Aeries Technology, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You 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. 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. 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 on Form 10-K. 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. Unless 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. Overview Aeries Technology is a global professional services and technology consulting firm that provides specialized expertise to private equity firms’ portfolio companies and middle-market, technology-enabled enterprises. We focus on the strategic planning, establishment, and operational management of Global Capability Centers (“GCCs”), which serve as offshore and nearshore operational hubs that extend and enhance our clients’ business capabilities. Our service portfolio combines industry-specific expertise, functional depth, and digital technology solutions to deliver comprehensive support throughout the GCC journey, from strategic planning and center establishment to continuous operational oversight. By integrating artificial intelligence (“AI”), process optimization, and strategic talent acquisition in cost-advantaged regions, we help our clients significantly reduce costs. Drawing on more than a decade of industry experience, we deliver business solutions that improve operational effectiveness, drive innovation, and accelerate strategic growth, creating measurable value for our clients. Our approach is specifically engineered to enable clients to realize tangible business benefits—accelerating revenue expansion through enhanced innovation capabilities and superior customer experiences, while simultaneously improving operational efficiency via streamlined cost structures and scalable service delivery models. GCCs developed by Aeries serve as strategic enablement platforms that help clients integrate and use advanced technologies, including AI, advanced analytics, and modern enterprise systems and methodologies. Clients retain comprehensive strategic control and operational governance, and they can adjust GCC ownership frameworks as organizational requirements change. Our integrated service delivery model positions Aeries to drive organizational change, helping enterprises speed up decision-making, improve customer service, and build sustainable competitive advantages. We help our clients expand globally by providing professional advisory and operations management services to establish and manage GCCs in strategically selected, cost-effective geographic locations that align with their operational requirements. Emphasizing digital enterprise transformation, these GCCs are architected to function as integrated extensions of client organizations, delivering access to exceptional talent and specialized capabilities. We believe this model helps our clients maintain competitive positioning and organizational agility, achieve sustainable cost optimization, operational excellence, and value-creation objectives, all without compromising functional authority or operational flexibility. 52 Our advisory practice encompasses direct engagement from senior leadership, delivering strategic guidance and industry best practices across operating model architecture and comprehensive organizational consulting. This includes end-to-end support spanning the GCC lifecycle, encompassing initial strategic planning, operating model design, and ongoing delivery framework optimization; talent market analysis; resource availability assessment for specialized roles within the proposed service framework; regulatory compliance management; tax structure optimization; and additional strategic considerations. Clients can tailor service configurations based on our recommendations and options, after which we collaborate to finalize and execute implementation strategies. A core part of our service offering focuses on AI and digital transformation. The Company has developed A1 GCC, a proprietary technology platform engineered to facilitate the planning, execution, and operational management of GCC initiatives. With advanced automation, data analytics, and the integration of artificial intelligence, we innovate and streamline operations. Our technology services are designed to improve decision-making, automate operational workflows, and deliver measurable business impact. We believe this technology-enabled GCC approach enhances operational effectiveness, enabling us to provide digital transformation services that support our clients’ growth objectives and strengthen their competitive positioning in a rapidly evolving digital marketplace. Our clients leverage our services for comprehensive organizational operations management, encompassing application engineering, information technology systems, data analytics and business intelligence, cybersecurity, finance and accounting, human resources, and customer service operations. We recruit and employ qualified professionals, place them on our payroll, and deploy them strategically across client operations. We work closely with clients to identify the best candidates and integrate with their organizational structures. Our talent professionals serve as operational extensions of client teams, and Aeries retains responsibility for career development, recognition programs, and advancement opportunities, which we believe contribute to stronger employee engagement and lower voluntary turnover. We oversee regulatory compliance, tax administration, talent acquisition, human resources