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Item 7. Management’s Discussion and Analysis

2025-07-02 compared with 2024-09-27 · 299 added, 255 removed, 127 unchanged (81% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements regarding our expectations for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations.

Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Factors that could cause such differences include those identified below and those described under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” and elsewhere in this report.

Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Aeries” and “the Company” refer to the business and operations of AARK and its consolidated subsidiaries prior to the Business Combination (excluding the associated legacy financial technology and investing business activities) and to Aeries Technology, Inc.

should read the following discussion and analysis together with our consolidated financial statements and the related notes included elsewhere

in this annual report on Form 10-K.

Among other things, the consolidated financial statements include more detailed information regarding

the basis of presentation for the financial data than included in the following discussion.

addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements

regarding our expectations for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that

could cause actual results to differ materially from our expectations.

Our actual results may differ materially from those contained in

or implied by any forward-looking statements.

Factors that could cause such differences include those identified below and those described

under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” and elsewhere in this report.

You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on

such statements, which speak only as of the date of this annual report.

It is impossible for us to predict new events or circumstances

that may arise in the future or how they may affect us.

Unless otherwise required by law, we undertake no obligation to update forward

looking statements to reflect events or circumstances occurring after the date of this annual report.

the context otherwise requires, references in this section to “we,” “us,” “our,” “Aeries,”

“Aeries Technology,” and “the Company” refer to the business and operations of AARK and its consolidated subsidiaries

prior to the Business Combination (excluding the associated legacy financial technology and investing business activities) and to Aeries

Technology, Inc.

and its consolidated subsidiaries, following the consummation of the Business Combination.

Aeries Technology is a global provider of professional and management services and technology consulting, specializing in the establishment and management of dedicated delivery centers known as “Global Capability Centers” (“GCCs”) for portfolio companies of private equity firms and mid-market enterprises.

Our engagement models are designed to provide a mix of deep vertical specialty, functional expertise, and digital systems and solutions to scale, optimize and transform a client’s business operations.

By leveraging AI, implementing process improvements, and recruiting talent in cost-effective geographies, we are positioned to deliver significant cost savings to our clients.

With over a decade of experience, we are committed to delivering transformative business solutions that drive operational efficiency, innovation, and strategic growth.

We support and drive our clients’ global growth by providing a range of services, including professional advisory services and operations management services, to build and manage GCCs in suitable and cost-effective locations based on client business needs.

With a focus towards digital enterprise enablement, these GCCs are designed to act as seamless extensions of the client organization, providing access to top-tier resources.

We believe this empowers our clients to remain competitive and nimble and to achieve their goals of enduring cost efficiencies, operational excellence, and value creation, without sacrificing functional control and flexibility.

Our advisory services involve the active participation of senior leadership, recommending strategies and best practices related to operating model design, consultation on various areas, market availability for resources with appropriate skillsets required for specific roles contemplated in the service model, regulatory compliance, optimization of tax structure, and more.

Our clients can customize the services based on options we provide, and we subsequently firm up the execution plan with the clients.

A key aspect of our service is our focus on digital transformation.

We aim to leverage cutting-edge technologies, including AI, to drive innovation and streamline operations.

Our technology services are designed to enhance decision-making, automate processes, and deliver significant business value.

We believe this approach through GCC set-up improves operational efficiencies, enabling us to deliver digital transformation services that align with our clients’ growth strategies and support their competitiveness in an evolving digital landscape.

Our clients also use our services to manage their organizational operations, including software development, information technology, data analytics, cybersecurity, finance, human resources, customer service and operations.

We hire appropriate talent and personnel on our payroll for deployment on client operations.

We work with our clients collaboratively to select the appropriate candidates and create functional alignment with the clients’ organizations.

While our talent becomes an extension of our clients’ team, Aeries continues to provide them with the opportunity for promotion, recognition and career path progression, which we believe results in higher employee satisfaction and lower voluntary attrition rates.

We manage the regulatory, tax, recruiting, human resources compliance and branding for each of our GCCs.

Our purpose-built business model aims to create a more flexible and cost-effective talent pool for deployment on clients’ operations, while fostering innovation through strategic alignment at senior levels and visibility across the organization.

The model also aims to insulate our clients from regulatory and tax issues and provides flexibility in scaling teams up or down based on their changing business needs.

We are committed to delivering best practices and success factors by leveraging our visibility into successful strategies from multiple companies, addressing many of the deficiencies associated with the traditional outsourcing and offshoring models.

As of March 31, 2024, Aeries had more than 30 clients spanning across industry segments, including companies in the industries of e-commerce, telecom, security, healthcare, engineering and others.

Recent Developments

Business Combination, and the Recent Exchange

The information disclosed under “ Corporate History, the Business Combination, and the Recent Exchange ” in Item 1 “ Business ” above is incorporated herein by reference.

Private Placements Around the Closing Date of the Business Combination

Pursuant to those certain Non-Redemption Agreements entered into on or about March 31, 2023, October 9, 2023, November 3, 2023 and November 5, 2023, in connection with the closing of the Business Combination, we issued an aggregate of 2,677,227 of Class A ordinary shares to the holders who elected not to redeem their shares pursuant to the Non-Redemption Agreements.

On November 3, 2023 and November 5, 2023, we entered into Forward Purchase Agreements with certain investors for an OTC Equity Prepaid Forward Transaction.

In connection with the Forward Purchase Agreements, we entered into the Subscription Agreements with the FPA holders, pursuant to which, subject to certain limitations contained therein, each FPA holder agreed to purchase from us that number of Class A ordinary shares up to the Maximum Number of Shares (as set forth in the applicable Forward Purchase Agreement) for a purchase price per share equal to the redemption price of $10.69, less the number of Class A ordinary shares the FPA holder purchased through the open market or via redemption reversals (the “Recycled Shares”).

The aggregate number of shares purchased by the FPA holders pursuant to the Subscription Agreements and the Forward Purchase Agreements (other than the Recycled Shares) was 3,711,667.

The FPA holders may sell the FPA Shares during the term of the applicable Forward Purchase Agreements.

If the FPA holders hold some or all of the FPA Shares at the end of the one-year term, then we will be required to make a cash payment of $2.00 per FPA Share then held, or issue additional Class A ordinary shares to such FPA holders at a price of $2.50 per share, at the election of the FPA holders.

