Company’s provision methodology involves a cross-functional process with the merchandising and planning teams to identify items at risk of non-recovery. This includes analysis of aged inventory by collection season, unit sales velocity, and margin erosion. Provisions are updated quarterly and recorded in the period in which such assessments are made.

Warrants

We account for warrants as either equity- classified or liability classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing liabilities from equity (“ASC 480”), and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance, modification, and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a non-cash gain or loss on the accompanying consolidated statements of operations and comprehensive loss. We assess the classification of our warrants at each reporting date to determine whether a change in classification between equity and liability is required.

Stock-based compensation

We account for share-based payments that involve the issuance of shares of our common stock to employees and non-employees and meet the criteria for share-based awards as stock-based compensation expense based on the grant-date fair value of the award. We estimate forfeitures and apply that to the stock-based compensation expense to be recognized over the period an award vests. We recognize compensation expense for awards with only service conditions on a straight-line basis over the requisite service period for the entire award.

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If factors change, and we utilize different assumptions including the probability of achieving performance conditions, share-based compensation cost on future award grants may differ significantly from share-based compensation cost recognized on past award grants. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our compensation and benefits expenses. In addition to the below, see Note 11 – Stock Based Compensation to our audited consolidated financial statements for additional detail.

For periods prior to the IPO, we issued stock option awards and restricted stock units to employees and non-employees under the 2021 Equity Incentive Plan (the “2021 Plan”). The fair value of each award is estimated on the date of the grant using the Black-Scholes option-pricing model in order to measure the compensation cost associated with the award. This model incorporates the following assumptions for inputs: the expected volatility in the market value of the underlying common stock, the expected term of the contractual option, the risk-free interest rate based upon quoted market yields for United State Treasury instruments with terms that were consistent with the expected term of the stock options and the expected dividend yield of the underlying common stock.

The fair value of the stock awards issued to employees and nonemployees under the 2021 Plan prior to the IPO was estimated at each grant date using the Black-Scholes model which requires the input of the following subjective assumptions: (a) length of time grantees will retain their vested stock options before exercising them for employees and the contractual term of the option for nonemployees (“expected term”), (b) The volatility of our common stock price over the expected term, (c) expected dividends, (d) risk-free interest rate over the option’s expected term, and estimated forfeiture rate. A summary of our significant assumptions for the pre-IPO stock awards is as follows:

● Expected term: For employees, the expected term is determined using the “simplified” method, as prescribed by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, to estimate on a formula basis the expected term of the Company’s employee stock options, which are considered to have “plain vanilla” characteristics. For nonemployees, the expected term represents the contractual term of the option.

● Expected volatility: The expected volatility was determined by examining the historical volatilities of a group of industry peers, as the Company did not have any trading history for our common stock prior to the IPO.

● Expected dividend yield: The expected dividend yield was based on our history and management’s current expectation regarding future dividends.

● Risk-free interest rate: The risk-free interest rate was based upon quoted market yields for the United States Treasury instruments with terms that were consistent with the expected term of the stock options.

● Estimated forfeiture rate: The expected forfeiture rate was based on our history and management’s expectation regarding future forfeitures.

If factors change, and we utilize different assumptions, share-based compensation cost on future award grants may differ significantly from share-based compensation cost recognized on past award grants. Higher volatility and longer expected terms result in an increase to share-based compensation determined at the date of grant. Future share-based compensation cost will increase to the extent that we grant additional share-based awards to employees and non-employees. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our selling, general and administrative expenses.

In future periods, we expect share-based compensation to increase, due in part to our existing unrecognized share-based compensation and as we issue additional share-based awards to continue to attract and retain employees.

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Income Taxes

We make assumptions, judgments and estimates to determine our current provision for income taxes, our deferred tax assets and liabilities and our uncertain tax positions. Our judgments, assumptions and estimates relative to the current provision for income tax take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly affect our ability to utilize our net operating loss carryforwards.

Our assumptions, judgments and estimates relative to the value of a deferred tax asset take into account predictions of the amount and category of future taxable income. Actual operating results and the underlying amount and category of income in future years could cause our current assumptions, judgments and estimates of recoverable net deferred tax assets to be inaccurate. Changes in any of the assumptions, judgments and estimates mentioned above could cause our actual income tax obligations to differ from our estimates, which could materially affect our financial position, results of operations or cash flows.

Our assumptions, judgement and estimates relative to uncertain tax positions take into account whether a tax position is more likely than not to be sustained upon examination by the relevant taxing authority based on the technical merits of the position and the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly affect our ability to utilize our net operating loss carryforwards.

Contingencies

We are involved in legal proceedings regarding contractual and employment relationships and a variety of other matters. We record contingent liabilities when a loss is assessed to be probable and its amount is reasonably estimable. If it is reasonably possible that a material loss could occur through ongoing litigation, we provide disclosure in the footnotes to our financial statements. Assessing probability of loss and estimating the amount of probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third-party claimants and courts. Should we experience adverse court judgments or should negotiated outcomes differ to our expectations with respect to such ongoing litigation it could have a material adverse effect on our results of operations, financial position, and cash flows.

Recent Accounting Pronouncements

For recent accounting pronouncements, see Note 2 of our audited consolidated financial statements included in this Annual Report.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business. These risks primarily include:

Interest rate risk

The fair value of our cash equivalents, held primarily in cash deposits, have not been significantly impacted by increases or decreases in interest rates to date, due to the short-term nature of these instruments. The interest expense associated with our letter of credit trade finance facility and debt factoring facilities are composed of a fixed spread over HIBOR or SOFR. The fee associated with revenue financing is fixed and the interest rate on our convertible bridge loan is accrued at a fixed rate also. We are exposed to interest rate risk where the interest expense associated with our financing arrangements is depending upon HIBOR or SOFR, a floating reference rate, or in the event that the fixed interest rate associated with our financing arrangements is increased upon roll-over of the financing arrangement at its contractual maturity. Fluctuations in interest rates have not been significant to date. We do not expect that interest rates will have a material impact on our results of operations, owing to the size and short-term nature of the floating rate financing arrangements.

Inflation risk

We are beginning to observe increases in our costs of goods sold, in particular, transportation costs. If these cost increases are sustained and we become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability to do so could harm our business, results of operations or financial condition.

Foreign exchange risk

To date, revenue has primarily been generated in U.S. dollar, U.K. pound sterling and euro. As a result, our revenue may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in U.K. pound sterling and euros relative to the U.S. dollar. Our foreign exchange risk is less pronounced for our cost of sales as to our cost of goods sold being predominantly U.S. dollar denominated. Our selling, general and administrative expenses are primarily made up of U.S. dollar, Hong Kong dollar, U.K. pound sterling and euro amounts. Although a portion of our non-U.S. dollar costs offset non-U.S. dollar revenue, a currency mismatch arises as to the amount and timing of our different currency cash flows. To date, we have not hedged our foreign currency exposure. We will continue to monitor the impact of foreign exchange risk and review whether to implement a hedging strategy to minimize this risk in future accounting periods. Hedging strategies where implemented, are unlikely to completely mitigate this risk. To the extent that foreign exchange risk is not hedged it may result in harm to our business, results of operations and financial condition.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. These risks primarily include:

Interest rate risk

The fair value of our cash equivalents, held primarily in cash deposits, have not been significantly impacted by increases or decreases in interest rates to date, due to the short-term nature of these instruments. The interest expense associated with our letter of credit trade finance facility and debt factoring facilities are composed of a fixed spread over HIBOR or SOFR. The fee associated with revenue financing is fixed and the interest rate on our convertible bridge loan is accrued at a fixed rate also. We are exposed to interest rate risk where the interest expense associated with our financing arrangements is depending upon HIBOR or SOFR, a floating reference rate, or in the event that the fixed interest rate associated with our financing arrangements is increased upon roll-over of the financing arrangement at its contractual maturity. Fluctuations in interest rates have not been significant to date. We do not expect that interest rates will have a material impact on our results of operations, owing to the size and short-term nature of the floating rate financing arrangements.

Inflation risk

We are beginning to observe increases in our costs of goods sold, in particular, transportation costs. If these cost increases are sustained and we become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability to do so could harm our business, results of operations or financial condition.

Foreign exchange risk

To date, revenue has primarily been generated in U.S. dollar, U.K. pound sterling and euro. As a result, our revenue may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in U.K. pound sterling and euros relative to the U.S. dollar. Our foreign exchange risk is less pronounced for our cost of sales as to our cost of goods sold being predominantly U.S. dollar denominated. Our selling, general and administrative expenses are primarily made up of U.S. dollar, Hong Kong dollar, U.K. pound sterling and euro amounts. Although a portion of our non-U.S. dollar costs offset non-U.S. dollar revenue, a currency mismatch arises as to the amount and timing of our different currency cash flows. To date, we have not hedged our foreign currency exposure. We will continue to monitor the impact of foreign exchange risk and review whether to implement a hedging strategy to minimize this risk in future accounting periods. Hedging strategies where implemented, are unlikely to completely mitigate this risk. To the extent that foreign exchange risk is not hedged it may result in harm to our business, results of operations and financial condition.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the financial statements, which begin on page F-1 of this Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d- 15(e) under the Exchange Act) as of the period covered by this Annual Report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.

Management’s Report on Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive and principal financial officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2025. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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ITEM 9B. OTHER INFORMATION

Insider Trading Arrangements

During the three months ended March 31, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K under the Exchange Act.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

(a) | Not applicable.
(b) | Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

The following table sets forth the names, ages and positions of our current executive officers and directors:

Name |  | Age |  | Position
Executive Off icers |  |  |  |
Chath Weerasinghe |  | 44 |  | Chief Financial and Operating Officer
Jane Gottschalk |  | 52 |  | President, Chief Creative Officer and Director
Mark Buckley |  | 43 |  | Former Chief Executive Officer and Director
Jeff Clayborn |  | 54 |  | Former Chief Financial Officer
Non-Executive Directors |  |  |  |
Max Gottschalk |  | 53 |  | Chairman of the Board of Directors
Andre Keijsers |  | 59 |  | Director
Berndt Hauptkorn |  | 57 |  | Director
Tracy Barwin |  | 46 |  | Director
Tim Nixdorff |  | 40 |  | Director
Adam Epstein |  | 46 |  | Director

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.

A majority of the authorized number of directors constitutes a quorum of the board of directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the board of directors may be taken without a meeting if all members of the board of directors individually or collectively consent in writing to the action.

Executive officers are appointed by the board of directors and serve at its pleasure.

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Executive Officers

Chath Weerasinghe– Chief Financial Officer

Mr. Weerasinghe has served as our Chief Financial Officer since February 2025. He brings over a decade of senior finance and operations experience in the retail and apparel sector. Prior to joining the Company, he spent four years at Canada Goose, where he served as Senior Director of Finance & Services (2021–2022) and later as Vice President of Finance & Operations (2022–2024). From 2017 to 2021, he was Group Head of Finance and IT at MUJI Europe Holdings Limited, and previously held the role of European Finance and Accounting Manager at American Apparel (2011–2016). Mr. Weerasinghe holds a B.A. in Applied Accounting from Oxford Brookes University and an MBA from the University of East London. He completed the INSEAD Chief Operating Officer Executive Education Program in 2024 and is a Fellow of the Association of Chartered Certified Accountants (FCCA).

Jeff Clayborne– Former Chief Financial Officer

Mr. Clayborne served as our Chief Financial Officer from October 2023 to January 2025. During his tenure, he contributed to our financial operations and planning during a key transition period. He is also a financial advisor at Healthy Extracts Inc. and previously held CFO roles at SONDORS, Inc. (2022–2023), where he led the company’s Nasdaq readiness and operational improvements, and at Verb Technology Company, Inc. (Nasdaq: VERB, VERBW) (2016–2022), where he supported its uplisting to Nasdaq and oversaw multiple financings. Earlier in his career, he held senior finance roles at Universal Music Group and The Walt Disney Company and began his career as a CPA with McGladrey & Pullen LLP and KPMG. Mr. Clayborne holds an MBA from the University of Southern California.

Jane Gottschalk – Chief Creative Officer and Director

Ms. Gottschalk has served as our Chief Creative Officer since September 2022, a member of our board of directors since March 2021, and was appointed President of the Company in February 2025. She has been deeply involved in the creative and brand direction of Perfect Moment for over a decade, including her roles as Creative Director of PMUK (2017–2022) and PMA (2012–2022), and now as Chief Creative Officer of both entities. Ms. Gottschalk has played a pivotal role in shaping the brand’s visual identity, product design, and market positioning across global markets. She is also a director of Jing Holdings Limited, the holding company for Jax Coco, a premium coconut water brand, and served on the board of Jax Coco UK Limited until May 2023. Ms. Gottschalk holds a B.A. from the University of Kent. She is the wife of Max Gottschalk, the Chairman of our board of directors. We believe Ms. Gottschalk is well-qualified to serve on our board given her deep understanding of the brand, creative leadership, and entrepreneurial vision, which continue to drive the Company’s unique positioning and cultural identity.

Mark Buckley – Former Chief Executive Officer and Director

Mr. Buckley served as our Chief Executive Officer from November 2022 until January 2025 and has been a member of our board of directors since November 2022. He also served as acting Chief Financial Officer until October 2023. In addition, Mr. Buckley is a director at 3rd Rock Private Limited. Prior to joining the Company, he was CFO of Rapha Racing Limited (2020–2022) and held senior finance roles there and at Burberry Limited (2011–2016), including Director of Financial Planning & Analysis. He began his career at Marks and Spencer Group plc, which included an international secondment to Woolworths South Africa. Mr. Buckley is a qualified accountant (ACCA, 2004). We believe he is qualified to serve on our board due to his extensive leadership and financial experience. Mr. Buckley was terminated as Chief Executive Officer on January 31, 2025, but remains a director of the Company as of March 31, 2025.

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Non-Executive Directors

Max Gottschalk – Chairman of the Board of Directors

Mr. Gottschalk has served as Chairman of our board of directors since March 2021, and has also served on the boards of PMA since 2012 and PMUK since 2017. He is the Founder and CEO of Vedra Partners Ltd., a London- and Switzerland-based multi-family office, and has extensive experience leading and advising investment entities across private equity, sustainable finance, and consumer goods. He is a Partner at Ocean 14 Capital Ltd., a fund focused on ocean sustainability, and holds director roles at Nurture Brands Ltd., Aeon Investment Ltd., and several holding entities of the Hycap Fund, an energy transition-focused private equity vehicle. Mr. Gottschalk previously co-founded Gottex Fund Management, a global asset management firm which he built and successfully listed on the Swiss stock exchange. Earlier in his career, he held senior roles at Bear Stearns in New York, leading fixed income hedge fund sales. Mr. Gottschalk holds a B.A. in Finance from the McIntire School of Commerce at the University of Virginia. We believe he is well-qualified to serve as Chairman due to his significant board experience, entrepreneurial track record, and broad expertise in investment management and strategic leadership.

Andre Keijsers – Director

Mr. Keijsers has served on our board since October 2023 and has held directorships at PMA, PMUK, and various affiliated entities since 2016. He is CEO of Van Lanschot Kempen Investment Management (UK) Ltd. and previously held executive roles at Vedra Partners, Gottex Fund Management, and Swapstream. He founded Arnhem Consulting and serves on multiple boards. Mr. Keijsers holds a doctorandus degree in Computer Science from Radboud University. We believe he is qualified to serve on our board given his governance, finance, and investment experience.

Berndt Hauptkorn – Director

Mr. Hauptkorn has served on our board since October 2023. He is President, Europe Region, and Global Markets Officer at Chanel, overseeing operations across EMEA and coordinating global leadership. Previously, he was CEO at Uniqlo Europe and Bally International, and a Principal at BCG. He holds a Diplom-Kaufmann and Dr. rer. pol. in Business Administration from Friedrich-Alexander-University. We believe his global fashion industry expertise and leadership experience make him a valuable board member.

Tracy Barwin – Director

Ms. Barwin has served on our board since November 2022. She is the Founder of Tracy B Ltd. and previously held senior roles at Hunter Boot, Uniqlo, and Myla, with a focus on direct-to-consumer and customer experience. Ms. Barwin holds a B.A. in Modern History and Politics from Manchester University and a postgraduate diploma from The Chartered Institute of Marketing. We believe she is qualified to serve on our board due to her experience in fashion, retail, and DTC operations.

Tim Nixdorff – Director

Mr. Nixdorff joined our board in January 2024. He is CEO of GORE Technologies AG and COO of Neon Equity AG. He previously held executive roles at Rag & Bone, Galvan London, and BEJOND Germany. Mr. Nixdorff holds a Master’s in Economics from Technical University of Dortmund and a B.A. in Business Administration from the University of Duisburg-Essen. We believe his experience in fashion, marketing, and investment industries supports his role on our board.

Adam Epstein – Director

On May 29, 2025, the Board of Directors of Perfect Moment Ltd. elected Adam Z. Epstein as a director of the Company. Mr. Epstein is the Portfolio Manager and Chief Investment Officer of MAZE Investments LLC. Mr. Epstein has worked in the financial services industry for more than two decades and brings extensive experience in capital markets, strategy, investor communications, and corporate governance. Mr. Epstein holds a BA in economics from the University of Michigan, MA in economics from the University of California, Santa Barbara and MBA in finance from the UCLA Anderson School of Management. He also holds the Chartered Financial Analyst designation. We believe he is qualified to serve on our board given his governance, finance, and investment experience.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers have, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

Compliance with Section 16(a)

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers, and persons who beneficially own more than 10% of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based solely on our review of the copies of such reports filed with the SEC and written representations from reporting persons, we believe that during the fiscal year ended March 31, 2025, all applicable Section 16(a) filing requirements were met in a timely manner, except Chath Weerasinghe, who filed one late Form 4, and Max Gottschalk, who filed one late Form 4.

Insider Trading Policies

We maintain an insider trading policy that applies to all directors, executive officers, employees, and consultants. The policy prohibits trading in our securities while in possession of material non-public information.

Board of Directors and Corporate Governance

When considering whether directors have the experience, qualifications, attributes and skills to enable the board of directors to satisfy its oversight responsibilities effectively considering our business and structure, the board of directors focuses primarily on the information discussed in each of the directors’ individual biographies as set forth above.

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The board of directors periodically reviews relationships that directors have with our company to determine whether the directors are independent. Directors are considered “independent” as long as they do not accept any consulting, advisory or other compensatory fee (other than director fees) from us, are not an affiliated person of our company or our subsidiaries (e.g., an officer or a greater than 10% stockholder) and are independent within the meaning of applicable United States laws and regulations and the NYSE American Company Guide. In this latter regard, the board of directors uses the NYSE American Company Guide (specifically, NYSE American Company Guide Section 803(a)(2)) as a benchmark for determining which, if any, of our directors are independent, solely in order to comply with applicable SEC disclosure rules.

Board Committees

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which will operate pursuant to its respective charter. The composition of each committee and its respective charter became effective upon the listing of our common stock on NYSE American, and copies of each charter will be posted on the corporate governance section of our website at www.perfectmoment.com. Each committee has the composition and responsibilities described below. Our board of directors may establish other committees from time to time.

