Financial Analysis

NOTE 16 COMMITMENTS AND CONTINGENCIES Commitments On August 28, 2019, Jiangmen Treasure Success was incorporated under the laws of the Peoples Republic of China in Jiangmen City, Guangdong Province, China, with a total registered capital of HKD 3 million (approximately $385,000). On December 9, 2020, shareholders of Jiangmen Treasure Success approved to increase its registered capital to HKD 15 million (approximately $1.9 million). The Companys subsidiary, Treasure Success, as a shareholder of Jiangmen Treasure Success, is required to contribute HKD 15 million (approximately $1.9 million) as paid-in capital in exchange for 100% ownership interest in Jiangmen Treasure Success. As of March 31, 2026, Treasure Success had made capital contribution of HKD 10 million (approximately $1.3 million). Pursuant to the articles of incorporation of Jiangmen Treasure Success, Treasure Success is required to complete the remaining capital contribution before December 31, 2029 as Treasure Success available funds permit. Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Companys management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would n …

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NOTE 12 CREDIT FACILITIES AND BANK LOAN Credit Facilities Starting from May and October 2021, the Company has participated in a financing program with two customers, in which the Company may receive early payments for approved sales invoices submitted by the Company through the bank the customer cooperates with. In March 2024, the Company joined a supply chain financing program with one additional customer. For any early payments received, the Company is subject to an early payment charge imposed by the customers bank, for which the rate is based on Secured Overnight Financing Rate (SOFR) plus a spread. In certain scenarios, the Company submits the sales invoice and receives payments prior to the shipment of the relative products. In that case, instead of recording the cash receipts as a reduction to accounts receivables, the Company records the cash receipts as receipts in advance from a customer until products are entitled to transfer. The Company records the early payment charge in interest expenses on the consolidated statements of operations and comprehensive income (loss). For the fiscal years ended March 31, 2026 and 2025, the early payment charge was $1,303,967 and $1,482,263, respectively. On January 12, 2022, DBS Bank (Hong Kong) Limited (DBSHK) offered to provide a banking facility of up to $5.0 million to Treasure Success pursuant to a facility letter dated January 12, 2022, which was amended pursuant to a facility letter dated January 4, 2024. Pursuant to the ame …

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NOTE 10 STOCK-BASED COMPENSATION Stock Options On March 21, 2018, the Board of Directors adopted the Jerash Holdings (US), Inc. 2018 Stock Incentive Plan (the Plan), pursuant to which the Company may grant various types of equity awards. 1,484,250 shares of common stock of the Company were reserved for issuance under the Plan. In addition, on July 19, 2019, the Board of Directors approved an amendment and restatement of the Plan, which was approved by the Companys stockholders at its annual meeting of stockholders on September 16, 2019. The amended and restated Plan increased the number of shares reserved for issuance under the Plan by 300,000, to 1,784,250, among other changes. As of March 31, 2026, the Company had 121,310 shares remaining available for future issuance under the Plan. All stock option activities are summarized as follows: Option to Weighted Average Acquire Shares Exercise Price Stock options outstanding as of March 31, 2024 150,000 $ 6.25 Granted - - Exercised - - Expired - - Stock options outstanding as of March 31, 2025 150,000 $ 6.25 Option to Weighted Average Acquire Shares Exercise Price Stock options outstanding as of March 31, 2025 150,000 $ 6.25 Granted - - Exercised - - Expired - - Stock options outstanding as of March 31, 2026 150,000 $ 6.25 All these outstanding options were fully vested and exercisable. As of March 31, 2026, there were 150,000 stock options outstanding. The weighted average remaining life of the options is 2.8 years. Restricted S …

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NOTE 17 INCOME TAX Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are subject to the regulations of the Income Tax Department in Jordan. Effective January 1, 2019, the Jordanian government reclassified the area where Jerash Garments and its subsidiaries are to a Development Zone. In accordance with the Development Zone law, Jerash Garments and its subsidiaries were subject to income tax at income tax rate of 20% plus a 1% social contribution effective from January 1, 2024. Effective from October 1, 2025, Jerash Garments has been granted tax concession at a corporate income tax rate of 10% plus a 1% social contribution in accordance with the Jordanian Income Tax Law. The foreign earnings of Jerash Garments and its subsidiaries are subject to U.S. taxation at the Jerash Holdings level under the new Global Intangible Low-Taxed Income (GILTI) regime. The provision for income taxes consisted of the following: For the Fiscal Years Ended March 31, 2026 2025 Domestic and foreign components of income (loss) before income taxes Domestic $ (2,097,096 ) $ (1,075,059 ) Foreign 6,844,542 1,226,250 Total $ 4,747,446 $ 151,191 For the Fiscal Years Ended March 31, 2026 2025 Provision (benefit) for income taxes Current tax: U.S. federal $ (5,594 ) $ 395,067 U.S. state and local 750 750 Foreign 1,124,935 436,854 Total Current Tax 1,120,091 832,671 Deferred tax: U.S. federal (47 ) 158,449 Total deferred tax (47 ) 158,449 Total tax …