Recent Private Placement

On April 8, 2024, we entered into a Share Subscription Agreement with an institutional accredited investor, pursuant to which we agreed to sell an aggregate of 2,261,778 newly issued Class A ordinary shares at a purchase price of $2.21 per share;

provided, that the issuance of delivery of the shares thereunder shall be subject to a 4.99% beneficial ownership limitation as describe in the agreement, as elected by the investor.

At the closing of the private placement, we received net proceeds of approximately $4.68 million, after deducting a 6.5% commission paid to a placement agent.

We have used, and intend to continue using, the net proceeds for general corporate and working capital purposes.

Key Factors Affecting Performance and Comparability

Market Opportunity

Our current markets are North America, Asia Pacific, and the Middle East, with a primary focus on the United States.

Within these regions we are focused on two primary areas, the private equity ecosystem and the mid-market enterprises.

Companies are looking for service providers who not only have the experience and expertise in providing the right-sized solution in this age of ever shortening business cycles but also a trusted partner with a transparent engagement model to lead the customers through the digital transformation journey.

Aeries’ model is purpose-built to provide this experience and expertise through a transparent engagement model to accelerate and enhance our clients’ businesses.

Private Markets

As private market investing evolves and the landscape of venture-backed and late-stage private growth companies transform, our service offerings will adapt accordingly to align with the shifting dynamics of potential investors and portfolio companies seeking our expertise.

While periods of macroeconomic growth in the United States, particularly in private equity markets, typically foster an upsurge in overall investment activity, any economic slowdowns, downturns, or volatility in the broader market and private equity landscape could potentially dampen this growth momentum.

Macro-economic headwinds

Our operational performance is influenced by prevailing economic conditions, including macroeconomic conditions, the overall inflationary climate, and business sentiment.

During the year ended March 31, 2024, there was persistent economic and geopolitical uncertainty in many markets around the world, including concerns over wage inflation, the potential of decelerating global economic growth, and increased volatility in foreign currency exchange rates.

Technology is a global provider of professional.

management, and technology consulting services to portfolio companies of private equity

firms and middle-market companies, specializing in the design, set-up and and management of Global Capability Centers (“GCCs”)

for our clients.

Our offerings are designed to provide a mix of deep vertical specialty, functional expertise, and digital systems and

solutions offering end-to-end coverage for the entire GCC lifecycle to scale, optimize and transform a client’s business operations.

By leveraging artificial intelligence (“AI”), implementing process improvements, and recruiting talent in cost-effective geographies,

we are positioned to deliver significant cost savings to our clients.

With over a decade of experience, we are committed to delivering

transformative business solutions that drive operational efficiency, innovation, and strategic growth, to positively impact value creation

for our clients.

solutions are purpose-built to help clients unlock business value—enhancing revenue growth through accelerated innovation and improved

customer experience, while also driving operating efficiency through optimized cost structures and scalable delivery.

Aeries-built GCCs

serve as strategic platforms through which clients can adopt and embed the latest technologies, including artificial intelligence, advanced

analytics, and modern enterprise tools and practices.

Clients maintain strategic oversight and operational control, with the flexibility

to adapt GCC ownership structures as business needs evolve.

Through our integrated model, Aeries enables organizations to move faster,

serve customers better, and build long-term enterprise value.

support and drive our clients’ global growth by providing a range of services, including professional advisory services and operations

management services, to build and manage GCCs in suitable and cost-effective locations based on client business needs.

With a focus towards

digital enterprise enablement, these GCCs are designed to act as seamless extensions of the client organization, providing access to top-tier

We believe this empowers our clients to remain competitive and nimble and to achieve their goals of enduring cost efficiencies,

operational excellence, and value creation, without sacrificing functional control and flexibility.

advisory services involve the active participation of senior leadership, recommending strategies and best practices related to operating

model design, consultation on various areas, market availability for resources with appropriate skillsets required for specific roles

contemplated in the service model, regulatory compliance, optimization of tax structure, and more.

Our clients can customize the services

based on options we provide, and we subsequently firm up the execution plan with the clients.

key aspect of our service is our focus on digital transformation.

We aim to leverage cutting-edge technologies, including AI, to drive

innovation and streamline operations.

Our technology services are designed to enhance decision-making, automate processes, and deliver

significant business value.

We believe this approach through GCC set-up improves operational efficiencies, enabling us to deliver digital

transformation services that align with our clients’ growth strategies and support their competitiveness in an evolving digital

clients also use our services to manage their organizational operations, including application engineering, information technology, data

analytics, cybersecurity, finance, human resources, customer service and operations.

We hire appropriate talent and personnel on our payroll

for deployment on client operations.

We work with our clients collaboratively to select the appropriate candidates and create functional

alignment with the clients’ organizations.

While our talent becomes an extension of our clients’ team, Aeries continues to

provide them with the opportunity for promotion, recognition and career path progression, which we believe results in higher employee

satisfaction and lower voluntary attrition rates.

We manage the regulatory, tax, recruiting, human resources compliance and branding for

each of our GCCs.

business model aims to create a more flexible and cost-effective talent pool for deployment on clients’ operations, while fostering

innovation through strategic alignment at senior levels and visibility across the organization.

The model also aims to insulate our clients

from regulatory and tax issues and provides flexibility in scaling teams up or down based on their changing business needs.

We are committed

to delivering best practices and success factors by leveraging our visibility into successful strategies from multiple companies, addressing

many of the deficiencies associated with the traditional outsourcing and offshoring models.

of March 31, 2025, Aeries had more than 30 clients spanning across industry segments, including companies in the industries of e-commerce,

telecom, security, healthcare, engineering and others.

Factors Affecting Performance and Comparability

markets that we currently operate in are North America and Asia Pacific, but our primary focus is North America, especially the private

equity ecosystem and the mid-market enterprises.

are looking for vendors who not only have the experience and expertise in providing the right-sized solution in this age of ever shortening

business cycles but also serve as a trusted partner with a transparent engagement model to handhold them through their digital transformation

Aeries’ model is designed to deliver this experience, expertise and transparent engagement approach to accelerate and enhance

our clients’ business.

private market investing evolves and the landscape of venture-backed and late-stage private growth companies transforms, our service offerings

will adapt accordingly, aligning with the shifting dynamics of potential investors and portfolio companies seeking our expertise.

periods of macroeconomic growth in the United States, particularly in private equity markets, typically foster an upsurge in overall investment

activity, any economic slowdowns, downturns, or volatility in the broader market and private equity landscape could potentially dampen

this growth momentum.