NYSE American permits a phase-in period of up to one year for an issuer registering securities in an initial public offering to meet the audit committee, compensation committee and nominating and corporate governance committee independence requirements. Under the initial public offering phase-in period, only one member of each committee is required to satisfy the heightened independence requirements at the time of the listing of our common stock on the NYSE American, a majority of the members of each committee must satisfy the heightened independence requirements within 90 days following the listing, and all members of each committee must satisfy the heightened independence requirements within one year from the listing.

Audit Committee

Andre Keijsers, Berndt Hauptkorn and Tracy Barwin serve on the audit committee, which is chaired by Andre Keijsers. Our board of directors has determined that Andre Keijsers, Berndt Hauptkorn and Tracy Barwin are “independent” for audit committee purposes as that term is defined in the rules of the SEC and the NYSE American Company Guide, and each member has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors has designated Andre Keijsers as an “audit committee financial expert,” as defined under the applicable rules of the SEC. We intend to comply with the applicable independent requirements for all members of the audit committee within the time periods specified under such rules.

The audit committee’s responsibilities include:

| ● | appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
| ● | pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
| ● | reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;
| ● | reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
| ● | coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;

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| ● | establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
| ● | recommending based upon the audit committee’s review and discussions with management and our independent registered public accounting firm whether our audited financial statements shall be included in our Annual Report on Form 10-K;
| ● | monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
| ● | preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
| ● | reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and
| ● | reviewing quarterly earnings releases.

Compensation Committee

Andre Keijsers and Tim Nixdorff serve on the compensation committee, which is chaired by Andre Keijsers. Our board of directors has determined that Andre Keijsers and Tim Nixdorff are “independent” as defined in the NYSE American Company Guide and each member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. We intend to comply with the applicable independent requirements for all members of the compensation committee within the time periods specified under such rules.

The compensation committee’s responsibilities include:

| ● | annually reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer;
| ● | evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer;
| ● | reviewing and approving the compensation of our other executive officers;
| ● | reviewing and establishing our overall management compensation, philosophy and policy;
| ● | overseeing and administering our compensation and similar plans;
| ● | evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the NYSE American Company Guide;
| ● | retaining and approving the compensation of any compensation advisors;
| ● | reviewing and making recommendations to our board of directors about our policies and procedures for the grant of equity-based awards;
| ● | evaluating and making recommendations to the board of directors about director compensation;
| ● | preparing the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement; and
| ● | reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters.

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Nominating and Corporate Governance Committee

Andre Keijsers, Berndt Hauptkorn and Tim Nixdorff will serve on the nominating and corporate governance committee, which will be chaired by Andre Keijsers. Our board of directors has determined that Andre Keijsers, Berndt Hauptkorn and Tim Nixdorff are “independent” as defined in the NYSE American Company Guide. We intend to comply with the applicable independent requirements for all members of the nominating and corporate governance committee within the time periods specified under such rules.

The nominating and corporate governance committee’s responsibilities include:

| ● | developing and recommending to the board of directors criteria for board and committee membership;
| ● | establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;
| ● | reviewing the size and composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us;
| ● | identifying individuals qualified to become members of the board of directors;
| ● | recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;
| ● | developing and recommending to the board of directors a code of business conduct and ethics and a set of corporate governance guidelines; and
| ● | overseeing the evaluation of our board of directors and management.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our code of ethics can be found on our website https://investors.perfectmoment.com/corporate-governance. We intend to disclose future amendments to, or waivers of, our Code, as and to the extent required by SEC regulations, at the same location on our website identified above or in public filings.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee is currently or has been within the past three years one of our officers or an employee. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Corporate Governance Guidelines

We have adopted corporate governance guidelines, that serve as a flexible framework within which our board of directors and its committees operate. These guidelines cover a number of areas including the size and composition of the board, board membership criteria and director qualifications, director responsibilities, board agenda, meetings of independent directors, committee responsibilities and assignments, board member access to management and independent advisors, director communications with third parties, director compensation, and management succession planning. A copy of our corporate governance guidelines is available on our website at https://www.investors.perfectmoment.com.

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Conflicts of Interest

We comply with applicable state law with respect to transactions (including business opportunities) involving potential conflicts. Applicable state corporate law requires that all transactions involving our company and any director or executive officer (or other entities with which they are affiliated) are subject to full disclosure and approval of the majority of the disinterested independent members of our board of directors, approval of the majority of our stockholders or the determination that the contract or transaction is intrinsically fair to us. More particularly, our policy is to have any related party transactions (i.e., transactions involving a director, an officer or an affiliate of our company) be approved solely by a majority of the disinterested independent directors serving on the board of directors.

Family Relationships

Max Gottschalk, the Chairman of our board of directors, and Jane Gottschalk, and our Chief Creative Officer and a member of our board of directors, are husband and wife. There are no other family relationships among any of the directors or executive officers.

ITEM 11. EXECUTIVE COMPENSATION

Director Compensation

During the fiscal year ended March 31, 2025, we paid cash and equity-based compensation to our non-employee directors for their service on our board of directors. We have reimbursed and will continue to reimburse all of our non-employee directors for their reasonable out-of-pocket expenses incurred in attending board of directors and committee meetings.

As of March 31, 2025, our non-employee directors held 208,400 outstanding option awards to purchase or to be issued our common stock.

As of March 31, 2025, Jane Gottschalk, our current Chief Creative Officer and a member of our board of directors, who was a non-employee director until August 2022, held options to purchase 68,172 shares of our common stock. We granted options to purchase 30,000 shares of our common stock each (for a total of 120,000 shares of our common stock) to Andre Keijsers, Tracy Barwin, Berndt Hauptkorn and Tim Nixdorff, our four independent directors, pursuant to and upon the terms and conditions of their Independent Director Agreements with us, vesting over a period of three years from the effective date of each such Independent Director Agreement. On March 5, 2024 we granted an additional 6,000 options to purchase our common stock to Berndt Hauptkorn and Tim Nixdorf, vesting over a period of three years from the effective date of each such Independent Director Agreement. On March 5, 2024 we granted an additional 13,200 options to purchase our common stock to Andre Keijsers and Tracy Barwin, vesting over a period of three years from the effective date of each such Independent Director Agreement.

We have implemented a compensation plan for our non-employee directors, such that non-employee directors will receive an annual cash retainer and/or an annual grant of stock options. Our committee chairpersons will not receive certain additional retainer fees. Our directors who are also our employees or officers will not receive any compensation specifically related to their activities as directors, other than reimbursement for expenses incurred in connection with their attendance at meetings.

Compensation to our board of directors will be reviewed annually, and changes will be recommended by the compensation committee and approved by our board of directors.

Board compensation will be reviewed annually, and changes will be recommended by the compensation committee and approved by our board of directors.

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Director Compensation Table

The following table discloses the cash fees, bonuses and stock awards and total compensation earned, paid or awarded to each of our non-employee directors during the fiscal year ended March 31, 2025. Columns disclosing compensation under the headings “Non-Equity Incentive Plan Compensation,” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” are not included because no compensation in these categories was awarded to, earned by or paid to our non-employee directors in the fiscal year ended March 31, 2025. The dollar amounts shown are in U.S. dollars. The amounts originally in British pounds were converted to U.S. dollars for this table using the average of the average exchange rates for each fiscal month during the applicable fiscal year.

Name(1) |  | Fees Earned or Paid in Cash ($) |  |  | Bonus ($) |  |  | Option Awards ($) |  |  | Total ($) |
Max Gottschalk |  |  | 185,703 |  |  |  | - |  |  |  | - |  |  |  | 185,703 | (2)
Tracy Barwin |  |  | 50,000 |  |  |  | - |  |  |  | - |  |  |  | 50,000 | (3)
Andre Keijsers |  |  | 50,000 |  |  |  | - |  |  |  | - |  |  |  | 50,000 | (3)
Berndt Hauptkorn |  |  | 50,000 |  |  |  | - |  |  |  | - |  |  |  | 50,000 | (3)
Tim Nixdorff |  |  | 50,000 |  |  |  | - |  |  |  | - |  |  |  | 50,000 | (3)

(1) | Chath Weerasinghe, Chief Financial Officer and Jane Gottschalk a Director and President, Chief Creative Officer during the fiscal year ending March 31, 2025, are not included in this table as they were employees, and, thus, received no compensation for their services as a director. The compensation received by Mr. Weerasinghe and Ms. Gottschalk as employees are disclosed in the section entitled “Executive Compensation – Summary Compensation Table” appearing elsewhere in this Annual Report.
(2) | The amount reported for Mr. Gottschalk represents consulting fees paid to him pursuant to the terms of his consulting agreement.
(3) | The amount reported for Ms. Barwin, Mr. Keijers, Mr. Hauptkorn and Mr. Nixdorff represent their director fees for the fiscal year ended March 31, 2025.
(4) | On January 31, 2025, the Company terminated Mark Buckley as Chief Executive Officer of the Company. Mr. Buckley continues to serve as a director of the Company.

Consulting Agreements

Max Gottschalk

We, through PMA, are party to a consulting agreement with Max Gottschalk, dated May 15, 2019, which continues until terminated in accordance with its terms, during which Mr. Gottschalk is entitled to receive fees for services rendered amounting to £12,000 per month. These amounts are in lieu of any other cash payments or equity awards Mr. Gottschalk may otherwise have been entitled to receive as a member of our board of directors.

Independent Director Compensation

Andre Keijsers

On September 15, 2023, we entered into an Independent Director Agreement with Mr. Keijsers, under which he receives an annual cash fee of $50,000 (payable in monthly installments) and was granted options to purchase 30,000 shares of common stock under the 2021 Plan. On March 5, 2024, he received an additional grant of 13,200 options. All options vest annually over four years from the agreement date and have a five-year term, subject to continued service and the terms of the applicable plan and award agreements. We also entered into a standard indemnification agreement with Mr. Keijsers and reimburse pre-approved business expenses.

Berndt Hauptkorn

On September 15, 2023, we entered into an Independent Director Agreement with Mr. Hauptkorn, under which he receives an annual cash fee of $50,000 (payable in monthly installments) and was granted options to purchase 30,000 shares of common stock under the 2021 Plan. On March 5, 2024, he received an additional grant of 6,000 options. Option terms, vesting, and other conditions are consistent with those described above. We also entered into a standard indemnification agreement with Mr. Hauptkorn and reimburse pre-approved business expenses.

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Tim Nixdorff

On January 18, 2024, we entered into an Independent Director Agreement with Mr. Nixdorff, under which he receives an annual cash fee of $50,000 (payable in monthly installments) and was granted options to purchase 30,000 shares of common stock under the 2021 Plan. On March 5, 2024, he received an additional grant of 6,000 options. Option terms, vesting, and other conditions are consistent with those described above. We also entered into a standard indemnification agreement with Mr. Nixdorff and reimburse pre-approved business expenses.

Tracy Barwin

On October 23, 2023, we entered into an Independent Director Agreement with Ms. Barwin, under which she receives an annual cash fee of $50,000 (payable in monthly installments) and was granted options to purchase 30,000 shares of common stock under the 2021 Plan. On March 5, 2024, she received an additional grant of 13,200 options. Option terms, vesting, and other conditions are consistent with those described above. We also entered into a standard indemnification agreement with Ms. Barwin and reimburse pre-approved business expenses.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth, for each non-employee director, certain information concerning outstanding option awards as of March 31, 2025:

Name |  | Number of securities underlying unexercised options (exercisable) (#) |  |  | Number of securities underlying unexercised options (unexercisable) (#) |  |  | Option exercise price ($) |  |  | Option expiration date |
Max Gottschalk |  |  | 12,500 |  |  |  | 37,500 |  |  |  | 4.10 |  |  |  | March 4, 2029 | (1)
Tracy Barwin |  |  | 10,800 |  |  |  | 32,400 |  |  |  | 4.10 |  |  |  | March 4, 2034 | (1)
Andre Keijsers |  |  | 10,800 |  |  |  | 32,400 |  |  |  | 4.10 |  |  |  | March 4, 2034 | (1)
Berndt Hauptkorn |  |  | 9,000 |  |  |  | 27,000 |  |  |  | 4.10 |  |  |  | March 4, 2034 | (1)
Tim Nixdorff |  |  | 9,000 |  |  |  | 27,000 |  |  |  | 4.10 |  |  |  | March 4, 2034 | (1)

(1) | 25% vesting on the first, second, third, and fourth anniversaries from director start date.

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Executive Compensation

Named Executive Officers

For the fiscal year ended March 31, 2025, our named executive officers (“Named Executive Officers”) include the following individuals who held executive roles during the year:

| ● | Mark Buckley, who served as Chief Executive Officer until his termination on January 31, 2025. Mr. Buckley continues to serve as a director of the Company.
| ● | Jeff Clayborne, who served as Chief Financial Officer from October 2023 until his termination on January 31, 2025.
| ● | Jane Gottschalk, who was appointed President of the Company effective February 3, 2025, and also continues to serve as our Chief Creative Officer.
| ● | Chathura Weerasinghe, who was appointed Chief Financial Officer and Chief Operating Officer effective February 3, 2025.

These individuals are collectively referred to as our Named Executive Officers for the purposes of this Annual Report.

Summary Compensation Table

The following table summarizes the compensation of our Named Executive Officers during the fiscal year ended March 31, 2025.

The dollar amounts shown are in U.S. dollars. The amounts originally in British pounds were converted to U.S. dollars for this table using the average of the average exchange rates for each fiscal month during the applicable fiscal year.

Name and Principal Position |  | Fiscal Year |  |  | Salary ($) |  |  | Bonus ($) |  |  | Stock Awards ($) |  |  | Option Awards ($) |  |  | All Other Compensation ($) |  |  | Total ($) |
Mark Buckley |  | 2025 |  |  |  | 349,269 | (1) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 349,269 |
Chief Executive Officer (until Jan. 31, 2025) |  | 2024 |  |  |  | 314,225 | (2) |  |  | 187,916 | (3) |  |  | 1,230,000 | (4) |  |  | - |  |  |  | 2,086 | (5) |  |  | 1,734,227 |
Jeff Clayborne |  | 2025 |  |  |  | 311,217 | (1) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 311,217 |
Chief Financial Officer (Oct. 2023 – Jan. 31, 2025) |  | 2024 |  |  |  | 83,344 | (6) |  |  | - |  |  |  | - |  |  |  | 1,183,706 | (8) |  |  | - |  |  |  | 1,267,050 |
Jane Gottschalk |  | 2025 |  |  |  | 257,921 | (1) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,493,964 |
Chief Creative Officer |  | 2024 |  |  |  | 251,380 | (2) |  |  | 187,916 | (2) |  |  | - |  |  |  | 1,054,668 | (9) |  |  | - |  |  |  | 1,493,964 |
Chath Weerasinghe |  | 2025 |  |  |  | 64,480 | (10) |  |  | 20,000 | (10) |  |  | 240,000 | (10) |  |  |  |  |  |  |  |  |  |  | 324,480 |
Chief Financial Officer (from Feb. 3, 2025) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

(1) | Reflects actual earnings for the fiscal year ended March 31, 2025.
(2) | Reflects actual earnings for the fiscal year ended March 31, 2024.
(3) | On February 12, 2024, we paid a bonus for the successful initial public offering and listing on NYSE American.

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(4) | On March 5, we granted Mr. Buckley restricted stock units totaling $1,230,000 payable in 300,000 shares of our common stock pursuant to the terms of his employment agreement. The restricted stock units vest equally over four years on the anniversary date of his contractual start date. The price per share as reported by NYSE American on the day of issuance was $4.10 and was used to calculate fair market value.
(5) | The amount reported in this column for Mr. Buckley represents PMUK contributions to the United Kingdom’s National Employment Savings Trust.
(6) | Reflects actual earnings for the fiscal year ended March 31, 2023, which may differ from approved 2023 base salary due to start date.
(7) | Reflects actual earnings for the fiscal year ended March 31, 2024, which may differ from approved 2023 base salary due to start date.
(8) | On March 5, 2024, we granted Mr. Clayborne a stock option to purchase up to 300,000 shares of our common stock pursuant to his employment agreement at an exercise price of $4.10 per share. The options were forfeited upon his termination on January 31, 2025.
(9) | On March 5, 2024, we granted Ms. Gottschalk a stock option to purchase up to 300,000 shares of our common stock at an exercise price of $4.10 per share. The option is not currently vested and will vest equally over four years from July 18, 2023, and will expire on March 4, 2029.
(10) | On February 3, 2025, we entered into an employment agreement with Mr. Weerasinghe for his service as Chief Financial Officer and Chief Operating Officer, which provides for a base salary of £300,000 per year and a sign-on bonus of £20,000 paid on his start date. He is eligible for a performance bonus of up to 50% of base salary. On February 3, 2025, we granted Mr. Weerasinghe 300,000 RSUs under the 2021 Equity Incentive Plan at a grant date fair value of $0.80 per unit. The RSUs will vest as follows: 75,000 on the first anniversary of the grant date, and 18,750 quarterly thereafter over three years, subject to continued service.

Employment Agreements

Named Executive Officers

Mark Buckley

On October 21, 2022, we entered into an employment agreement with Mr. Buckley through PMUK for his service as Chief Executive Officer, effective November 7, 2022. He also served as acting Chief Financial Officer until October 2023. Mr. Buckley receives an annual base salary of £250,000 and is eligible for performance-based bonuses. In lieu of options originally contemplated at $0.01 per share (below fair market value), he was granted 300,000 RSUs vesting over four years. Mr. Buckley also serves as a member of our board of directors.

The agreement may be terminated by either party with three months’ notice, or by the Company with immediate effect upon payment in lieu of notice. The Company may also terminate without notice for cause, including material breach, gross misconduct, or dishonesty. Mr. Buckley is subject to 12-month post-termination non-solicitation covenants.

Mr. Buckley’s employment as Chief Executive Officer was terminated on January 31, 2025. He was a director of the Company until March 31, 2025.

Jane Gottschalk

On September 7, 2022, we entered into an employment agreement with Ms. Gottschalk through PMUK for her role as Chief Creative Officer, effective September 1, 2022. She receives an annual base salary of £200,000 and was eligible for a £50,000 guaranteed bonus on her first anniversary, which she waived. Future bonuses are performance-based. On February 3, 2025, the Board appointed Ms. Gottschalk as President of the Company in addition to her ongoing role as Chief Creative Officer.

In December 2024, the Board approved the cancellation of Ms. Gottschalk’s 300,000 stock options and granted her 300,000 RSUs under the 2021 Equity Incentive Plan, with a four-year annual vesting schedule beginning October 20, 2024.

The agreement may be terminated by either party with three months’ notice or by the Company with immediate effect upon payment in lieu of notice. The Company may also terminate without notice for cause, including material breach, gross misconduct, or dishonesty. Ms. Gottschalk is subject to 12-month post-termination non-solicitation restrictions.

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Chath Weerasinghe - Chief Financial Officer (from Feb. 3, 2025)

On February 3, 2025, the Company entered into an employment agreement (the “Employment Agreement”) with Chath Weerasinghe for his service as Chief Financial Officer and Chief Operating Officer of the Company.