management, and brand alignment for each GCC we establish. Our business model is designed to build a more agile, cost-efficient talent deployment framework for client operations and to promote innovation through strategic alignment at the executive level and comprehensive organizational visibility. This model provides clients with protection against regulatory and tax complexities while offering operational flexibility to scale teams in response to evolving business demands. We use proven methodologies and success frameworks, drawing on insights from successful engagements across multiple client organizations, to address the fundamental limitations of traditional outsourcing and offshoring approaches. As of March 31, 2026, Aeries had more than 40 clients spanning across industry segments, including companies in the industries of e-commerce, telecom, security, healthcare, engineering and others. Key Factors Affecting Performance and Comparability Market Opportunity Our primary market focus centers on North America, particularly within the private equity ecosystem and mid-market enterprise segments. Companies 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 journey. Aeries’ model is designed to deliver this experience, expertise and transparent engagement approach to accelerate and enhance our clients’ business. 53 Private Markets As 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. 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, 2026, 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. 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. Income Taxes We 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. Currently, the Company is liable to pay income tax in India, Mexico, Singapore, and the United States. In India, 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 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. 54 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. As of March 31, 2026, the Company had a revolving credit facility with Kotak Mahindra Bank of INR 320 million (or approximately $3.4 million at the exchange rate in effect on March 31, 2026). The revolving facility is available for Aeries’ operational requirements. The interest rate is equal to the 3-months Repo Rate plus a margin of 3.90% and 6 months Marginal Cost of Funds based Lending Rate (“MCLR”) plus a margin of 0.80% as of March 31, 2026 and March 31, 2025, 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 Repo rate and the interest rate charged by the bank will affect the financing cost basis and the overall cost of borrowing. Aeries also has an outstanding unsecured loan from director of Aeries Technology Group Business Accelerators Pvt Ltd. (“ATGBA” or “ATG”), Mr. Vaibhav Rao, amounting to $0.7 million at an interest rate of 12% per annum. The principal amount of the loan was outstanding in entirety as of and for the years ended March 31, 2026 and March 31, 2025. On 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, 2026) at 10.75% from Mercedes-Benz Financial Services India Pvt. Ltd. The Company is required to repay the loan in 48 monthly instalments beginning January 4, 2023. On 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, 2026) at 10.25% from Mercedes-Benz Financial Services India Pvt. Ltd. The Company is required to repay the loan in 48 monthly instalments beginning September 4, 2024. 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. For information about the risks we face, see “ Risk Factors .” Results of Operations Overview 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 customer location. Substantially all of the revenue in our North America region relates to business with customers in the United States. Year Ended March 31, 2026 2025 North America $ 62,873 $ 65,486 Asia Pacific and Other 7,141 4,712 Total revenue $ 70,014 $ 70,198 Our revenues were primarily earned in U.S. dollars. Our costs were primarily incurred in Indian rupees, U.S. dollars and Mexican pesos. We bear a substantial portion of the risk of inflation and fluctuations in currency exchange rates, and therefore our operating results could be negatively affected by adverse changes in inflation rates and foreign currency exchange rates. 55 Comparison of the Year Ended March 31, 2026 and March 31, 2025 The following table presents selected financial data for the year ended March 31, 2026, and 2025 (in thousands, except percentages): Year Ended March 31, 2026 2025 $ Change % Change Revenues, net $ 70,014 $ 70,198 $ (184 ) (0 )% Cost of Revenue 52,715 53,478 763 1 % Gross Profit $ 17,299 $ 16,720 $ 579 3 % Gross Profit Margin 25 % 24 % Operating expenses Selling, general & administrative expenses 12,781 45,490 32,709 72 % Total operating expenses $ 12,781 $ 45,490 $ 32,709 72 % Income / (loss) from operations $ 4,518 $ (28,770 ) $ 33,288 116 % Other income / (expense) Change in fair value of forward purchase agreement put option liability (51 ) 4,585 (4,636 ) (101 )% Change in fair value of derivative warrant liabilities 208 738 (530 ) (72 )% Gain on settlement of forward purchase agreement put option liability - 581 (581 ) (100 )% Interest income 318 326 (8 ) (2 )% Interest expense (463 ) (751 ) 288 38 % Other income, net 935 624 311 50 % Total other income / (expense), net 947 6,103 (5,156 ) (84 )% Income / (Loss) before income taxes 5,465 (22,667 ) 28,132 124 % Income tax (expenses) / benefit (1,991 ) 1,072 (3,063 ) (286 )% Net income / (loss) $ 3,474 $ (21,595 ) $ 25,069 116 % Less: Net income / (loss)attributable noncontrolling