Macro-economic

operational performance is influenced by prevailing economic conditions, including macroeconomic conditions, the overall inflationary

climate, and business sentiment.

During the year ended March 31, 2025, there was persistent economic and geopolitical uncertainty

in many markets around the world, including concerns over wage inflation, the potential of decelerating global economic growth, and increased

volatility in foreign currency exchange rates.

These factors have impacted and may continue to impact our business operations.

Customer Retention and Early Termination of

Long-Term Contracts

Maintaining long-term customer

relationships is important to our business, as a significant portion of our revenue is derived from these contracts.

Although we have

auto-renewal service agreements with clients, they may choose to terminate or not renew, in which case they must provide a notice period,

typically ranging from 90 to 180 days, and pay a termination fee based on the commercial margin if termination occurs without cause.

is an increasing likelihood that clients may choose to terminate our service agreements after we have established and operated delivery

centers for them, as it becomes more feasible and cost-efficient for them to take over.

While the above-described contractual provisions

provide some financial protection, the termination fee may not fully offset the long-term revenue loss, and replacing clients can be challenging

due to the lengthy customer acquisition cycle.

To mitigate this risk, we focus on maintaining strong relationships, expanding our customer

base, diversifying service offerings, and delivering high-quality service to encourage renewals or alternative service arrangements when

terminations occur.

Our operational results and financial condition may still be negatively affected if multiple key customers terminate

their agreements around the same time, as replacing this revenue can take time.

We are incorporated in the Cayman Islands and have operations in India, Mexico, Singapore, the UAE and the United States.

Our effective tax rate has historically varied and will continue to vary from year to year based on several factors:

the tax rate in the jurisdiction of our organization, the geographical sources of our earnings and the tax rates in those countries, the tax relief and incentives available to us, the financing and tax planning strategies employed by us, changes in tax laws or the interpretation thereof, and movements in our tax reserves, if any.

Currently, the Company is liable to pay income tax in India, Mexico, Singapore, the UAE and the United States.

In India, the Company has chosen to pay taxes according to the newly introduced tax regime in 2019 while forgoing some exemptions and deductions.

Consequently, the Company calculates its consolidated provision for income taxes based on the asset and liability method.

Deferred income taxes are recognized on the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as determined under tax laws and rates.

A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized.

These deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the year in which these temporary differences are anticipated to be settled or recovered.

If there is evidence that indicates some portion or all of the recorded deferred tax assets will not be realized in future periods, the deferred tax assets are recorded net of a valuation allowance.

The Company evaluates uncertain tax positions to determine if they are likely to be sustained upon examination, and a liability is recorded when such uncertainties fail to meet the “more likely than not” threshold.

Financing Costs

We regularly evaluate our variable and fixed-rate debt obligations.

We have historically used short and long-term debt to finance our working capital requirements, capital expenditures and other investments.

In May 2023, Aeries amended its revolving credit facility with Kotak Mahindra Bank (“Amended Credit Facility”), whereby the total borrowing capacity was increased to $3.8 million (at the exchange rate in effect on March 31, 2024).

Retention and Early Termination of Long-Term Contracts

long-term customer relationships is important to our business, as a significant portion of our revenue is derived from these contracts.

Although we have auto-renewal service agreements with clients, they may choose to terminate or not renew, in which case they must provide

a notice period, typically ranging from 90 to 180 days, and pay a termination fee based on the commercial margin if termination occurs

without cause.

There is an increasing likelihood that clients may choose to terminate our service agreements after we have established

and operated delivery centers for them, as it becomes more feasible and cost-efficient for them to take over.

While the above-described

contractual provisions provide some financial protection, the termination fee may not fully offset the long-term revenue loss, and replacing

clients can be challenging due to the lengthy customer acquisition cycle.

To mitigate this risk, we focus on maintaining strong relationships,

expanding our customer base, diversifying service offerings, and delivering high-quality service to encourage renewals or alternative

service arrangements when terminations occur.

Our operational results and financial condition may still be negatively affected if multiple

key customers terminate their agreements around the same time, as replacing this revenue can take time.

are incorporated in the Cayman Islands and have operations in India, Mexico, Singapore and the United States.

Our effective tax rate has

historically varied and will continue to vary from year to year based on the tax rate in the jurisdiction of our organization, the geographical

sources of our earnings and the tax rates in those countries, the tax relief and incentives available to us, the financing and tax planning

strategies employed by us, changes in tax laws or the interpretation thereof, and movements in our tax reserves, if any.

the Company is liable to pay income tax in India, Mexico, Singapore, and the United States.

In India, the Company has chosen to pay taxes

according to the newly introduced tax regime in 2019 while forgoing some exemptions and deductions.

Consequently, the Company calculates

its consolidated provision for income taxes based on the asset and liability method.

This involves determining deferred tax assets and

liabilities based on temporary differences between the consolidated financial statements and income tax bases of assets and liabilities.

These deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the

year in which these temporary differences are anticipated to be settled or recovered.

If there is evidence that indicates some portion

or all of the recorded deferred tax assets will not be realized in future periods, the deferred tax assets are recorded net of a valuation

The Company evaluates uncertain tax positions to determine if they are likely to be sustained upon examination, and a liability

is recorded when such uncertainties fail to meet the “more likely than not” threshold.

regularly evaluate our variable and fixed-rate debt obligations.

We have historically used short and long-term debt to finance our working

capital requirements, capital expenditures and other investments.

In May 2023, Aeries amended its revolving credit facility (“Amended

Credit Facility”), whereby the total borrowing capacity was increased to $3.7 million (at the exchange rate in effect on March 31,

2025), with Kotak Mahindra Bank.

The revolving facility is available for Aeries’ operational requirements.

The interest rate is equal to the 6 months Marginal Cost of Funds based Lending Rate (“MCLR”) plus a margin of 0.80% and 1.20 % as of March 31, 2024 and 2023, respectively.

Aeries is required to pay interest on the outstanding balance of the credit facility at this financing cost basis, calculated based on the actual number of days for which the funds are utilized.

Any changes in the prevailing MCLR rates and the interest rate charged by the bank will affect the financing cost basis and the overall cost of borrowing.

Additionally, Aeries has an outstanding unsecured loan from a director of ATG, Mr.

Vaibhav Rao, amounting to $0.8 million at an interest rate of 10% per annum.

The principal amount of the loan was outstanding in entirety as of and for the years ended March 31, 2024 and 2023.

The Company also has an outstanding four-year vehicle loan of $0.1 million (at the exchange rate in effect on March 31, 2024) at an interest rate of 10.75% per annum.