The terms of Mr. Weerasinghe’s Employment Agreement provide for a base salary of £300,000 per year and allow for a performance bonus of up to 50% of Mr. Weerasinghe’s annual salary subject to achieving certain performance targets. Additionally, per the terms of the Employment Agreement, Mr. Weerasinghe will receive a sign-on bonus of £20,000, to be paid on Mr. Weerasinghe’s start date, February 3, 2025. In addition, Mr. Weerasinghe will be entitled to participate in the Company’s 2021 Equity Incentive Plan, with 300,000 restricted stock units (the “RSUs”) to be granted as of Mr. Weerasinghe’s start date. The RSUs will vest over a period of four years pursuant to a Restricted Stock Unit Agreement, with 75,000 RSUs vesting on the twelve (12) month anniversary of the start date and the remaining RSUs will vest quarterly over three years, with 18,750 RSUs vesting per quarter.

Other Executive Officers

Jeff Clayborne

On October 20, 2023, we entered into an employment agreement with Mr. Clayborne for his service as Chief Financial Officer, which was amended on January 22, 2024. The agreement provided for an annual base salary of $275,000 and eligibility for a discretionary annual bonus. The initial term was two years, subject to automatic one-year renewals unless terminated by either party with 30 days’ notice.

In December 2024, the Board cancelled Mr. Clayborne’s stock option grant for 300,000 shares and approved the grant of (i) 300,000 RSUs with a four-year annual vesting schedule beginning October 20, 2024, and (ii) 106,667 RSUs with a four-year annual vesting schedule beginning October 20, 2025, at a grant date fair value of $1.12 per RSU. Mr. Clayborne’s employment was terminated on January 31, 2025, and a total of 371,467 RSUs were forfeited upon termination.

The agreement provided for severance of three months’ base salary and a lump sum of $13,300 if terminated without cause or for good reason, subject to customary conditions including a release of claims. Mr. Clayborne was also subject to one-year post-termination non-compete and non-solicitation restrictions, and confidentiality and indemnification provisions.

As of March 31, 2025, Mr. Clayborne held no options and no vested RSUs.

UK National Employment Savings Trust

Our subsidiary in the United Kingdom, PMUK, is required by the applicable local laws and regulations to make contributions to the United Kingdom’s National Employment Savings Trust for all eligible personnel, including Mark Buckley, our former Chief Executive Officer and former acting Chief Financial Officer. During the fiscal year ended March 31, 2025 and March 31, 2024, we contributed $1.7 thousand and $1.7 thousand, respectively, to NEST on behalf of Mr. Buckley.

2021 Equity Incentive Plan

The board of directors and stockholders adopted our 2021 Equity Incentive Plan on August 24, 2021. Our 2021 Equity Incentive Plan, as amended (the “2021 Plan”), provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to our employees and our parent and subsidiary corporations’ employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to our employees, directors, and consultants and our parent and subsidiary corporations’ employees and consultants. As of June 30, 2025, there were 4,299,957 shares of our common stock granted or available for grant under the 2021 Plan of which 1,571,807 are allocated to employees and consultants (vested and non-vested), 208,400 are allocated to Directors (vested and non-vested), and 2,519,750 were unallocated.

Authorized Shares

The number of shares of our common stock available for issuance under the 2021 Plan also includes an annual increase on the first day of each fiscal year beginning with the fiscal year ending March 31, 2025 and ending on (and including) the fiscal year ending March 31, 2031, in an amount equal to the least of:

| ● | 500,000 shares of our common stock; or
| ● | such number of shares of our common stock as the administrator may determine.

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If an award granted under the 2021 Plan expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program or, with respect to restricted stock, RSUs, performance units, or performance shares, is forfeited to, or repurchased by, us due to failure to vest, then the unpurchased shares (or for awards other than stock options or stock appreciation rights, the forfeited or repurchased shares) which were subject thereto will become available for future grant or sale under the 2021 Plan (unless the 2021 Plan has terminated). With respect to stock appreciation rights, only the net shares actually issued will cease to be available under the 2021 Plan and all remaining shares under stock appreciation rights will remain available for future grant or sale under the 2021 Plan (unless the 2021 Plan has terminated). Shares that actually have been issued under the 2021 Plan under any award will not be returned to the 2021 Plan; provided, however, that if shares issued pursuant to awards of restricted stock, RSUs, performance shares, or performance units are repurchased or forfeited to us due to failure to vest, such shares will become available for future grant under the 2021 Plan. Shares used to pay the exercise price of an award or to satisfy the tax withholding obligations related to an award will become available for future grant or sale under the 2021 Plan. To the extent an award is paid out in cash rather than shares, the cash payment will not result in a reduction in the number of shares available for issuance under the 2021 Plan.

Plan Administration

The board of directors or one or more committees appointed by the board of directors will administer the 2021 Plan. In addition, if we determine it is desirable to qualify transactions under the 2021 Plan as exempt under Rule 16b-3, such transactions will be structured with the intent that they satisfy the requirements for exemption under Rule 16b-3. Subject to the provisions of the 2021 Plan, the administrator has the power to administer the 2021 Plan and make all determinations deemed necessary or advisable for administering the 2021 Plan, including the power to determine the fair market value of our common stock, select the service providers to whom awards may be granted, determine the number of shares covered by each award, approve forms of award agreement for use under the 2021 Plan, determine the terms and conditions of awards (including the exercise price, the time or times when the awards may be exercised, any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any award or the shares relating thereto), construe and interpret the terms of the 2021 Plan and awards granted under it, prescribe, amend, and rescind rules and regulations relating to the 2021 Plan, including creating sub-plans, and modify or amend each award, including the discretionary authority to extend the post-termination exercisability period of awards (provided that no option or stock appreciation right will be extended past its original maximum term), temporarily suspend the exercisability of an award if the administrator deems such suspension to be necessary or appropriate for administrative purposes, and to allow a participant to defer the receipt of payment of cash or the delivery of shares that would otherwise be due to such participant under an award. The administrator may institute and determine the terms of an exchange program under which (i) outstanding awards are surrendered or cancelled in exchange for awards of the same type (which may have a higher or lower exercise price or different terms), awards of a different type and/or cash, (ii) participants would have the opportunity to transfer any outstanding awards to a financial institution or other person or entity selected by the administrator, and/or (iii) the exercise price of an outstanding award is increased or reduced. The administrator’s decisions, determinations, and interpretations are final and binding on all participants.

Stock Options

Stock options may be granted under the 2021 Plan in such amounts as the administrator will determine in accordance with the terms of the 2021 Plan. The exercise price of options granted under the 2021 Plan must at least be equal to the fair market value of our common stock on the date of grant. The term of an option will be stated in the award agreement, and in the case of an incentive stock option, may not exceed 10 years. With respect to any participant who owns stock representing more than 10% of the voting power of all classes of our outstanding stock, the term of an incentive stock option granted to such participant must not exceed five years and the exercise price must equal at least 110% of the fair market value on the date of grant. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares, or other property acceptable to the administrator, as well as other types of consideration permitted by applicable law. After a participant ceases to provide service as an employee, director, or consultant, he or she may exercise his or her option for the period of time stated in his or her award agreement. In the absence of a specified time in an award agreement, if the cessation of service is due to death or disability, the option will remain exercisable for 12 months. In all other cases, in the absence of a specified time in an award agreement, the option will remain exercisable for three months following the cessation service. An option may not be exercised later than the expiration of its term. Subject to the provisions of the 2021 Plan, the administrator determines the other terms of options.

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Stock Appreciation Rights

Stock appreciation rights may be granted under the 2021 Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the exercise date and the date of grant. Stock appreciation rights will expire upon the date determined by the administrator and set forth in the award agreement. After a participant ceases to provide service as an employee, director, or consultant, he or she may exercise his or her stock appreciation right for the period of time stated in his or her award agreement. In the absence of a specified time in an award agreement, if cessation of service is due to death or disability, the stock appreciation rights will remain exercisable for 12 months. In all other cases, in the absence of a specified time in an award agreement, the stock appreciation rights will remain exercisable for three months following the cessation of service. However, in no event may a stock appreciation right be exercised later than the expiration of its term. Subject to the provisions of the 2021 Plan, the administrator determines the other terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash, shares of our common stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant.

Restricted Stock

Restricted stock may be granted under the 2021 Plan. Restricted stock awards are grants of shares of our common stock that vest in accordance with terms and conditions established by the administrator (if any). The administrator will determine the number of shares of restricted stock granted to any employee, director, or consultant and, subject to the provisions of the 2021 Plan, will determine any terms and conditions of such awards. The administrator may impose whatever conditions to vesting it determines to be appropriate (for example, the administrator may set restrictions based on the achievement of specific performance goals or continued service to us); provided, however, that the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the administrator provides otherwise. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

Restricted Stock Units

RSUs may be granted under the 2021 Plan. RSUs are bookkeeping entries representing an amount equal to the fair market value of one share of our common stock. Subject to the provisions of the 2021 Plan, the administrator determines the terms and conditions of RSUs, including the vesting criteria, and the form and timing of payment. The administrator may set vesting criteria based upon the achievement of company-wide, divisional, business unit, or individual goals (including continued employment or service), applicable federal or state securities laws, or any other basis determined by the administrator in its discretion. The administrator, in its sole discretion, may pay earned RSUs in the form of cash, in shares, or in some combination thereof. Notwithstanding the foregoing, the administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

Performance Units and Performance Shares

Performance units and performance shares may be granted under the 2021 Plan. Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. The administrator will establish performance objectives or other vesting provisions in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants. The administrator may set performance objectives based upon the achievement of company-wide, divisional, business unit, or individual goals (including continued employment or service), applicable federal or state securities laws, or any other basis determined by the administrator in its discretion. After the grant of a performance unit or performance share, the administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance units or performance shares. Performance units will have an initial dollar value established by the administrator on or prior to the date of grant. Performance shares will have an initial value equal to the fair market value of our common stock on the date of grant. The administrator, in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares, or in some combination thereof.

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Non-Employee Directors

The 2021 Plan provides that all outside (non-employee) directors will be eligible to receive all types of awards (except for incentive stock options) under the 2021 Plan. In order to provide a maximum limit on the awards that can be made to tour non-employee directors, the 2021 Plan provides that in any given fiscal year, a non-employee director may not be paid, issued, or granted equity awards (including awards issued under the 2021 Plan) with an aggregate value (the value of which will be based on their grant date fair value determined in accordance with U.S. generally accepted accounting principles) and any other compensation (including without limitation any cash retainers or fees) that, in the aggregate, exceed $500,000 (excluding awards or other compensation paid or provided to him or her as a consultant or employee). The maximum limits do not reflect the intended size of any potential grants or a commitment to make grants to our outside directors under the 2021 Plan in the future.

Non-Transferability of Awards

Unless the administrator provides otherwise, the 2021 Plan generally does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime. If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate.

Certain Adjustments

In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2021 Plan, the administrator will adjust the number and class of shares that may be delivered under the 2021 Plan and/or the number, class, and price of shares covered by each outstanding award, and the numerical share limits set forth in the 2021 Plan.

Dissolution or Liquidation

In the event of our proposed dissolution or liquidation, the administrator will notify participants as soon as practicable prior to the effective date of such proposed transaction and all awards will terminate immediately prior to the consummation of such proposed transaction.

Merger or Change in Control

The 2021 Plan provides that in the event of our merger with or into another corporation or entity or a change in control (as defined in the 2021 Plan), each outstanding award will be treated as the administrator determines, including, without limitation, that (i) awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices, (ii) upon written notice to a participant, that the participant’s awards will terminate upon or immediately prior to the consummation of such merger or change in control, (iii) outstanding awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon consummation of such merger or change in control and, to the extent the administrator determines, terminate upon or immediately prior to the effectiveness of such merger or change in control, (iv) (A) the termination of an award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such award or realization of the participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the administrator determines in good faith that no amount would have been attained upon the exercise of such award or realization of the participant’s rights, then such award may be terminated by us without payment), or (B) the replacement of such award with other rights or property selected by the administrator in its sole discretion, or (v) any combination of the foregoing. The administrator will not be obligated to treat similarly all awards, all awards a participant holds, all awards of the same type, or all portions of awards.

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In the event that the successor corporation does not assume or substitute for the award (or portions thereof), the participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciations rights (or portions thereof) that is not assumed or substituted for, all restrictions on restricted stock, RSUs, performance shares, and performance units (or portions thereof) not assumed or substituted for will lapse, and, with respect to such awards with performance-based vesting (or portions thereof) not assumed or substituted for, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met, in all cases, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and us or any parent or subsidiary. Additionally, in the event an option or stock appreciation right (or portions thereof) is not assumed or substituted for in the event of a merger or change in control, the administrator will notify each participant in writing or electronically that the option or stock appreciation right (or its applicable portion), as applicable, will be exercisable for a period of time determined by the administrator in its sole discretion, and the option or stock appreciation right (or its applicable portion), as applicable, will terminate upon the expiration of such period.

With respect to awards granted to an outside director, in the event of a change in control, the outside director’s options and stock appreciation rights, if any, will vest fully and become immediately exercisable, all restrictions on his or her restricted stock and RSUs will lapse, and, with respect to awards with performance-based vesting, all performance goals or other vesting requirements for his or her performance shares and units will be deemed achieved at 100% of target levels and all other terms and conditions met, in all cases, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and us or any parent or subsidiary.

The following table sets forth, for each executive officer, certain information concerning outstanding restricted stock awards as of March 31, 2025:

Name |  | Number of securities underlying unvested restricted stock awards (#) |  |  | Fair Value ($) |  |  | Vest date |
Chath Weerasinghe |  |  | 300,000 |  |  |  | 0.80 |  |  |  | February 2, 2026 | (1)

(1) | Fully vests on the fourth anniversary from contractual start date.

The following table sets forth, for each executive officer, certain information concerning outstanding option awards as of March 31, 2025:

Name |  | Number of securities underlying unexercised options (exercisable) (#) |  |  | Number of securities underlying unexercised options (unexercisable) (#) |  |  | Option exercise price ($) |  |  | Option expiration date |
Jane Gottschalk |  |  | 68,172 |  |  |  | - |  |  |  | 3.50 |  |  |  | January 1, 2027 | (1)

(1) | All shares have fully vested.

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Clawback Policy

Awards are subject to the Company’s clawback policy, which was adopted on January 19, 2024 pursuant to Section 811 of the NYSE American Company Guide, Section 10D of the Exhchange Act, and Rule 10D-1 promulgated under the Exchange Act (the “Clawback Policy”). The Clawback Policy requires us to recoup incentive-based compensation from current and former executive officers in the event of an accounting restatement, subject to certain exceptions set forth in the policy. In addition, our board of directors, acting as the administrator of the Clawback Policy (such administrator to be the Compensation Committee if so designated by the board of directors) also may specify in an award agreement that the participant’s rights, payments, and benefits with respect to an award will be subject to reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition upon the occurrence of certain specified events. The administrator of the Clawback Policy may require a participant to forfeit, return, or reimburse us all or a portion of the award and any amounts paid under the award pursuant to the terms of the Clawback Policy or applicable laws.

Amendment; Termination

The administrator has the authority to amend, alter, suspend, or terminate the 2021 Plan provided such action does not materially impair the existing rights of any participant. The 2021 Plan will automatically terminate in 2031, unless terminated sooner.

Enterprise Management Incentive Sub-Plan

The 2021 Plan includes an Enterprise Management Incentive Sub-Plan for the purpose of granting options to participants residing in the United Kingdom in compliance with the laws of the United Kingdom.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The board of directors and stockholders adopted our 2021 Equity Incentive Plan on August 24, 2021. The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to our employees and our parent and subsidiary corporations’ employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to our employees, directors, and consultants and our parent and subsidiary corporations’ employees and consultants. As of June 30, 2025, there were 4,299,957 shares of our common stock granted or available for grant under the 2021 Plan.

The following information is as of March 31, 2025.

Plan category |  | Number of securities to be issued upon exercise of outstanding options, warrants, and rights |  |  | Weighted-average exercise price of outstanding options, warrants, and rights |  |  | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in third column) |
Equity compensation plans approved by securityholders |  |  | 1,470,206 |  |  | $ | 2.13 |  |  |  | 2,693,407 |
Equity compensation plans not approved by securityholders |  |  | 136,344 |  |  | $ | 0.01 |  |  |  | - |
Total |  |  | 1,606,550 |  |  | $ | 1.95 |  |  |  | 2,693,407 |

Security Ownership of Certain Beneficial Owners

The following table sets forth certain information regarding the beneficial ownership of our common stock as of June 30, 2025 for each person, or group of affiliated persons, known to us to beneficially own more than 5% of the common stock. The common stock is our only class of voting securities which is currently outstanding.

Beneficial ownership of our common stock is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has a right to acquire ownership at any time within 60 days of the date of this Annual Report. Except as indicated by footnote, and subject to applicable community property laws, we believe the persons identified in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

In the following table, percentage ownership is based on 35,708,299 based on the beneficial ownership of our common stock and Series AA Preferred Stock that currently convert at a rate of five shares of Common Stock for every one share of Series AA Preferred Stock as of June 30, 2025. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of common stock subject to options or other convertible securities held by that person or entity that are currently exercisable or releasable or that will become exercisable or releasable within 60 days of June 30, 2025. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

Title of Class |  | Name and address of Beneficial Owner |  | Amount and Nature of Beneficial Ownership |  |  | Percentage of Class |
Common stock |  | Kahala 19(1) |  |  | 3,361,995 |  |  |  | 9 | %

(1) | Kahala 19 beneficially owns 2,500,000 shares of Common Stock and 172,399 shares of Series AA Preferred Stock that currently convert at a rate of five shares of Common Stock for every one share of Series AA Preferred Stock. The address of Kahala 19 is 11550 Meridian ST, Ste 125, Carmel IN 46032

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Security Ownership of Management

The following table sets forth certain information regarding the beneficial ownership of our common stock and Series AA Preferred Stock that currently convert at a rate of five shares of Common Stock for every one share of Series AA Preferred Stock as of June 30, 2025 for each of our directors, named executive officers, and all of our directors and executive officers as a group.

Unless otherwise indicated, the address of each of the following persons is United House, 9 Pembridge Road, London W11 3JY, United Kingdom, and each such person has sole voting and investment power with respect to the shares set forth opposite his, her or its name.

Title of Class |  | Name and address of Beneficial Owner |  | Amount and Nature of Beneficial Ownership |  |  | Percentage of Class |
Common stock |  | Named Executive Officers and Directors: |  |  |  |  |  |  |  |
|  | Max Gottschalk(2) |  |  | 7,219,467 |  |  |  | 20.2 | %
|  | Mark Buckley(3) |  |  | 203,250 |  |  |  | 0.6 | %
|  | Jane Gottschalk(4) |  |  | 7,219,467 |  |  |  | 20.2 | %
|  | Andre Keijsers(5) |  |  | 23,845 |  |  |  | * |
|  | Berndt Hauptkorn(6) |  |  | 9,000 |  |  |  | * |
|  | Tracy Barwin(7) |  |  | 10,800 |  |  |  | * |
|  | Tim Nixdorff(8) |  |  | 9,000 |  |  |  | * |
|  | Adam Epstein(9) |  |  | - |  |  |  |  |
|  | All directors and executive officers as a group |  |  | 7,475,778 |  |  |  | 38.1 | %

| * | Less than 1%.