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NOTE 7 LEASES The Company had 37 operating leases for manufacturing facilities, offices, and staff dormitories as of March 31, 2026. Some leases include one or more options to renew, which is typically at the Companys sole discretion. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in measurement of the right of use (ROU) assets and lease liability. The Companys lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets and related lease obligations are recognized at the commencement date based on the present value of remaining lease payments over the lease term. All of the Companys leases are classified as operating leases and primarily include office space, manufacturing facilities and staff dormitories. Supplemental balance sheet information related to operating leases was as follows: As of March 31, 2026 As of March 31, 2025 Operating lease right of use assets $ 1,038,563 $ 850,172 Operating lease liabilities current $ 319,910 $ 339,699 Operating lease liabilities non-current 539,183 287,527 Total operating lease liabilities $ 859,093 $ 627,226 The weighted average remaining lease terms and discount rates for all of operating leases were as follows: Remaining lease term and discount rate: For the Fiscal Years Ended March 31, 2026 March 31, 2025 Weighted average remaining lease te …

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NOTE 11 RELATED PARTY TRANSACTIONS The relationship and the nature of related party transactions are summarized as follows: Name of Related Party Relationship to the Company Nature of Transactions Yukwise Limited (Yukwise) Wholly owned by the Companys President, Chief Executive Officer, Chairman, and a significant stockholder Consulting Services Multi-Glory Corporation Limited (Multi-Glory) Wholly owned by a significant stockholder Consulting Services Consulting agreements On January 12, 2018, Treasure Success and Yukwise entered into a consulting agreement, pursuant to which Mr. Choi will serve as Chief Executive Officer and provide high-level advisory and general management services for $300,000 per annum. The agreement renews automatically for one-month terms. This agreement became effective as of January 1, 2018. Total consulting fees under this agreement were $300,000 for the fiscal years ended March 31, 2026 and 2025. On January 16, 2018, Treasure Success and Multi-Glory entered into a consulting agreement, pursuant to which Multi-Glory will provide high-level advisory, marketing, and sales services to the Company for $300,000 per annum. The agreement renews automatically for one-month terms. The agreement became effective as of January 1, 2018. Total consulting fees under this agreement were $300,000 for the fiscal years ended March 31, 2026 and 2025. …

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NOTE 15 SEGMENT REPORTING ASC 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Companys internal organizational structure as well as information about geographical areas, business segments, and major customers in financial statements for details on the Companys business segments. The amendment of ASC 280 requires incremental disclosures in annual and interim periods to reportable segments and clarifies entities with a single reportable segment are also required to provide new disclosures in significant segment expenses, profit and loss, assets, and other segment items for better understanding company business activities and overall financial performance and assess potential future cash flow for the business. The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the CODM for making operating decisions and assessing performance as the source for determining the Companys reportable segments. CODM, including Chief Executive Officer and Chief Financial Officer, reviews operation results on the consolidated revenue, gross profit, selling, general, and administrative expenses, and net income or loss. In selling, general, and administration expenses, CODM reviews staff payroll and other related expenses, inventory export and related costs, depreciation, and other major items. Based on CODMs as …

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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Companys consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the SEC). The consolidated financial statements include the financial statements of Jerash Holdings, its wholly owned subsidiaries, and two non-wholly owned subsidiaries. Non-wholly owned subsidiaries are entities that the reporting parent entity does not own equity interests in full. Noncontrolling interest is evaluated with a depiction of the portion of a non-wholly owned subsidiarys net assets, net income, and net comprehensive income that is attributable to holders of equity-classified ownership interests other than the reporting parent entity. As mentioned in Note 1, the Company holds 51% of equity interest in J&B and Jerash Newtech through its wholly owned subsidiary, Treasure Success. The Company consolidates J&B and Jerash Newtech and reports noncontrolling interest to reflect the portion of their equity that is not attributable to the Company as the controlling shareholder. As of March 31, 2026 and 2025, noncontrolling interest was $142,583 and $52,781, respectively. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolida …

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NOTE 9 EQUITY Preferred Stock The Company has 500,000 shares of preferred stock, par value of $0.001 per share, authorized; none were issued and outstanding as of March 31, 2026 and 2025. The preferred stock can be issued by the board of directors of Jerash Holdings (the Board of Directors) in one or more classes or one or more series within any class, and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, rights, qualifications, limitations, or restrictions of such rights as the Board of Directors may determine from time to time. Common Stock The Company had 12,699,940 shares of common stock outstanding as of March 31, 2026 and 2025. On February 9, 2023, the Board of Directors approved the grant of 405,800 RSUs under the Plan (as defined below) to 37 executive officers and employees of the Company, with a two-year vesting period. 405,100 RSUs were vested and additional shares were issued for the fiscal year ended March 31, 2025. Statutory Reserve In accordance with the corporate law in Jordan, Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are required to make appropriations to certain reserve funds, based on net income determined in accordance with generally accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be 10% of net income until the reserve is equal to 100% of the entitys share cap …

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NOTE 18 SUBSEQUENT EVENTS The Company has evaluated all subsequent events through the date of the filing of this Annual Report on Form 10-K with the SEC to ensure that this filing includes appropriate disclosure of events both recognized in the consolidated financial statements as of March 31, 2026. The Company has determined that there were no subsequent events that required recognition, adjustment to, or disclosure in the consolidated financial statements, except for the following: On April 9, 2026, the Company signed a credit facility agreement offered by Capital Bank of Jordan (Capital Bank). Pursuant to the facility, Capital Bank agreed to finance import invoices of up to $7.5 million with condition that such invoices are secured by letter of credit issued by customers. The facility bears an SOFR interest rate plus a spread, with minimum 5% interest rate annually. The Capital Bank facility is reviewed annually. On May 4, 2026, the Board of Directors approved the payment of a dividend of $0.05 per share. …

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