What changed in this filing

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Item 1. Financial Statements

2026-02-12 compared with 2025-11-13 · 362 added, 422 removed, 270 unchanged (74% of the section changed)

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in thousands, except share and per share data)

September 30, 2025

March 31, 2025

and cash equivalents

receivable, net

and other current assets

current assets

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Inventories, net

Prepaid and other current assets

Total current assets

Long term assets:

Operating lease right of use assets

Property and equipment, net

Other non-current assets

Liabilities and Shareholders’ Equity

lease right of use assets

and equipment, net

non-current assets

and Shareholders’ Equity

finance facility

borrowings, net

payable - related party, current, net

lease obligations

current liabilities

Trade payables

Accrued expenses

Trade finance facility

Short-term borrowings, net

Note payable - related party, current, net

Operating lease obligations

Deferred revenue

Total current liabilities

Long term liabilities:

Note payable - related party, long-term, net

Total liabilities

Shareholders’ equity:

Series AA convertible preferred stock, $ 0.0001 par value, 1,800,000 shares authorized;

924,921 shares issued and outstanding as of September 30, 2025 and March 31, 2025

Common stock;

term liabilities:

payable - related party, long-term, net

Shareholders’

AA convertible preferred stock, $ 0.0001 par value, 1,800,000 shares authorized;

924,921 shares issued and outstanding as of December

31, 2025 and March 31, 2025

$ 0.0001 par value;

100,000,000 shares authorized;

35,221,933 and 19,291,000 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total shareholders’ equity

Total Liabilities and Shareholders’ Equity

35,412,694 and 19,291,000 shares issued and outstanding as of December 31,

2025 and March 31, 2025, respectively

paid-in capital

other comprehensive loss

shareholders’ equity

Liabilities and Shareholders’ Equity

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

MOMENT LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE

INCOME (LOSS)

in thousands, except share and per share data)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Revenues, net:

Cost of sales

general and administrative expenses

and advertising expenses

operating expenses

Selling, general and administrative expenses

Marketing and advertising expenses

Total operating expenses

(loss) from operations

Interest expense

Foreign currency transaction gain

Total other expense, net

Dividends on Series AA Convertible Preferred Stock

currency transaction (loss)/gain

other expense, net

income (loss)

on Series AA Convertible Preferred Stock

Net loss attributable to common shareholders, basic and diluted

Basic and diluted loss per share attributable to common shareholders

Basic and diluted weighted-average number of shares outstanding

Other comprehensive losses:

Foreign currency translation gain (loss)

Comprehensive loss

and diluted income (loss) per share attributable to common shareholders

and diluted weighted-average number of shares outstanding

comprehensive income (losses):

income (loss)

currency translation gain (loss)

Comprehensive

income (loss)

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

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in thousands, except share data)

the three months ended September 30, 2025 and 2024

Income (Loss)

the three months ended December 31, 2025, and 2024

Convertible Preferred Stock

Common Shares

Accumulated Other

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Shareholders’

Income (Loss)

Balance - June 30, 2024

Stock compensation expense for employee vested options

Stock compensation expense for employee vested RSUs

Fair value of shares issued for services

Foreign currency translation adjustment

Balance - September 30, 2024

Balance - June 30, 2025

Stock compensation expense for employee vested options

Stock compensation expense for employee vested RSUs

Cancellation of employee vested options

Fair value of RSUs issued to related party as a finance cost

Issuance of common stock from public offering

Issuance of common stock and warrants to related party under securities purchase agreement, net

Foreign currency translation adjustment

Dividends on Series AA Convertible Preferred Stock

Balance - September 30, 2025

the six months ended September 30, 2025 and 2024

– September 30, 2024

compensation expense for employee vested options

compensation for employee vested RSUs

value of shares issued for services

currency translation adjustment

- December 31, 2024

- September 30, 2025

compensation expense for employee vested options

compensation expense for employee vested RSUs

currency translation adjustment

on Series AA Convertible Preferred Stock

- December 31, 2025

the nine months ended December 30, 2025, and 2024

Convertible Preferred Stock

Common Shares

Accumulated Other

Comprehensive

Shareholders’

Income (Loss)

Balance - March 31, 2024

Stock compensation expense for employee vested options

Stock compensation expense for employee vested RSUs

Fair value of shares issued for services

Foreign currency translation adjustment

Balance - September 30, 2024

Balance - March 31, 2025

Stock compensation expense for employee vested options

Stock compensation expense for employee vested RSUs

Cancellation of employee vested options

Fair value of shares issued for services

Fair value of RSUs issued to related party as a finance cost

Issuance of common stock upon extinguishment of Related Party Note

Sale of common stock from public offering

Issuance of common stock and warrants to related party under securities purchase agreement, net

Foreign currency translation adjustment

Dividends on Series AA Convertible Preferred Stock

Balance - September 30, 2025

- March 31, 2024

compensation expense for employee vested options

compensation for employee vested RSUs

value of shares issued for services

currency translation adjustment

- December 31, 2024

- March 31, 2025

compensation expense for employee vested options

compensation expense for employee vested RSUs

of employee vested options

value of shares issued for services

value of RSUs issued to related party as a finance cost

of common stock upon extinguishment of Related Party Note

of common stock from public offering

of common stock and warrants to related party under securities purchase agreement, net

currency translation adjustment

on Series AA Convertible Preferred Stock

- December 31, 2025

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

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in thousands)