Refer to the notes to our consolidated financial statements titled “Short-term borrowings” and “Long-term debt” included elsewhere in this Annual Report on Form 10-K for additional information on our indebtedness.

The interest rate is

equal to the 6 months Marginal Cost of Funds based Lending Rate (“MCLR”) plus a margin of 0.8% and 0.80% as of March 31,

2025 and March 31, 2024, respectively.

Aeries is required to pay interest on the outstanding balance of the credit facility at this

financing cost basis, calculated based on the actual number of days for which the funds are utilized.

Any changes in the prevailing MCLR

rates and the interest rate charged by the bank will affect the financing cost basis and the overall cost of borrowing.

also has an outstanding unsecured loan from director of Aeries Technology Group Business Accelerators Pvt Ltd., Mr.

amounting to $0.8 million at an interest rate of 10% per annum.

The principal amount of the loan was outstanding in entirety as of and

for the years ended March 31, 2025 and March 31, 2024.

December 7, 2022, the Company entered into a vehicle loan, secured by the vehicle, for INR 11.5 million (or approximately $0.1 million

at the exchange rate in effect on March 31, 2025) at 10.75% from Mercedes-Benz Financial Services India Pvt.

The Company is

required to repay the loan in 48 monthly instalments beginning January 4, 2023.

August 2, 2024, the Company entered into a vehicle loan, secured by the vehicle, for INR 8.2 million (or approximately $0.1 million

at the exchange rate in effect on March 31, 2025) at 10.25% from Mercedes-Benz Financial Services India Pvt.

The Company is

required to repay the loan in 48 monthly instalments beginning September 4, 2024.

to the notes to our consolidated financial statements titled “ Short-term borrowings ” and “ Long-term debt ”

included elsewhere in this Annual Report on Form 10-K for additional information on our indebtedness.

For information about the risks we face, see “ Risk Factors .”

Results of Operations

The Company has one operating segment and presents and discusses revenues by client location.

The Company has one operating segment and presents and discusses revenues by customer location.

The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

The following table shows the disaggregation of the Company’s revenues by major client location.

Substantially all of the revenue in our North America region relates to business with clients in the United States.

(In thousands)

The following table shows the disaggregation of the Company’s revenues by major customer location.

Substantially all of the revenue in our North America region relates to business with customers in the United States.

North America

13 unchanged sentences

Total operating expenses

Income from operations

(Loss) / income from operations

Other income / (expense)

Change in fair value of forward purchase agreement put option liability

Change in fair value of derivative liabilities

Gain on settlement of forward purchase agreement put option liability

Interest income

2 unchanged sentences

Total other income / (expense), net

Income / (loss) before income taxes

Income tax expenses

Net income attributable to noncontrolling interests

Net income attributable to redeemable noncontrolling interests

Net income attributable to the shareholders’ of Aeries Technology, Inc.

Revenue , net

Revenue, net for the year ended March 31, 2024 was $72.5 million, a $19.4 million or a 37% increase compared to revenue, net of $53.1 million for the year ended March 31, 2023.

This change is attributable to a $18.3 million increase in revenues generated due to addition of new clients and a net $1.1 million increase in revenues resulting from the ramp-up of our existing clients.

(Loss) / income before income taxes

Income tax benefit / (expenses)

Net (loss) / income

Net (loss) / income attributable noncontrolling interest

Net (loss) / income attributable to redeemable noncontrolling interests

Net (loss) / income attributable to the shareholders of Aeries Technology, Inc.

For the year ended March 31, 2025, our revenue on a consolidated basis decreased by $2.3 million or 3%, to $70.2 million from $72.5 million for the year ended March 31, 2024.

We experienced revenue decrease of $21.3 million related to the closure of certain consulting projects and ramp-downs in some of our existing client engagements.

These declines were offset by an increase in revenue of $19.0 million, related to the addition of new clients and increase in business from existing clients.

Cost of Revenue

Cost of revenue for the year ended March 31, 2024 was $50.9 million, a $11.4 million or a 29% increase compared to cost of revenue of $39.4 million for the year ended March 31, 2023.

The primary drivers of the increase include $6.9 million attributed to higher compensation and benefit expenses, reflecting an expansion in client-serving headcount to support revenue growth.

Additionally, $3.7 million increase in fees of external consultants and $0.9 million increase in rent and professional charges.

These cost increases were partially offset by $0.7 million decrease in recruitment-related expenses.

Gross profit for the year ended March 31, 2024 was $21.6 million, a $8.0 million or a 58% increase compared to gross profit of $13.7 million for the year ended March 31, 2023.

This increase was primarily driven by a $19.4 million increase in revenue, resulting from heightened demand for services from new and existing clients.

The revenue growth was primarily offset by a $11.4 million increase in cost of revenue, largely due to higher compensation expenses and other costs related to contract fulfillment.

For the year ended March 31, 2025, our cost of revenue increased by $2.6 million or 5%, to $53.5 million from $50.9 million for the year ended March 31, 2024.

The primary drivers of the increase included a $6.9 million increase in employee compensation and benefits, including bonuses and a $1.0 million increase in administrative cost and rent.

These cost increases were offset by a $4.4 million decrease in cost related to fees to external consultants and $0.8 decrease in costs related to legal and professional fees.

For the year ended March 31, 2025, our gross profit decreased by $4.9 million or 23%, compared to the year ended March 31, 2024.

The lower gross profit was primarily due to decline in revenue of $2.3 million and increase of $2.6 million in cost of revenue mainly due to the increased compensation costs and benefits which is offset by decrease in cost related to fees to external consultants and legal and professional fees.

Gross Profit Margin

Gross profit margin for the year ended March 31, 2024, was 30%, an increase of 413 basis points compared to gross profit margin of 26% for the year ended March 31, 2023.

The improvement is primarily attributed to higher business volumes from the project-based consulting business, which typically generates higher margins due to fixed hourly rate billing.

Selling, general and administrative

Selling and administrative

expenses for the year ended March 31, 2024, were $18.7 million, a $7.3 million and 65% increase, compared to selling and administrative

expenses of $11.3 million for the year ended March 31, 2023.

The increase was due to $3.2 million increase in legal and professional

expenses due to business combination related expenses, $1.1 million of expected credit loss expense, and $3.9 million increase in operations

costs, largely attributable to expanded support headcount, higher travel expenses and additional legal and professional expenses.

increases were partially offset by a $2.2 million reduction in ESOP-related expenses following the completion of the vesting period.