interest 278 (1,163 ) 1,441 124 % Less: Net income / (loss) attributable to redeemable noncontrolling interests 642 (718 ) 1,360 189 % Net income / (loss) attributable to the shareholders of Aeries Technology, Inc. $ 2,554 $ (19,714 ) $ 22,268 113 % Revenue, net For the year ended March 31, 2026, our revenue on a consolidated basis decreased by $0.18 million, or 0%, to $70.01 million from $70.20 million for the year ended March 31, 2025. We experienced a revenue reduction of $20.23 million due to the ramp-down of existing client engagements and the completion or closure of certain consulting projects. This decline was partially offset by an $18.46 million increase related to new client additions and higher business volumes from existing clients, along with $1.95 million of one-time revenue related to buy-out fees. Cost of Revenue For the year ended March 31, 2026, our cost of revenue decreased by $0.76 million, or 1%, to $52.72 million from $53.48 million for the year ended March 31, 2025. The reduction was primarily driven by a $0.98 million decrease in employee compensation and benefits, and a $0.85 million decrease in depreciation, repairs and maintenance expenses, fees paid to external consultants and reduction in general insurance. These reductions were partially offset by a $1.07 million increase in rent, recruitment expenses, and other administrative costs associated with new client acquisitions. 56 Gross Profit For the year ended March 31, 2026, our gross profit increased by $0.58 million, or 3%, compared to the year ended March 31, 2025. The higher gross profit was primarily due slightly lower revenue of $0.18 million, as compared to a significant decrease of $0.76 million in cost of revenues, mainly driven by lower employee compensation costs. Gross Profit Margin For the year ended March 31, 2026, our gross profit margin increased by 100 basis points compared to the year ended March 31, 2025. The margin improvement was supported by a reduction in cost of revenues, mainly due to lower employee compensation costs. Selling, general and administrative expenses Selling, general and administrative expenses decreased by $32.71 million, or 72% to $12.78 million for the year ended March 31, 2026, compared to $45.49 million for the year ended March 31, 2025. This significant decrease was primarily driven by a $12.45 million decrease in stock-based compensation related expense, $7.62 million decrease in the write-off of accounts receivable, $4.91 million decrease in professional fees, $4.26 million on account of higher expected credit loss provisioning in the comparative period, $1.69 million reduction in impairment loss recorded on software and computer equipment and intangible asset under development, reduction in employee benefits costs of $1.00 million and a $0.78 million decrease in rates and taxes and other administrative expenses. Total Other Income (expense), net Total other income / (expense), net, was $0.95 million for the year ended March 31, 2026, compared to $6.10 million for the year ended March 31, 2025, a decrease of $5.16 million, or 84%. The decline of $5.75 million in income is attributed to a change in the fair value of the forward purchase agreement put option liability and warrant liabilities and $1.00 million on account of write-off of other receivables. The above is offset by an increase of $1.30 million on account of write-back of sundry balances and net foreign exchange gain along with reduction in interest expense by $0.29 million during the current period. Income tax benefit / (expenses) The income tax expense for the year ended March 31, 2026 was $1.99 million, a $3.06 million or 286% decrease compared to the income tax benefit of $1.07 million for the year ended March 31, 2025. For the year ended March 31, 2026, the effective tax rate of 36.4% increased primarily due to the non-recognition of deferred tax benefits on losses incurred in certain lower-tax jurisdictions. In contrast, during the year ended March 31, 2025 where the effective tax rate was 4.7%, such benefits were recognized, resulting in a comparatively lower effective tax rate. Non-GAAP Financial Measures We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency on how we evaluate the business. We use non-GAAP financial measures to budget, make operating and strategic decisions, and evaluate our performance. 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 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. We have provided the reconciliations between the US GAAP and non-GAAP financial measures below, and we also discuss our underlying US GAAP results throughout the Management’s Discussion and Analysis of Financial Condition and Results of Operations section. 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 GAAP financial measures, and not to rely on any single financial measure to evaluate our business. 57 Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization, further adjusted to exclude stock-based compensation, business combination-related costs, impairment, severance pay and changes in fair value of derivative liabilities. Adjusted EBITDA is a key performance indicator that we use to evaluate our operating performance and in making financial, operating, and planning decisions. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the reporting period. We believe these non-GAAP measures are useful insight to investors by offering a clearer view of Aeries’ operating performance. This information has been used by our management for internal reporting and planning procedures, including aspects of our consolidated operating budget and capital expenditure planning. The following table provides a reconciliation from net income / (loss) (US GAAP measure) to Adjusted EBITDA, and Adjusted EBITDA margin for the year ended March 31, 2026, and 2025 (in thousands): Year Ended March 31, 2026 2025 Net income / (loss) $ 3,474 $ (21,595 ) Income tax expense / (benefit) 1,991 (1,072 ) Interest income (318 ) (326 ) Interest expense 463 751 Depreciation and amortization 837 1,384 Impairment loss - 1,693 EBITDA $ 6,447 $ (19,165 ) Adjustments (+) Stock-based compensation 293 12,746 (+) Business Combination and M&A transaction related costs 1,000 6,993 (+) Severance Pay 728 678 (-) Change in fair value of derivative liabilities (157 ) (5,323 ) (-) Gain on settlement of forward purchase agreement put option liability - (581 ) Adjusted EBITDA $ 8,311 $ (4,652 ) Revenue 70,014 70,198 Adjusted EBITDA margin [Adjusted EBITDA / Revenue] 11.9 % (6.6 )% 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, 2026, and Business Combination related costs for the year ended related March 31, 2025, and (ix) change in fair value of derivative liabilities and FPA put option liabilities. 58 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. However, certain conditions as listed below raise substantial doubt about the Company’s ability to continue as a going concern for this period: ● As of March 31, 2026, the Company had a working capital deficit of $6.8 million, primarily due to current liabilities related to the Forward Purchase Agreements (“FPAs”) of $4.3 million (as defined below), short term borrowings of $4.4 million and remaining due to other current liabilities such as accrued compensation benefits and other accruals. 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. As of the date of this Form 10-K report, the remaining balance owed to the FPA holders is approximately $4.3 million. The maturity consideration maybe settled either in cash or equity at the option of the FPA holders. 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. Sandia Investment Management LP (“Sandia”), one of the FPA holders agreed to the revised terms where the remaining liability will be settled by adjusting the proceeds from FPA share sales, either via cash or additional share issuance. Further, pursuant to Amendment No. 2 dated January 22, 2026 (Amendment No. 2”) to the Letter Agreement with Sandia dated September 16, 2025 (the “Letter Agreement”) commencing March 2026, the Company will make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No, 2. The outstanding amount will be subject to 15% per annum interest calculated monthly. ● Additionally, during the year ended March 31, 2026, the Company has recognized a $1.9 million write off of receivables pertaining to our business. The Company identified the risk of non-collection, leading the Company to also to record an allowance for doubtful accounts of approximately $1.3 million, compared to $3.6 million as of March 31, 2025. ● The Company received a notice, dated April 29, 2025, of non-renewal and buyout from one of its significant customers effective September 26, 2025. The non-renewal is expected to result in an annual revenues loss of approximately $4.0 million. The Company has also, subsequent to the reporting period end, received a non-renewal notice on April 24, 2026, effective from June 30, 2026 from a significant customer, expected to result in an annual revenue loss of approximately $5.7 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 primarily with cash generated from operations and the revolving credit facility from Kotak Mahindra Bank. As of March 31, 2026, the Company had a balance of $4.9 million in cash and cash equivalents and also generated overall positive cash flows for the year ended March 31, 2026. 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. 59 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 $1.65 million and $2.7 million. ● The Company and one of the FPA holders, Meteora Capital Partners LP (“Meteora”), have settled the liability through the issuance of shares, and no further amount is owed to Meteora. Other FPA holders have sold their shares and the liabilities towards them have been fixed and the aggregate outstanding liability under all FPAs is valued at $4.3 million as of March 31, 2026. The Company is actively pursuing capital raising alternatives to pay the remaining balance due with other FPA holders. ● 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. Management’s plans to address these challenges include (i) raising additional funds through existing or new credit facilities, (ii) raising equity or equity-linked capital, (iii) restructuring current liabilities into equity or long-term obligations, (iv) further negotiating for waivers from vendors, and (v) further reducing non-core expenses with a renewed focus on organic growth in the core geography we historically operate in, which is North America. There is no guarantee that these measures will be successful or that additional funding will be available on acceptable terms. Any future equity financing could significantly dilute existing shareholders’ ownership. Moreover, we have generated positive operating cashflow of $6.8 million for the year ending March 31, 2026 and our future profitability depends on our ability to generate revenue in excess of our expenses, including costs relating to the maintenance of our business and debt service requirements. 