Six months ended

September 30, 2025

September 30, 2024

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Bad debt expense

Inventory reserve

Stock based compensation

Amortization of stock-based marketing services shares issued for services

Amortization of debt finance costs

Effect of changes in assets and liabilities:

Accounts receivable, net

Inventories, net

Prepaid and other current assets

Operating lease right of use assets

Other non-current assets

Operating lease obligations

Trade payables

Accrued expenses

Deferred revenue

Net cash used in operating activities

Investing activities:

Purchases of property and equipment

Net cash used in investing activities

Financing activities:

Proceeds from public offering, net

Proceeds from securities purchase agreement, net from related party

Proceeds from short-term borrowings, net

Repayment of short-term borrowings

Proceeds from trade finance facilities, net

Repayment of trade finance facility

Proceeds from notes payable – related party

Payment of dividend on Series AA Convertible Preferred Stock

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash

Cash and cash equivalents and restricted cash – beginning of the period

Cash and cash equivalents and restricted cash – end of the period

Supplemental disclosures of cash flow information:

Interest paid on borrowings

Reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows

Supplemental disclosure of non-cash investing and financing activities:

Recognition of debt discount on short-term borrowings

Fair value of shares issued to extinguish a note payable – related party

Fair value of RSUs issued as a finance cost on notes payable – related

Fair value of shares issued in exchange for services to be received

Cancellation of employee vested options

Recognition of operating lease right of use asset and lease obligation

to reconcile net loss to net cash used in operating activities:

and amortization

based compensation

of stock-based marketing services shares issued for services

of debt finance costs

of changes in assets and liabilities:

receivable, net

and other current assets

lease right of use assets

non-current assets

lease obligations

cash used in operating activities

of property and equipment

cash used in investing activities

offering costs

from public offering, net

from convertible note

from securities purchase agreement, net from related party

from short-term borrowings, net

of short-term borrowings

from trade finance facilities, net

of trade finance facilities

from notes payable – related party

of dividend on Series AA Convertible Preferred Stock

cash provided by financing activities

of exchange rate changes on cash

change in cash

and cash equivalents and restricted cash – beginning of the period

and cash equivalents and restricted cash – end of the period

disclosures of cash flow information:

paid on borrowings

Reconciliation

of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets

and cash equivalents

cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows

disclosure of non-cash investing and financing activities:

of debt discount on short-term borrowings

value of shares issued to extinguish a note payable – related party

value of RSUs issued as a finance cost on notes payable – related party

value of shares issued in exchange for services to be received

of employee vested options

of operating lease right of use asset and lease obligation

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

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to Condensed Consolidated Financial Statements

the three and six months ended September 30, 2025 and 2024

the three and nine months ended December 31, 2025 and 2024

otherwise indicated, dollar amounts in thousands)

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the opinion of our management, these condensed consolidated financial statements contain all normal recurring adjustments considered

necessary for a fair presentation of the Company’s financial position at September 30, 2025, results of operations for the three

and six months ended September 30, 2025 and 2024, consolidated statements of shareholders’ equity for the three and six months

ended September 30, 2025 and 2024, and cash flows for the three and six months ended September 30, 2025 and 2024.

necessary for a fair presentation of the Company’s financial position at December 31, 2025, results of operations for the three

and nine months ended December 31, 2025 and 2024, consolidated statements of shareholders’ equity for the three and nine months

ended December 31, 2025 and 2024, and cash flows for the nine months ended December 31, 2025 and 2024.

The Company’s

results for the three and six months ended September 30, 2025 are not necessarily indicative of the results expected for the full year.

results for the three and nine months ended December 31, 2025 are not necessarily indicative of the results expected for the full year.

You should read these statements in conjunction with our audited consolidated financial statements and management’s discussion

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and Perfect Moment International AG (“PMCH”).

These unaudited condensed consolidated financial statements have been prepared on the same basis as the annual

consolidated financial statements and reflect all adjustments which are, in the opinion of management, necessary for the fair statement

of the financial information for the interim periods presented.

All significant intercompany balances and transactions have been eliminated

in consolidation.

These unaudited condensed consolidated financial statements have been prepared

on the same basis as the annual consolidated financial statements and reflect all adjustments which are, in the opinion of management,

necessary for the fair statement of the financial information for the interim periods presented.

All significant intercompany balances

and transactions have been eliminated in consolidation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

December 31, 2025, the Company has funded its operations with proceeds from the sale of common stock from the initial public

offering, 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 $ 5,566

for the nine months ended December 31, 2025 and used cash in operations of $ 8,882

during that period.

As of December 31, 2025, the Company had an accumulated deficit of $ 70,482 .

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

Company’s future capital requirements will depend on many factors, including production costs and planned growth.

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has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as

a going concern through twelve months from the date these consolidated financial statements are available to be issued.

a going concern through twelve months from the date these condensed consolidated financial statements are available to be issued.

addition, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial

statements for the year ended March 31, 2025, expressed substantial doubt about the Company’s ability to continue as a going concern.

These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification

of the liabilities that might be necessary should the Company be unable to continue as a going concern.

These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the

classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

preparation of the condensed consolidated financial statements in conformity with U.S.

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preferred stock, classification of warrants, and the valuation of stock-based compensation awards .