Total other income, net

Total other income, net for

the year ended March 31, 2024, was $16.1 million, a $15.7 million and 3,610% increase, compared to other income, net of $0.4 million

for the year ended March 31, 2023.

The increase was primarily driven by a $16.2 million increase resulting due to change in fair

value of derivative liabilities, partially offset by a reduction in exchange gains recorded in the year ended March 31, 2023.

Income tax expense

Provision from income taxes

for the year ended March 31, 2024, was $1.9 million, an increase of $0.8 million and 77% increase compared to provision of income

taxes of $1.1 million for the year ended March 31, 2023.

The increase was primarily due to the significant rise in pre-tax income

and higher non-deductible expenses during the year.

For the year ended March 31, 2025, our gross profit margin decreased by 600 basis points compared to the year ended March 31, 2024.

The decrease was primarily attributed to decrease in business from the project-based consulting business, which typically yield higher margins due to billing being based on fixed hourly rates.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $26.8 million, or 144% to $45.5 million for the year ended March 31, 2025, compared to $18.7 million for the year ended March 31, 2024.

This significant increase was primarily driven by a $11.1 million increase in stock-based compensation related expense, incremental bad-debts recorded by the company of $9.1 million, $1.7 million impairment loss recorded on software and computer equipment and intangible asset under development, a $1.0 million increase in legal and professional charges, a $1.2 million incremental provisions for expected credit loss on customer receivables and a $1.3 million increase due to director fees and rates and taxes.

Additionally, employee compensation and benefits increased by $2.2 million due to increased hiring, resulting in increased personnel related costs, and travel expenses.

Total Other Income (expense), net

Total other income/ (expense), net was $6.1 million for the year ended March 31, 2025 compared to $16.1 million for the year ended March 31, 2024, a $10.0 million and 62% change primarily due to a change in the fair value of the forward purchase agreement put option liability and derivative warrant liability.

Income tax benefit / (expenses)

The income tax benefit for

the year ended March 31, 2025 was $1.0 million, representing a $2.9 million or 157% improvement

compared to the income tax expense of $1.9 million for the year ended March 31, 2024.

The improvement was primarily due to

significant increase in recognition of deferred tax benefit on losses in certain subsidiaries having a lower jurisdictional tax

rates along with a reduction in taxable income resulting in lower current tax, provision for vendor expenses on a higher side for

year ended March 31, 2025.

Non-GAAP Financial Measures

2 unchanged sentences

We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below.

The adjustments generally fall within the categories of non-cash items, other than costs related to the Business Combination.

The adjustments generally fall within the categories of non-cash items, other than costs related to the Business Combination and M&A transaction related costs, which represent non-recurring legal, professional, personnel and other fees and expenses incurred in connection with potential mergers and acquisitions related activities.

We believe the non-GAAP measures presented herein should always be considered along with, and not as a substitute for or superior to, the related US GAAP financial measures.

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The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable US GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA and Adjusted EBITDA Margin

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We believe these non-GAAP measures are useful insight to investors by offering a clearer view of Aeries’ operating performance.

This information is frequently utilized by securities analysts and other stakeholders as a measure of financial information and debt service capabilities, and it has been used by our management for internal reporting and planning procedures, including aspects of our consolidated operating budget and capital expenditures.

The following table provides a reconciliation from net income (US GAAP measure) to Adjusted EBITDA and Adjusted EBITDA margin (Non-GAAP measures) for the year ended March 31, 2024, and 2023 (in thousands):

Income tax expense

This information has been used by our management for internal reporting and planning procedures, including aspects of our consolidated operating budget and capital expenditures.

The following table provides a reconciliation from net (loss) / income (US GAAP measure) to Adjusted EBITDA, and Adjusted EBITDA margin for the year ended March 31, 2025, and 2024 (in thousands):

Net (loss) / income

Income tax (benefit) / expense

Interest income

Interest expenses

Interest expense

Depreciation and amortization

Impairment loss

(+) Stock-based compensation

(+) Business Combination related costs

(+) Business Combination and M&A transaction related costs

(+) Severance Pay

(-) Change in fair value of derivative liabilities

(-) Gain on settlement of forward purchase agreement put option liability

Adjusted EBITDA

Adjusted EBITDA Margin

Some of the limitations of Adjusted EBITDA and Adjusted EBITDA margin include that these measures do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments or foreign exchange gain/loss, (ii) changes in, or cash requirements for, working capital, (iii) significant interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt, (iv) payments made or future requirements for income taxes, (v) cash requirements for future replacement or payment in depreciated or amortized assets, (vi) stock based compensation costs, (vii) Business Combination related costs, and (viii) change in fair value of derivative liabilities.

Adjusted EBITDA margin [Adjusted EBITDA / Revenue]

Some of the limitations of Adjusted EBITDA and Adjusted EBITDA margin include:

each of these measures does not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments or foreign exchange gain/loss;

(ii) changes in, or cash requirements for, working capital;

(iii) significant interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt;

(iv) payments made or future requirements for income taxes;

(v) cash requirements for future replacement or payment in depreciated or amortized assets;

(vi) stock based compensation costs, (vii) severance pay, viii) Business Combination and M&A transaction related costs, which represent non-recurring legal, professional, personnel and other fees and expenses incurred in connection with potential mergers and acquisitions related activities for the year ended March 31, 2025, and Business Combination related costs for the year ended related March 31, 2024, and (ix) change in fair value of derivative liabilities.

Liquidity and Capital Resources

The accompanying consolidated

financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and

the satisfaction of liabilities in the normal course of business.

The going concern basis of presentation assumes that the Company will

continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge

its liabilities and commitments in the normal course of business.

As of March 31, 2024, the shareholders’ equity had a deficit

of $1.9 million.

This may raise substantial doubt regarding the Company’s ability to continue as a going concern for at least 12

months from the date when these financial statements are available to be filed with the SEC.

The Company acquired approximately

$8.7 million in cash shortly following the closing of the Business Combination, and as of March 31, 2024, it had $2.1 million in

cash and cash equivalent.

The outflow of cash since the closing is primarily attributed to payments of transaction expenses related to

the Business Combination.

In addition, pursuant to the FPAs entered in connection with the closing of the Business Combination, at the

end of the contract period of one year under the FPAs, we may be required to pay the maturity consideration (approximately up to $8 million

in cash or a number of Class A ordinary shares valued at $2.50 per share, at the option of the FPA holders) in respect of the FPA Shares

held by the FPA holders.

