What changed in this filing

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Item 1A. Risk Factors

2026-06-29 compared with 2025-06-30 · 162 added, 179 removed, 1015 unchanged (25% of the section changed)

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These risks include, but are not limited to, the following:

Our history of losses and

the substantial doubt about our ability to continue as a going concern, which could cause our stockholders to lose some or all of

their investment in us.

Our business depends on

our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products, which would adversely

affect our business.

Our business partially

depends on our wholesale partners, and our failure to maintain and further develop our relationships with our wholesale partners

could harm our business.

A downturn in the global

economy will likely affect customer purchases of discretionary items, which could materially harm our sales, profitability and financial

Our financial performance

is subject to significant seasonality and variability, which could significantly impact our cash flow and cause the price of our

common stock to decline.

We currently do not operate

Perfect Moment owned physical retail stores.

Our plans to open Perfect Moment owned physical retail stores are dependent on a variety

of factors, including store locations being available for lease and the stores being economically viable to operate.

Our limited operating experience

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

Our success is substantially

dependent on the service of certain members of our board of directors and senior management.

history of losses and the substantial doubt about our ability to continue as a going concern, which could cause our stockholders

to lose some or all of their investment in us.

business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products,

which would adversely affect our business.

business partially depends on our wholesale partners, and our failure to maintain and further develop our relationships with our

wholesale partners could harm our business.

downturn in the global economy will likely affect customer purchases of discretionary items, which could materially harm our sales,

profitability and financial condition.

financial performance is subject to significant seasonality and variability, which could significantly impact our cash flow and cause

the price of our common stock to decline.

currently do not operate Perfect Moment owned physical retail stores.

Our plans to open Perfect Moment owned physical retail stores

are dependent on a variety of factors, including store locations being available for lease and the stores being economically viable

limited operating experience and limited brand recognition in new international markets may limit our expansion and cause our business

and growth to suffer.

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

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

business is reliant on a limited number of third-party manufacturers and raw material suppliers.

Our ability to deliver

our products to the market and to meet customer expectations could be harmed if we encounter problems with our distribution system.

Data security breaches

and other cyber security events could result in disruption to our operations or financial losses and could negatively affect our

reputation, credibility and business.

Our fabrics and manufacturing

technology generally are not patented and can be imitated by our competitors.

If our competitors sell products similar to ours at

lower prices, our net revenue and profitability could suffer.

Our share price may be

volatile, and you may be unable to sell your shares at or above the price at which you purchased them.

ability to deliver our products to the market and to meet customer expectations could be harmed if we encounter problems with our

distribution system.

security breaches and other cyber security events could result in disruption to our operations or financial losses and could negatively

affect our reputation, credibility and business.

fabrics and manufacturing technology generally are not patented and can be imitated by our competitors.

If our competitors sell products

similar to ours at lower prices, our net revenue and profitability could suffer.

Our common stock has been delisted from NYSE American and now trades on

the OTCQB Venture Market, which may adversely affect the liquidity and market price of our common stock and our ability to raise capital.

share price may be volatile, and you may be unable to sell your shares at or above the price at which you purchased them.

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

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Based upon our current operating plan and assumptions, we expect

that the net proceeds from the initial public offering and our existing cash balances and expected cash flows from operations, alongside

the continuance of our existing financing arrangements, and the automatic conversion of the outstanding balance of the Notes upon the

closing of the initial public offering will be sufficient to fund our operations for at least the next 12 months, excluding financing

to support production (i.e.

timing of working capital).

However, our operating plan may change, and our assumptions may prove to be wrong,

as a result of many factors currently unknown to us, and we could use our available capital resources sooner than we expect.

to seek additional funds sooner than planned, through public or private equity or debt financings or other third-party funding or a combination

of these approaches.

Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital

if market conditions are favorable or based upon specific strategic considerations.

that our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements,

will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e.

working capital).

However, our operating plan may change, and our assumptions may prove to be wrong, as a result of many factors currently

unknown to us, and we could use our available capital resources sooner than we expect.