Actual results may differ from these

judgements and estimates under different assumptions or conditions and any such differences may be material.

Actual results may differ

from these judgements and estimates under different assumptions or conditions and any such differences may be material.

Company experiences certain effects of seasonality with respect to its business.

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customers concentrated in the northern hemisphere, and the lowest sales during its first fiscal quarter.

of September 30, 2025 and March 31, 2025, the Company did not have any contract assets and had $ 1,190 and $ 264 , respectively, of deferred

of December 31, 2025 and March 31, 2025, the Company did not have any contract assets and had $ 380 and $ 264 , respectively, of deferred

revenue on the accompanying consolidated balance sheets.

the three and six months ended September 30, 2025 and 2024, revenue, net recognized from performance obligations related to prior periods

the three and nine months ended December 31, 2025 and 2024, revenue, net recognized from performance obligations related to prior periods

was not material.

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OF REVENUE NET BY CHANNEL AND GEOGRAPHICAL LOCATION

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Three Months Ended

Six Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Channel revenue, net

Wholesale revenues

Ecommerce revenues

Retail revenues

Partnership revenues

Geographic location revenue, net

Europe (excluding United Kingdom)

United States

United Kingdom

Rest of the world

Total revenue, net

cash consists of cash deposits and certificate of deposits under the Company’s trade finance facility.

Restricted cash is classified

as current on the accompanying consolidated balance sheets as the trade finance facility can be due on demand.

location revenue, net

(excluding United Kingdom)

Restricted cash as of March 31, 2025 consisted of cash deposits and certificate of deposits under the Company’s trade

finance facility and was classified as current on the accompanying consolidated balance sheets as the trade finance facility was due on

There was no restricted cash as of December 31, 2025.

receivable and allowance for credit losses

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Accounts receivable are carried net of allowances

for credit losses as of September 30, 2025 and 2024.

for credit losses as of December 31, 2025 and 2024.

After all reasonable attempts to collect a receivable have failed, the amount of

the receivable is written off against the allowance.

As of September 30, 2025 and March 31, 2025, the Company had $ 560 and $ 547 , respectively,

in allowances for credit losses.

of December 31, 2025 and March 31, 2025, the Company had $ 944 and $ 547 , respectively, in allowances for credit losses.

Concentration

of credit risk

the three and six months ended September 30, 2025, the largest single supplier of manufactured goods produced 43 % of the Company’s

products and for the same periods in 2024, produced 45 % of the Company’s products.

the three and six months ended September 30, 2025, the largest single fabric supplier supplied Nil and 56 %, respectively, of

the fabric used to manufacture the Company’s products, and for the same periods in 2024, supplied 44 % and 46 %, respectively, of

the fabric used to manufacture the Company’s products.

the three months ended September 30, 2025, we had one major customer, which accounted for approximately 16 % of total revenue.

the six months ended September 30, 2025, we had one major customer, which accounted for approximately 12 % of total revenue.

the three months ended September 30, 2024, we had one major customer, which accounted for approximately 15 % of total revenue.

the six months ended September 30, 2024, we had two major customers, which accounted for approximately 23 % of total revenue.

of September 30, 2025, one customer accounted for approximately 19 % of total accounts receivable.

the three and nine months ended December 31, 2025, the largest single supplier of manufactured goods produced approximately 29% of

the Company’s products and for the same periods in 2024, produced 62 %

respectively, of the Company’s products.

the three and nine months ended December 31, 2025, the largest single fabric supplier supplied approximately 0 % and 56 %, respectively,

of the fabric used to manufacture the Company’s products, and for the same periods in 2024, supplied 0 % and 46 %, respectively,

of the fabric used to manufacture the Company’s products.

the three and nine months ended December 31, 2025 and 2024, no single customer accounted for more than 10 %

of total re v enue.

of December 31, 2025, one customer accounted for approximately 12 % of total accounts receivable.

As of March 31, 2025, two customers

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OF FOREIGN CURRENCY EXCHANGE RATE

Period end exchange rate:

September 30, 2025

March 31, 2025

Period end exchange rate

Three months ended

Average exchange rate:

September 30, 2025

September 30, 2024

Six months ended

Average exchange rate:

September 30, 2025

September 30, 2024

Average exchange rate

per share of common stock

net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period.

Diluted net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted average number of shares

of common stock outstanding plus the number of additional shares of common stock that would have been outstanding if all dilutive potential

shares of common stock had been issued using the treasury stock method.

For diluted net loss per share, when the Company has a net loss,

the weighted average number of shares of common stock is the same as for basic net loss per share due to the fact that when a net loss

exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

end exchange rate:

end exchange rate

exchange rate:

exchange rate

income (loss) per share of common stock

net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding

for the period.

Diluted net income (loss) per share is computed by dividing the net income (loss) applicable to common shareholders by

the weighted average number of shares of common stock outstanding plus the number of additional shares of common stock that would have

been outstanding if all dilutive potential shares of common stock had been issued using the treasury stock method.

For diluted net income

(loss) per share, when the Company has a net loss, the weighted average number of shares of common stock is the same as for basic net

loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is

anti-dilutive.

participating securities such as our preferred stock, basic and diluted net loss per share attributable to common shareholders is presented

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for common stock and participating securities.