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. On October 1, 2025, the Company entered into an “at-the-market” sales agreement (the “ATM Sales Agreement”) and filed a shelf registration statement on Form S-3 and corresponding prospectus supplement with the SEC to permit sales under the ATM Sales Agreement. As of the date of this Report, the Company has not sold any shares under the ATM Sales Agreement. Cash Flow for the year ended March 31, 2026 and 2025 The following table presents net cash provided by operating activities, investing activities and financing activities for the year ended March 31, 2026, and 2025 (in thousands): Year Ended March 31, 2026 2025 $ Change Cash at the beginning of period $ 2,764 $ 2,084 $ 680 Net cash provided by / (used in) operating activities 6,772 (1,009 ) 7,781 Net cash used in investing activities (1,418 ) (858 ) (560 ) Net cash (used in) / provided by financing activities (3,017 ) 2,432 (5,449 ) Effects of exchange rates on cash (223 ) 115 (338 ) Cash at the end of period $ 4,878 $ 2,764 $ 2,114 60 Analysis of Cash Flow Changes between the years ended March 31, 2026 and 2025 Operating Activities - There is a $7.78 million increase in net cash provided by operating activities for the year ended March 31, 2026 as compared to the year ended March 31, 2025. The overall increase is primarily attributable to increase in net cash profitability by $6.57 million and improvement in working capital requirements of $1.21 million. Investing Activities - Net cash used in investing activities during the year ended March 31, 2026 was $1.42 million, of which $1.11 million was used for the purchase of property and equipment, $0.13 million loans was issued to affiliates, $0.61 million was placed as fixed deposit with banks and $0.01 million investment in wholly owned subsidiary. The outflows were offset by inflow from property and equipment of $0.09 million $0.11 million repayments received from loans to affiliates and $0.25 million proceeds from maturities of fixed deposits placed with banks. 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 - Net cash used in financing activities during the year ended March 31, 2026 was $3.02 million, primarily from net repayment of short-term borrowings of $1.83 million, payments for purchase of treasury shares of $0.58 million, payment of insurance financing liability of $0.16 million, repayment of long-term debt of $0.13 million, payment of finance lease obligation of $0.18 million, payment of FPA liabilities of $0.10 million and payment of deferred transaction costs of $0.04 million. 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. Off-Balance Sheet Arrangements As of March 31, 2026 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 See “Summary of Significant Accounting Policies”, in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Application of Significant Accounting Policies and Estimates General 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 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, 2026 and 2025. 61 Critical Accounting Policies and Management Estimates Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements included elsewhere in this Annual Report. The preparation of our consolidated financial statements in accordance with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Our critical accounting policies are those that materially affect our consolidated financial statements and involve difficult, subjective or complex judgments by management. A thorough understanding of these critical accounting policies is essential when reviewing our consolidated financial statements. 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 the FPA holders. 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. On November 6, 2024, the maturity consideration for the FPA became due. Consequently, 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, settling its maturity consideration liability with Meteora. 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 September 16, 2025, the Company entered into a Letter Agreement (the “Letter Agreement”) with Sandia, one if its FPA holders, with respect to the Sandia FPA. ● The Letter Agreement primarily (1) provides for sales of FPA shares held by Sandia to offset the Company’s payment obligations to Sandia under the Sandia FPA at a sales price not lower than $1.05 per share continuing through December 31, 2025 (the “Designated Period”), (2) provides for the issuance and registration of additional Class A ordinary shares (the “Additional Shares”) to Sandia in an amount equal to (a) the result of dividing (i) the remaining liability at the end of the Designated Period by (ii)the greater of (x) the 30-day volume-weighted average price per Class A ordinary share on the Nasdaq Capital Market for the 30 trading days immediately preceding the expiration of the Designated Period or (y) $1.00 per share, minus (b) the number of remaining FPA Shares held by Sandia at the end of the Designated Period, provided that the total number of the Additional Shares issued shall not be less than 500,000 Class A ordinary shares, and (3) clarifies the Company’s payment obligations under the FPA in the case of a Change in Control (as defined in the Letter Agreement) or the delisting of the Company’s Class A ordinary shares from the Nasdaq Capital Market. ● On December 30, 2025, 1,355,906 Additional Shares were issued to Sandia pursuant to the Letter Agreement. ● On December 31, 2025, the Company entered into “Amendment No. 1” to the Letter Agreement extending the Designated Period to January 9, 2026. 