We may need to seek additional funds sooner than

planned, through public or private equity or debt financings or other third-party funding or a combination of these approaches.

if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions

are favorable or based upon specific strategic considerations.

additional capital-raising efforts may divert our management’s attention from the operation of our business.

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concern, holders of our securities might lose their entire investment.

Although based upon our current operating plan and assumptions,

we expect that our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing

arrangements will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e.

timing of working capital), the doubts raised relating to our ability to continue as a going concern may make our shares an unattractive

investment for potential investors.

These factors, among others, may make it difficult to raise any additional capital and may cause

us to be unable to continue to operate our business.

These factors, among others, may make it difficult to raise any

additional capital and may cause us to be unable to continue to operate our business.

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

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carry out our plans to expand our product offering include:

the success of new products

and new product lines will depend on market demand and there is a risk that new products and new product lines will not deliver expected

results, which could negatively impact our future sales and results of operations;

if our expanded product

offerings fail to maintain and enhance our distinctive brand identity, our brand image may be diminished and our sales may decrease;

implementation of these

plans may divert management’s attention from other aspects of our business and place a strain on our management, operational

success of new products and new product lines will depend on market demand and there is a risk that new products and new product

lines will not deliver expected results, which could negatively impact our future sales and results of operations;

our expanded product offerings fail to maintain and enhance our distinctive brand identity, our brand image may be diminished and

our sales may decrease;

implementation

of these plans may divert management’s attention from other aspects of our business and place a strain on our management, operational

and financial resources, as well as our information systems;

incorporation of novel

materials or features into our products may not be accepted by our customers or may be considered inferior to similar products offered

by our competitors.

incorporation

of novel materials or features into our products may not be accepted by our customers or may be considered inferior to similar products

offered by our competitors.

also may fail to create adequate brand awareness around new product offerings.

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become more burdensome.

The United States and the countries

in which our products are produced or sold have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations,

or may adversely adjust prevailing quota, duty, or tariff levels.

The results of any audits or related disputes regarding these restrictions

or regulations could have an adverse effect on our financial statements for the period or periods for which the applicable final determinations

Countries impose, modify, and remove tariffs and other trade restrictions in response to a diverse array of factors, including

global and national economic and political conditions, which make it impossible for us to predict future developments regarding tariffs

and other trade restrictions.

Trade restrictions, including tariffs, quotas, embargoes, safeguards, and customs restrictions, have and

could result in a higher cost or restrictions on the importation of the products we sell.

Although we have and may continue to look

for alternative sourcing options, we may not be able to shift production in a timely or cost-effective manner, if at all, from various

countries in which we manufacture our products to offset those costs or restrictions.

Therefore, we may not be able to mitigate the entire

increase to our cost resulting from tariffs and we may not be able to, or may choose not to, pass any cost increase onto consumers.

increase in our prices could have an adverse impact on our direct sales to consumers, as well as sales by our wholesale customers.

addition, the uncertainty in the global trade environment may have adverse impacts on capital markets or consumer discretionary spending,

which could lower demand for our products.

Any adverse impact on our costs or on consumer demand could have a material adverse effect

on our business, financial condition and results of operations.

We are dependent on international

trade agreements and regulations.

The countries in which we produce and sell our products could impose or increase tariffs, duties, or

other similar charges that could negatively affect our results of operations, financial position, or cash flows.

United States and the countries in which our products are produced or sold have imposed and may impose additional quotas, duties, tariffs,

or other restrictions or regulations, or may adversely adjust prevailing quota, duty, or tariff levels.

The results of any audits or

related disputes regarding these restrictions or regulations could have an adverse effect on our financial statements for the period

or periods for which the applicable final determinations are made.

Countries impose, modify, and remove tariffs and other trade restrictions

in response to a diverse array of factors, including global and national economic and political conditions, which make it impossible

for us to predict future developments regarding tariffs and other trade restrictions.