(2) | Consists of (i) 3,479,491 shares of common stock held of record by Fermain Limited; (ii) 242,625 shares of common stock held of record by JGA; (iii) 1,692,694 shares of common stock issued to JGA as consideration for the extinguishment of unpaid principal and interest on an outstanding promissory note totaling $507,808 at the per share price of $0.30 during the offering completed on June 30, 2025; (iv) 68,172 shares of common stock issuable upon the exercise of stock options by Mr. Gottschalk’s spouse, Jane Gottschalk; (v) 12,500 shares of common stock issuable upon the exercise of stock options and (vi) the total excludes 37,500 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025. Mr. Gottschalk beneficially owns 3,802,988 shares of Common Stock and 344,797 shares of Series AA Preferred Stock through JGA that currently convert at a rate of five shares of Common Stock for every one share of Series AA Preferred Stock.
(3) | Consists of 203,250 shares of common stock held directly.
(4) | Consists of (i) 3,479,491 shares of common stock held of record by Fermain Limited; (ii) 242,625 shares of common stock held of record by JGA; (iii) 68,172 shares of common stock issuable upon the exercise of stock options (iv)12,500 shares of common stock issuable upon the exercise of stock options by Ms. Gottschalks spouse, Max Gottschalk and (v) the total excludes 37,500 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025 held by Ms. Gottschalk’s spouse, Max Gottschalk. Ms. Gottschalk beneficially owns 3,802,988 shares of Common Stock and 344,797 shares of Series AA Preferred Stock that currently convert at a rate of five shares of Common Stock for every one share of Series AA Preferred Stock.
(5) | Consists of 13,045 shares of common stock held directly and 10,800 shares of common stock issuable upon the exercise of stock options. The total excludes 32,400 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025.
(6) | Consists of 9,000 shares of common stock issuable upon the exercise of stock options. The total excludes 27,000 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025.
(7) | Consists of 10,800 shares of common stock issuable upon the exercise of stock. The total excludes 32,400 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025.
(8) | Consists of 9,000 shares of common stock issuable upon the exercise of stock. The total excludes 27,000 shares of our common stock underlying stock options not exercisable within 60 days of June 30, 2025.
(9) | [●]

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

We follow ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. When and if we contemplate entering into a transaction in which any executive officer, director, nominee, or any family member of the foregoing would have a direct or indirect interest, regardless of the amount involved, the terms of such transaction are to be presented to our full board of directors (other than any interested director) for approval, and documented in the board minutes.

SEC regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the company, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.

In addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” the following is a description of all related person transactions that occurred during the fiscal year ended March 31, 2025.

Consulting Agreements with Directors

Certain directors of the Company and its subsidiaries provided consulting and advisory services to the Company, as non-employees, recognized in selling, general and administrative expenses in our consolidated financial statements contained elsewhere in this Annual Report. As of March 31, 2024, none of these expenses were unpaid.

Below are the directors of the Company and its subsidiaries, that provided consulting and advisory services during the year.

|  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
(Amounts in thousands) |  |  |  |  |  |  |  |
(A) Max Gottschalk (director of the Company) |  | $ | 185 |  |  | $ | 181 |
(B) Tracy Barwin (director of the Company) |  |  | - |  |  |  | 121 |
(C) Andre Keijsers(director of the Company) |  |  | - |  |  |  | 22 |
Total Expenses |  | $ | 185 |  |  | $ | 324 |

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| (A) | We, through PMA, are party to a consulting agreement with Max Gottschalk, dated May 15, 2019, which continues until terminated in accordance with its terms, during which Mr. Gottschalk is entitled to receive fees for services rendered amounting to £8,000 per month from April 2021 to November 2022 and £12,000 per month since December 2022. These amounts are in lieu of any other cash payments or equity awards Mr. Gottschalk may otherwise have been entitled to receive as a member of our board of directors.
| (B) | We were party to a consulting agreement with Tracy Barwin, dated November 18, 2022, pursuant to which Ms. Barwin was entitled to receive £1,500 per day for services rendered with a minimum commitment of two days per month. These amounts were in lieu of any other cash payments or equity awards Ms. Barwin may otherwise have been entitled to receive as a member of our board of directors. The consulting agreement with Ms. Barwin was terminated in October 2023 and replaced by an independent director agreement.

Other Transactions with Related Persons

The Chairman has provided a $4,000 personal guarantee for the Company’s trade finance facility. The guarantee is a pay-on-demand guarantee securing the Company’s obligations under the trade finance facility, including interest and bank costs, fees and expenses, up to $4,000. The Chairman does not receive consideration in exchange for the personal guarantee.

In March 2025, the Company entered into securities purchase agreements with a company controlled by the Chairman whereby the Company issued 344,797 shares of Series AA Preferred Stock at an original issue price of $5.8005 per share for gross proceeds of $2,000.

Review, Approval or Ratification of Transactions with Related Parties

Our board of directors reviews and approves transactions with directors, officers and holders of five percent or more of our voting securities and their affiliates, each a related party. The material facts as to the related party’s relationship or interest in the transaction are disclosed to our board of directors prior to their consideration of such transaction, and the transaction is not considered approved by our board of directors unless a majority of the directors who are not interested in the transaction approve the transaction. Further, when stockholders are entitled to vote on a transaction with a related party, the material facts of the related party’s relationship or interest in the transaction are disclosed to the stockholders, who must approve the transaction in good faith.

We have adopted a written related party transactions policy that such transactions must be approved by our audit committee or another independent body of our board of directors.

Director Independence

As our common stock is currently listed for trading on the NYSE American, we have evaluated independence in accordance with the rules of the NYSE American Company Guide and the SEC with respect to each director and director nominee. Our board of directors undertook a review of the independence of its members and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon the information requested from and provided by each director concerning their background, employment, and affiliations, including family relationships, our Board has determined that each of the following non-employee directors are independent as that term is defined under the rules of the NYSE American Company Guide.

In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of capital stock by each non-employee director, and the transactions involving their affiliates described in this Annual Report.

All of the members of the Audit, Nomination, and Compensation Committees are also independent.

Based on these standards, our board of directors determined Mark Buckley, Jeff Clayborne, Jane Gottschalk, and Max Gottschalk were not independent.

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The following table shows the fees that we paid for audit and other services provided by Weinberg & Company, P.A., our independent registered public accounting firm for fiscal years ended 2025 and 2024, respectively (amounts in thousands).

Fees |  | 2025 |  |  | 2024 |
Audit Fees |  | $ | 272 |  |  | $ | 266 |
Audit Related Fees |  |  | 44 |  |  |  | 37 |
Tax Fees |  |  | - |  |  |  | - |
Other Fees related to initial public offering |  |  | - |  |  |  | 177 |
Total Fees |  | $ | 316 |  |  | $ | 480 |

Audit Fees —This category includes the audit of our annual financial statements and services that are normally provided by the independent auditors in connection with engagements for those fiscal years.

Audit-Related Fees — This category consists of assurance and related services by the independent auditor that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees”.

All Other Fees — This category consists of fees for other miscellaneous items.

Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures to oversee the external audit process and pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by our board of directors or Audit Committee, as applicable, before the respective services were rendered.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

Reference is made to the financial statements attached beginning on page F-1 of this Annual Report.

(a)(2) Financial Statement Schedules

None.

(a)(3) Exhibits

Reference is made to the exhibits listed on the Index to Exhibits.

ITEM 16. FORM 10-K SUMMARY

None.

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Index to Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB Firm ID: 572) | F-2
Consolidated Financial Statements: |
Balance Sheets as of March 31, 2025 and 2024 | F-3
Statements of Operations and Comprehensive Loss for the years ended March 31, 2025 and 2024 | F-4
Statements of Changes in Stockholders’ Equity for the years ended March 31, 2025 and 2024 | F-5
Statements of Cash Flows for the years ended March 31, 2025 and 2024 | F-6
Notes to Consolidated Financial Statements for the years ended March 31, 2025 and 2024 | F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Perfect Moment Ltd and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Perfect Moment Ltd and Subsidiaries (the “Company”) as of March 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2025 and 2024, and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company incurred recurring losses, had a net loss and used cash in operations during the year ended March 31, 2025, and the Company had an accumulated deficit at March 31, 2025. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2023.

/s/ Weinberg & Company, P.A.

Weinberg & Company, P.A.

Los Angeles, California

June 30, 2025

F-2

PERFECT MOMENT LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

|  | March 31, 2025 |  |  | March 31, 2024 |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 6,159 |  |  | $ | 7,910 |
Restricted cash |  |  | 1,350 |  |  |  | - |
Accounts receivable, net |  |  | 886 |  |  |  | 1,035 |
Inventories, net |  |  | 1,567 |  |  |  | 2,230 |
Prepaid and other current assets |  |  | 2,812 |  |  |  | 742 |
Total current assets |  |  | 12,774 |  |  |  | 11,917 |
Long term assets: |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | 44 |  |  |  | 143 |
Property and equipment, net |  |  | 483 |  |  |  | 502 |
Other non-current assets |  |  | 36 |  |  |  | 47 |
Total assets |  | $ | 13,337 |  |  | $ | 12,609 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Trade payables |  | $ | 2,594 |  |  | $ | 1,584 |
Accrued expenses |  |  | 4,233 |  |  |  | 2,697 |
Trade finance facility |  |  | 2,495 |  |  |  | - |
Short-term borrowings, net |  |  | 1,851 |  |  |  | - |
Operating lease liabilities, current |  |  | 44 |  |  |  | 101 |
Unearned revenue |  |  | 264 |  |  |  | 420 |
Total current liabilities |  |  | 11,481 |  |  |  | 4,802 |
Long term liabilities: |  |  |  |  |  |  |  |
Operating lease liabilities, non-current |  |  | - |  |  |  | 44 |
Total liabilities |  |  | 11,481 |  |  |  | 4,846 |
Commitments and contingencies (see Note 14) |  |  | - |  |  |  | - |
Stockholders’ equity: |  |  |  |  |  |  |  |
Series AA convertible preferred stock, $0.0001 par value, 1,800,000 shares authorized; 924,921 shares and nil shares issued and outstanding as of March 31, 2025 and 2024, respectively |  |  | - |  |  |  | - |
Common stock, $0.0001 par value, 100,000,000 shares authorized: 19,291,000 and 15,653,449 shares issued and outstanding as of March 31, 2025 and 2024, respectively |  |  | 2 |  |  |  | 1 |
Additional paid-in-capital |  |  | 66,793 |  |  |  | 56,824 |
Accumulated other comprehensive loss |  |  | (23 | ) |  |  | (85 | )
Accumulated deficit |  |  | (64,916 | ) |  |  | (48,977 | )
Total stockholders’ equity |  |  | 1,856 |  |  |  | 7,763 |
Total liabilities and stockholders’ equity |  | $ | 13,337 |  |  | $ | 12,609 |

The accompanying notes are an integral part of these consolidated financial statements

F-3

PERFECT MOMENT LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Amounts in thousands, except share and per share data)

|  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
Revenue, net |  | $ | 21,501 |  |  | $ | 24,443 |
Cost of sales |  |  | 11,072 |  |  |  | 12,001 |
Gross profit |  |  | 10,429 |  |  |  | 12,442 |
Operating expenses: |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  | 20,685 |  |  |  | 15,333 |
Marketing and advertising expenses |  |  | 3,540 |  |  |  | 4,784 |
Total operating expenses |  |  | 24,225 |  |  |  | 20,117 |
Loss from operations |  |  | (13,796 | ) |  |  | (7,675 | )
Other income (expense), net |  |  |  |  |  |  |  |
Interest expense |  |  | (2,046 | ) |  |  | (1,311 | )
Foreign currency transactions (loss) gain |  |  | (107 | ) |  |  | 264 |
Other income |  |  | 10 |  |  |  | - |
Total other expense, net |  |  | (2,143 | ) |  |  | (1,047 | )
Net Loss |  | $ | (15,939 | ) |  | $ | (8,722 | )
Other comprehensive losses |  |  |  |  |  |  |  |
Foreign currency translation gain (loss) |  |  | 62 |  |  |  | (288 | )
Comprehensive loss |  | $ | (15,877 | ) |  | $ | (9,010 | )
Basic and diluted loss per share |  | $ | (0.99 | ) |  | $ | (1.34 | )
Basic and Diluted weighted-average number of shares outstanding |  |  | 16,095,138 |  |  |  | 6,518,960 |

The accompanying notes are an integral part of these consolidated financial statements

F-4

PERFECT MOMENT LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended March 31, 2025 and 2024

(Amounts in thousands, except share data)

|  | Preference Shares |  |  |  |  |  |  |  |  | Accumulated |  |  |  |  |  | Total |
|  | Series AA Convertible |  |  | Series A Convertible |  |  | Series B Convertible |  |  | Common Shares |  |  | Additional Paid-in |  |  | Other Comprehensive |  |  | Accumulated |  |  | Stockholders’ Equity |
|  | Shares |  |  | Amount |  |  | Shares |  |  | Amount |  |  | Shares |  |  | Amount |  |  | Shares |  |  | Amount |  |  | Capital |  |  | Income (Loss) |  |  | Deficit |  |  | (Deficit) |
Balance -March 31, 2023 |  |  | - |  |  | $ | - |  |  |  | 5,323,782 |  |  | $ | 1 |  |  |  | 1,189,998 |  |  | $ | - |  |  |  | 4,824,352 |  |  | $ | - |  |  | $ | 35,910 |  |  | $ | 203 |  |  | $ | (40,255 | ) |  | $ | (4,141 | )
Stock compensation on employee vested RSUs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 75,000 |  |  |  | - |  |  |  | 429 |  |  |  | - |  |  |  | - |  |  |  | 429 |
Stock compensation expense for employee vested options |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 310 |  |  |  | - |  |  |  | - |  |  |  | 310 |
Issuance of common stock for cash |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 409,050 |  |  |  | - |  |  |  | 2,179 |  |  |  | - |  |  |  | - |  |  |  | 2,179 |
Sale of common stock from public offering |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,334,000 |  |  |  | - |  |  |  | 6,009 |  |  |  | - |  |  |  | - |  |  |  | 6,009 |
Issuance of common stock upon conversion of convertible debt and accrued interest |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,497,267 |  |  |  | - |  |  |  | 11,987 |  |  |  | - |  |  |  | - |  |  |  | 11,987 |
Issuance of common stock upon conversion of Series A convertible stock |  |  | - |  |  |  | - |  |  |  | (5,323,782 | ) |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | 5,323,782 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Issuance of common stock upon conversion of Series B convertible stock |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,189,998 | ) |  |  | - |  |  |  | 1,189,998 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Foreign currency translation adjustment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (288 | ) |  |  | - |  |  |  | (288 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (8,722 | ) |  |  | (8,722 | )
Balance - March 31, 2024 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,653,449 |  |  |  | 1 |  |  |  | 56,824 |  |  |  | (85 | ) |  |  | (48,977 | ) |  |  | 7,763 |
Balance |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,653,449 |  |  |  | 1 |  |  |  | 56,824 |  |  |  | (85 | ) |  |  | (48,977 | ) |  |  | 7,763 |
Stock compensation expense for employee vested options |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 715 |  |  |  | - |  |  |  | - |  |  |  | 715 |
Stock compensation on employee vested RSUs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 285,449 |  |  |  | - |  |  |  | 619 |  |  |  | - |  |  |  | - |  |  |  | 619 |
Fair value of shares issued for services |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,352,102 |  |  |  | - |  |  |  | 1,488 |  |  |  | - |  |  |  | - |  |  |  | 1,488 |
Issuance of preferred stock and warrants, net |  |  | 924,921 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,148 |  |  |  | - |  |  |  | - |  |  |  | 5,148 |
Issuance of common stock upon conversion of convertible debt |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,000,000 |  |  |  | 1 |  |  |  | 1,999 |  |  |  | - |  |  |  | - |  |  |  | 2,000 |
Foreign currency translation adjustment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 62 |  |  |  | - |  |  |  | 62 |
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,939 | ) |  |  | (15,939 | )
Balance – March 31, 2025 |  |  | 924,921 |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  |  | 19,291,000 |  |  | $ | 2 |  |  | $ | 66,793 |  |  | $ | (23 | ) |  | $ | (64,916 | ) |  | $ | 1,856 |
Balance |  |  | 924,921 |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  |  | 19,291,000 |  |  | $ | 2 |  |  | $ | 66,793 |  |  | $ | (23 | ) |  | $ | (64,916 | ) |  | $ | 1,856 |

The accompanying notes are an integral part of these consolidated financial statements

F-5

PERFECT MOMENT LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

|  | Year Ended |  |  | Year Ended |
|  | March 31, 2025 |  |  | March 31, 2024 |
Operating Activities: |  |  |  |  |  |  |  |
Net loss |  | $ | (15,939 | ) |  | $ | (8,722 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 342 |  |  |  | 555 |
Bad debt expense |  |  | (21 | ) |  |  | 217 |
Inventory reserve |  |  | 1,599 |  |  |  | 382 |
Realized foreign exchange (gain) loss |  |  | 107 |  |  |  | (128 | )
Stock based compensation |  |  | 1,334 |  |  |  | 739 |
Amortization of stock-based marketing services shares issued for services |  |  | 910 |  |  |  | 185 |
Amortization of debt finance costs |  |  | 1,801 |  |  |  | 492 |
Other |  |  | (10 | ) |  |  | - |
Effect of changes in assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable, net |  |  | 160 |  |  |  | (238 | )
Inventories, net |  |  | (937 | ) |  |  | (349 | )
Prepaid and other current assets |  |  | (1,493 | ) |  |  | (219 | )
Operating lease right-of-use assets |  |  | 99 |  |  |  | 268 |
Other non-current assets |  |  | 3 |  |  |  | (37 | )
Operating lease right-of-use liability |  |  | (100 | ) |  |  | (162 | )
Trade payables |  |  | 903 |  |  |  | 295 |
Accrued expenses |  |  | 1,536 |  |  |  | 2,029 |
Unearned revenue |  |  | (155 | ) |  |  | 240 |
Net cash used in operating activities |  |  | (9,861 | ) |  |  | (4,453 | )
Investing Activities: |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (302 | ) |  |  | (211 | )
Net cash used by investing activities |  |  | (302 | ) |  |  | (211 | )
Financing Activities: |  |  |  |  |  |  |  |
Proceeds from initial public offering |  |  | - |  |  |  | 6,009 |
Proceeds from sale of common stock |  |  | - |  |  |  | 2,179 |
Proceeds from issuance of preference shares and warrants, net |  |  | 5,148 |  |  |  | - |
Proceeds from convertible debt obligations |  |  | 2,000 |  |  |  | - |
Proceeds from trade finance facility |  |  | 2,845 |  |  |  | 1,847 |
Repayment of trade finance facility |  |  | (351 | ) |  |  | (1,873 | )
Proceeds from short-term borrowings, net |  |  | 5,792 |  |  |  | - |
Repayment of short-term borrowings |  |  | (5,742 | ) |  |  | - |
Net cash provided by financing activities |  |  | 9,692 |  |  |  | 8,162 |
Effect of Exchange Rate Changes on Cash |  |  | 70 |  |  |  | (300 | )
Net change in cash |  |  | (401 | ) |  |  | 3,198 |
Cash and cash equivalents and restricted cash - beginning of period |  |  | 7,910 |  |  |  | 4,712 |
Cash and cash equivalents and restricted cash - end of period |  | $ | 7,509 |  |  | $ | 7,910 |
Supplemental disclosures of cash flow information: |  |  |  |  |  |  |  |
Interest paid on borrowings and bank loans |  | $ | 154 |  |  | $ | 107 |
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 6,159 |  |  | $ | 7,910 |
Restricted cash |  |  | 1,350 |  |  |  | - |
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows |  | $ | 7,509 |  |  | $ | 7,910 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |  |  |  |
Conversion of convertible debt to common stock |  | $ | 2,000 |  |  | $ | 11,987 |
Fair value of shares issued in exchange for services to be received |  | $ | 1,488 |  |  | $ | - |
Recognition of debt discounts on short-term borrowings |  | $ | 2,866 |  |  | $ | - |
Offset of deferred offering costs to proceeds received |  | $ | - |  |  | $ | 1,169 |
Recognition of operating lease right of use assets and lease obligations |  | $ | - |  |  | $ | 198 |
Write-off of expired operating lease right-of-use assets and lease obligations |  | $ | - |  |  | $ | 53 |

The accompanying notes are an integral part of these consolidated financial statements

F-6

PERFECT MOMENT LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2025 AND 2024

(Unless otherwise indicated, dollar amounts in thousands)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of operations

Perfect Moment Ltd., a Delaware corporation (“Perfect Moment” or “PML” and, together with its subsidiaries unless the context otherwise requires, the “Company”), is an owner and operator of a luxury fashion brand that offers ski, surf, and activewear collections under the brand name Perfect Moment. The Company’s collections are sold directly to customers.

