Financial Analysis

14. COMMITMENTS AND CONTINGENCIES Notice from NYSE On December 17, 2024 the Company received a notification from the NYSE American LLC (the NYSE) stating that the Company was not in compliance with the minimum stockholders equity requirements of Sections 1003(a)(ii) of the NYSE American Company Guide (the Company Guide) requiring stockholders equity of $ 4,000 or more if the Company has reported losses from continuing operations and/or net losses in three of the four most recent fiscal years. As of March 31, 2026, the Company had stockholders deficit of approximately $ 686 and had losses in its three most recent fiscal years ended March 31, 2026. The Company was then subject to the procedures and requirements of Section 1009 of the Company Guide. The Company had until June 11, 2026 to regain compliance with the Company Guide. The Company submitted a plan of action to regain compliance with the Company Guide (the Plan) on January 10, 2025, which the NYSE accepted on March 4, 2025. Accordingly, the Company was able to continue its listing during the Plan period and was subject to periodic reviews including quarterly monitoring for compliance with the Plan until it has regained compliance. The notification and Plan acceptance has no immediate effect on the listing or trading of the Companys common stock on the NYSE. The NYSEs acceptance of the Companys Plan does not affect the Companys business, operations or reporting requirements with the U.S. Securities and Exchange Commissio …

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11. STOCK-BASED COMPENSATION PLANS The Company maintains the 2021 Equity Incentive Plan (the 2021 Plan), which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and performance units and performance shares to employees, directors and consultants of the Company or any parent or subsidiary of the Company. The purpose of the 2021 Plan is to enable the Company to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants of the Company or any parent or subsidiary of the Company, and to promote the success of the Companys business. The Company has 1,400,801 unallocated shares available to grant from the 2021 Plan as of March 31, 2026. The Company has historically granted stock options to non-employees in exchange for the provision of services, both under the 2021 Plan and outside of the 2021 Plan. The Company has granted stock options and time-based restricted stock units (time-based RSUs). Stock options granted to date generally have a 4 -year vesting period and vest at a rate of 25 % each year on the anniversary date of the grant. Stock options generally expire on the earlier of 10 years from the date of grant, or a specified period of time following termination. Time-based RSUs generally vest over a period of four years in accordance with the terms and conditions establi …

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8. DEBT Short-Term Borrowings During the years ended March 31, 2026 and 2025, the Company entered into business loan and security agreements (the Term Loans) with a lender for short-term loans to be provided by the lender, or the lenders assignees (collectively, the Lenders) that mature 30-weeks from the date of a borrowing. No amount of repaid borrowings may be reborrowed. During the year ended March 31, 2026 and 2025, the Company borrowed a gross amount of $ 1,988 and $ 8,658 , respectively, net of fees of $ 658 and $ 2,866 , respectively, which were recorded as a debt discount and are being amortized over the term of the Term Loans. During the years ended March 31, 2026 and 2025, the Company made total repayments of $ 4,725 and $ 5,742 , respectively. During the years ended March 31, 2026 and 2025, the company amortized $ 1,544 and $ 1,801 , respectively, of the debt discount to interest expense. As of March 31, 2026 and 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. Trade Finance Facility The Company, through PMA, had a trade finance facility extended on goods for which letters of credit are issued to the Companys suppliers by a financial institution. The trade facility agreement was entered into in June 2022 and subsequently amended since with the most recent amendment in August 2024. The outstanding balanc …

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13. INCOME TAXES Components of income tax (benefit) expense were as follows: SCHEDULE OF INCOME TAX BENEFIT EXPENSE Year Ended March 31, 2026 Year Ended March 31, 2025 Current $ - $ - Deferred - - Total income tax (benefit) expense $ - $ - The following is a reconciliation of the federal statutory rate to the Companys effective income tax rate: SCHEDULE OF RECONCILIATION OF INCOME TAXES Year Ended March 31, 2026 Year Ended March 31, 2025 Year Ended March 31, 2026 Year Ended March 31, 2025 Statutory rate 21.0 % 21.0 % Change in valuation allowance (21.0 ) (21.1 ) Foreign tax differential 0.0 (1.2 ) Permanent differences 0.0 1.3 Effective rate 0.0 % 0.0 % The tax effects of temporary cumulative differences which give rise to deferred tax assets and liabilities are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES March 31, 2026 March 31, 2025 Deferred tax liabilities: Related Party Interest $ 154 $ - Gain/Loss on Currency 37 - Fixed and intangible assets (50 ) 175 Total deferred tax liabilities 141 175 Deferred tax assets: Tax loss carryforward 11,511 10,284 Stock compensation expense 446 815 IPO expenses - 163 Interest Expense 5 - Valuation allowance (11,821 ) (11,087 ) Total deferred tax assets 141 175 Deferred tax assets, net $ - $ - During the years ended March 31, 2026 and 2025, the Company recorded an increase in the valuation allowance of $ 734 and $ 3,190 , respectively, related to federal deferred tax assets. Deferred tax assets are recorded relate …