No income was allocated to the participating securities for the three and six months ended

September 30, 2025 and 2024 as results of operations were a loss and basic and diluted weighted-average shares are the same in the loss

per share calculation for both periods.

No income was allocated to the participating securities for the three and nine months

ended December 31, 2025 and 2024 as results of operations were a loss and basic and diluted weighted-average shares are the same in the

loss per share calculation for both periods.

dilutive stock options and securities excluded from the computation of diluted net income (loss) per share, because the effect would

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

September 30, 2025

September 30, 2024

Options to acquire common stock

Restricted stock units to acquire common stock

Warrants to acquire common stock

Series AA convertible preferred stock

to acquire common stock

stock units to acquire common stock

to acquire common stock

AA convertible preferred stock (see Note 13)

issued accounting pronouncements

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OF INVENTORIES

September 30, 2025

March 31, 2025

Finished goods

Raw materials

Finished goods on consignment

Goods in transit

Total inventories

Inventory reserve

Total inventories, net

goods on consignment (1)

inventories, net

Certain prior period presentation of these categories were reclassified to ensure comparability with current period presentation.

PREPAID AND OTHER CURRENT ASSETS

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OF PREPAID AND OTHER CURRENT ASSETS

September 30, 2025

March 31, 2025

Deposits and prepayments

Prepaid import duties

Marketing services

Other receivables

Unbilled accounts receivable

Total prepaid and other current assets

and prepayments

accounts receivable

prepaid and other current assets

ACCRUED EXPENSES

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OF ACCRUED EXPENSES

September 30, 2025

March 31, 2025

Accrued expenses

Accrued import duties

Indirect taxes

Accrued payroll and payroll taxes

Accrued Series AA Preferred Stock dividends

Returns provision

Merchant credit

the six months ended September 30, 2025, the Company entered into business loan and security agreements (the “2026 Term Loans”)

import duties

payroll and payroll taxes 1

1 Certain prior period presentation of these categories were reclassified to ensure comparability

with current period presentation.

the nine months ended December 31, 2025, the Company entered into business loan and security agreements (the “2026 Term Loans”)

with the same lender as the Term Loans entered into during fiscal year 2025 for short-term loans that mature 30-weeks from the date of

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balance owed on the fiscal year 2025 Term Loans at March 31, 2025 are collectively referred to as the “Term Loans”.

the six months ended September 30, 2025 and 2024, the Company made total repayments on the Term Loans of $ 3,871 and $ 399 , respectively.

During the three and six months ended September 30, 2025, the Company amortized $ 538 and $ 1,293 , respectively, of the debt discount to

the nine months ended December 31, 2025 and 2024, the Company made total repayments on the Term Loans of $ 4,725 and $ 3,846 , respectively.

During the three and nine months ended December 31, 2025, the Company amortized $ 251 and $ 1,544 , respectively, of the debt discount to

interest expense.

During the three and six months ended September 30, 2024, the Company amortized $ 181 of the debt discount to interest

As of September 30, 2025 and March 31, 2025, the Company had outstanding borrowings of $ 854 and $ 2,738 , respectively, and an

unamortized debt discount of $ 252 and $ 887 , respectively, resulting in a net balance of $ 602 and $ 1,851 , respectively.

During the three and nine months ended December 31, 2024, the Company amortized $ 979 and $ 1,160 , respectively, of the

debt discount to interest expense.

During the three and nine months ended December 31, 2024, the Company received an early payment discount

of $ 179 that was recorded as a cancelled debt discount in the same amount.

As of December 31, 2025 and March 31, 2025, the

Company had outstanding borrowings of $ nil and $ 2,738 , respectively, and an unamortized debt discount of $ nil and $ 887 , respectively,

resulting in a net balance of $ nil and $ 1,851 , respectively.

May 2025, the Company entered into a promissory note (the “May 2025 Related Party Note”) with an entity controlled by the

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August 2025, the Company received $ 3,390

from one of its principal shareholders (a related party) in exchange for an unsecured promissory note that matured on November

8, 2025 (the “First August 2025 Related Party Note”;

subsequently amended to March 2026 (see Note 13), and

from one of its principal shareholders (a related party) in exchange for an unsecured promissory note that matures on March

9, 2026 (the “First August 2025 Related Party Note”), and $ 1,700

from two of its principal shareholders (related parties) in exchange for an unsecured promissory note that matures on August

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If the Company prepays the notes, the unvested restricted stock units would vest proportionately with the amount of the prepayment.

the three and six months ended September 30, 2025, the Company amortized $ 98 of the debt discount to interest expense.

As of September

30, 2025, the Company has outstanding borrowings of $ 5,090 and an unamortized discount of $ 207 resulting in a net balance of $ 4,883 , of which $ 3,283 is current.

the three and nine months ended December 31, 2025, the Company amortized $ 41 and $ 139 , respectively, of the debt discount to interest

As of December 31, 2025, the Company has outstanding borrowings of $ 5,090 and an unamortized discount of $ 166 resulting in a

net balance of $ 4,924 , of which $ 3,319 is current.

the three and nine months ended December 31, 2025, the Company incurred and paid interest on the August 2025 Related Party Notes totaling

As of December 31, 2025, there were no amounts of accrued but unpaid interest on the August 2025 Related Party Notes.

Finance Facility

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commissions and estimated offering expenses.

connection with the Offering, the Company issued to the representative of the underwriters, warrants to purchase up to 500,000

shares of common stock at an exercise price of $ 0.375

per share (the “June 2025 Warrant”).