On February 7, 2024, the company entered into an underwriting agreement with ThinkEquity LLC, as representative (the “Representative”) of the several underwriters identified therein, relating to the Company’s initial public offering (the “IPO”) of 1,334,000 shares of the Company’s common stock, par value $0.0001 per share (see Note 10). The Company previously filed the form of underwriting agreement as an exhibit to the Company’s registration statement on Form S-1, as amended from time to time (File No. 333-274913), which was declared effective by the Securities and Exchange Commission on February 7, 2024. The price per share to the public was $6.00 generating gross proceeds of $8,004. The Company also granted the Underwriters a 45-day option to purchase up to 200,100 additional shares of Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO. The Underwriters did not exercise the over-allotment option.

Basis of presentation

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and present the consolidated financial position, income (loss), comprehensive income (loss), and cash flows of the Company and its wholly owned subsidiaries. The figures in the notes to the financials are presented in thousands.

References to GAAP issued by the FASB in these accompanying notes to the financial statements are to the Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”). The financial statements have been prepared assuming the Company will continue as a going concern.

Principles of consolidation

These consolidated financial statements include the accounts of Perfect Moment Ltd. and its wholly owned subsidiaries; Perfect Moment Asia Limited (“PMA”), Perfect Moment (UK) Limited (“PMUK”), Perfect Moment USA, Inc. (“PMUSA”), and Perfect Moment TM Sarl (“PMTM”). All significant intercompany balances and transactions have been eliminated in consolidation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern

Through March 31, 2025, the Company has funded its operations with proceeds from the sale of common stock from the initial public offering and the issuance of common stock, alongside existing trade, invoice and shareholder financing arrangements. The Company has incurred recurring losses, including a net loss of $15,939 for the year ended March 31, 2025 and used cash in operations of $9,861 during that period. As of March 31, 2025, the Company had an accumulated deficit of $64,916. These factors raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date these consolidated financial statements were available to be issued. The Company’s ability to continue as a going concern is dependent upon the management of its expenses and its ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations

F-7

The Company’s future capital requirements will depend on many factors, including production costs and planned growth. In order to finance these opportunities and associated costs, it is possible that the Company would need to raise additional financing if working capital is insufficient to support its business needs. While there can be no assurances, the Company intends to raise such capital through additional short-term loan issuances, debt factoring, and additional equity raises. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital on acceptable terms when needed, its product development , results of operations and financial condition would be materially and adversely affected.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these consolidated financial statements are available to be issued. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Emerging Growth Company

The Company is expected to be an emerging growth company, as defined in the Jumpstart Our Business Startups (“JOBS”) Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as to those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments in applying the Company’s accounting policies that affect the reported amounts and disclosures made in the consolidated financial statements and accompanying notes. Management continually evaluates the estimates and judgments it uses. These estimates and judgments have been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties that management believes will materially affect the methodology or assumptions utilized in making these estimates and judgments in these consolidated financial statements. Significant estimates inherent in the preparation of the consolidated financial statements include reserves for uncollectible accounts receivables, realizability of inventory; sales reserves; useful lives and impairments of long-lived assets; realization of deferred tax assets and related uncertain tax positions; classification of convertible preferred stock, classification of warrants, and the valuation of stock-based compensation awards. Actual results may differ from these judgements and estimates under different assumptions or conditions and any such differences may be material.

Seasonality

The Company experiences certain effects of seasonality with respect to its business. The Company generally experiences greater sales during its last three fiscal quarters, primarily driven by ski and outerwear sales being higher during the winter months and the Company’s customers concentrated in the northern hemisphere, and the lowest sales during its first fiscal quarter.

Revenue Recognition

Revenues are recognized when the Company’s performance obligations are satisfied as evidenced by transfer of control of promised goods to customers or consumers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. For transactions within the Company’s wholesale channel, control generally transfers to the customer upon shipment to, or upon receipt by, the customer depending on the terms of sale with the customer. For inventories sold on consignment to wholesalers, the Company records revenue when the inventory is sold to the third-party customer by the wholesaler. For transactions within the Company’s direct-to-consumer (“DTC”) channel, control generally transfers to the consumer at the time of sale within retail stores and generally upon receipt by the consumer with respect to e-commerce transactions. In certain arrangements the Company receives payment before the customer receives the promised good. These payments are initially recorded as deferred revenue, a contract liability, and recognized as revenue in the period when control is transferred to the customer.

The amount of consideration the Company expects to be entitled to receive and recognize as revenue, net across both wholesale and DTC channels varies with changes in sales returns, other accommodations and incentives offered. The Company estimates expected sales returns and other accommodations, such as chargebacks and markdowns, and records a sales reserve to reduce revenue. These estimates are based on historical rates of product returns and claims, as well as events and circumstances that indicate changes to such historical rates are warranted. However, actual returns and claims in any future period are inherently uncertain and thus may differ from estimates. As a result, the Company adjusts estimates of revenue at the earlier of when the most likely amount of consideration the Company expects to receive changes or when the amount of consideration becomes fixed. If actual or expected future returns and claims are significantly different than the sales reserves established, the Company records an adjustment to revenue, net in the period in which it made such determination. As of March 31, 2025 and 2024, the provision for returns was $594 and $298, respectively, and included as a component of accrued expenses on the accompanying consolidated balance sheets.

Partnership revenue is recognized over time based on the greater of contractual minimum guarantees and actual, or estimated, sales of products by the Company’s partners.

The Company may issue merchant credits, which are essentially refund credits. The merchant credits are initially deferred and subsequently recognized as revenue when tendered for payment.

The Company expenses sales commissions when incurred, which is generally at the time of sale, because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses on the accompanying statements of operations and comprehensive loss.

As of March 31, 2025 and 2024, the Company did not have any contract assets and had $264 and $420, respectively, of unearned revenue on the accompanying consolidated balance sheets.

Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities.

F-8

For the years ended March 31, 2025 and 2024 revenue, net recognized from performance obligations related to prior periods were not material. Revenue, net expected to be recognized in any future period related to remaining performance obligations is not material.

Disaggregated revenue

The following table disaggregates the Company’s revenue, net by channel and geographic location:

SCHEDULE OF REVENUE NET BY CHANNEL AND GEOGRAPHICAL LOCATION

|  | Year ended March 31, 2025 |  |  | Year ended March 31, 2024 |
Channel revenue, net |  |  |  |  |  |  |  |
Wholesale revenues |  | $ | 10,111 |  |  | $ | 10,891 |
Ecommerce revenues |  |  | 10,060 |  |  |  | 10,383 |
Retail revenues |  |  | 775 |  |  |  | - |
Partnership revenues |  |  | 555 |  |  |  | 3,169 |
Total revenue, net |  | $ | 21,501 |  |  | $ | 24,443 |

Geographic location revenue, net |  |  |  |  |  |  |  |
Europe (excluding United Kingdom) |  | $ | 7,202 |  |  | $ | 7,909 |
United States |  |  | 8,236 |  |  |  | 9,935 |
United Kingdom |  |  | 4,168 |  |  |  | 4,845 |
Rest of the world |  |  | 1,895 |  |  |  | 1,754 |
Total revenue, net |  | $ | 21,501 |  |  | $ | 24,443 |

Cost of sales

Cost of sales consists of all direct costs to source and purchase raw materials and finished goods, production costs (including labor), non-refundable taxes, duties, other landing costs, as well as specific provisions for excess, close-out or slow-moving inventory.

Cost of sales also includes freight costs associated with the shipment of goods to the Company’s warehouses and distribution centers, including freight costs associated with the transfer of inventory within the Company’s third-party fulfillment and distribution centers and to the Company’s retail stores.

Selling, general and administrative expenses

Selling, general and administrative expenses consist of personnel-related costs, depreciation and amortization, occupancy, warehousing, professional fees, technology, human resources, legal, and other selling and general operating expenses related to the Company’s business functions. Selling, general and administrative expenses also include costs associated with the handling of inventory and warehousing costs associated with the operation of the Company’s third-party fulfillment and distribution centers.

Marketing and advertising expenses

Marketing and advertising expenses consist of agency, contractor and consulting expense, content production, promotional operating expense, and advertising costs.

Advertising costs, including the costs to produce advertising, are expensed in the period incurred. Total advertising expense was $1,646 and $1,446 for the years ended March 31, 2025 and 2024, respectively.

F-9

Cash and cash equivalents and restricted cash

Cash and cash equivalents consist of cash on hand and bank balances with original maturities of three months or less. The Company has not experienced any losses related to these balances, and management believes the Company’s credit risk to be minimal.

Restricted cash consists of cash deposits and certificate of deposits under the Company’s trade finance facility (see Note 8). Restricted cash is classified as current on the accompanying consolidated balance sheets as the trade finance facility can be due on demand.

The Company maintains the majority of cash at Chase or HSBC where the balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times, the cash balances may exceed the FDIC-insured limit. As of March 31, 2025, we do not believe we have any significant concentrations of credit risk due to the strong credit rating of Chase and HSBC. The cash held by other banks is within the FDIC insured amount and cash held by third party payment platforms are short term timing balances.

Accounts receivable and allowance for credit losses

Accounts receivable primarily arise out of sales customers. The allowance for credit losses is an amount equal to the estimated probable losses net of recoveries in accounts receivable using the incurred loss methodology. After considering current economic conditions and specific and financial stability of its customers, an allowance for credit losses is maintained in the consolidated balance sheet at a level which management believes is sufficient to cover all probable future credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions that might impact collectability. Accounts receivable are carried net of allowances for credit losses as of March 31, 2025 and 2024. After all reasonable attempts to collect a receivable have failed, the amount of the receivable is written off against the allowance. As of March 31, 2025 and 2024, the Company had $547 and $558, respectively, in allowances for credit losses.

Concentration of credit risk:

Supplier

In the years ended March 31, 2025 and 2024, the largest single supplier of the Company’s manufactured goods produced 39% and 75%, respectively, of the company’s products. In the years ended March 31, 2025 and 2024, the largest fabric supplier supplied 82% and 79%, respectively, of the fabric used to manufacture the Company’s products.

Customer

For the years ended March 31, 2025 and 2024, we had individual customers that accounted for approximately 12% and 13%, respectively, of total revenue, net. These customers individually did not comprise more than 10% of total accounts receivable as of March 31, 2025 and 2024.

As of March 31, 2025 and 2024, two customers accounted for approximately 27% of total accounts receivable. These customers did not comprise individually more than 10% of total revenues during the years ended March 31, 2025 and 2024.

F-10

Inventories, net

Inventories, consisting of finished goods, inventories in transit, and raw materials, are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis, and includes all costs incurred to deliver inventory to the Company’s third-party fulfillment and distribution centers, including freight, non-refundable taxes, duty and other landing costs.

The Company periodically reviews its inventories and makes a provision as necessary to appropriately value goods that are obsolete, have quality issues, or are damaged. The amount of the provision is equal to the difference between the cost of the inventory and its net realizable value based upon assumptions about product quality, damages, future demand, selling prices, and market conditions. If changes in market conditions result in reductions in the estimated net realizable value of its inventory below its previous estimate, the Company would increase its provision in the period in which it made such a determination.

In addition, the Company provides for inventory shrinkage based on historical trends from actual physical inventory counts. Inventory shrinkage estimates are made to reduce the inventory value for lost or stolen items. The Company performs physical inventory counts and cycle counts throughout the year and adjusts the shrink provision accordingly.

Prepaid and other current assets

Amounts recorded in prepaid and other current assets consist of employee advances, unbilled accounts receivable, prepaid insurance, and other current assets, all of which are expected to be realized within one year from the reporting period.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Cost of property and equipment consists of purchase price, conversion cost and estimated cost of dismantling and restoration. Expenditures such as repairs and maintenance, overhaul costs and borrowing costs are expensed as incurred. Expenditures that extend the useful life of an asset are capitalized. Direct internal and external costs related to software used for internal purposes and website development which are incurred during the application development stage or for upgrades that add functionality are capitalized. All other costs related to internal use software are expensed as incurred. Property and equipment carrying values are reviewed for impairment when events or circumstances indicate that the asset group to which the property and equipment belong might be impaired.

The following estimated useful lives are used for to depreciate property and equipment on a straight-line basis:

SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE

|  | Useful Life
Furniture and fixtures |  | 5 years
Office equipment |  | 3-5 years
Computer equipment |  | 3 years
Software and website development |  | 3 years
Leasehold improvements |  | Lessor of 5 years or remaining term of underlying lease

Convertible preferred stock:

Convertible preferred stock consists of preferred stock shares issued with an option to convert into shares of common stock at the option of holders. The convertible preferred stock are accounted for as permanent equity in the scope of ASC 815, Derivatives and Hedging (“ASC 815”) and recorded at fair value which is representative of the proceeds received (see Note 10).

Warrants

We evaluate the appropriate balance sheet classification of warrants we issue as either equity or as a derivative liability. In accordance with ASC 815, we classify a warrant as equity if it is “indexed to the Company’s equity” and meets several specific conditions for equity classification. A warrant is not considered “indexed to the Company’s equity,” in general, when it contains certain types of exercise contingencies or potential adjustments to its exercise price. If a warrant is not indexed to the Company’s equity or it has net cash settlement provisions that result in the warrants being accounted for under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) or ASC 815, it is classified as a derivative liability which is carried on the consolidated balance sheets at fair value with any changes in its fair value recognized in the statements of operations and comprehensive loss. At March 31, 2025 and 2024 all of the Company’s outstanding warrants were classified as equity.

Leases

The Company determines if an arrangement is or contains a lease at contract inception, recording a lease liability and corresponding right-of-use asset at lease commencement for identified leases at the lease commencement date, which is generally when the Company takes possession of the asset. Lease agreements may contain adjustments to lease payments based on fixed escalation clauses, an index or a rate. Lease agreements may also require the Company to pay real estate taxes, insurance, common area maintenance, and other costs, collectively referred to as operating costs, in addition to lease payments. Lease agreements also may contain lease incentives, such as tenant improvement allowances and rent holidays. Lease agreements can include one or more options to renew or extend the initial lease term. The exercise of a lease renewal option is generally at the Company’s sole discretion. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants

The lease liability is initially measured at the present value of the minimum fixed lease payments over the expected lease term, which includes options to extend or terminate the lease agreement when it is reasonably certain those options will be exercised, using the Company’s discount rate as of lease commencement. Minimum fixed lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Company generally uses its incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis, it uses market-based rates as an input to derive an appropriate incremental borrowing rate, adjusted for the lease term and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease.

The Company has elected the practical expedient to account for the lease and non-lease components as a single lease component. Therefore, minimum lease payments used to measure the lease liability include all of the fixed consideration in the contract.

Variable lease payments associated with the Company’s leases are recognized upon the occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. Variable lease payments are presented in the accompanying consolidated statements of operations and comprehensive loss in the same line item as expense arising from fixed lease payments, which is generally within selling, general and administrative expenses.

Leases with an initial term of 12 months or less are considered short-term leases and not recorded on the accompanying consolidated balance sheets. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term in the same line item as expense arising from fixed lease payments, which is generally within selling, general and administrative expenses.

F-11

Long-Lived Assets

Long-lived assets held for use are evaluated for impairment when the occurrence of events or a change in circumstances indicate that the carrying value of the assets may not be recoverable. In these cases, the Company estimates the future undiscounted cash flows to be derived from the asset or asset group to determine whether the asset or asset group is recoverable. If the carrying value of an asset or asset group exceeds the estimated undiscounted future cash flows, an analysis is performed to estimate the fair value of the asset or asset group. An impairment is recorded if the fair value of the asset or asset group is less than the carrying amount.

Impairment charges of long-lived assets, if any, are classified as selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. The Company did not record impairment losses for the years ended March 31, 2025 and 2024.

Income Taxes

The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of preparing the consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences, together with net operating loss carryforwards and tax credits, are recorded as deferred tax assets or liabilities on the Company’s consolidated balance sheet. Deferred income tax assets and liabilities are measured using enacted tax rates, for the appropriate tax jurisdiction, which are expected to be in effect when these differences are anticipated to reverse.

A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. A valuation allowance may be required to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it may not be able to realize all or part of its deferred tax asset in the future or that new estimates indicate that a previously recorded valuation allowance is no longer required, an adjustment to the deferred tax asset is charged or credited to income in the period of such determination.

The Company recognizes tax positions that meet a “more likely than not” minimum recognition threshold. If necessary, the Company recognizes interest and penalties associated with tax matters as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the consolidated balance sheets.

Foreign currency

The Company’s reporting currency is the U.S. Dollar (“USD”). The functional currency for each entity included in these consolidated financial statements is the applicable local currency of each entity. The Company’s entities domiciled in the United States, United Kingdom, Hong Kong and Switzerland maintain their books and records in their local currencies, which are USD, Great Britain Pound (“GBP”), Hong Kong Dollar (“HKD”) and Swiss Franc (“CHF”), respectively. For each entity whose functional currency is not the USD, assets and liabilities are translated into USD using the exchange rate in effect on the balance sheet date and revenue and expenses are translated into USD on a monthly basis using the average rate in effect for that month. Translation gains and losses are recorded as a foreign currency translation adjustment as a component of other comprehensive loss, which is a component of accumulated other comprehensive loss on the accompanying consolidated balance sheets.