We may not have sufficient cash from operations or cash reserves to pay the maturity consideration in the event

the FPA holders elect to receive the maturity consideration in cash.

Therefore, we may need to rely on our available debt

capacity to pay some or all of the maturity consideration.

Payment of the maturity consideration in cash would reduce the amount of cash

on hand or available debt capacity to fund our operations, which could adversely affect our ability to make necessary investments, and,

therefore, could affect our results of operations.

The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

However, certain conditions as listed below raise substantial doubt about the Company’s ability to continue as a going concern for this period:

For the year ended March 31, 2025, the Company reported a net loss of $21.6 million.

As of March 31, 2025, the Company had a working capital deficit of $11.1 million, primarily due to current liabilities related to the FPAs entered into on November 3, 2023, and November 5, 2023.

These FPAs were liquidity arrangements entered into as part of the Business Combination consummated as of November 6, 2023.

Under these liquidity arrangements, certain investors agreed not to redeem their holdings in WWAC in exchange for the Company entering into the FPAs.

This step was taken to address the agreed minimum cash requirement with WWAC as of the closing date of the Business Combination, which WWAC was unable to meet without this financing.

Pursuant to the FPAs, the Company is obligated to pay a maturity consideration of $8 million at the end of the one-year term plus extension (if any), agreed with certain FPA holders.

The maturity consideration may be settled either in cash or equity at the option of the FPA holders.

As of the date of this Form 10-K report, the remaining balance owed to the FPA holders is $5 million.

We do not have sufficient cash from operations or cash reserves to pay the maturity consideration in cash.

Paying the maturity consideration in cash would reduce the amount of cash on hand or available debt capacity to fund our operations, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations.

Additionally, during the year ended March 31, 2025, the Company has recognized a $9.5 million write off of receivables pertaining to our business.

There is a heightened risk of non-collection, leading the Company to also to record an allowance for doubtful accounts of approximately $3.6 million, compared to $1.3 million in the previous year.

The Company received a non-renewal notice from a significant customer related to its dedicated offshore operations managed by the Company, which is expected to result in an annual revenue loss of approximately $11.5 million.

Our working capital needs are primarily to finance our payroll and other administrative and information technology expenses in advance of the receipt of accounts receivable, as well as increased expenses due to being a public reporting company.

Our primary capital requirements include expanding existing operations to support our growth, financing acquisitions and enhancing capabilities, including building certain digital solutions.

The Company has historically

financed its operations and expansions with cash generated from operations, the revolving credit facility from Kotak Mahindra Bank, and

loans from related parties.

As of March 31, 2024, the Company had $2.1 million in cash and cash equivalents, and the Company also generated

overall positive cash flows for the year ended March 31, 2024.

Management expects to have sufficient cash from the operations, cash reserves

and debt capacity for the next 12 months and for the foreseeable future to finance our operations, our growth and expansion plans.

addition, we may attempt to raise additional funds through public or private debt or equity financing.

In April 2024, we received net

proceeds of $4.68 million by selling 2,261,778 newly issued Class A ordinary shares in a private placement at a purchase price of $2.21

We are in ongoing negotiations with relevant parties to potentially restructure certain of our current liabilities into equity

or long-term liabilities.

However, there is no guarantee that these measures will achieve the desired objectives, and these is no assurance

that we may raise additional financing on terms acceptable to us or at all.

The Company has historically financed its operations and expansions primarily with cash generated from operations and the revolving credit facility from Kotak Mahindra Bank.

As of March 31, 2025, the Company had a balance of $2.7 million in cash and cash equivalents and also generated overall positive cash flows for the year ended March 31, 2025.

Management expects to have sufficient cash from the operations, cash reserves and debt capacity for the next 12 months and for the foreseeable future to finance our operations, growth, expansion plans.

However, this expectation assumes that the FPA liabilities will not require immediate cash settlement.

If an immediate cash settlement is required for the remaining FPA liabilities, the Company may lack the necessary financial resources to sustain operations during this period.

The Company has undertaken or completed the following actions to improve its available cash balances, liquidity, and cash generated from operations:

The non-renewal of the customer contract requires a one-time buyout payment from the customer to us of approximately $3.0 million.

On November 6, 2024, the Company and one of the FPA holders, Meteora Capital Partners, LP (“Meteora”), which holds 250,000 shares under its FPA, agreed to settle the liability through the issuance of additional shares.

As a result the Company issued 57,811 Class A ordinary shares to Meteora during November 2024, settling the $625,000 maturity consideration liability with Meteora, leaving a remaining balance of $5 million owed to other FPA holders.

We are actively pursuing capital raising alternatives to pay the remaining balance due and exploring options with FPA holders to settle the remaining liabilities.

Targeted cost cutting measures have been instituted, focusing on non-core expenses including those related to inorganic growth strategy, such as reductions in the use of outside vendors and professional services, as well as selective headcount and salary reductions, which are designed to improve our cash flow position without impacting core business operations.

The Company’s ability to continue as a going concern is dependent upon, among other things, successfully executing its mitigation plan, which includes (i) raising additional funds from existing or new credit facilities, (ii) raising equity or equity linked capital, (iii) restructuring current liabilities into equity or long-term obligations, and (iv) further reducing non-core expenses with a renewed focus on organic growth in the core geography we historically operate in, which is North America.

The Company is hopeful of accomplishing its objectives through these measures in the anticipated time frame and also expects that the funds available through the above-mentioned arrangements will be sufficient to alleviate the doubts about the Company’s ability to continue as a going concern.

However, there is no guarantee of the success of these efforts.

Cash Flow for the year ended March 31, 2025 and 2024

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Cash at the beginning of period

Net cash provided by operating activities

Net cash used in operating activities

Net cash used in investing activities

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Cash at the end of period

Operating Activities

Net cash provided by operating

activities for the year ended March 31, 2024, decreased by $6.4 million compared to the prior year.

The decline was primarily driven

by an increase of accounts receivable by $5.6 million.

The Net income for the year

ended March 31, 2024, increased by $15.6 million as compared to the prior year, which was offset mainly due to adjustment of $14.8 million

decrease due to the change in fair value of the FPA put option liability and $1.4 million decrease due to the change in fair value

of derivative warrant liabilities for the year ended March 31, 2024.