The June 2025

Warrant is exercisable beginning on the date of issuance and expires five

years thereafter.

June 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $ 5 using the Black-Scholes

option-pricing model with the following assumptions:

volatility of 60 %, risk-free rate of 4.2 %, annual dividend yield of

0.0 % and expected life of five years .

connection with the Offering, the Company issued to the representative of the underwriters, warrants to purchase up to 500,000 shares

of common stock at an exercise price of $ 0.375 per share (the “June 2025 Warrant”).

The June 2025 Warrant is exercisable

beginning on the date of issuance and expires five years thereafter.

June 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $ 5 using the Black-Scholes option-pricing

model with the following assumptions:

volatility of 60 %, risk-free rate of 4.2 %, annual dividend yield of 0.0 % and expected life of five

connection with the underwriter’s exercise of the over-allotment option, the Company issued the representative of the underwriters

from the Offering a warrant to purchase up to 15,656

shares of the Company common stock at an exercise price of

(the “July 2025 Warrant”).

The July 2025 Warrant

is exercisable beginning on the date of issuance and expires five

years thereafter.

July 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $ 74 using the Black-Scholes

option-pricing model with the following assumptions:

volatility of 113 %, risk-free rate of 4.2 %, annual dividend yield of 0.0 %

and expected life of five years .

from the Offering a warrant to purchase up to 15,656 shares of the Company common stock at an exercise price of $ 0.375 (the “July

2025 Warrant”).

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

July 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $ 74 using the Black-Scholes option-pricing

model with the following assumptions:

volatility of 113 %, risk-free rate of 4.2 %, annual dividend yield of 0.0 % and expected life of

holder of the June 2025 Warrants and July 2025 Warrants shall not have the right to convert any portion of the respective warrants to

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immediately after giving effect to such conversion.

Any increase to the beneficial ownership limitation will not be effective until the 61st day after notice is received by the Company.

Any increase to the beneficial ownership limitation will not be effective until the

61st day after notice is received by the Company.

Purchase Agreement:

On August 27, 2025, the Company entered into a securities purchase agreement (the “August SPA”)

to issue and sell 3,172,858 shares of its common stock at a per share price of $ 0.46822 , which represents the average closing price of

the Company’s common stock for the five trading days immediately preceding the sale, and a warrant to purchase up to 3,204,908

shares of its common stock at an exercise price of $ 0.46822 per share (the “August 2025 Warrant”) for aggregate net proceeds

of approximately $ 1,429 , after deducting direct offering expenses.

The August 2025 Warrant is exercisable beginning on the date of issuance

and expires three years thereafter.

The August 2025 Warrant can be exercised on a cashless basis if the shares underlying the August

2025 Warrant are not registered at the time it is exercised.

to issue and sell 3,172,858 shares of its common stock (the “August SPA Shares”) at a per share price of $ 0.46822 , which

represents the average closing price of the Company’s common stock for the five trading days immediately preceding the sale, and

a warrant to purchase up to 3,204,908 shares of its common stock (the “August 2025 Warrant Shares”, and together with the

August SPA Shares, the “August SPA Securities”) at an exercise price of $ 0.46822 per share (the “August 2025 Warrant”)

for aggregate net proceeds of approximately $ 1,429 , after deducting direct offering expenses.

The August 2025 Warrant is exercisable

beginning on the date of issuance and expires three years thereafter.

The August 2025 Warrant can be exercised on a cashless basis if

the shares underlying the August 2025 Warrant are not registered at the time it is exercised.

August 2025 Warrant was determined to be an equity classified warrant and fair value was calculated as $ 1,125 using the Black-Scholes

option-pricing model with the following assumptions:

volatility of 113 %, risk-free rate of 4.2 %, annual dividend yield of 0.0 %

and expected life of three years .

volatility of 113 %, risk-free rate of 4.2 %, annual dividend yield of 0.0 % and expected

life of three years .

holder of the August 2025 Warrants shall not have the right to convert any portion of the respective warrants to the extent that after

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(i) a cashless exercise of the August 2025 Warrants or (ii) a redemption and subsequent cancellation of the August 2025 Warrant, in exchange

for $ 0.001 per warrant.

Line of Credit (“ELOC”):

On October 7, 2025, the Company entered into an equity purchase agreement (the “ELOC”),

whereby the Company has the right, but not the obligation, to direct an investor to purchase up to $ 25,000 of the Company’s common

stock (the “Put Shares”), where the Company directs the investor to purchase Put Shares in increments between $5 and the

lesser of (a) $500 or (b) 20.0% of the Average Daily Trading Value (as defined in the ELOC), on the terms and conditions set forth in

The purchase price of the Put Shares will be the lesser of (i) 97.0% of the Market Price (as defined in the ELOC) or (ii) 102.0%

of the Market Alternative Price (as defined in the ELOC).

If the Company’s principal market is any tier of the OTC Markets on the

date the investor receives the Company’s directive, the purchase price of the Put Shares will be the lesser of (i) 85.0% of the

Market Price or (ii) 85.0% of the Market Alternative Price.

The number of Put Shares to be purchased by the investor is subject to a

beneficial ownership limitation of 4.99%.

ELOC will not be effective until it is first approved by the Company’s shareholders and then approved by the Company’s board

of directors.