Pursuant to US GAAP, assets and liabilities of the Company’s foreign operations with functional currencies other than the USD are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Cash flows are also translated at average translation rates for the periods; therefore, amounts reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted:

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE

Year end exchange rate: |  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
GBP:USD |  |  | 1.29539 |  |  |  | 1.26254 |
HKD:USD |  |  | 0.12856 |  |  |  | 0.12778 |
CHF:USD |  |  | 1.13505 |  |  |  | 1.10871 |

Average exchange rate: |  | March 31, 2025 |  |  | March 31, 2024 |
Average exchange rate: |  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
GBP:USD |  |  | 1.27522 |  |  |  | 1.27055 |
HKD:USD |  |  | 0.12828 |  |  |  | 0.12782 |
CHF:USD |  |  | 1.12788 |  |  |  | 1.12514 |

F-12

Stock-based compensation

Share-based compensation cost is estimated at the grant date based on the award’s fair value. For stock options, time-based restricted stock units, and market-based restricted stock units, share-based compensation cost is recognized over the expected requisite service period using the straight-line attribution method. For equity-classified market-based restricted stock units, the probability of achieving the related market condition is incorporated into the grant date fair value. If targets are not met, no compensation cost will be reversed except in the case of award forfeitures. For performance-based restricted stock units, share-based compensation cost is recognized based on the Company’s assessment of the probability of achieving the related performance targets. If such targets are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company estimates forfeitures for share-based awards granted, but which are not expected to vest.

The inputs into the Black Scholes option pricing model are subjective and generally require significant judgment. Prior to going public, the fair value of the shares of common and preferred stock has historically been determined by the Company’s management with the assistance of third-party specialists as there was no public market for the common stock up until February 8, 2024. The fair value is obtained by considering a number of objective and subjective factors, including the valuation of comparable companies, sales of preferred stock to unrelated third parties, projected operating and financial performance, the lack of liquidity of common and preferred stock and general and industry specific economic outlook, amongst other factors. The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company’s stock option exercise history does not provide a reasonable basis upon which to estimate expected term. Because the Company was privately held for a portion of the periods covered by these financial statements and historically did not have an active trading market for its common and preferred stock for a sufficient period of time, the expected volatility was estimated based on the average volatility for comparable publicly traded companies, over a period equal to the expected term of the stock option grants. The Company listed on NYSE American on February 8, 2024 and now uses the closing price on the day of grant to determine FMV and for the stock options issued in Q3 2025 the company used the average of a peer group of similar companies based by one or all the following factors to determine volatility: industry, revenue, market capitalization. The risk-free rate assumption is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the option. The Company has never paid dividends on its common stock and does not anticipate paying dividends on common stock in the foreseeable future.

Comprehensive loss

Comprehensive loss includes net loss as well as other changes in shareholders’ deficit that result from transactions and economic events other than those with shareholders. For the year ended March 31, 2025, these changes related to foreign currency translation gains and losses. There were no reclassifications out of comprehensive loss for the years ended March 31, 2025 and 2024.

Loss per share of common stock

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding plus the number of additional shares of common stock that would have been outstanding if all dilutive potential shares of common stock had been issued using the treasury stock method. Potential shares of common stock are excluded from the computation when their effect is antidilutive. The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common stock during the reporting period.

Potentially dilutive stock options and securities as presented in the table below were excluded from the computation of diluted net income (loss) per share, because the effect would be anti-dilutive. As the Company incurred losses in the years ended March 31, 2025 and 2024, basic and diluted weighted-average shares are the same in the loss per share calculation, in accordance with ASC 260-10-45-20.

F-13

SCHEDULE OF ANTIDILUTIVE SECURITIES FOR BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

|  | March 31, 2025 |  |  | March 31, 2024 |
Options to acquire common stock |  |  | 1,006,550 |  |  |  | 1,108,356 |
Restricted stock units granted to employees to acquire stock |  |  | 600,000 |  |  |  | 225,000 |
Warrants to acquire common stock |  |  | 123,376 |  |  |  | 66,700 |
Series AA convertible preferred stock |  |  | 4,624,620 |  |  |  | - |
Antidilutive securities |  |  | 6,354,546 |  |  |  | 1,400,056 |

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

| Level 1: | Inputs based on unadjusted quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
| Level 2: | Pricing inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data
| Level 3: | Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for the asset and liability in the market and significant to the overall fair value measurement.

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and liabilities measured at fair value are based on one or more of the following techniques noted in ASC 820:

| ● | Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
| ● | Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost).
| ● | Income approach: Techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option pricing, and excess earnings models).

The Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses and operating lease liabilities approximate their fair value due to their short-term nature or expected settlement date of these instruments. The carrying values of debt obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company does not have financial instruments measured at fair value on a recurring basis as of March 31, 2025 and 2024.

It is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Segment Reporting

ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s chief financial officer and chief creative officer collectively perform the function that allocates resources and assesses performance, and thus together, serve as the Company’s CODM. The CODM reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment. The CODM assesses performance for the single reportable segment and decides how to allocate resources based on net loss. The measure of segment assets is reported on the balance sheet as total assets.

Reclassifications

Certain prior period presentation and disclosures were reclassified to ensure comparability with current period presentation. Specifically, costs associated with packaging services, warehousing services and merchant fees we reclassified from cost of sales to selling, general and administrative expenses for the year ended March 31, 2025. Accordingly, the Company reclassified $3,211 of cost of sales to selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss for the year ended March 31, 2024 to conform to the current period presentation. The reclassifications have not changed the results of operations of the prior period.

F-14

Recent Accounting Pronouncements, adopted

ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosure (“ASU 2023-07”) expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company adopted the guidance effective March 31, 2025 for the fiscal year beginning April 1, 2024. There was no impact on the Company’s reportable segments identified and additional required disclosures have been included in these financial statements (see Note 16, Segment Reporting).

Recent Accounting Pronouncements, not yet adopted

ASU 2024-01, Compensation-Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”) introduces updates to accounting standards related to the classification and measurement of financial instruments under ASC 320. The update primarily focuses on clarifying guidance for equity securities, debt instruments, and other financial assets, particularly in the areas of fair value measurement and impairment recognition. It aims to improve consistency and comparability in the reporting of financial instruments by refining the criteria for classifying securities and enhancing the methodology for recognizing and measuring impairments. ASU 2024- 01 also mandates additional disclosures to provide greater transparency around the valuation techniques and assumptions used in determining the fair value of financial instruments. The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (“ASU 2024-02”) updates accounting standards for revenue recognition, lease accounting, and impairment of long-lived assets. ASU 2024-02 provides enhanced guidance for estimating variable consideration, accounting for contract modifications, determining lease terms, and simplifying impairment testing for long-lived assets. It also introduces increased disclosure requirements for financial instruments and derivatives. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2024-02 is not expected to have a material effect on the Company’s financial statements

ASU 2024-03, Disaggregation of Income Statement Expenses (“DISE”) (“ASU 2024-03”) requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosure about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”) incorporates several disclosure and presentation requirements currently residing in SEC Regulation S-X and S-K into the ASC. The amendments are applied prospectively and are effective when the SEC removes the related requirements from Regulation S-X and S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. Early adoption is prohibited. The Company is currently evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), include amendments that further enhance income tax disclosures, primarily through disaggregation of specific rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this ASU to determine the impact on the Company’s disclosures.

ASUs recently issued but not listed above were assessed and determined to be either not applicable or are expected to have minimal impact on the consolidated financial position or results of operations.

3. INVENTORIES, NET

The following table details the primary categories of inventories for the periods presented.

SCHEDULE OF INVENTORY

|  | March 31, 2025 |  |  | March 31, 2024 |
Finished goods |  | $ | 3,354 |  |  | $ | 2,680 |
Raw materials |  |  | 807 |  |  |  | 721 |
Finished goods on consignment |  |  | 363 |  |  |  | 205 |
Goods in transit |  |  | 32 |  |  |  | 14 |
Total inventories |  |  | 4,556 |  |  |  | 3,620 |
Inventory reserve |  |  | (2,989 | ) |  |  | (1,390 | )
Total inventories, net |  | $ | 1,567 |  |  | $ | 2,230 |

4. PREPAID AND OTHER CURRENT ASSETS

The following table details the primary categories of prepaid and other current assets for the periods presented.

SCHEDULE OF PREPAID AND OTHER CURRENT ASSETS

|  | March 31, 2025 |  |  | March 31, 2024 |
Deposits and prepayments |  | $ | 1,621 |  |  | $ | 436 |
Marketing services |  |  | 578 |  |  |  | - |
Unbilled accounts receivable |  |  | 147 |  |  |  | - |
Other receivables |  |  | 466 |  |  |  | 306 |
Total prepaid and other current assets |  | $ | 2,812 |  |  | $ | 742 |

F-15

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following for the periods presented:

SCHEDULE OF PROPERTY AND EQUIPMENT

|  | March 31, 2025 |  |  | March 31, 2024 |
Furniture and fixtures |  | $ | 178 |  |  | $ | 177 |
Office equipment |  |  | 58 |  |  |  | 57 |
Leasehold improvements |  |  | 29 |  |  |  | 29 |
Software and website development |  |  | 2,220 |  |  |  | 1,886 |
Computer equipment |  |  | 140 |  |  |  | 121 |
Property and equipment, gross |  |  | 2,625 |  |  |  | 2,270 |
Accumulated depreciation |  |  | (2,142 | ) |  |  | (1,768 | )
Property and equipment, net |  | $ | 483 |  |  | $ | 502 |

Depreciation expense related to property and equipment was $342 and $555 for the years ended March 31, 2025 and 2024, respectively, and is included as a component of selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss.

6. LEASES

The Company has obligations under operating leases for its offices. As of March 31, 2025 and 2024, the remaining lease terms of the various leases are less than 24 months. The majority of the Company’s leases include renewal options at the sole discretion of the Company. In general, it is not reasonably certain that lease renewals will be exercised at lease commencement and therefore lease renewals are not included in the lease term.

The following table details the Company’s net lease expense. The lease expenses include contingent rent payments and other non-fixed lease related costs, including common area maintenance, property taxes, and landlord’s insurance.

SCHEDULE OF LEASE EXPENSE

Lease expense |  | March 31, 2025 |  |  | March 31, 2024 |
Lease expense |  | Year Ended March 31, 2025 |  |  | Year Ended March 31, 2024 |
Net lease expense: |  |  |  |  |  |  |  |
Operating lease expense |  | $ | 110 |  |  | $ | 299 |
Total lease expense |  | $ | 110 |  |  | $ | 299 |
Weighted-average remaining lease term - Years |  |  | 0.53 |  |  |  | 1.53 |
Weighted-average discount rate |  |  | 5.0 | % |  |  | 5.0 | %

Rent expense for the fiscal years ended March 31, 2025 and 2024 was $894 and $479, respectively (including short term and other rentals).

F-16

SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES

Maturity of lease liabilities |  | March 31, 2025 |  |  | March 31, 2024 |
Within one year |  | $ | 48 |  |  | $ | 109 |
Within one to two years |  |  | - |  |  |  | 45 |
Total lease payments |  |  | 48 |  |  |  | 154 |
Discount rate |  |  | (4 | ) |  |  | (9 | )
Present value of lease liabilities |  | $ | 44 |  |  | $ | 145 |

7. ACCRUED EXPENSES

The following table details the primary categories of accrued expenses for the periods presented.

SCHEDULE OF ACCRUED EXPENSES

|  | March 31, 2025 |  |  | March 31, 2024 |
Accrued expenses |  | $ | 472 |  |  | $ | 471 |
Accrued payroll and payroll taxes |  |  | 1,207 |  |  |  | - |
Severance |  |  | 414 |  |  |  | 531 |
Indirect taxes |  |  | 1,254 |  |  |  | 1,040 |
Returns provision |  |  | 594 |  |  |  | 298 |
Accrued import duties |  |  | 228 |  |  |  | 294 |
Merchant credit |  |  | 64 |  |  |  | 63 |
Total |  | $ | 4,233 |  |  | $ | 2,697 |

8. DEBT

Short-Term Borrowings

During the year ended March 31, 2025, the Company entered into seven separate business loan and security agreements (the “Term Loans”) with a lender for short-term loans to be provided by the lender, or the lender’s assignees (collectively, the “Lenders”) and mature 30-weeks from the date the amounts are borrowed. No amount of repaid borrowings may be reborrowed. The Company borrowed under seven short-term borrowing arrangements during the year ended March 31, 2025, borrowing a gross amount of $8,658, net of fees of $2,866 which was recorded as a debt discount and is being amortized over the term of the agreement. During the year under March 31, 2025, the Company made total repayments of $5,742. The company amortized $1,801 of the debt discount to interest expense and realized a cancelled debt discount of $179 related as an early payment discount of the notes for the same amount resulting unamortized debt discount balance of $887. As of March 31, 2025, the Company had outstanding borrowings of $2,738 and an unamortized debt discount of $887, resulting in net balance of $1,851.

As of March 31, 2025, the Company has outstanding borrowings under four agreements that require weekly payments of principal and interest totaling $53, $34, $71, and $59 which have a remaining term of one week, eight weeks, thirteen weeks, and twenty-seven weeks, respectively. If an event of default, as defined in the agreement, occurs, the Company must make a mandatory prepayment to the Lenders in an amount equal to the sum of (i) all outstanding principal plus accrued and unpaid interest and (ii) a prepayment fee equal to the amount of interest that would be paid through the maturity date (the “Prepayment Fee”) plus (iii) all other obligations that are due and payable, including increased interest of 5.0%.

The Company has the right to make a full or partial prepayment of any or all obligations, but is obligated to pay a make-whole payment equal to the Prepayment Fee.

Use of proceeds is limited to the repayment of other obligations to one of the Lenders and for general business requirements. The term loans are secured by collateral of the company that consists of all properties, rights and assets of the Company.

Trade Finance Facility

The Company, through PMA, has a trade finance facility extended on goods for which letters of credit are issued to the Company’s suppliers by a financial institution that matures in June 2025. The trade facility agreement was entered into in June 2022 and subsequently amended since with the most recent amendment in August 2024. As of March 31, 2025 and 2024, the outstanding balance under the trade finance facility was $2,495 and $0, respectively, and the Company had a limit on the trade finance facility of $2,700 and $5,000, respectively. As of March 31, 2025, there were no outstanding pledged letters of credit by HSBC. The Company is permitted to draw on the trade finance facility agreement to the extent that there is a deposit made to a specified account with the financial institution.

The trade finance facility, as amended in August 2024, provides for (a) import facilities up to $2,700 and $5,000 as of March 31, 2025 and 2024, respectively, with repayment due 120-days from the draw, and (b) post-shipment buyer loans up to $1,800 and $800 as of March 31, 2025 and 2024, respectively, with repayment due 90-days from the draw. The Company’s ability to draw on the trade finance facility is subject to terms per the agreement, which include verification that the Company received the products from suppliers, among other requirements. The financial institution reserved the right to demand repayment at any time. A commission fee equal to 0.25% and 0.0625% will be charged on the first $50 and balances in excess of $50 respectively, drawn under the trade finance facility.

For drawings in Hong Kong dollars, the interest rate equals the Hong Kong Interbank Offered Rate (“HIBOR”) plus 3.0% (6.72% at March 31, 2025), and for drawings in U.S. dollars, the interest rate equals the Secured Overnight Financing Rate (“SOFR”) plus 3.3% (7.71 % at March 31, 2025).

As of March 31, 2025, the trade finance facility was secured by a personal guarantee of $4,000 from the chairman of the Company’s board of directors and a requirement for a cash deposit from PMA equal to 50.0% of the limit of the trade finance facility, or $1,350. As of March 31, 2025, the cash deposit associated with the trade finance facility agreement was $1,350 and is recorded as restricted cash on the accompanying consolidated balance sheets.

The $2,495 outstanding under the trade finance facility as of March 31, 2025 was repaid in full during June 2025.

F-17

9. CONVERTIBLE DEBT OBLIGATIONS

2021 and 2022 Debt Financings

In March 2021, the Company entered into an arrangement whereby the Company completed convertible debt financing (“2021 Debt Financing”), from 47 investors, for gross proceeds of $6,000, less $841 of debt issuance costs, at an 8.0% interest rate to provide working capital for its operations. Between April and July 2022, the Company received further convertible debt financing (“2022 Debt Financing”) from 47 investors for gross proceeds of $4,000, less $531 of debt issuance costs, that rank pari passu to the 2021 Debt Financing, at an 8.0% interest rate. The debt issuance costs were amortized over the life of the convertible debt. The Company’s convertible debt obligations are secured by a security interest over the assets of the Company.

The 2021 Debt Financing had a maturity date of December 15, 2023. In December 2023 and January 2024, the maturity date of all convertible promissory notes was extended to February 14, 2024. Upon the closing of an IPO, prior to the redemption date, the convertible debt was convertible into the Company’s common stock at a conversion price equal to 80% of the public offering price of the Company’s common stock in the IPO.

On February 12, 2024, $10,002 in principal amount plus accrued interest in the amount of $1,985 automatically converted into the Company’s common stock, at 80% of the initial public offering price into an aggregate of 2,497,267 shares of common stock (see note 10). Upon conversion of the convertible debt, the unamortized balance of debt discount of $492 was charged to interest expense.

2024 Debt Financing

In December 2024, the Company entered into a convertible secured promissory note (“2024 Debt Financing”) whereby the Company completed convertible debt financing (“2024 Debt Financing”), from one investor, for gross proceeds of $2,000, to provide working capital for its operations. The Company’s convertible debt obligations are secured by a security interest over the assets of the Company. The 2024 Debt Financing matures on December 6, 2025. The 2024 Debt Financing has the following features:

Conversion rights - The investor has the right, but not the obligation, to convert any portion of the outstanding and unpaid principal and accrued interest into shares of common stock at the conversion price of $1.00.

Interest – The 2024 Debt Financing bears interest of 15.0% per annum.

Exchange Cap – The lender shall not have the right to convert any portion of the 2024 Debt Financing to the extent that after giving effect to such conversion the lender, together with any affiliate, would beneficially own in excess of 4.99% (which may be increased to 9.99% at the investor’s sole discretion) of the number of common shares outstanding immediately after giving effect to such conversion or receipt of shares as payment of interest. Additionally, the Company shall not issue any common shares upon conversion of the 2024 Debt Financing, or otherwise, if the issuance of such common shares would exceed the aggregate number of common shares that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations of the NYSE, unless approved by the Company’s stockholders.

Event of default – the unpaid principal amount of the 2024 Debt Financing and any accrued but unpaid interest becomes immediately due in payable if an Event of Default, as defined in the 2024 Debt Financing occurs. The investor has the right, but not the obligation, to convert at any time after an Event of Default at the conversion price of $1.00.

Prepayment feature - A prepayment prior to maturity to repay amounts outstanding under the 2024 Debt Financing is required equal to 33% of net proceeds of an offering up to $10,000 of preferred stock after the first $2,000 in net proceeds.