Trade restrictions, including tariffs, quotas,

embargoes, safeguards, and customs restrictions, have and could result in a higher cost or restrictions on the importation of the

products we sell.

Although we have and may continue to look for alternative sourcing options, we may not be able to shift production

in a timely or cost-effective manner, if at all, from various countries in which we manufacture our products to offset those costs or

restrictions.

Therefore, we may not be able to mitigate the entire increase to our cost resulting from tariffs and we may not be able

to, or may choose not to, pass any cost increase onto consumers.

Any increase in our prices could have an adverse impact on our direct

sales to consumers, as well as sales by our wholesale customers.

In addition, the uncertainty in the global trade environment may have

adverse impacts on capital markets or consumer discretionary spending, which could lower demand for our products.

Any adverse impact

on our costs or on consumer demand could have a material adverse effect on our business, financial condition and results of operations.

are dependent on international trade agreements and regulations.

The countries in which we produce and sell our products could impose

or increase tariffs, duties, or other similar charges that could negatively affect our results of operations, financial position, or

changes in, or withdrawal from, trade agreements or political relationships between the United States and the PRC, Europe, Canada, or

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work with a group of approximately 31 vendors that manufacture our products, 24 of which produced products in the fiscal year ended March

During the fiscal year ended March 31, 2025, the largest single manufacturer, produced approximately 39% of our products and

substantially all of our products were manufactured in China.

We work with a group of approximately 8 suppliers to provide the fabrics

for our products.

For the fiscal year ended March 31, 2025, the largest single supplier produced approximately 46% of the fabric for

our products.

During the fiscal year ended March 31, 2025, approximately 62% of our fabrics originated from China and 37% from Japan.

We also source other raw materials which are used in our products, including items such as content labels, elastics, buttons, clasps

and drawcords from suppliers located predominantly in the Asia Pacific region.

During the fiscal year ended March 31, 2026, the largest single manufacturer produced approximately 31% of our products.

work with a group of approximately 54 suppliers to provide the fabrics for our products.

price of raw materials depends on a wide variety of factors largely beyond the control of the Company.

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with doing business outside of these regions, including:

the impact of health conditions,

and related government and private sector responsive actions, and other changes in local economic conditions in countries where our

suppliers or manufacturers are located;

political unrest, terrorism,

labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;

fluctuations in foreign

currency exchange rates;

the imposition of new laws

and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes and other charges

on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;

reduced protection for

intellectual property rights, including trademark protection, in some countries, particularly in the PRC;

disruptions or delays in

shipments whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, natural disasters

or health pandemics, or other transportation disruptions.

impact of health conditions, and related government and private sector responsive actions, and other changes in local economic conditions

in countries where our suppliers or manufacturers are located;

unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which

our products are manufactured;

in foreign currency exchange rates;

imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties,

taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;

protection for intellectual property rights, including trademark protection, in some countries, particularly in the PRC;

or delays in shipments whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, natural

disasters or health pandemics, or other transportation disruptions.

and other factors beyond our control could interrupt our suppliers’ production in offshore facilities, influence the ability of

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

We operate distribution and warehousing

facilities and offices around the world and substantially all of our manufacturers are located outside of the United States.

We are subject

to numerous risks and global events beyond our control which could negatively impact consumer spending or our own operations or operations

of our customers or business partners, and therefore our results of operations, including:

changes in diplomatic and trade relationships,

trade policy or actions of foreign or U.S.

governmental authorities impacting trade and foreign investment;

operate distribution and warehousing facilities and offices around the world and substantially all of our manufacturers are located outside

of the United States.