The ELOC was approved by the Company’s shareholders on January 14, 2026, but has not been approved by the Company’s

Board as of the dates these condensed consolidated financial statements were issued.

Once the ELOC is effective, the Company will

issue the investor shares of the Company’s common stock (the “Commitment Shares”) that is determined by dividing 187,000

by the lesser of (i) the closing price of the Company’s common stock on the Trading Day (as defined in the ELOC) immediately preceding

date the ELOC is approved by Company’s board of directors, or (ii) average of the five (5) closing prices of the Company’s

common stock during the five Trading Days immediately preceding the date the ELOC is approved by Company’s board of directors.

As of the date these condensed consolidated financial statements were issued, the approvals were not yet received.

connection with the ELOC, the Company entered into a registration rights agreement (the “ELOC RRA”) whereby the Company will

file a registration statement covering the maximum number of registerable securities (as defined in the ELOC RRA) within forty-five calendar

days from the date the ELOC is approved by the Company’s board of directors.

ELOC will end on the earlier of (i) the date the investor purchased $ 25,000 of Put Shares, (ii) October 7, 2027, (iii) the date of written

notice of termination by the Company to the investor (per the terms and conditions set forth in the ELOC), (iv) the ELOC RRA is no longer

effective after the initial effective date of the ELOC RRA, or (v) the date that the Company commences a case or any person commences a proceeding

against the Company, a custodian is appointed for the company or for all or substantially all of its property or the Company makes a general

assignment for the benefit of its creditors.

Issued for Services

Company, from time to time, issues shares of its common stock for marketing and other services.

The fair value of the shares is

initially capitalized as a prepaid service cost and amortized over the service period.

As of March 31, 2025, the unamortized service

costs were $ 578 .

During the six months ended September 30, 2025, the Company issued 100,000 shares

of common stock to a vendor for services to be rendered with a fair value of $ 62 as

determined by the closing price on the day of issuance.

During the six months ended September 30, 2025 and 2024, the Company

amortized $ 339 and

respectively, of the value of the shares as the services were rendered.

As of September 30, 2025, the unamortized service cost was

$ 301 and was included as a component of prepaid and other current assets (see Note 4).

The fair value of the shares is initially

capitalized as a prepaid service cost and amortized over the service period.

As of March 31, 2025, the unamortized service costs were

During the nine months ended December 31, 2025, the Company issued 100,000 shares of common stock to a vendor for services to be

rendered with a fair value of $ 62 as determined by the closing price on the day of issuance.

During the nine months ended

December 31, 2025 and 2024, the Company amortized $ 455 and $ 419 respectively, of the value of the shares as the services were rendered.

As of December 31, 2025, the unamortized service cost was $ 185 and was included as a component of prepaid and other current assets (see

AA Preferred Stock Dividends

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price, which is the equivalent to $ 0.6961 per annum per share.

the three and six months ended September 30, 2025, the Company recorded dividends on our Series AA Preferred Stock of approximately $ 161

the three and nine months ended December 31, 2025, the Company recorded dividends on our Series AA Preferred Stock of approximately $ 161

and $ 481 respectively.

As of September 30, 2025, we have unpaid dividends on our Series AA Preferred Stock of $ 54 recorded as a component

of accrued expenses on the accompanying condensed consolidated balance sheets (see Note 5).

to December 31, 2025, and following approval by the Company’s shareholders at the annual general meeting, all outstanding shares

of the Series AA Preferred Stock were converted into shares of the Company’s common stock in accordance with the amended conversion

terms (see Note 13).

The conversion had no impact on the Company’s consolidated financial position as of December 31, 2025.

STOCK-BASED COMPENSATION PLANS

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OF TIME-BASED RSU ACTIVITY

Non-vested at March 31, 2025

Vested/deemed vested

Non-vested at September 30, 2025

total stock compensation expense related to vesting of time-based RSUs for the three months ended September 30, 2025 and 2024, was $ 40

and $ 127 , respectively, and for the six months ended September 30, 2025 and 2024, was $ 76 and $ 204 , respectively, was recognized on the

accompanying condensed consolidated statements of operations and comprehensive loss as a component of selling, general and administrative

As of September 30, 2025, the total unrecognized stock-based compensation for time-based RSUs totaled $ 1,032 and was expected

to be recognized over a weighted average period of 3.6 years.

at March 31, 2025

Vested/deemed

at December 31, 2025

total stock compensation expense related to vesting of time-based RSUs for the three months ended December 31, 2025 and 2024, was $ 91

respectively, and for the nine months ended December 31, 2025 and 2024, was $ 167

respectively, was recognized on the accompanying condensed consolidated statements of operations and comprehensive income as a component

of selling, general and administrative expenses.

As of December 31, 2025, the total unrecognized stock-based compensation for time-based

RSUs totaled $ 1,016

and was expected to be recognized over a weighted average period

summary of option activity is presented below:

OF STOCK OPTION ACTIVITY

Outstanding at March 31, 2025

Outstanding at September 30, 2025

Vested and expected to vest at September 30, 2025

Exercisable at September 30, 2025

During August 2025, the Company

re-purchased 208,400 stock options from certain directors and officers at fair value as determined by the closing price on the day of

re-purchase, for cash consideration of $ 60 .