Investing Activities

Net cash used in investing activities during the year ended March 31, 2024, was $1.7 million, of which $1.5 million was used for the purchase of property and equipment and $2.3 million was used for the issuance of loans to affiliates, offset by $2.1 million generated from loan repayments received from affiliates.

Analysis of Cash Flow Changes between the years ended March 31, 2025 and 2024

Operating Activities - There is a $3.3 million decrease in net cash used in operating activities for the year ended March 31, 2025 as compared to the year ended March 31, 2024.

The overall decrease was primarily attributable to adjustments related to change in fair value of derivative warrant liabilities, FPA put option liability, stock-based compensation expense, sundry balances written off, provision for expected credit loss and gain on settlement of forward purchase agreement put option liability by $31.9 million and by a $10.2 million increase in cash flow from better working capital management.

This decrease is partially offset by an increase in net loss by $38.9 million.

Investing Activities - Net cash used in investing activities during the year ended March 31, 2025 was $0.9 million, of which $1.5 million was used for the purchase of property and equipment and $1.4 million was used for the issuance of loans to affiliates, offset by $1.8 million generated from loan repayments received from affiliates and $0.2 million received from sale of property and equipment.

Financing Activities

Financing Activities - Net cash provided by financing activities during the year ended March 31, 2025 was $2.4 million, primarily from proceeds of the PIPE transaction of $4.7 million, and proceeds from long-term debt of $1.5 million;

offset by the repayment of long term debt of $1.8 million and short-term debt of $0.4 million, payments for purchase of treasury shares of $0.7 million., payment of insurance financing liability of $0.5 million and payment of finance lease obligation of $0.3 million.

Net cash provided by financing activities during the year ended March 31, 2024, was $7.1 million, primarily from proceeds from the Business Combination of $8.7 million, the net proceeds from short-term debt of $2.6 million and proceeds from long-term debt of $0.9 million;

offset by the repayment of long-term debt of $0.4 million, payment of deferred transaction costs of $2.3 million, payment of promissory note liability of $1.5 million, payment of insurance financing liability of $0.4 million and payment of finance lease obligation of $0.4 million.

Net cash provided by financing activities during the year ended March 31, 2023, was $0.3 million, primarily from net proceeds from short term borrowings of $1.2 million, proceeds from long-term debt of $0.4 million;

partially offset by payment of deferred transaction costs of $0.8 million, payment of finance lease obligations of $0.4 million and repayment of long-term debt of $0.2 million.

Off-Balance Sheet Arrangements

As of March 31, 2024 and currently, we do not have any material off-balance sheet arrangements.

As of March 31, 2025 and currently, we do not have any material off-balance sheet arrangements, other than as disclosed in “Commitments and Contingencies” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

New Accounting Pronouncements

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The following is a summary of the basis of preparation and significant accounting policies which have been applied in the preparation of the accompanying consolidated financial statements.

The accounting policies have been applied consistently in the preparation of these consolidated financial statements.

A full description of significant accounting policies is provided in our consolidated financial statements for the fiscal years ended March 31, 2024 and 2023.

The accounting policies have been applied consistently in preparation of these consolidated financial statements.

A full description of significant accounting policies is provided in our consolidated carve-out financial statements for the fiscal years ended March 31, 2025 and 2024.

Critical Accounting Policies and Management Estimates

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A thorough understanding of these critical accounting policies is essential when reviewing our consolidated financial statements.

We believe that the critical accounting policies listed below involve the most difficult management decisions because they require the use of significant estimates and assumptions as described above.

We believe the current assumptions, judgments and estimates used to determine amounts reflected in our consolidated financial statements are appropriate;

however, actual results may differ under different conditions.

This discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included in this document.

Please see Note 2 to our consolidated financial statements included elsewhere in this Annual Report for the complete list of significant accounting policies and estimates.

Forward Purchase Agreement

On November 3, 2023 and November 5, 2023, WWAC entered into Forward Purchase Agreements (the “FPAs”) with Sandia Investment Management LP, Sea Otter Trading, LLC, YA II PN, Ltd and Meteora Capital Partners, LP (collectively known as “FPA holders”) for an OTC Equity Prepaid Forward Transaction.

On November 3, 2023 and November 5, 2023, WWAC entered into Forward Purchase Agreements (the “FPAs”) with Sandia Investment Management LP (“Sandia”), Sea Otter Trading, LLC, YA II PN, Ltd and Meteora Capital Partners, LP (“Meteora” and collectively, the “FPA holders”) for an OTC Equity Prepaid Forward Transaction.

Subscription Agreements (the “Subscription Agreements”) were also executed alongside the FPA for subscription of the underlying FPA shares by the FPA holders either through a new issuance or purchase of shares from existing holders (“Recycled Shares”).

The FPAs and Subscription Agreements have been accounted for separately as discussed subsequently.

The FPAs stipulate a new issuance of 3,711,667 Class A ordinary shares to the FPA holders at the redemption price (i.e., $10.69 per share) and purchase of 288,333 Recycled Shares through redemption reversals.

The amount to be received by the Company from the FPA holders on such issuance of approximately 3,711,667 shares is held with the FPA holders as prepaid with respect to the forward transaction.

Pursuant to the FPA, the Company was obligated to pay a prepayment amount of $42.8 million which was settled as below:

$39.7 million against the consideration receivable by the Company for a new issuance of class A ordinary shares to the FPA holders;

$3.1 million representing the cash paid by the Company to the FPA holders to fund the purchase price of the Recycled Shares.

At the end of the contract period of one year, for each unsold share held by the FPA holders, the Company is obligated to pay the FPA holders an amount of $2 in cash or a variable number of the Company’s Class A ordinary shares in order to provide a return of $2.5 per FPA share determined based on the 30-day VWAP of the Company’s Class A ordinary shares (“Maturity Consideration”).

The FPA holders have the option to select the form of Maturity Consideration.

The Optional Termination Right held by the FPA holders economically results in the prepaid forward contract being akin to a written put option with the purchaser’s right to sell all or a portion of the 4,000,000 Class A ordinary shares to the Company.

The Company is entitled over the 12-month maturity period to either a return of the prepayment or the underlying shares, which the FPA holders will determine at their sole discretion depending on the movement in the Company’s share price.

The FPAs consist of two freestanding financial instruments that are accounted for as follows:

The total prepayment of $42.8 million (“Prepayment Amount”) which includes a net cash outflow of $3.1 million as discussed above.