We are subject to numerous risks and global events beyond our control which could negatively impact consumer spending

or our own operations or operations of our customers or business partners, and therefore our results of operations, including:

in diplomatic and trade relationships, trade policy or actions of foreign or U.S.

governmental authorities impacting trade and foreign

military conflict;

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public health crises, disease epidemics or pandemics;

natural disasters and extreme weather conditions,

which may increase in frequency and severity due to climate change;

economic instability resulting in the disruption of trade from foreign

the imposition of new laws, regulations and rules, including those relating to sustainability and climate change, data privacy,

labor conditions, minimum wage, quality and safety standards and disease epidemics or other public health concerns;

and changes in local

economic conditions in countries where our stores, customers, manufacturers and suppliers are located.

These risks could hamper our

ability to sell products, negatively affect the ability of our manufacturers to produce or deliver our products or procure materials

and increase our cost of doing business generally, any of which could have an adverse effect on our results of operations, profitability,

cash flows and financial condition.

In the event that one or more of these factors make it undesirable or impractical for us to conduct

business in a particular country, our business could be adversely affected.

natural disasters and extreme weather conditions, which may increase in frequency and severity due to climate change;

economic instability

resulting in the disruption of trade from foreign countries;

the imposition of new laws, regulations and rules, including those relating

to sustainability and climate change, data privacy, labor conditions, minimum wage, quality and safety standards and disease epidemics

or other public health concerns;

and changes in local economic conditions in countries where our stores, customers, manufacturers and

suppliers are located.

risks could hamper our ability to sell products, negatively affect the ability of our manufacturers to produce or deliver our products

or procure materials and increase our cost of doing business generally, any of which could have an adverse effect on our results of operations,

profitability, cash flows and financial condition.

In the event that one or more of these factors make it undesirable or impractical

for us to conduct business in a particular country, our business could be adversely affected.

economic recession, depression, downturn or economic or political uncertainty in our key markets may adversely affect consumer discretionary

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dollars are recorded as a foreign currency translation adjustment in accumulated other comprehensive income or loss

within stockholders’ equity.

We also have exposure to changes in foreign exchange rates associated with transactions which are

undertaken by our subsidiaries in currencies other than their functional currency.

within stockholders’ (deficit) equity.

We also have exposure to changes in foreign exchange rates associated with transactions

which are undertaken by our subsidiaries in currencies other than their functional currency.

Such transactions include intercompany transactions

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and other claims related to our business.

See Note 14 of the Notes to Consolidated Financial Statements included elsewhere in this Annual

See Note 14 of the Notes to Consolidated Financial Statements included elsewhere in this

Annual Report.

have in the past and may become involved in legal proceedings or audits, including government and agency investigations, and consumer,

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These provisions:

require a 66 and 2/3% stockholder

vote to remove directors, who may only be removed for cause;

authorize our board of

directors to issue “blank check” preferred stock and to determine the rights and preferences of those shares, which may

be senior to our common stock, without prior stockholder approval;

establish advance notice

requirements for nominating directors and proposing matters to be voted on by stockholders at stockholders’ meetings;

prohibit our stockholders

from calling a special meeting and prohibit stockholders from acting by written consent;

require a 66 and 2/3% stockholder

vote to effect certain amendments to our certificate of incorporation and bylaws;

prohibit cumulative voting

in the election of directors, which limits the ability of minority stockholders to elect director candidates.

a 66 and 2/3% stockholder vote to remove directors, who may only be removed for cause;

our board of directors to issue “blank check” preferred stock and to determine the rights and preferences of those shares,

which may be senior to our common stock, without prior stockholder approval;

advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholders’

our stockholders from calling a special meeting and prohibit stockholders from acting by written consent;

a 66 and 2/3% stockholder vote to effect certain amendments to our certificate of incorporation and bylaws;

cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates.

provisions could discourage, delay or prevent a transaction involving a change in control.

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Related to Ownership of Our Common Stock

common stock has been delisted from NYSE American and now trades on the OTCQB Venture Market, which may adversely affect the liquidity

and market price of our common stock and our ability to raise capital.

June 12, 2026, we received notice from NYSE Regulation that it had determined to commence proceedings to delist our common stock from

NYSE American, having determined that we were unable to regain compliance with Sections 1003(a)(i) and 1003(a)(ii) of the NYSE American

Company Guide within the maximum 18-month compliance plan period, which expired on June 11, 2026.