The re-purchase provided for $ 37 in excess fair value of the cash consideration over the fair

value of the initial options, which was recognized as compensation expense and was included as a component of selling, general and administrative

expenses for the three and six months ended September 30, 2025.

total stock compensation expense recognized related to vesting of stock options for the three months ended September 30, 2025 and 2024

was $ 72 and $ 215 , respectively and for the six months ended September 30, 2025 and 2024 was $ 170 and $ 508 , respectively, and was recognized

on the accompanying condensed consolidated statements of operations and comprehensive loss as a component of selling, general and administrative

As of September 30, 2025 the total unrecognized stock-based compensation for stock options was $ 890 and is expected to be recognized

at March 31, 2025

at December 31, 2025

and expected to vest at December 31, 2025

at December 31, 2025

August 2025, the Company re-purchased 208,400 stock options from certain directors and officers at fair value as determined by the closing

price on the day of re-purchase, for cash consideration of $ 60 .

The re-purchase provided for $ 37 in excess fair value of the cash consideration

over the fair value of the initial options, which was recognized as compensation expense and was included as a component of selling,

general and administrative expenses for the three and nine months ended December 31, 2025.

total stock compensation expense recognized related to vesting of stock options for the three months ended December 31, 2025 and 2024

was $ 54 and $ 101 , respectively and for the nine months ended December 31, 2025 and 2024 was $ 224 and $ 609 , respectively, and was recognized

on the accompanying condensed consolidated statements of operations and comprehensive income as a component of selling, general and administrative

As of December 31, 2025 the total unrecognized stock-based compensation for stock options was $ 375 and is expected to be recognized

over a weighted average period of 2.1 years.

following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at September

following table summarizes the shares of the Company’s common stock issuable upon exercise of warrants outstanding at December

OF COMMON STOCK ISSUABLE UPON EXERCISE OF WARRANTS OUTSTANDING

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Average Exercise

summary of warrant activity for the six months ended September 30, 2025 is presented below:

March 2025 Warrant

June 2025 Warrant

July 2025 Warrant

summary of warrant activity for the nine months ended December 31, 2025 is presented below:

OF WARRANTS ACTIVITY

Outstanding at March 31, 2025

Outstanding at September 30, 2025, all vested

of September 30, 2025, the intrinsic value of the outstanding warrants was $ 34 .

at March 31, 2025

at December 31, 2025, all vested

of December 31, 2025, the intrinsic value of the outstanding warrants was $ 31 .

COMMITMENTS AND CONTINGENCIES

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reported losses from continuing operations and/or net losses in three of the four most recent fiscal years.

As of September 30, 2025,

As of December 31, 2025,

the Company had shareholders’ equity of approximately $ 1,057 and had losses in its three most recent fiscal years ended March 31,

20 unchanged sentences

believe the claims are entirely without merit and we continue to vigorously defend the matter.

October 6, 2025, the Company received notice that its former Chief Executive Officer of the Company, Mark Buckley,

filed Grounds of Complaint with the UK Employment Tribunal against the Company alleging, among other things, unfair dismissal from his

The Company filed its Grounds of Resistance to Mr.

October 6, 2025, the Company received notice that its former Chief Executive Officer of the Company, Mark Buckley, filed Grounds of Complaint

with the UK Employment Tribunal against the Company alleging, among other things, unfair dismissal from his position.

The Company filed

its Grounds of Resistance to Mr.

Buckley’s claims on October 30, 2025.

The Company strongly believes

in its defense to Mr.

Buckley’s claims and also has strong counterclaims to bring against Mr.

Buckley because of his actions and

conduct while serving as the Company’s CEO.

The Company intends to continue vigorously defending the matter.

The Company’s

attempts to resolve the dispute will continue in parallel with the ongoing litigation.

commitments – The Company had $ 2,176 purchase obligations as of September 30, 2025, related to purchase orders to factories

The Company’s attempts to resolve the dispute will continue

in parallel with the ongoing litigation.

commitments – The Company had $ 382 purchase obligations as of December 31 2025, related to purchase orders to factories

for the manufacture of finished goods.

lien on inventory – Per the terms of one third-party service contract, a lien may be placed on the Company’s

inventory if the Company fails to make a payment for services within 30 days from the date the third-party supplier notifies the Company

of an outstanding payment.

As of September 30, 2025 and March 31, 2025, a lien has not been placed on the Company’s inventory in

connection with this contract.

– In April 2025, a two-year lease renewal agreement was executed during April 2025 with fixed monthly payments of

approximately $ 0.6 .

– In April 2025, a two-year lease renewal agreement was executed during April 2025 with fixed monthly payments of approximately

At inception, the Company recorded a right of use asset and operating lease liability of approximately $ 18 .

In October 2025, the Company notified its landlord of its intent to terminate this lease in January 2026.

In October 2025, the

Company notified its landlord of its intent to terminate this lease in January 2026.

RELATED PARTY TRANSACTIONS

and Advisory Services

director and one related party of the Company provided consulting and advisory services for the Company totaling $ 191 and $ 47 for the

three months ended September 30, 2025 and 2024, respectively, and totaling $ 371 and $ 93 for the six months ended September 30, 2025 and

2024, respectively, and are included in selling, general and administrative expenses on the accompanying consolidated statement of operations

and comprehensive loss.