In March 2025, $2,000 in principal converted into an aggregate 2,000,000 shares of the Company’s common stock, at a conversion price of $1.00 (see Note 10). At the time of conversion, accrued but unpaid interest was of $93 included in the balance of accrued expenses in the accompanying consolidated balance sheet as of March 31, 2025, which was subsequently paid in cash to the lender.

10. STOCKHOLDERS’ EQUITY

The Company is authorized to issue 110,000,000 shares of stock, of which 100,000,000 is designated as common stock and 10,000,000 is designated as preferred stock.

Common stock

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share, of which 19,291,000 and 15,653,449 were issued and outstanding as of March 31, 2025 and 2024, respectively.

Sale of common stock from private placement

During May to August 2023, the Company issued 409,050 shares of common stock at a par value of $0.0001 and a purchase price of $6.00 per share. The total net proceeds were $2,179, net of broker fees and expenses. The holders of the common stock shall be entitled to cast one vote for each share held at all stockholder meetings and have no right to subscribe to or purchase any new or additional issue of shares.

F-18

Shares and Warrants Issued as Part of the Company’s Underwritten Public Offering

On February 7, 2024, the company entered into an underwriting agreement with ThinkEquity LLC, as representative (the “Representative”) of the several underwriters identified therein, relating to the Company’s initial public offering (the “IPO”) of 1,334,000 shares of the Company’s common stock, par value $0.0001 per share. The Company previously filed the form of underwriting agreement as an exhibit to the Company’s registration statement on Form S-1, as amended from time to time (File No. 333-274913), which was declared effective by the Securities and Exchange Commission on February 7, 2024. The price per share to the public was $6.00 generating gross proceeds of $8,004. On February 12, 2024, the Company consummated the IPO and issued 1,334,000 shares of Common Stock for aggregate net proceeds of approximately $6,009, after deducting underwriting discounts and commissions and estimated offering expenses.

Series A and Series B Convertible Preferred Stock

On February 12, 2024, all outstanding shares of our Series A convertible preferred stock and the Series B convertible preferred stock were automatically converted into 5,323,782 and 1,189,998, respectively, shares of common stock in connection with the closing of the initial public offering.

Series AA Preferred Stock

In March 2025, the Company designated a series of preferred stock as the 12.00% Series AA Convertible Preferred Stock, par value of $0.0001 per share (the “Series AA Preferred Stock”) and authorized 1,800,000 shares of Series AA Preferred Stock.

In March 2025, the Company entered into securities purchase agreements with twelve investors whereby the Company issued 924,921 shares of Series AA Preferred Stock at an original issue price of $5.8005 per share for gross proceeds of $5,365, less $217 of issuance costs or total net proceeds of $5,148. In connection with the securities purchase agreements, the Company entered into a registration rights agreement with the investors whereby the Company committed to file the registration statement to register for resale the shares of common stock issuable upon conversion of the Series AA Preferred Stock purchased by the investors pursuant to the securities purchase agreements no later than thirty days from the final closing date. Registration statement was filed on March 6, 2025

Additionally, the Company entered into a placement agency agreement with a placement agent in exchange for a cash fee of 6.0% of the gross proceeds paid by investors introduced to the Company by the placement agent. Additionally, the Placement Agent received 56,676 warrants to purchase shares of common stock equal to 5.0% of the shares of common stock issuable upon conversion of the Series AA Preferred Stock purchased by these investors (the “March 2025 Warrant”) at a per share price of $1.45 for a term of five years that may be exercised on a cash or cashless basis (see Note 12).

The Series AA Preferred Stock holder and the March 2025 Warrant holder (collectively, the “March 2025 Investors”) shall not have the right to convert any portion of the Series AA Preferred Stock or March 2025 Warrant to the extent that after giving effect to such conversion the March 2025 Investors, together with any affiliates, would beneficially own in excess of 4.99% (which may be increased to 9.99% at the March 2025 Investor’s sole discretion) of the number of common shares outstanding immediately after giving effect to such conversion. Any increase to the beneficial ownership limitation will not be effective until the 61st day after notice is received by the Company.

The March 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $31 using the Black-Scholes option-pricing model with the following assumptions: volatility of 55.0%, risk-free rate of 3.98%, annual dividend yield of 0.0% and expected life of five years.

F-19

The rights, preferences, privileges and restrictions for the Series AA Preferred Stock are as follows:

Dividends: Dividends on the Series AA Preferred Stock accrue daily and will be cumulative from the first day of the calendar month in which they are issued, and shall be payable monthly in arrears on the 30th day of each calendar month, when, as and if declared by the board of directors, at the rate of 12.0% per annum of its original issue price, which is the equivalent to $0.6961 per annum per share.

Liquidation preference: Upon (i) a liquidation or winding up of the Company, or (ii) a reorganization, merger or consolidation in which the holders of the voting securities of the Company do not retain at least a majority of the total outstanding voting securities, or (iii) a sale, lease, transfer, exclusive license or other disposition of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, the holders of Series AA Preferred Stock are entitled to receive a preferential payment per share equal to the greater of (a) $5.8005 plus declared but unpaid dividends, or (b) the amount per share that would have been payable had all shares of Series AA Preferred Stock been converted into Common Stock immediately prior to such event.

Conversion: Shares of Series AA Preferred Stock are convertible into shares of common stock at the option of the holder, according to a conversion ratio equal to the original issue price of $5.8005 divided by the conversion price of $1.1601, or $5.00. The conversion price is subject to adjustment from time to time as specified in the March 2025 Certificate of Designation.

Shares of Series AA Preferred Stock are convertible into shares of common stock automatically any time after the date six months after the original issuance date if the closing price of the common stock equals or exceeds 200.0% of the original issuance price, or $11.601, and the average trading column of the common stock exceeds 200,000 shares for at least twenty trading days in a period of thirty consecutive trading days.

Redemption: The Series AA Preferred Stock are not redeemable at the option of the holder, on either a contingent or non-contingent basis.

Voting: The Series AA Preferred Stock are non-voting in Company matters, with the exception that Series AA Preferred Stock holders are required to approve (i) any amendment, or other change, to the Company’s articles of incorporation that would have an adverse impact to the Series AA Preferred Stock holders dividend rights, preferences or special rights and (ii) any increase to the authorized number of shares of Series AA Preferred Stock, or authorize or issuance shares of any class or series of Senior Stock or Parity Stock, both of which are defined in the March 2025 Certificate of Designation.

The Series AA Convertible Preferred Stock has no stated maturity, is not subject to any sinking fund, and will remain outstanding indefinitely unless a holder chooses to convert the Series AA Preferred Stock into shares of our common stock, or we elect to automatically convert it into shares of our common stock. As of March 31, 2025, the Series AA Convertible Preferred Stock were convertible into 4,624,620 common shares.

Shares Issued for Services

During the year ended March 31, 2025, the Company issued 1,352,102 shares of restricted common stock to vendors for services rendered and to be rendered with a fair value of $1,488. These shares of common stock were valued based on the market value of the Company’s common stock price at the issuance date or the date the Company entered into the agreement related to the issuance. During the year ended March 31, 2025, the Company amortized $910 of the value of the shares as the services were rendered and $578 of the remaining fair value of the shares was included as a prepaid asset as of March 31, 2025 (see Note 4).

11. STOCK-BASED COMPENSATION PLANS

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”), which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and performance units and performance shares to employees, directors and consultants of the Company or any parent or subsidiary of the Company. The purpose of the 2021 Plan is to enable the Company to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants of the Company or any parent or subsidiary of the Company, and to promote the success of the Company’s business. The Company has 2,519,750 unallocated shares available to grant from the 2021 Plan as of March 31, 2025. The Company has historically granted stock options to non-employees in exchange for the provision of services, both under the 2021 Plan and outside of the 2021 Plan.

The Company has granted stock options and time-based restricted stock units (“time-based RSUs”). Stock options granted to date generally have a four 4-year vesting period and vest at a rate of 25% each year on the anniversary date of the grant. Stock options generally expire on the earlier of ten years from the date of grant, or a specified period of time following termination. Time-based RSUs generally vest over a period of four years in accordance with the terms and conditions established by the board of directors, and are based on continued service.

Time-based RSUs

The fair value of time-based RSUs is determined using the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends not received during the vesting period. For the time-based RSUs granted during the years ended March 31, 2025 and 2024, the expected annual dividend yield was 0.0%.

A summary of time-based RSU activity is presented below:

SCHEDULE OF TIME-BASED RSU ACTIVITY

|  |  |  |  | Weighted- |
|  |  |  |  | Average |
|  |  |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding at March 31, 2023 |  |  | - |  |  |  | - |
Granted |  |  | 300,000 |  |  | $ | 4.10 |
Vested |  |  | (75,000 | ) |  |  | 4.10 |
Outstanding at March 31, 2024 |  |  | 225,000 |  |  |  | 4.10 |
Granted |  |  | 1,105,866 |  |  |  | 1.11 |
Vested |  |  | (285,449 | ) |  |  | 3.31 |
Forfeited |  |  | (445,417 | ) |  |  | 2.78 |
Outstanding at March 31, 2025 |  |  | 600,000 |  |  | $ | 0.99 |

The total stock compensation expense recognized related to vesting of time-based RSUs for the years ended March 31, 2025 and 2024, was $619 and $429, respectively, and was recognized on the accompanying consolidated statements of operations as a component of selling, general and administrative expenses. As of March 31, 2025, the total unrecognized stock-based compensation for time-based RSUs totaled $530 and are expected to be recognized over a weighted average period of 3.7 years.

F-20

Stock Options

The fair value of the share option awards was estimated using the Black-Scholes method using the closing price of the Company’s common stock on the date of grant based on the following weighted-average assumptions:

SCHEDULE OF FAIR VALUE OF SHARE OPTION AWARDS

|  | Year Ended |  |  | Year Ended |
|  | March 31, 2025 |  |  | March 31, 2024 |
Expected option term |  |  | 10.0 years |  |  |  | 5.0 - 10.0 years |
Stock price volatility |  |  | 138.4 | % |  |  | 129.1 | %
Risk free interest rate |  |  | 2.09 | % |  |  | 1.74-1.81 | %
Expected annual dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Forfeiture rate |  |  | 29.9 | % |  |  | 25.7 | %

A summary of stock option activity is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

|  |  |  |  |  |  |  | Weighted- |  |  |  |
|  |  |  |  | Weighted- |  |  | Average |  |  |  |
|  |  |  |  | Average |  |  | Remaining |  |  | Aggregate |
|  |  |  |  | Exercise |  |  | Contractual |  |  | Intrinsic |
|  | Options |  |  | Price |  |  | Life (Years) |  |  | Value |
Outstanding at March 31, 2023 |  |  | 299,956 |  |  | $ | 1.60 |  |  |  | 1.94 |  |  | $ | 1,320 |
Granted |  |  | 808,400 |  |  |  | 4.10 |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Outstanding at March 31, 2024 |  |  | 1,108,356 |  |  |  | 3.42 |  |  |  | 3.45 |  |  | $ | 595 |
Granted |  |  | 688,194 |  |  |  | 2.15 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (790,000 | ) |  |  | 3.59 |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Outstanding at March 31, 2025 |  |  | 1,006,550 |  |  | $ | 2.42 |  |  |  | 2.85 |  |  | $ | 178 |
Vested and expected to vest March 31, 2025 |  |  | 874,724 |  |  | $ | 3.13 |  |  |  | 6.89 |  |  | $ | 178 |
Exercisable at March 31, 2025 |  |  | 562,910 |  |  | $ | 3.22 |  |  |  | 5.77 |  |  | $ | 178 |

The total stock compensation expense recognized related to vesting of stock options for the years ended March 31, 2025 and March 31, 2024 was $715 and $310, respectively, and was recognized on the accompanying consolidated statements of operations as a component of selling, general and administrative expenses. As of March 31, 2025 the total unrecognized stock-based compensation for stock options was $1,035 and is expected to be recognized over a weighted average period of 2.85 years.

F-21

12. WARRANTS

In connection with the IPO (see Note 1) and the securities purchase agreement (see Note 10), the Company issued stock purchase warrants to certain investors that permit the investor to acquire a fixed amount of shares of common stock at a per share price that ranges between $1.45 and $7.50 for a five year term that may be exercised on a cash or cashless basis.

Concurrently with the closing of the IPO, the Company also issued warrants to purchase up to 66,700 shares of Common Stock to the Representative and its designees, at an exercise price of $7.50 per share (the “Underwriter Warrants”). The Underwriter Warrants are exercisable beginning on August 5, 2024, and expire on February 7, 2029.

All issued warrants were determined to be equity-classified at issuance, and as such, were recorded to additional-paid-in capital at such time.

The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at March 31, 2025:

SCHEDULE OF COMMON STOCK ISSUABLE UPON EXERCISE OF WARRANTS OUTSTANDING

|  | Warrants Outstanding |
|  | Exercise Price |  |  | Number Outstanding |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Weighted Average Exercise Price |
Underwriter Warrants |  | $ | 7.50 |  |  |  | 66,700 |  |  |  | 3.9 |  |  | $ | 7.50 |
March 2025 Warrant |  |  | 1.45 |  |  |  | 56,676 |  |  |  | 5.0 |  |  |  | 1.45 |
|  | $ | 1.45 – 7.50 |  |  |  | 123,376 |  |  |  | 4.1 |  |  | $ | 6.65 |

The following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at March 31, 2024:

|  | Warrants Outstanding |
|  | Exercise Price |  |  | Number Outstanding |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Weighted Average Exercise Price |
Underwriter Warrants |  | $ | 7.50 |  |  |  | 66,700 |  |  |  | 4.9 |  |  | $ | 7.50 |

A summary of warrant activity for the periods presented is as follows:

SCHEDULE OF WARRANTS ACTIVITY

|  |  |  |  | Weighted- |
|  |  |  |  | Average |
|  |  |  |  | Exercise |
|  | Warrants |  |  | Price |
Outstanding at March 31, 2023 |  |  | - |  |  | $ | - |
Granted |  |  | 66,700 |  |  |  | 7.50 |
Outstanding at March 31, 2024 |  |  | 66,700 |  |  |  | 7.50 |
Granted |  |  | 56,676 |  |  |  | 1.45 |
Outstanding at March 31, 2025 |  |  | 123,376 |  |  | $ | 6.65 |

F-22

The Underwriter Warrants will expire on February 12, 2029 (see Note 10) and the March 2025 Warrants will expire on March 31, 2030 (see Note 10). As of March 31, 2025 the intrinsic value of the outstanding warrants was $8.

13. INCOME TAXES

Components of income tax (benefit) expense were as follows:

SCHEDULE OF INCOME TAX BENEFIT EXPENSE

|  | March 31, 2025 |  |  | March 31, 2024 |
|  |  | Year Ended March 31, 2025 |  |  |  | Year Ended March 31, 2024 |
Current |  | $ | - |  |  | $ | - |
Deferred |  |  | - |  |  |  | - |
Total income tax (benefit) expense |  | $ | - |  |  | $ | - |

The following is a reconciliation of the federal statutory rate to the Company’s effective income tax rate:

SCHEDULE OF RECONCILIATION OF INCOME TAXES

|  |  | Year Ended March 31, 2025 |  |  |  | Year Ended March 31, 2024 |
|  |  | Year Ended March 31, 2025 |  |  |  | Year Ended March 31, 2024 |
Statutory rate |  |  | 21.0 | % |  |  | 21.0 | %
Change in valuation allowance |  |  | (21.1 | ) |  |  | (13.9 | )
Foreign tax differential |  |  | (1.2 | ) |  |  | (1.2 | )
Permanent differences |  |  | 1.3 |  |  |  | (5.9 | )
Effective rate |  |  | 0.0 | % |  |  | 0.0 | %

F-23

The tax effects of temporary cumulative differences which give rise to deferred tax assets and liabilities are summarized as follows:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

|  | March 31, 2025 |  |  | March 31, 2024 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed and intangible assets |  | $ | 175 |  |  | $ | 113 |
Inventory |  |  | - |  |  |  | - |
Total deferred tax liabilities |  |  | 175 |  |  |  | 113 |
Deferred tax assets: |  |  |  |  |  |  |  |
Tax loss carryforward |  |  | 10,284 |  |  |  | 7,312 |
Stock compensation expense |  |  | 815 |  |  |  | 535 |
IPO expenses |  |  | 163 |  |  |  | 163 |
Valuation allowance |  |  | (11,087 | ) |  |  | (7,897 | )
Total deferred tax assets |  |  | 175 |  |  |  | 113 |
Deferred tax assets, net |  | $ | - |  |  | $ | - |

During the years ended March 31, 2025 and 2024, the Company recorded an increase in the valuation allowance of $3,190 and $1,449, respectively, related to federal deferred tax assets. Deferred tax assets are recorded related to net operating losses and temporary differences between the book and tax bases of assets and liabilities expected to produce tax deductions in future periods. The realization of these assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible.

Throughout the year ended March 31, 2025, the Company has been assessing the realizability of its deferred tax assets by considering positive factors such as the next three years’ profit projection making it more likely than not that the Company will be able to recognize a deferred tax asset on losses. Based upon historical performance of the Company, a valuation allowance of 100% was recorded as there is currently no significant evidence to indicate realizability of deferred tax assets. During the years ended March 31, 2025 and 2024, the Company recorded a valuation allowance of 100% of UK and Hong Kong losses.

The Company is subject to US federal income tax, as well as income tax in multiple US state and local jurisdictions and a number of foreign jurisdictions. Returns for the years since fiscal year 2022 are still open based on statutes of limitation only.

F-24

14. COMMITMENTS AND CONTINGENCIES

Notice from NYSE – On December 17, 2024 the Company received a notification from the NYSE American LLC (the “NYSE”) stating that the Company is not in compliance with the minimum stockholders’ equity requirements of Sections 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”) requiring stockholders’ equity of $4,000 or more if the Company has reported losses from continuing operations and/or net losses in three of the four most recent fiscal years. As of September 30, 2024, the Company had stockholders’ equity of approximately $2,700 and had losses in its three most recent fiscal years ended March 31, 2024.

The Company is now subject to the procedures and requirements of Section 1009 of the Company Guide. The Company has until June 11, 2026 to regain compliance with the Company Guide. The Company submitted a plan of action to regain compliance with the Company Guide (the “Plan”) on January 10, 2025, which the NYSE accepted on March 4, 2025. Accordingly, the Company will be able to continue its listing during the Plan period and will be subject to periodic reviews including quarterly monitoring for compliance with the Plan until it has regained compliance.

The notification and Plan acceptance has no immediate effect on the listing or trading of the Company’s common stock on the NYSE. The NYSE’s acceptance of the Company’s Plan does not affect the Company’s business, operations or reporting requirements with the U.S. Securities and Exchange Commission.

Legal proceedings - The Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental agencies and other third parties which are incidental to the conduct of its business. This includes legal matters such as initiation and defense of proceedings to protect intellectual property rights, liability claims, employment claims, and similar matters. The Company believes the ultimate resolution of any such legal proceedings, audits, and inspections will not have a material adverse effect on its consolidated balance sheets, results of operations or cash flow.