Effective June 18, 2026, our common

stock began trading on the OTCQB Venture Market under the symbol “PMNT.”

The OTCQB is a substantially

more limited trading market than NYSE American.

As a result of this delisting, we may experience the following consequences, among others:

liquidity and trading volume in our common stock;

volatility in the trading price of our common stock;

analyst coverage and investor interest;

ability to raise capital through the sale of equity securities;

restrictions on the ability of certain institutional investors, including mutual funds and

pension funds, to hold or purchase our common stock.

There can be no assurance that

an active or liquid trading market for our common stock will develop or be maintained on the OTCQB.

The delisting of our common stock

from NYSE American and the commencement of trading on the OTCQB could materially and adversely affect our business, financial condition,

and results of operations.

are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies

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As of June 26, 2026, there were 31,083,694 shares of common stock reserved for issuance in connection

with outstanding awards granted under the 2021 Plan and 2,527,944 shares of common stock were available for future issuance under

the 2021 Plan.

Future equity incentive grants and issuances of common stock under awards outstanding under the 2021 Plan may result in

dilution to our stockholders.

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

will face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a

private company.

The Sarbanes-Oxley Act, including the requirements of Section 404, as well as new rules and regulations

subsequently implemented by the SEC and the Public Company Accounting Oversight Board impose additional reporting and other

obligations on public companies.

We expect that compliance with these public company requirements will increase our costs and make

some activities more time-consuming.

A number of those requirements will require us to carry out activities we have not done

For example, we will adopt new internal controls and disclosure controls and procedures.

In addition, we will incur

additional expense associated with our SEC reporting requirements.

Furthermore, if we identify an issue in complying with those

requirements (for example, if we or our accountants identify a material weakness or significant deficiency in our internal control

over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could

adversely affect us, our reputation or investor perceptions of us.

We also expect that it will be difficult and expensive to obtain

director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially

higher costs to obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and train qualified

people to serve on our board of directors or as executive officers.

Advocacy efforts by stockholders and third parties may also

prompt even more changes in corporate governance and reporting requirements.

We expect that the additional reporting and other

obligations imposed on us by these rules and regulations will increase our legal and financial compliance costs and administrative

fees significantly.

These increased costs will require us to divert a significant amount of money that we could otherwise use to

expand our business and achieve our strategic objectives.

with outstanding awards granted under the 2021 Plan and 2,527,944 shares of common stock were available for future issuance under the

Future equity incentive grants and issuances of common stock under awards outstanding under the 2021 Plan may result in dilution

to our stockholders.

a public company, we incur significant compliance and reporting costs.

We face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private

The Sarbanes-Oxley Act, including the requirements of Section 404, as well as new rules and regulations subsequently implemented

by the SEC and the Public Company Accounting Oversight Board impose additional reporting and other obligations on public companies.

expect that compliance with these public company requirements will increase our costs and make some activities more time-consuming.

number of those requirements will require us to carry out activities we have not done previously.

For example, we will adopt new internal

controls and disclosure controls and procedures.

In addition, we will incur additional expense associated with our SEC reporting requirements.

Furthermore, if we identify an issue in complying with those requirements (for example, if we or our accountants identify a material

weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those

issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us.

We also expect that

it will be difficult and expensive to obtain director and officer liability insurance, and we may be required to accept reduced policy

limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

As a result, it may be more difficult

for us to attract and train qualified people to serve on our board of directors or as executive officers.

Advocacy efforts by stockholders

and third parties may also prompt even more changes in corporate governance and reporting requirements.

We expect that the additional

reporting and other obligations imposed on us by these rules and regulations will increase our legal and financial compliance costs and

administrative fees significantly.

These increased costs will require us to divert a significant amount of money that we could otherwise

use to expand our business and achieve our strategic objectives.

securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they

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

What changed 10-K

Item 1A. Risk Factors