As of September 30, 2025 and March 31, 2025 there were no amounts owed to either the director or the related

One director and one related

party of the Company provided consulting and advisory services for the Company totaling $ 191

and $ 46 for the three months ended December

31, 2025 and 2024, respectively, and totaling $ 563

and $ 139 for the nine months ended December

31, 2025 and 2024, respectively, and are included in selling, general and administrative expenses on the accompanying consolidated statement

of operations and comprehensive loss.

As of December 31, 2025 and March 31, 2025 there were no amounts owed to either the director or

the related party.

SEGMENT REPORTING

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

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Revenues, net

significant segment expenses:

Cost of sales

Selling expense

General and administrative

Marketing and advertising

Non-cash compensation

Other segment items (1)

general and administrative expense

and advertising

segment items (1)

income (loss)

interest expense and foreign currency transactions (loss) gain.

9 unchanged sentences

consolidated financial statements.

Line of Credit (“ELOC”)

October 7, 2025, the Company entered into an equity purchase agreement (the “ELOC”), whereby the Company has the right, but

not the obligation, to direct an investor to purchase up to $ 25,000 of the Company’s common stock (the “Put Shares”),

where the Company directs the investor to purchase Put Shares in increments between $5 and the lesser of (a) $500 or (b) 20.0% of the

Average Daily Trading Value (as defined in the ELOC), on the terms and conditions set forth in the ELOC.

The purchase price of the Put

Shares will be the lesser of (i) 97.0% of the Market Price (as defined in the ELOC) or (ii) 102.0% of the Market Alternative Price (as

defined in the ELOC).

If the Company’s principal market is any tier of the OTC Markets on the date the investor receives the Company’s

directive, the purchase price of the Put Shares will be the lesser of (i) 85.0% of the Market Price or (ii) 85.0% of the Market Alternative

The number of Put Shares to be purchased by the investor is subject to a beneficial ownership limitation of 4.99% .

ELOC will not be effective until it is first approved by the Company’s shareholders and then approved by the Company’s board

of directors.

Once the ELOC is effective, the Company will issue the investor shares of the Company’s common stock (the “Commitment

Shares”) that is determined by dividing 187,000 by the lesser of (i) the closing price of the Company’s common stock on the

Trading Day (as defined in the ELOC) immediately preceding date the ELOC is approved by Company’s board of directors, or (ii) average

of the five (5) closing prices of the Company’s common stock during the five Trading Days immediately preceding the date the ELOC

is approved by Company’s board of directors.

As of the date these condensed consolidated financial statements were issued, the

approvals were not yet received.

connection with the ELOC, the Company entered into a registration rights agreement (the “ELOC RRA”) whereby the Company will

file a registration statement covering the maximum number of registerable securities (as defined in the ELOC RRA) within forty-five calendar

days from the date the ELOC is approved by the Company’s board of directors.

ELOC will end on the earlier of (i) the date the investor purchased $ 25,000 of Put Shares, (ii) October 7, 2027, (iii) the date of written

notice of termination by the Company to the investor (per the terms and conditions set forth in the ELOC), (iv) the ELOC RRA is no longer

effective after the initial effective date of the ELOC RRA, or (v) voluntary on involuntary bankruptcy proceedings commence.

August 2025 Related Party Note Amendment

October 2025, the Company amended the First August 2025 Related Party Note extending the maturity date from November 8, 2025 to March

of Matters to a Vote of Security Holders

January 14, 2026, the shareholders holding a majority of the voting power of the Company entitled to vote as of the record date of November

21, 2025 approved a number of corporate matters.

These actions included authorizing certain issuances of common stock and warrants, amending

the Certificate of Incorporation to increase authorized shares, approving the ELOC, and authorizing an additional reverse stock split

of the common stock at a ratio to be determined by the Company’s board of directors.

Refer to the definitive information statement

filed via form DEF 14A with the SEC on November 26, 2025.

AA Preferred Stock Conversion

January 15, 2026, the Company issued 11,458,306 shares of its common stock upon conversion of all outstanding shares of Series AA Preferred

Stock at a reduced conversion price of $ 0.46822 per share, as approved by the shareholders of the Company on January 14, 2026.

January 2026, the August 2025 Warrant was amended and restated to provide for (i) preemptive rights of the holder of the August 2025

Warrant to participate in future financings by the Company, pro rata, except in connection with certain issuance;

(ii) the right of the

holder of the August 2025 Warrant to match any proposal to provide equity or debt financing to the Company so long as the holder of the

August 2025 Warrant holds at least 4.99% of the outstanding common stock of the Company;

and (iii) weighted average anti-dilution price

protection, with customary carve outs including for the excluded issuance.

Additionally, the Company issued the holder of the August

2025 Warrant an additional Warrant (the “January 2026 Warrant”) to purchase up to an amount of shares of its common stock

equal to the difference between (i) 19.99% of the number of shares of its common stock outstanding as of the closing date of the conversion

of the Series A Preferred Stock and (ii) the August SPA Securities (see Note 9).

During January 2026, the

Company entered into a lease for office premises at 5th Floor, Gramophone Works, 326 Kensal Road, London W10 5BZ, commencing January

The lease has a ten-year term and includes a mutual break option after five years.

Lease payments for the first five-years

total approximately GBP 1,600 (approximately $ 2,151 as of December 31, 2025).

The Company accounted for the lease under ASC 842

beginning on the commencement date.

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 1. Financial Statements