On December 20, 2023, Aspen Skiing Company, LLC filed a complaint against the Company in the United States District Court for the District of Colorado, alleging, among other things, trademark infringement, false association, false endorsement, unfair competition and deceptive trade practices by the Company. The claims relate to the Company’s social media posts of models and influencers in ski gondolas on the mountain owned by Aspen Skiing Company and now discontinued limited edition clothing sold by the Company that included images, which were licensed by the Company from a photographer, of a skier’s rest area in Aspen that Aspen Skiing Company calls the “AspenX Beach Club.” The complaint seeks monetary damages, non-monetary relief, such as an injunction to end the alleged unlawful practices, and attorneys’ fees and costs on behalf of the Aspen Skiing Company. The Company entered into a settlement agreement with Aspen Skiing Company for a de minimis amount during August 2024.

On May 14, 2025, we were named as a defendant in a lawsuit filed in the Superior Court of the State of California in and for the County of Los Angeles Central Judicial District by Amanda Archer and Archer Bytes LLC, a former public relations consultant for the Company. The complaint alleges breach of contract, and other claims and seeks specific damages of $600,000 and unspecified punitive damages. We believe the claims are entirely without merit and intend to vigorously defend the matter.

On April 24, 2025, the Company’s former Chief Executive Officer (the “Former CEO”) commenced ACAS Early Conciliation proceedings (a mandatory step in the UK prior to filing a legal claim) alleging, among other things, unfair dismissal from his position. The Company has not yet been notified that the Former CEO has filed a legal claim with the UK Employment Tribunal.

Capital commitments - The Company had $7,045 of purchase obligations as of March 31, 2025, related to purchase orders to factories for the manufacture of finished goods.

Vendor lien on inventory - Per the terms of one third-party service contract, a lien may be placed on the Company’s inventory if the Company fails to make a payment for services within 30 days from the date the third-party supplier notifies the Company of an outstanding payment. As of March 31, 2025 and 2024, a lien has not been placed on the Company’s inventory in connection with this contract.

15. RELATED PARTY TRANSACTIONS

Two directors of the Company provided consulting and advisory services for the Company totaling $185 and $324 for the years ended March 31, 2025 and 2024, respectively, and are included in selling, general and administrative expenses on the accompanying consolidated statement of operations and comprehensive loss. As of March 31, 2025 and 2024, there were no amounts owed to either director.

Our trade finance facility (see Note 8) was secured by a standby documentary credit for $1,000, which was secured by a guarantee from a company controlled by the Chairman of our board of directors (the “Chairman”) from June 2023 through January 2024. The guarantee accrued interest of 8% per annum from June 2023 through November 2023 and interest of 10.0% from November 2023 through January 2024, payable by the Company. Interest expense for the year ended March 31, 2024 was $56.

The Chairman has provided a $4,000 personal guarantee for the Company’s trade finance facility. The guarantee is a pay-on-demand guarantee securing the Company’s obligations under the trade finance facility, including interest and bank costs, fees and expenses, up to $4,000. The Chairman does not receive consideration in exchange for the personal guarantee.

In March 2025, the Company entered into securities purchase agreements with a company controlled by the Chairman whereby the Company issued 344,797 shares of Series AA Preferred Stock at an original issue price of $5.8005 per share for gross proceeds of $2,000.

F-25

16. SEGMENT REPORTING

The following table includes additional information about reported segment revenue, significant segment expenses and segment measure of profitability:

SCHEDULE OF SEGMENT REVENUE, SIGNIFICANT SEGMENT EXPENSES AND SEGMENT MEASURE OF PROFITABILITY

|  | Year ended March 31, 2025 |  |  | Year ended March 31, 2024 |
Revenue, net |  | $ | 21,501 |  |  | $ | 24,443 |
Less: |  |  |  |  |  |  |  |
Significant segment expenses |  |  | - |  |  |  | - |
Cost of Revenue |  |  | 11,072 |  |  |  | 12,001 |
Selling expense |  |  | 3,916 |  |  |  | 4,077 |
General and administrative |  |  | 14,501 |  |  |  | 10,516 |
Marketing and advertising |  |  | 3,540 |  |  |  | 4,784 |
Non-cash compensation |  |  | 2,244 |  |  |  | 740 |
Other segment items(1) |  |  | 2,167 |  |  |  | 1,047 |
Net loss |  | $ | (15,939 | ) |  | $ | (8,722 | )

| (1) | Includes interest expense, foreign currency transactions (loss) gain, and other income.

See Note 2 for revenue by geographic location. Long-lived assets, excluding other non-current assets, by geography are summarized as follows:

SCHEDULE OF LONG-LIVED ASSETS, EXCLUDING OTHER NON-CURRENT ASSETS, BY GEOGRAPHY

|  |  | Year ended March 31, 2025 |  |  |  | Year ended March 31, 2024 |
United Kingdom |  | $ | 478 |  |  | $ | 547 |
Hong Kong |  |  | 49 |  |  |  | 98 |
Total long-lived assets |  | $ | 527 |  |  | $ | 645 |

17. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as described below or within these consolidated financial statements, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

During May 2025, the Company entered into a business loan and security agreement with the same lender and substantially the same terms as the Term Loans, borrowing gross proceeds of $1,400, net of fees of $70. Thirty weekly payments of principal and interest totaling $66 commence in June 2025.

During May 2025, the Company entered into a consulting agreement for business advisory services under which it issued 100,000 shares of common stock at a fair value of $62, as determined by the closing price on the day of issuance.

During May 2025, the Company entered into a promissory note (the “May 2025 Note”) with a lender controlled by the Chairman of the Company’s board of directors to borrow $500. The May 2025 Note matures on December 31, 2025 and permits the Company to prepay the note in full without penalty at any time. If an Event of Default, as defined in the May 2025 Note, occurs, the outstanding principal and accrued interest becomes due and payable immediately.

In May 2025 we entered two agreements with lenders in which we borrowed gross proceeds of $1,900, $500 of which were pursuant to a note with an entity controlled by the Chairman of our board of directors. Refer to Note 17 to our consolidated financial statements included in Item 8 of this Form 10-K.

On June 30, 2025, the Company closed a public offering of 10,000,000 shares of its common stock at an offering price of $0.30 per share (the “Offering”), pursuant to its registration statement on Form S-3 (File No. 333-285612). The Offering generated gross proceeds of $3.0 million. After underwriting discounts, non-accountable expenses, legal expense reimbursement, and other offering-related costs, the Company received net proceeds of approximately $2,686,850.

In connection with the Offering, the Company issued to ThinkEquity LLC, the representative of the underwriters, warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.38 per share. These warrants are exercisable beginning on the date of issuance and expire five years thereafter. The underwriters were also granted a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or pre-funded warrants to cover over-allotments, if any. As of the date of this filing, the over-allotment option has not been exercised.

Concurrently with the closing off the Offering, the May 2025 Note was extinguished through the issuance of 1,692,694 shares of the Company’s common stock at a per share price of $0.30.

F-26

INDEX TO EXHIBITS

The exhibits listed below are filed as part of this Report on Form 10-K, or are incorporated herein by reference, in each case as indicated below.

Exhibit |  |  |  | Incorporated by Reference
Number |  | Description |  | Form |  | File No. |  | Exhibit |  | Filing Date
3.1 |  | Amended and Restated Certificate of Incorporation of the Company |  | 8-K |  | 001-41930 |  | 3.1 |  | February 13, 2024
3.2 |  | Amended and Restated Bylaws of the Company |  | 8-K |  | 001-41930 |  | 3.2 |  | February 13, 2024
3.3 |  | Certificate of Designations of 12.00% Series AA Convertible Preferred Stock. |  | 8-K |  | 001-41930 |  | 3.1 |  | April 2, 2025
4.1 |  | Form of the Company’s Common Stock Certificate |  | S-1 |  | 333-274913 |  | 4.1 |  | November 6, 2023
4.2 |  | Form of Underwriter Warrants |  | S-1 |  | 333-274913 |  | 4.2 |  | January 22, 2024
4.3 |  | Form of Convertible Promissory Note for 2021 Debt Financing |  | S-1 |  | 333-274913 |  | 4.3 |  | November 6, 2023
4.4 |  | Form of Amendment No. 1 to Convertible Promissory Note for 2021 Debt Financing |  | S-1 |  | 333-274913 |  | 4.4 |  | November 6, 2023
4.5 |  | Form of Amendment No. 2 to Convertible Promissory Note for 2021 Debt Financing |  | S-1 |  | 333-274913 |  | 4.5 |  | November 6, 2023
4.6 |  | Form of Amendment No. 3 to Convertible Promissory Note for 2021 Debt Financing |  | S-1 |  | 333-274913 |  | 4.6 |  | January 18, 2024
4.7 |  | Form of Convertible Promissory Note for 2022 Debt Financing |  | S-1 |  | 333-274913 |  | 4.6 |  | November 6, 2023
4.8 |  | Form of Amendment No. 1 to Convertible Promissory Note for 2022 Debt Financing |  | S-1 |  | 333-274913 |  | 4.7 |  | November 6, 2023
4.9 |  | Form of Amendment No. 2 to Convertible Promissory Note for 2022 Debt Financing |  | S-1 |  | 333-274913 |  | 4.9 |  | January 18, 2024
4.10 |  | Form of Convertible Secured Note dated December 6, 2024 |  | 8-K |  | 001-41930 |  | 10.2 |  | December 12, 2024
4.11 |  | Form of Placement Agent Warrant |  | 8-K |  | 001-41930 |  | 4.1 |  | April 2, 2025
10.1+ |  | Employment Agreement between Perfect Moment Ltd. and Jeff Clayborne |  | S-1 |  | 333-274913 |  | 10.2 |  | November 6, 2023
10.2+ |  | Amendment No. 1 to Employment Agreement between Perfect Moment Ltd. and Jeff Clayborne |  | S-1 |  | 333-274913 |  | 10.3 |  | January 22, 2024
10.3+ |  | Independent Director Agreement between Perfect Moment Ltd. and Andre Keijsers |  | S-1 |  | 333-274913 |  | 10.20 |  | January 18, 2024

62

Exhibit |  |  |  | Incorporated by Reference
Number |  | Description |  | Form |  | File No. |  | Exhibit |  | Filing Date
10.4+ |  | Independent Director Agreement between Perfect Moment Ltd. and Berndt Hauptkorn |  | S-1 |  | 333-274913 |  | 10.21 |  | January 18, 2024
10.5+ |  | Independent Director Agreement between Perfect Moment Ltd. and Tracy Barwin |  | S-1 |  | 333-274913 |  | 10.22 |  | January 18, 2024
10.6+ |  | Form of Indemnification Agreement for Directors and Officers |  | S-1 |  | 333-274913 |  | 10.21 |  | November 6, 2023
10.7 |  | Guarantee Agreement between Perfect Moment Asia Limited and J. Gottschalk & Associates |  | S-1 |  | 333-274913 |  | 10.37 |  | November 6, 2023
10.8 |  | Amendment to UBS Switzerland AG Standby Documentary Credit |  | S-1 |  | 333-274913 |  | 10.40 |  | December 1, 2023
10.9+ |  | Employment Agreement between Perfect Moment (UK) Limited and Mark Buckley |  | S-1 |  | 333-274913 |  | 10.1 |  | November 6, 2023
10.10+ |  | Employment Agreement between Perfect Moment (UK) Limited and Jane Gottschalk |  | S-1 |  | 333-274913 |  | 10.3 |  | November 6, 2023
10.11+ |  | Consulting Agreement between Perfect Moment Asia Limited and Max Gottschalk |  | S-1 |  | 333-274913 |  | 10.4 |  | November 6, 2023
10.12+ |  | Board Member Agreement between Perfect Moment Asia Limited and Tracy Barwin |  | S-1 |  | 333-274913 |  | 10.6 |  | November 6, 2023
10.13+ |  | 2021 Equity Incentive Plan and forms of award agreements thereunder |  | S-1 |  | 333-274913 |  | 10.8 |  | November 6, 2023
10.14+ |  | Amendment No. 1 to 2021 Equity Incentive Plan |  | S-1 |  | 333-274913 |  | 10.10 |  | January 26, 2024
10.15+ |  | Independent Director Agreement between Perfect Moment Ltd. and Tim Nixdorff |  | S-1 |  | 333-274913 |  | 10.23 |  | January 18, 2024
10.16 |  | Facility Letter Agreement between Perfect Moment Asia Limited and HSBC |  | S-1 |  | 333-274913 |  | 10.31 |  | November 6, 2023
10.17 |  | Amendment to Facility Letter Agreement, dated April 11, 2023, between Perfect Moment Asia Limited and HSBC |  | S-1 |  | 333-274913 |  | 10.32 |  | November 6, 2023
10.18 |  | Amendment to Facility Letter Agreement, dated July 10, 2023, between Perfect Moment Asia Limited and HSBC |  | S-1 |  | 333-274913 |  | 10.33 |  | November 6, 2023
10.19 |  | UBS Switzerland AG Standby Documentary Credit |  | S-1 |  | 333-274913 |  | 10.34 |  | November 6, 2023
10.20 |  | Charge over Securities and Deposits between Perfect Moment Asia Limited and HSBC |  | S-1 |  | 333-274913 |  | 10.35 |  | November 6, 2023
10.21 |  | Guarantee of Perfect Moment Limited |  | S-1 |  | 333-274913 |  | 10.36 |  | November 6, 2023
10.22 |  | Share Registration Agreement |  | S-1 |  | 333-274913 |  | 10.44 |  | January 26, 2024
10.23 |  | Form of Lock-Up Agreement |  | S-1 |  | 333-274913 |  | 10.45 |  | January 26, 2024
10.24 |  | Perfect Moment Ltd. Enterprise Management Incentive Share Option Agreement with Negin Yeganegy |  | S-8 |  | 333-277335 |  | 99.3 |  | February 23, 2024
10.25 |  | Excerpts from the Settlement Agreement, dated October 26, 2022, by and between Perfect Moment UK Limited and Negin Yeganegy, relating to the Perfect Moment Ltd. Enterprise Management Incentive Share Option Agreement with Negin Yeganegy |  | S-8 |  | 333-277335 |  | 99.4 |  | February 23, 2024
10.26 |  | Subordinated Business Loan and Security Agreement dated July 25, 2024 |  | 8-K |  | 001-41930 |  | 10.1 |  | August 29, 2024
10.27 |  | Subordinated Business Loan and Security Agreement dated August 23, 2024 |  | 8-K |  | 001-41930 |  | 10.2 |  | August 29, 2024

63

Exhibit |  |  |  | Incorporated by Reference
Number |  | Description |  | Form |  | File No. |  | Exhibit |  | Filing Date
10.28 |  | Standard Merchant Cash Advance Agreement dated September 25, 2024 |  | 10-Q |  | 001-41930 |  | 10.3 |  | November 14, 2024
10.29 |  | Subordinated Business Loan and Security Agreement dated September 30, 2024 |  | 10-Q |  | 001-41930 |  | 10.4 |  | November 14, 2024
10.30 |  | Business Loan and Security Agreement dated October 23, 2024 |  | 10-Q |  | 001-41930 |  | 10.5 |  | November 14, 2024
10.31 |  | Business Loan and Security Agreement dated November 24, 2024 |  | 10-Q |  | 001-41930 |  | 10.3 |  | February 14, 2025
10.32 |  | Form of Convertible Secured Note Purchase Agreement dated December 6, 2024 |  | 8-K |  | 001-41930 |  | 10.1 |  | December 12, 2024
10.33 |  | Licence Agreement dated January 10, 2024 |  | 1-A |  | 024-12548 |  | 6.32 |  | December 16, 2024
10.34+ |  | Consulting Agreement between Perfect Moment (UK) Limited and Vittorio Giacomelli |  | 8-K |  | 001-41930 |  | 10.1 |  | February 6, 2025
10.35+ |  | Employment Agreement between Perfect Moment (UK) Limited and Chath Weerasinghe |  | 8-K |  | 001-41930 |  | 10.2 |  | February 6, 2025
10.36+ |  | Restricted Stock Unit Agreement dated February 3, 2025, between the Company and Chath Weerasinghe |  | 8-K |  | 001-41930 |  | 10.3 |  | February 6, 2025
10.37+ |  | Amendment to Contract of Employment between Perfect Moment (UK) Limited and Jane Gottschalk |  | 8-K |  | 001-41930 |  | 10.4 |  | February 6, 2025
10.38 |  | Form of Securities Purchase Agreement, dated March 28, 2025, between the Registrant and the investors party thereto. |  | 8-K |  | 001-41930 |  | 10.1 |  | April 2, 2025
10.39 |  | Form of Registration Rights Agreement, dated March 28, 2025, between the Registrant and the investors party thereto. |  | 8-K |  | 001-41930 |  | 10.2 |  | April 2, 2025
10.40 |  | Placement Agency Agreement, dated March 28, 2025, between the Registrant and the Placement Agent |  | 8-K |  | 001-41930 |  | 10.3 |  | April 2, 2025
19.1 |  | Insider Trading Policy |  |  |  |  |  |  |  |
21.1 |  | Subsidiaries of the Company |  | S-1 |  | 333-274913 |  | 21.1 |  | January 18, 2024
23.1 |  | Consent of Weinberg & Company, P.A. |  |  |  |  |  |  |  |
31.1 |  | Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |
31.2 |  | Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |
32.1* |  | Certifications of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |
32.2** |  | Certifications of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |
97.1* |  | Perfect Moment Ltd. Clawback Policy |  |  |  |  |  |  |  |
101.INS |  | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |  |  |  |  |  |  |  |
101.SCH |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  |  |  |  |
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  |  |  |  |
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  |  |  |  |
101.LAB |  | Inline XBRL Taxonomy Extension Labels Linkbase Document |  |  |  |  |  |  |  |
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  |  |  |  |
104 |  | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |  |  |  |  |  |  |  |

+ Indicates a management contract or compensatory plan or arrangement.

* Filed herewith

** Furnished herewith.

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

| PERFECT MOMENT LTD.
Date: June 30, 2025 | By: | /s/ Jane Gottschalk
|  | Jane Gottschalk
|  | President, Chief Creative Officer and Director
|  | (Principal Executive Officer)
Date: June 30, 2025 | By: | /s/ Chath Weerasinghe
|  | Chath Weerasinghe
|  | Chief Financial Officer
|  | (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: June 30, 2025 | By: | /s/ Jane Gottschalk
|  | Jane Gottschalk
|  | President, Chief Creative Officer and Director
|  | (Principal Executive Officer)
Date: June 30, 2025 | By: | /s/ Chath Weerasinghe
|  | Chath Weerasinghe
|  | Chief Financial Officer
|  | (Principal Financial and Accounting Officer)
Date: June 30, 2025 | By: | /s/ Andre Keijsers
|  | Andre Keijsers
|  | Director
Date: June 30, 2025 | By: | /s/ Berndt Hauptkorn
|  | Berndt Hauptkorn
|  | Director
Date: June 30, 2025 | By: | /s/ Max Gottschalk
|  | Max Gottschalk
|  | Director
Date: June 30, 2025 | By: | /s/ Tracy Barwin
|  | Tracy Barwin
|  | Director
Date: June 30, 2025 | By: | /s/ Tim Nixdorff
|  | Tim Nixdorff
|  | Director

65