62 ● Further, on January 22, 2026, the Company and Sandia entered into “Amendment No. 2” to the Letter Agreement, pursuant to which the Company agreed, commencing March 2026, to make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No. 2. The outstanding amount will be subject to 15% per annum interest calculated monthly. The remaining FPA holders have sold their shares in the open market, reducing the amount they are owed and have requested cash for the outstanding balance. Derivative Financial Instruments and FPA Put Option Liability The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40 under which the Instruments (as defined below) do not meet the criteria for equity treatment and must be recorded as liabilities. The Company accounts for the FPA put option liability as a financial liability in accordance with the guidance in ASC 480-10. Warrants and FPA are collectively referred as the “Instruments”. The Instruments are subjected to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statement of operations. See Note 17 for further discussion of the pertinent terms of the warrants and Note 20 for further discussion of the methodology used to determine the value of the Instruments. A derivative financial instrument written by the Company which has been accounted for in accordance with the guidance contained in ASC 815-40 including subsequent re-measurement at fair value with the changes being recognized in Company’s condensed consolidated statement of operations. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value at inception and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. 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. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 – Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets but corroborated by market data. Level 3 – Unobservable inputs that are supported by little or no market activity and reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 63 Fair Value of Financial Instruments Except for the warrants and FPAs as described above, the fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (the “FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheets. Redeemable Noncontrolling Interest Redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to the Company. Such redeemable noncontrolling interest include exchange agreements with a call and a put option where the minority interest investors’ respective ordinary shares in ATG will be exchanged for Class A ordinary shares based on the exchange ratio as set out in the Exchange agreements. The exchange is subject to certain exchange conditions and cash redemption features which are outside of the Company’s control. The redeemable noncontrolling interest has initially been measured at the proportionate share in the net assets of the subsidiaries in accordance with ASC 805-40-30-3. Subsequently, the carrying value is adjusted with an allocation of the subsidiaries’ earnings based on ownership interest. Noncontrolling interest that has redemption features outside the Company’s control is accounted for as redeemable noncontrolling interest and is recorded as mezzanine equity and is reported between liabilities and shareholders’ equity / (deficit) in the consolidated balance sheets. Accounts receivable, net The Company records a receivable when an unconditional right to consideration exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. 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. Under ASC 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 $1.3 million as of March 31, 2026 and $3.6 million as of March 31, 2025, 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): Year Ended March 31, 2026 Opening balance as of March 31, 2025 $ 3,574 Additions charged to cost and expense (379 ) Write-off charged against the allowance (1,860 ) Closing balance as of March 31, 2026 $ 1,335 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. 64 Internal Use Software Costs The Company capitalizes certain costs related to internal use software acquired, modified, or developed related to the Company’s platform. These capitalized costs 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. Maintenance and training costs are expensed as incurred. The Company charged impairment loss of Nil and $1.7 million during the years ended March 31, 2026 and 2025 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 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. Effective November 21, 2025, the Government of India has consolidated multiple existing labour legislations into a unified framework comprising four labour codes collectively referred to as the new “Labour Codes”. The Labour Codes, among other things introduce changes, including a uniform definition of wages. These legislative changes have resulted in an increase in the projected benefit obligation, which has been recognized as prior service cost of $0.06 million in Consolidated Statements of Operations for the year ended March 31, 2026. Additionally, the Government of India is in the process of issuing rules and regulations and clarifying certain aspects of the Labor Codes. The issuance of rules and regulations, as well as the outcome of these clarifications, could impact our compensation and benefit expenses in India. 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. Item 7A. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, we are not required to provide this information. 65