The Prepayment Amount has been accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net repurchase of the Recycled Shares and sale of newly issued shares to the FPA holders pursuant to a subscription agreement without receipt of the underlying consideration of $39.7 million.

The “FPA Put Option” includes both the in-substance written put option and the expected Maturity Consideration.

The FPA Put Option is a derivative instrument that the Company has recorded as a liability and measured at fair value in accordance with ASC 480-10.

The instrument is subject to remeasurement at each balance sheet date, with changes in fair value recognized in the consolidated statements of operations.

The initial fair value of the FPA put option liability at the Closing Date was $25.0 million, and the fair value as on March 31, 2024 was $42.3 million, which is reported as a FPA put option liability in our consolidated balance sheet.

The change in the fair value of the FPA put option liability of $17.3 million for the year ended March 31, 2024 has been recorded to change in fair value of forward purchase agreement put option liability in the Company’s consolidated statements of operations.

On November 6, 2024, the Company reached an agreement with one of its FPA holders, Meteora, which holds 250,000 shares under its FPA, to settle the outstanding maturity consideration liability through the issuance of additional shares.

As a result, the Company issued 57,811 Class A ordinary shares to Meteora in November 2024.

The issuance of the shares has been conducted in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act, on the basis that Meteora is an accredited investor and the Company did not engage in any general solicitation in connection with such offer and sale.

On November 6, 2024, the maturity consideration for the FPA became due.

The agreement with Sandia was extended to January 5, 2025.

The maturity consideration was fulfilled with Meteora through shares.

The remaining funds have requested cash for their shares.

Some of their shares have been sold in the open market which reduces the amount owed.

Derivative Financial Instruments and FPA Put Option Liability

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Derivative liabilities are classified in the consolidated balance sheets as current or noncurrent based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Company and one of the FPA holders, namely Meteora Capital Partners LP (“Meteora”), which holds 250,000 shares under its

FPA, agreed to settle the liability through issuance of additional shares.

As a result, the Company issued 57,811 Class A ordinary shares

to Meteora during November 2024, settling the $0.6 million maturity consideration liability with Meteora, leaving a remaining balance

of $5.0 million owed to other FPA holders, which may be settled either in cash or in equity, at the option of the investors.

Fair Value Measurements

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If revenue recognized on a contract exceeds the billings, then the Company records an unbilled receivable for that excess amount, which is included as part of accounts receivable, net in the Company’s consolidated balance sheets.

Prior to the Company’s adoption of ASU 2016-13, Topic 326 Financial Instruments – Credit Losses (“Topic 326”), the accounts receivable balance was reduced by an allowance for doubtful accounts that was determined based on the Company’s assessment of the collectability of customer accounts.

Prior to the Company’s

adoption of ASU 2016-13, Topic 326 Financial Instruments – Credit Losses (“Topic 326”), the accounts receivable balance

was reduced by an allowance for doubtful accounts that was determined based on the Company’s assessment of the collectability of

customer accounts.

Under Topic 326, accounts receivable are recorded at the invoiced amount, net of allowance for credit losses.

The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors.

In establishing any required allowance, management considers historical losses adjusted for current market conditions, the current receivables aging, current payment terms and expectations of forward-looking loss estimates.

Allowance for credit losses was $1.2 million as of March 31, 2024 and allowance for doubtful accounts was $0 as of March 31, 2023, and is classified within “Accounts Receivable, net” in the consolidated balance sheets.

See “Recent accounting pronouncements adopted” section below for information pertaining to the adoption of Topic 326.

Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors.

In establishing any required

allowance, management considers historical losses adjusted for current market conditions, the current receivables aging, current payment

terms and expectations of forward-looking loss estimates.

Allowance for credit losses was $3.6 million as of March 31, 2025 and

$1.2 million as of March 31, 2024, and is classified within “Accounts Receivable, net” in the consolidated balance sheets.

The following tables provides details of the Company’s allowance for credit losses (in thousands):

Opening balance as of March 31, 2024

Transition period adjustment on accounts receivables (through retained earnings) pursuant to ASC 326

Adjusted balance as of April 1, 2023

Additions charged to cost and expense

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Revenue recognition

We account for revenue in

accordance with ASC 606, Revenue from Contracts with Customers (ASC 606).

A performance obligation is a promise in a contract to transfer

a distinct good or service to the customer, and is the unit of account in ASC 606.

Revenue is measured as the amount of consideration

we expect to receive in exchange for transferring goods or providing services.

The contract transaction price is allocated to each distinct

performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

All of our material sources of

revenue are derived from contracts with customers.

Refer to Note 2 - Summary of Significant Accounting Policies to the consolidated financial

statements included in this Annual Report for additional information regarding our revenue recognition policy.

We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606).

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

All of our material sources of revenue are derived from contracts with customers.

Refer to Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included in this Annual Report for additional information regarding our revenue recognition policy.

Internal Use Software Costs

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are primarily related to salaries and other personnel costs.

Costs incurred in the preliminary stages of development are expensed as incurred.

Once the application development stage has been reached, internal and external costs, if direct and incremental, are capitalized until

the software is substantially complete and ready for its intended use.

Capitalization ceases upon completion of all substantial testing.

Costs incurred in the preliminary stages of development are expensed as

Once the application development stage has been reached, internal and external costs, if direct and incremental, are capitalized

until the software is substantially complete and ready for its intended use.

Capitalization ceases upon completion of all substantial

Maintenance and training costs are expensed as incurred.

Refer to Note 2 - Summary of Significant Accounting Policies to the consolidated

financial statements included in this Annual Report for additional information regarding this policy.

The Company charged impairment loss of $1.7 million and $0 during the

years ended March 31, 2025 and 2024 in “Selling, general and administrative expenses” on the consolidated statements

of operations.

Refer to Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included in this

Annual Report for additional information regarding this policy.

Employee Benefit Plan

The Company provides for a

gratuity obligation through a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees in India under

Payments of Gratuity Act, 1972.

The cost of providing benefits under this plan is determined based on actuarial valuation at each year

The Company provides for a gratuity obligation through a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees in India under Payments of Gratuity Act, 1972.

The cost of providing benefits under this plan is determined based on actuarial valuation at each year end.

Actuarial valuation is carried out for gratuity using the projected unit credit method.

The Company reviews its assumptions on an

annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so.

Refer to Note

2 - Summary of Significant Accounting Policies to the consolidated financial statements included in this Annual Report for additional

information regarding this policy.

The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so.

Refer to Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements included in this Annual Report for additional information regarding this policy.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis