Perfect Moment Ltd
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 14, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-045852
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001493152-25-006515
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 165 previous paragraphs and 175 current paragraphs.
110 unchanged; 36 reworded; 29 added; 18 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Total net revenue for the nine months ended December 31, 2024 was $16,466 compared to $19,602 for the nine months ended December 31, 2023, a decrease of $3,136 or 16%. The decrease is primarily attributed to the termination of a collaboration with Hugo Boss in FY24 totaling $3,169. The remaining increase of $33 is attributed to retail revenue of $516 from our New York and London pop-up locations, plus $91 in revenue from our collaboration with Johnnie Walker, all offset by $592 lower wholesale revenue.
Current report
Total revenue for the three months ended December 31, 2024 was $11,658 compared to $12,726 for the three months ended December 31, 2023, a decrease of $1,068 or 8%. The decrease is primarily attributed to the termination of a collaboration with Hugo Boss in FY24 totaling $1,145. The remaining increase of $77 is attributed to retail revenue of $516 from our New York and London pop-up locations, plus $91 in revenue from our collaboration with Johnnie Walker, all offset by $494 lower wholesale revenue.
Current report
The Company did not extend the two-year collaboration with Hugo Boss as the collaboration took precedence over all other wholesalers. The change allows management to continue building the foundations of future growth through better delivery times, improved quality, consistency, and extend our supplier relationships, which will better serve our wholesale partners and direct to consumer channels, driving longer terms sustainable revenue growth.
Current report
Our gross profit for the three months ended December 31, 2024 was $6,389 compared to $6,627 for the three months ended December 31, 2023, a decrease of $238 or 4%. The decrease is driven by lower sales that is primarily attributed to a collaboration with Hugo Boss that ended in FY24. Our gross margins were 55.0% compared to 52% achieved in the prior year. The increase in gross margin is attributed to our margin expansion projects
Current report
The Company did not extend the two-year collaboration with Hugo Boss as the collaboration took precedence over all other wholesalers. The change allows management to continue building the foundations of future growth through better delivery times, improved quality, consistency, and extend our supplier relationships which will better serve our wholesale partners and direct to consumer channels, driving longer terms sustainable revenue growth.
Current report
No single customer accounted for more than 10% of total revenue for the three and nine months ended December 31, 2024.
Current report
Total revenue for the three months ended December 31, 2024 was $11,658 compared to $12,726 for the three months ended December 31, 2023, a decrease of $1,068 or 8%. The decrease is primarily attributed to a collaboration with Hugo Boss in FY24 totaling $1,145 that ended in FY24. The remaining increase of $77 is attributed to retail revenue of $516 from our New York and London pop-up locations, plus Diageo revenue totaling $91 all offset by $494 lower wholesale revenue.
Current report
Our gross profit for the three months ended December 31, 2024, was $6,389 compared to $6,627 for the three months ended December 31, 2023, a decrease of $238 or 4%. The decrease in gross profit is primarily attributed to a collaboration with Hugo Boss that ended in FY24. Our gross margins were 55% compared to 52% in the prior year. The increase in gross margin is attributed to our margin expansion projects
Current report
Selling, general and administrative expenses (“SG&A”)
Current report
SG&A expenses for the three months ended December 31, 2024 were $6,649 compared to $4,420 for the three months ended December 31, 2023, an increase of $2,229 or 50%. The increase is primarily attributed to an increase in stock compensation expense and amortization of pre-paid services performed for equity totaling $690, increased legal and professional fees of $620 related to incremental public company costs, an increase in people costs to support growth initiatives totaling $344, increase rent totaling $142, increased in IT services of $111 related to 3PL and retail set-ups, increased travel totaling $56 to support new retail locations, and to support Diageo and an increase in dues and subscriptions of $55 primarily attributed to NYSE.
Current report
● The AW24 collection was featured across leading fashion and lifestyle publications this quarter including a multi-page feature in The Standard UK, and coverage within Harper’s BAZAAR US, ELLE US, Town & Country US, Condé Nast Traveler US, InStyle US, Country & Townhouse UK, The Telegraph UK, Grazia UK, Cosmopolitan UK, Marie Claire UK and many more globally.
Current report
● Notable press coverage from the Johnnie Walker collaboration included Women’s Wear Daily, Forbes, InStyle, Grazia, Robb Report, Men’s Journal and more.
Current report
Interest Expense
Current report
Interest expense for the three months ended December 31. 2024 was $1,046 compared to $403 for the three months ended December 31, 2023. The increase in interest expense was primarily driven by an increase in borrowings from advances on future receipts.
Current report
Total net revenue for the nine months ended December 31, 2024 was $16,466 compared to $19,602 for the nine months ended December 31, 2023, a decrease of $3,136 or 16%. The decrease is primarily attributed to a collaboration with Hugo Boss in FY24 totaling $3,169 that ended in FY24. The remaining increase of $33 is attributed to retail revenue of $516 from our New York and London pop-up locations, plus Diageo revenue totaling $91 all offset by $592 lower wholesale revenue.
Current report
Our gross profit for the nine months ended December 31, 2024 was $8,819 compared to $10,388 for the nine months ended December 31, 2023, a decrease of $1,569 or 15%. The decrease is driven by lower sales that is primarily attributed to a two-year collaboration with Hugo Boss that ended in FY24. Our gross margins were 54% compared to 53% in the prior year. Improving our gross margins remains an important focus, and we anticipate our gross margins to continue to improve and ultimately reflect significant improvement year-over-year. We are making significant progress across all our margin expansion projects including opening our first U.S. distribution center last month. Following the facility opening in October 2024, we realized an immediate improvement in operating efficiency. We will experience reduced duty costs for ecommerce orders in the second half of this fiscal year, which will drive improved gross margins compared to last year. In the beginning of fiscal 2025 we sold a high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. Based on our initiatives we anticipate additional margin improvements in Q4.
Current report
Selling, general and administrative expenses (“SG&A”)
Current report
SG&A expenses for the nine months ended December 31, 2024 were $13,871 compared to $9,591 for the nine months ended December 31, 2023, an increase of $4,280 or 45%. The increase is primarily attributed to an increase in stock compensation expense and amortization of pre-paid services performed for equity totaling $1,315, increased legal and professional fees of $966 related to incremental public company costs and the ASC litigation, an increase in people costs to support growth initiatives totaling $744, increase rent totaling $258, an increase in dues and subscriptions of $198 primarily attributed to NYSE and EAC declarations, an increase in insurance totaling $193 associated with public D&O, an increase in travel of $160 to support Diageo, retail stores, investors conferences, and the CFOs travel to London, increased postage of $120 to support samples, an increase in selling expenses of $80k and an increase in IT expenses of $79k related to 3PL and retail set-ups. Overall, the Company has identified approximately $2,000 of year-over-year cost increases associated with going public.
Current report
● To celebrate the opening of Perfect Moment’s first Soho store and the launch of the AW24 collection, Jane Gottschalk and photographer Grace Burns co-hosted an intimate dinner at Hotel Chelsea in New York City, attended by guests including Tamara Mellon, Rachelle Hruska MacPherson, Isabella Massenet, Clementine Vaughn, Bambi Northwood-Blyth, and Romilly Newman. The intimate event was featured exclusively first on Vogue online, and continued media coverage during the quarter included features of Perfect Moment’s Soho store opening in Modern Luxury Manhattan, DuJour, Daily Front Row, and Avenue Magazine.
Current report
● In Q3, Perfect Moment partnered with Goldener Hirsch by Auberge Resorts Collection, Deer Valley’s top winter destination, for an exclusive après-ski pop-up. The takeover spanned the hotel’s main lobby, including two Christmas trees adorned with custom Perfect Moment ornaments, and the outdoor patio where guests could lounge in Perfect Moment houndstooth patterned sling chairs with branded throws and plush pillows. The partnership garnered coverage in WWD, Architectural Digest, and Haute Living amongst others. To celebrate the partnership, Perfect Moment hosted VIP ski trip with top models & influencers at Goldener Hirsch to amplify the partnership.
Current report
Interest Expense
Current report
Interest expense for the nine months ended December 31. 2024 was $1,241 compared to $1,169 for the three months ended December 31, 2023. The increase in interest expense was primarily driven by an increase in borrowings from advances on future receipts.
Current report
The $2,420 decrease in adjusted EBITDA for the three months ended December 31, 2024 compared to the same period in 2023, is primarily attributed to unfavorable currency transactions totaling $1,021, an increase in stock compensation expense and amortization of pre-paid services performed for equity totaling $690, increased legal and professional fees of $620 related to incremental public company costs, an increase in people costs to support growth initiatives totaling $344 and an increase in retail development and planning costs of $273 to support new retail locations, all offset by lower marketing and advertising of $445.
Current report
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.
Current report
Through December 31, 2024, the Company has funded its operations with proceeds from the sale of common stock from the initial public offering, the issuance of common stock, convertible debt, and preferred stock, alongside existing trade, invoice and shareholder financing arrangements. The Company has incurred recurring losses, including a net loss of $8,614 for the nine months ended December 31, 2024 and used cash in operations of $8,780 during the period. As of December 31, 2024, the Company had an accumulated deficit of $57,591. Also, we have accrued approximately $1,143 of delinquent payroll taxes.
Current report
These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Current report
In 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, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments that might result from this uncertainty.
Current report
Management’s plans to alleviate the conditions that raise substantial doubt include:
Current report
The Company’s ability to continue as a going concern for 12 months from the date of these unaudited condensed Consolidated Financial Statements were available to be issued is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and to obtain additional capital financing. No assurance can be given that the Company will be successful in these efforts mentioned above.
Removed paragraphs (18)
Previous report
Since fiscal year 2020, the company’s fiscal second quarter revenue averaged approximately 12% of the fiscal year’s total revenue, with the fiscal first half averaging only 15% of total annual revenue.
Previous report
Total revenue for the six months ended September 30, 2024 was $4,808 compared to $6,876 for the six months ended September 30, 2023, a decrease of $2,068 or 30%. The decrease is primarily attributed to a collaboration with Hugo Boss in FY24 totaling $2,024 that ended in FY24. The remaining decrease of $44 is attributed to the timing of wholesale shipments of $98 offset by an increase in ecommerce of $54.
Previous report
Total revenue for the three months ended September 30, 2024 was $3,833 compared to $5,888 for the three months ended September 30, 2023, a decrease of $2,054 or 35%. The decrease is primarily attributed to a collaboration with Hugo Boss that ended in FY24. The remaining decrease of $30 is attributed to timing of wholesale shipments of $120 or 4% offset by an increase in ecommerce of $90 or 8% attributed to enhanced brand awareness and the company’s focus on ecommerce.
Previous report
The Company did not look to extend the two-year collaboration with Hugo Boss as the collaboration required the use of Perfect Moments supply chain, designers, and took precedence over all other wholesalers. The change allows management to continue building the foundations of future growth through better delivery times, improved quality, consistency, and extend our supplier relationships which will better serve our wholesale partners and direct to consumer channels, driving longer terms sustainable revenue growth.
Previous report
Gross revenue for the six months ended September 30, 2024, increased to $3,398 an increase of $795 or 31% compared to the six months ended September 30, 2023, driven by continued growth in ecommerce revenue. The end of season sale for autumn/winter 2023 (AW23) included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. The Company experiences higher return rates on discounted products and for the six months ended September 30, 2024, our returns as a percentage of sales increased to 39% from 28% for the six months ended September 30, 2023. Overall, net revenue increased $54k or 3%.
Previous report
Our gross profit for the three months ended September 30, 2024 was $2,071 compared to $3,279 for the three months ended September 30, 2023, a decrease of $1,208 or 37%. The decrease is driven by lower sales that is primarily attributed to a collaboration with Hugo Boss that ended in FY24. Our gross margins were 54.0% compared to 56% achieved in the prior year. The decrease in gross margin is attributed to the continuation of the end of season sale noted above plus a greater percentage of ecommerce sales versus wholesale sales for the six months ended September 30, 2024 compared to September 30, 2023. Ecommerce margins are historically lower than wholesale.
