What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 208 added, 125 removed, 324 unchanged (51% of the section changed)

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are focused on generating long-term, brand-right growth and improving profitability.

During the three months ended June 30, 2025, we

continued to scale our direct-to-consumer business, launched a new spring/summer capsule, and increased our annual style count from approximately

75 to over 200.

We also implemented a tiered pricing architecture across key categories to support value perception and drive margin

During the six months ended September 30, 2025,

we continued to scale our direct-to-consumer business, launched a new spring/summer capsule, opened a new European distribution hub in

the Netherlands as part our global logistics transformation, and increased our annual style count from approximately 75 to over 200.

We also implemented a tiered pricing architecture across key categories to support value perception and drive margin enhancement.

intend to grow our business over time by expanding our digital and retail footprint, diversifying our product portfolio, enhancing international

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to increase awareness, strengthen customer engagement, and support customer acquisition and retention.

July 21, 2025, the representative of the underwriters partially exercised the over-allotment option for an additional 313,128 shares

of the Company’s common stock, generating net proceeds of approximately $87, after deducting underwriting discounts and commissions

and estimated offering expenses.

July 21, 2025, in connection with the underwriters’ exercise of the over-allotment option, the Company additionally issued the

representative of the underwriters a warrant to purchase up to 15,656 shares of the Company common stock at an exercise price of $0.38

(the “July 2025 Warrant”).

The July 2025 Warrant is exercisable beginning on the date of issuance and expires five years

October 2025, we entered into an equity purchase agreement (the “ELOC”), whereby we have the right, but not the obligation,

to direct an investor to purchase up to $25,000 of our common stock (the “Put Shares”).

The ELOC will not become effective

until it has received approval from our shareholders and our board of directors.

October 2025, we amended the First August 2025 Related Party Note extending the maturity date from November 8, 2025 to March 9, 2026.

Comparability

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of Operations

following table sets forth our results of operations for the:

of goods sold

following tables set forth our results of operations for the:

Three months ended

September 30, 2025

Three months ended

September 30, 2024

Cost of goods sold

Gross margin (1)

general and administrative expenses

and advertising expenses

Operating expenses:

other (expense) income, net

Other comprehensive

currency translation losses

Comprehensive

Selling, general and administrative expenses

Marketing and advertising expenses

Total operating expenses

Loss from operations

Total other (expense) income, net

Other comprehensive losses

Foreign currency translation losses

Comprehensive loss

Six months ended

September 30, 2025

Six months ended

September 30, 2024

Cost of goods sold

Gross margin (1)

Operating expenses:

Selling, general and administrative expenses

Marketing and advertising expenses

Total operating expenses

Loss from operations

Total other (expense) income, net

Other comprehensive losses

Foreign currency translation losses

Comprehensive loss

margin is defined as gross profit as a percentage of revenue, net

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We believe that these measures are useful for period-to-period comparisons of the Company’s

We have included these non-GAAP financial measures in this Quarterly Report because they are key measures management uses to

evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating

to operating expenses and the allocation of our resources.

Accordingly, we believe that these measures provide useful information to

investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

We have included these non-GAAP financial measures in this Quarterly Report because they are key measures management uses

to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those

relating to operating expenses and the allocation of our resources.

Accordingly, we believe that these measures provide useful information

to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

Three months ended September 30,

Six months ended September 30,

Net loss, as reported

compensation expense

of stock-based services

and amortization

Interest expense

Stock compensation expense

Amortization of stock-based marketing services

Depreciation and amortization

Total EBITDA adjustments

Adjusted EBITDA

EBITDA is a non-GAAP financial measure that displays our net loss from continuing operations, adjusted to eliminate the effect of certain

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and in communications with our board of directors concerning our financial performance.

The $331 improvement in

Adjusted EBITDA for the three months ended June 30, 2025 compared to the same period in 2024 was primarily driven by a $533 increase

in gross profit, reflecting higher revenue and an increase in gross margin from 36.6% to 60.3%.

The margin expansion was largely attributed

to the contribution from our partnership revenue stream, which had not been in effect during the three months ended June 30, 2024,

as well as improved channel and product mix.

Selling, general and administrative

(SG&A) expenses increased $117 during the quarter, with key drivers including the $199 amortization of stock-based services, increased

legal and professional fees in connection with public company fundraising efforts, higher payroll and related costs to support operational

expansion, and incremental spending across key areas such as IT, insurance, travel, and retail operations.

While these investments contributed

to higher SG&A, they were necessary to support the Company’s transition and strategic objectives for growth.

Additionally,

a $76 increase in marketing and advertising expense, primarily from agency fees and promotional activities, further supported brand awareness

and sales efforts.

The improvement in Adjusted

EBITDA demonstrates operating leverage on higher revenue and margin despite ongoing investments in infrastructure and brand development.

$1,205 improvement in adjusted EBITDA for the three months ended September 30, 2025, compared to the same period in 2024, was primarily

driven by a $791 increase in gross profit, reflecting higher revenue and an increase in gross margin from 54.0% to 60.1%.

expansion was largely attributable to the contribution from the partnership revenue stream, which was not in effect during the three

months ended June 30, 2024, as well as a more favorable channel and product mix.

In addition, continued

improvements in the Company’s logistics and supply chain operations, including enhanced warehouse efficiency and optimized shipping

routes, contributed to lower fulfillment costs and supported further gross margin improvement.

general and administrative (SG&A) expenses decreased by $286 during

the quarter compared to the prior-year period, reflecting continued cost discipline and reduced discretionary spending across most categories.

The decrease was primarily driven by a reduction in stock-based compensation expense following the restructuring of the Company’s

employee equity compensation program and the redundancy plan implemented in the fourth quarter of the prior fiscal year.

Partially offsetting

these savings were higher legal and professional fees associated with ongoing public company compliance and fundraising activities, as

well as costs to support operational expansion.

The Company also incurred incremental spending across key functional areas including information

technology, insurance, travel, and retail operations, which were necessary to support its transition and long-term growth initiatives.

Additionally, a $343 decrease

in marketing and advertising expense, primarily from agency fees and promotional activities, further supported brand awareness and sales

$1,531 improvement in adjusted EBITDA for the six months ended September 30, 2025 compared to the same period in 2024 was primarily driven

by a $1,321 increase in gross profit, reflecting higher revenue and an increase in gross margin from 50.5% to 60.2%.

The margin expansion

was largely attributed to the contribution from our partnership revenue stream, which had not been in effect during the six months ended

September 30, 2024, as well as improved channel and product mix.

general and administrative (SG&A) expenses decreased by $171 for the

six months ended September 30, 2025, primarily driven by lower stock-based compensation following the restructuring of the employee equity

program and prior-year redundancy actions.

These savings were partly offset by higher legal, professional, and payroll costs related to

public company activities and operational expansion.

The increase was more visible in the most recent quarter as new management initiatives

began to take effect, resulting in a more balanced expense profile for the six-month period.

Marketing and advertising expenses also decreased

by $267, mainly due to lower agency fees and promotional activity.

improvement in adjusted EBITDA demonstrates operating leverage on higher revenue and margin despite ongoing investments in infrastructure

and brand development.

financial measures have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related

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should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Total revenue for the three

months ended June 30, 2025 was $1,472, compared to $974 for the same period in 2024, an increase of $498, or 51.1%.

Growth was primarily

driven by contributions from new revenue streams, including collaboration revenue.

Wholesale and ecommerce channels also contributed

modest growth year-over-year.

The year-over-year increase

in revenue reflects the Company’s strategic efforts to diversify its sales channels and expand into new geographies while strengthening

brand presence through collaborations and flagship retail exposure.

revenue for the three months ended September 30, 2025 was $4,763, compared to $3,833 for the same period in 2024, an increase of $930,

or 24% and for the six months ended September 30, 2025 was $6,235, compared to $4,808 for the same period in 2024, an increase of $1,427,

Growth for both periods was primarily driven by contributions from the

new partnership channel, with additional improvement from the wholesale channel reflecting more favorable shipment timing compared to

the same period in FY25.

The year-over-year increase in

revenue was primarily driven by a stronger wholesale order book and improved operational execution, which enabled more efficient fulfillment

and shipment timing compared to the prior year.

These enhancements reflect the Company’s ongoing focus on operational discipline

and supply chain optimization, positioning it to capture additional sales opportunities over the remainder of the season.

of goods sold

Cost of goods sold

for the three months ended June 30, 2025 was $583, compared to $618 for the same period in 2024, a decrease of $35, or 5.6%.

was primarily driven by improved inventory efficiency and disciplined cost management.

The Company continues to focus on optimizing its

supply chain and sourcing practices to support long-term margin expansion.

of goods sold for the three months ended September 30, 2025 was $1,901, compared to $1,762 for the same period in 2024, an increase

of $139, or 8% and for the six months ended September 30, 2025 was $2,484, compared to $2,378 for the same period in 2024, an

increase of $106, or 4%.

The increase was primarily driven by improved inventory efficiency and disciplined cost

continue to focus on optimizing our supply chain and sourcing practices to support long-term margin expansion.

profit and gross margin

Gross profit for

the three months ended June 30, 2025 was $889, compared to $356 for the same period in 2024, an increase of $533, or 149.7%.

improved to 60.3%, up from 36.6% in the prior-year period.

This increase reflects the favorable impact of channel mix, particularly growth

in higher-margin revenue streams, and the Company’s ongoing focus on disciplined pricing and supply chain reengineering.

expansion demonstrates progress toward achieving improved profitability while continuing to scale the business.

profit for the three months ended September 30, 2025 was $2,862, compared to $2,071 for the same period in 2024, an increase of $791,

Gross margin improved to 60.1%, up from 54.0% in the prior-year period.

This increase reflects the favorable impact of channel

mix, particularly growth in higher-margin revenue streams, and our ongoing focus on disciplined pricing and supply chain reengineering.

profit for the six months ended September 30, 2025 was $3,751, compared to $2,430 for the same period in 2024, an increase of $1,321,

Gross margin improved to 60.2%, up from 50.5% in the prior-year period.

This increase reflects the favorable impact of channel

mix, particularly growth in higher-margin revenue channels, and our ongoing focus on disciplined pricing and supply chain reengineering.

margin expansion demonstrates progress toward achieving improved profitability while continuing to scale the business.

general and administrative expenses (“SG&A”)

expenses for the three months ended June 30, 2025 were $3,415, compared to $3,298 for the same period in 2024, an increase of $117,

The increase reflects strategic investments to support the Company’s growth trajectory.

Key contributors

included amortization of stock-based services, professional fees related to fundraising activities, and higher payroll and personnel

costs (due to timing).

The Company also incurred targeted increases across areas such as technology, compliance, and insurance to

support operations and future scalability.

Importantly, SG&A expenses remained relatively flat as a percentage of revenue,

highlighting enhanced operating leverage and improved cost discipline.

Selling, general and administrative

(SG&A) expenses for the three months ended September 30, 2025 were $3,637, compared to $3,923 for the same period in 2024, a decrease

of $286, or 7%.

For the six months ended September 30, 2025, SG&A expenses were $7,052, compared to $7,223 in the prior-year period,

a decrease of $171, or 2%.

The decreases primarily

reflect continued cost discipline and reduced discretionary spending, including lower stock-based compensation following the

restructuring of the Company’s employee equity program and prior-year redundancy actions.

These savings were partially offset

by higher legal and professional fees related to public company compliance and fundraising activities, as well as increased payroll

and operational costs to support expansion initiatives.

The Company also incurred targeted increases across technology, compliance,

and insurance to strengthen its operating infrastructure and scalability.

Overall, SG&A expenses decreased as a percentage

of revenue—improving to 76% from 102% for the three-month period and to 113% from 150% for the six-month period—reflecting

enhanced operating leverage, improved cost efficiency, and the early benefits of management’s ongoing efforts to align the cost

base with revenue growth.

and advertising expense

Marketing and advertising

expenses for the three months ended June 30, 2025 were $529, compared to $453 for the same period in 2024, an increase of $76, or 16.7%.

The increase reflects the Company’s continued investment in brand visibility and customer engagement initiatives.

was primarily driven by increased agency support and event-based activations aimed at driving growth across both direct-to-consumer and

wholesale channels.

The Company remains focused on maintaining marketing efficiency while building global brand awareness and desire.

and advertising expenses for the three months ended September 30, 2025 were $362, compared to $705 for the same period in 2024, a decrease

of $343, or 49%.

For the six months ended September 30, 2025, marketing and advertising expenses were $891, compared to $1,158 in

the prior-year period, a decrease of $267, or 23%.

The decreases

primarily reflect the timing of marketing initiatives as the Company continues to better align and phase its brand and promotional activities

throughout the year, rather than concentrating spend in the first half.

In addition, management implemented permanent cost-saving measures

through optimized agency support, improved event planning, and a greater focus on in-house capabilities, resulting in a more efficient

allocation of marketing resources.

The Company remains focused on

maintaining marketing efficiency while continuing to strengthen global brand awareness and customer engagement through targeted and data-driven

campaigns that support both direct-to-consumer and wholesale channels.

and Quarterly Trends

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and Capital Resources

of June 30, 2025, we had cash and cash equivalents of $2,986, including an accumulated deficit of $68,735.

September 30, 2025, the Company has funded its operations with proceeds from the sale of common stock from the initial public offering,

a public offering during September 2025, and other sales of common stock;

the sale of preferred stock, alongside existing trade, invoice

and shareholder financing arrangements.

The Company has incurred recurring losses, including a net loss of $5,659 for the six months

ended September 30, 2025 and used cash in operations of $11,138 during that period.

As of September 30, 2025, the Company had an accumulated

deficit of $70,575.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for at least

twelve months from the date these condensed consolidated financial statements were available to be issued.

The Company’s ability

to continue as a going concern is dependent upon management of its expenses and its ability to obtain necessary financing to meet its

obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.

of September 30, 2025, we had cash and cash equivalents of $393, including an accumulated deficit of $70,575.

Historically, we have generated

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sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could

result in additional dilution of the percentage ownership of our stockholders” and “Risk Factors – Risks Related to

result in additional dilution of the percentage ownership of our shareholders” and “Risk Factors – Risks Related to

Our Business, Our Brand, Our Products and Our Industry – We have a history of losses, expect to continue to incur losses in the

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

consolidated statements of cash flow data:

Net cash used

in operating activities

Net cash used in investing

Net cash used in financing

Six months ended

September 30,

Consolidated statement of cash flow data:

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Flows Used in Operating Activities

the three months ended June 30, 2025, operating activities used $3,892 in cash and cash equivalents and restricted cash, primarily resulting

from a net loss of $3,819, an adjustment to add back non-cash charges of $1,249 and a net cash outflow from changes in operating assets

and liabilities of $1,322.

Net cash used by changes in operating assets and liabilities during the three months ended June 30, 2025 consisted

primarily of an outflow of cash from a decrease in accrued expenses of $1,824, a decrease in trade payables of $272, and an increase

in prepaid and other current assets of $260, partially offset by an inflow of cash from an increase in deferred revenue of $542 and a

decrease in inventory of $228.

the three months ended June 30, 2024, operating activities used $3,880 in cash and cash equivalents and restricted cash, primarily resulting

from a net loss of $3,388, an adjustment to add back non-cash charges of $398 and a net cash outflow from changes in operating assets

and liabilities of $890.

Net cash used by changes in operating assets and liabilities during the three months ended June 30, 2024 consisted

primarily of an outflow of cash from a $1,645 increase in prepaid expenses and other current assets related to supplier deposits and

a $857 decrease in accrued deferred revenue and an $375 decrease in inventories.

the six months ended September 30, 2025, operating activities used $11,138 in cash and cash equivalents and restricted cash,

primarily resulting from a net loss of $5,659, non-cash adjustments totaling $2,479, and a net cash outflow from changes in

operating assets and liabilities of $7,958.

Net cash used in changes in operating assets and liabilities was driven primarily by an

increase in inventory of $5,339, reflecting higher stock purchases to support the upcoming winter season and expanded sales

channels, as well as an increase in accounts receivable of $3,888 and a decrease in accrued expenses of $1,248.

These outflows were

partially offset by an increase in trade payables of $1,633 and an increase in deferred revenue of $912.

The increase in inventory

also reflects improved inventory planning and purchasing timing, designed to enhance availability and support stronger sell-through

performance in the second half of the fiscal year.

the six months ended September 30, 2024, operating activities used $7,734 in cash and cash equivalents and restricted cash, primarily

resulting from a net loss of $6,132, an adjustment to add back non-cash charges of $961 and a net cash outflow from changes in operating

assets and liabilities of $2,563.

Net cash used by changes in operating assets and liabilities during the six months ended September

30, 2024 consisted primarily of an inflow of cash from a $2,559 increase in trade payables, a $908 increase in unearned revenue, offset

by a cash outflow as a result of a $2,811 increase in inventories, $1,435 increase in accounts receivable, $1,425 increase in prepaid

and other current assets and a $359 decrease in accrued expenses.

Flows Used in Investing Activities

was no cash used in investing activities for the three months ended June 30, 2025 as compared to the $64 that was used for the three

months ended June 30, 2024 as we did not have requirement to purchase any property and equipment during the current period.

activities for the six months ended September 30, 2025 were $169, compared to $102 for the same period in 2024, an increase of $67, or

The increase primarily reflects capital expenditures related to the opening of the new pop-up store in Verbier and

preparatory investments for additional pop-up locations planned for the third quarter.

These investments are consistent with the Company’s

strategy to enhance brand visibility and expand its retail presence in key markets while maintaining disciplined capital allocation.

Flows Provided by Financing Activities

the three months ended June 30, 2025, financing activities used $466 in cash and cash equivalents, primarily attributed to $2,538 of

net proceeds from the sale of our common stock, $1,330 of net proceeds from short term borrowings, and $500 of net proceeds related

to the issuance of a note payable to a related party, offset by a $2,241 repayment of short term borrowings, $2,495 repayment of

trade finance facilities, and $98 payment of dividends on our Series AA Convertible Preferred Stock.

were no cash flows associated with financing activities during the three months ended June 30, 2024.

the six months ended September 30, 2025, financing activities provided $4,338 in cash and cash equivalents, primarily attributed to $4,050

of net proceeds from the sale of our common stock, $1,330 of net proceeds from short term borrowings, and $5,590 of proceeds related

to the issuance of notes payable to related parties, offset by a $3,871 repayment of short term borrowings, $2,495 repayment of trade

finance facility, and $266 payment of dividends on our Series AA Convertible Preferred Stock.

the six months ended September 30, 2024, financing activities provided $2,507 in cash and cash equivalents and restricted cash,

primarily attributed to $2,000 net proceeds from short term borrowings and $906 in net proceeds from trade finance facilities,

offset by $399 in repayment of short term borrowings.

Sheet Arrangements

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customers and record sales reserves to reduce revenue, net.

of March 31, 2025, our sales-related reserves were $0.6 million compared to $0.3 million as of March 31, 2024.

The most significant variable

affecting these reserve balances is sales levels.

As a percentage of Net sales, the sales reserves balances were 2.8% as of March

31, 2025 compared to 1.3% as of March 31, 2024.

The reserve for returns from customers is the component of our sales-related reserves

most susceptible to estimation uncertainty.

of September 30, 2025, our sales-related reserves were $0.1 million compared to $0.6 million as of March 31, 2025.

The most significant

variable affecting these reserve balances is sales levels.

As a percentage of net revenue, the sales reserves balances were 1.1%

as of September 30, 2025 compared to 2.8% as of March 31, 2025 .

The reserve for returns from customers is the component of our sales-related

reserves most susceptible to estimation uncertainty.

These estimates are based on 1) historical rates of product returns and claims;

and 2) events

and circumstances that indicate changes to such historical rates are warranted, such as our customers’ inventory positions and

their anticipated sell-through rates.

However, actual returns and claims in any future period are inherently uncertain and thus may differ

from our estimates.

As a result, we adjust our estimates of revenue at the earlier of when the most likely amount of consideration we

expect to receive changes or when the amount of consideration becomes fixed.

If actual or expected future returns and claims are significantly

different than the sales reserves established, we record an adjustment to Net sales in the period in which such determination

and 2) events and circumstances that indicate changes to such historical rates are warranted, such as our customers’ inventory

positions and their anticipated sell-through rates.

However, actual returns and claims in any future period are inherently uncertain

and thus may differ from our estimates.

As a result, we adjust our estimates of revenue at the earlier of when the most likely amount

of consideration we expect to receive changes or when the amount of consideration becomes fixed.

If actual or expected future returns

and claims are significantly different than the sales reserves established, we record an adjustment to Net sales in the period

in which such determination was made.

Receivable and Credit Losses

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3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative

and qualitative disclosures regarding market risks in our portfolio, see, “Management’s Discussion and Analysis of Financial

Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk” above.

quantitative and qualitative disclosures regarding market risks in our portfolio, see, “Management’s Discussion and Analysis

of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk” above.

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-Q

Item 2. Management’s Discussion and Analysis