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6. LEASES The Company has obligations under operating leases for its offices. The majority of the Companys leases include renewal options at the sole discretion of the Company. In general, it is not reasonably certain that lease renewals will be exercised at lease commencement and therefore lease renewals are not included in the lease term. In January 2026, the Company entered into a long-term non-cancellable lease agreement for its new office facility. The lease terminates in 2030. The Company classified the lease as an operating lease and determined that the present value of the right of use asset and lease liability at the adoption date was $ 1,077 , using a discount rate of 8.00 %. The following table details the Companys net lease expense. The lease expenses include contingent rent payments and other non-fixed lease related costs, including common area maintenance, property taxes, and landlords insurance. SCHEDULE OF LEASE EXPENSE Lease expense March 31, 2026 March 31, 2025 Lease expense Year Ended March 31, 2026 Year Ended March 31, 2025 Net lease expense: Operating lease expense $ 76 $ 110 Total lease expense $ 76 $ 110 Weighted-average remaining lease term (in years) 4.72 0.53 Weighted-average discount rate 8.0 % 5.0 % Rent expense for the fiscal years ended March 31, 2026 and 2025 was $ 534 and $ 894 , respectively (including short term and other rentals). SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES Maturity of lease liabilities March 31, 2026 Within one year $ …

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9. NOTES AND LINE OF CREDIT RELATED PARTY Related Party Notes During May 2025, the Company entered into a promissory note (the May 2025 Related Party Note) with an entity controlled by the Chairman of the Companys board of directors to borrow $ 500 . The May 2025 Related Party Note matured on December 31, 2025 and permitted the Company to prepay the note in full without penalty at any time. If an Event of Default, as defined in the May 2025 Related Party Note, occurs, the outstanding principal and accrued interest would become due and payable immediately. Concurrently, with the closing of an offering in September 2025 (see Note 8), the May 2025 Related Party Note and accrued unpaid interest totaling $ 508 was extinguished through the issuance of 1,692,694 shares of the Companys common stock at a per share price of $ 0.30 . The issuance of shares was approved and determined to be on terms and conditions at arms length as the share price was the same price extended to third parties as part of a share offering that closed on the same day (see Note 10). During August 2025, the Company received $ 3,390 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 18, 2030 (the Second August 2025 Related Party Note, collectively with t …

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Recent Accounting Pronouncements, adopted ASU 2024-01, Compensation-Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (ASU 2024-01) introduces updates to accounting standards related to the classification and measurement of financial instruments under ASC 320. The update primarily focuses on clarifying guidance for equity securities, debt instruments, and other financial assets, particularly in the areas of fair value measurement and impairment recognition. It aims to improve consistency and comparability in the reporting of financial instruments by refining the criteria for classifying securities and enhancing the methodology for recognizing and measuring impairments. ASU 2024- 01 also mandates additional disclosures to provide greater transparency around the valuation techniques and assumptions used in determining the fair value of financial instruments. The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2024-01 effective March 31, 2026, for the fiscal year beginning April 1, 2025. The adoption of this guidance did not have material impact on Companys consolidated financial statements or related disclosures. ASU 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (ASU 2024-02) updates accounting standards for revenue recognition, lease accounting, and impairment of long-lived assets. ASU 2024-02 provides enhanced gu …

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15. RELATED PARTY TRANSACTIONS Consulting and Advisory Services One director of the Company provided consulting and advisory services for the Company totaling $ 292 and $ 185 for the years ended March 31, 2026 and 2025, respectively, and are included in selling, general and administrative expenses on the accompanying consolidated statement of operations and comprehensive loss. Series AA Preferred Stock In March 2025, the Company entered into securities purchase agreements with a company controlled by the Chairman whereby the Company issued 344,797 shares of Series AA Preferred Stock at an original issue price of $ 5.8005 per share for gross proceeds of $ 2,000 . On January 15, 2026, the Company issued 11,458,306 shares of its common stock upon conversion of all outstanding shares of the Series AA Preferred Stock held by the company controlled by the Chairman (see Note 10). Line of Credit One of the lenders on the Revolver was an investor of the Company that owned more than 5.0% of outstanding shares of the Company. Refer to Note 9 for further details. See Note 9 for further discussion of notes payable issued to related parties.

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16. SEGMENT REPORTING The following table includes additional information about reported segment revenue, significant segment expenses and segment measure of profitability: SCHEDULE OF SEGMENT REVENUE, SIGNIFICANT SEGMENT EXPENSES AND SEGMENT MEASURE OF PROFITABILITY Year ended March 31, 2026 Year ended March 31, 2025 Revenue, net $ 23,603 $ 21,501 Less: Significant segment expenses - Cost of Revenue 7,644 11,072 Selling expense 4,204 3,916 General and administrative 12,727 14,501 Marketing and advertising 3,234 3,540 Non-cash compensation 1,034 2,244 Other segment items (1) 1,891 2,167 Net loss $ (7,131 ) $ (15,939 ) (1) Includes interest expense, foreign currency transactions gain (loss), and other income. See Note 2 for revenue by geographic location. Long-lived assets, excluding other non-current assets, by geography are summarized as follows: SCHEDULE OF LONG-LIVED ASSETS, EXCLUDING OTHER NON-CURRENT ASSETS, BY GEOGRAPHY Year ended March 31, 2026 Year ended March 31, 2025 United Kingdom $ 1,357 $ 478 Hong Kong - 49 Total long-lived assets $ 1,357 $ 527

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going concern Through March 31, 2026, 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 other financing arrangements. The Company has incurred recurring losses, including a net loss of $ 7,131 for the year ended March 31, 2026 and used cash in operations of $ 8,998 during that period. As of March 31, 2026, the Company had an accumulated deficit of $ 72,047 and a stockholders deficit of $ 686 . These factors raise substantial doubt about the Companys ability to continue as a going concern for at least twelve months from the date these consolidated financial statements were available to be issued. The Companys ability to continue as a going concern is dependent upon the 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. The Companys future capital requirements will depend on many factors, including production costs and planned growth. In order to finance these opportunities and associated costs, it is possible that the Company would need to raise additional financing if working capital is insufficient to support its business needs. While there can be no assurances, the Company intends to raise such capital thro …

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10. STOCKHOLDERS (DEFICIT) EQUITY The Company is authorized to issue 110,000,000 shares of stock, of which 100,000,000 is designated as common stock and 10,000,000 is designated as preferred stock. Common stock The Company is authorized to issue 100,000,000 shares of common stock with a par value of $ 0.0001 per share, of which 47,048,174 and 19,291,000 were issued and outstanding as of March 31, 2026 and 2025, respectively. Sale of Common Stock Public Offering: On June 30, 2025, the Company closed a public offering of 10,000,000 shares of its common stock at an offering price of $ 0.30 per share (the Offering), pursuant to its registration statement on Form S-3 (File No. 333-285612) for aggregate net proceeds of approximately $ 2,538 , after deducting underwriting discounts and commissions and estimated offering expenses. The underwriters were also granted a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or pre-funded warrants to cover over-allotments, if any. On July 21, 2025, the over-allotment option was partially exercised by the underwriters for an additional 313,128 shares of the Companys common stock, generating net proceeds of approximately $ 83 , after deducting underwriting discounts and commissions and estimated offering expenses. In 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 J …

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17. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as described below or within these consolidated financial statements, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On May 8, 2026, the Company consummated a securities purchase agreement with one of the lenders of the Revolver under which it issued 6,060,606 shares of its common stock at a purchase price of $ 0.33 per share and warrants to purchase up to 8,276,944 shares of its common stock at an exercise price of $ 0.40 per share and expiring on August 27, 2028 for gross proceeds of $ 2,000 (the May 2026 Securities Purchase Agreement) . In connection with the May 2026 Securities Purchase Agreement, the Company issued warrants to purchase up to 1,864,753 shares of its common stock at an exercise price of $ 0.46822 per share and expiring on August 27, 2028 to the other lender of the Revolver. On June 12, 2026, the Company received a notice (the Delisting Notice) from NYSE Regulation informing the Company that NYSE Regulation has determined to commence proceedings to delist the common stock of Perfect Moment Ltd. (ticker symbol: PMNT) from NYSE American. NYSE Regulation determined that the Company is no longer suitable for listing pursuant to Section 1 …

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