Previous report
The Company did not look to extend the two-year collaboration with Hugo Boss as the collaboration required the use of Perfect Moments supply chain, designers, and took precedence over all other wholesalers. The change allows management to continue building the foundations of future growth through better delivery times, improved quality, consistency, and extend our supplier relationships which will better serve our wholesale partners and direct to consumer channels, driving longer terms sustainable revenue growth.
Previous report
For the three and six months ended September 30, 2023, we had two major customers, which accounted for approximately 47% or $2,786 of total revenue and 40% or $2,786 of total revenue, respectively. The related accounts receivable balance for these customers was approximately $760 as of September 30, 2023, and $41 as of March 31, 2023.
Previous report
Total revenue for the three months ended September 30, 2024 was $3,833 compared to $5,888 for the three months ended September 30, 2023, a decrease of $2,055 or 35%. The decrease is primarily attributed to a collaboration with Hugo Boss in FY24 that ended FY24. The remaining decrease of $30 is attributed to timing of wholesale shipments of $120 or 4% offset by an increase in ecommerce of $90 or 8% attributed to enhanced brand awareness and the company’s focus on ecommerce. Ecommerce gross revenue increased to $1,671 an increase of $356 or 27% compared to the three months ended September 30, 2023. The end of season sale for autumn/winter 2023 (AW23) included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. The Company experiences higher return rates on discounted products and for the three months ended September 30, 2024, our returns as a percentage of sales increased to 31% from 23% for the six months ended September 30, 2023.
Previous report
Our gross profit for the three months ended September 30, 2024, was $2,071 compared to $3,279 for the three months ended September 30, 2023, a decrease of $1,208 or 37%. The decrease in gross profit is primarily attributed to a collaboration with Hugo Boss that ended in FY24. Our gross margins were 54% compared to 56% in the prior year. Improving our gross margins remains an important focus, and we anticipate our gross margins in our current fiscal year 2025 to significantly improve year-over-year. We are making significant progress across all our margin expansion projects including opening our first U.S. distribution center in October 2024. Following the facility opening, we realized an immediate improvement in operating efficiency. We will experience reduced duty costs for ecommerce orders in the second half of this fiscal year, which will drive improved gross margins compared to last year. The decrease in gross margin for the current quarter is attributed to the continuation of the end of season sale for autumn/winter 2023 (AW23) that included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. In addition, the Company had a greater percentage of ecommerce sales versus wholesale sales for the three months ended September 30, 2024 compared to September 30, 2023. Ecommerce margins are historically lower than wholesale.
Previous report
SG&A expenses for the three months ended September 30, 2024 were $3,923 compared to $2,693 for the three months ended September 30, 2023, an increase of $1,230 or 46%. The increase is primarily attributed to an increase in stock compensation expense of $667, an increase in people costs to support growth initiatives totaling $204, an increase in warehousing and merchant services due to increased returns totaling $152, increased legal and professional fees of $119 attributed to the ASC litigation that has been settled and incremental public company costs, dues and subscriptions of $83 primarily attributed to NYSE, and increased insurance cost of $75 attributed to D&O.
Previous report
● Global media coverage during the quarter included an exclusive in Women’s Wear Daily on the new Soho store opening, as well as coverage across ELLE, Vogue Scandinavia, Vogue India, The Standard, Hello! Magazine, Fashion Network, Fashion United.
Previous report
Total revenue for the six months ended September 30, 2024 was $4,808 compared to $6,876 for the six months ended September 30, 2023, a decrease of $2,068 or 30%. The decrease is primarily attributed to a collaboration with Hugo Boss in FY24 totaling $2,024 that ended in FY24. The remaining decrease of $44 is attributed to timing of wholesale shipments of $98 offset by an increase in ecommerce of $54 attributed to enhanced brand awareness and the company’s focus on ecommerce. Ecommerce gross revenue increased to $3,398 an increase of $795 or 31% compared to the six months ended September 30, 2023, driven by continued growth in ecommerce revenue. The end of season sale for autumn/winter 2023 (AW23) included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. The Company experiences higher return rates on discounted products and for the six months ended September 30, 2024, our returns as a percentage of sales increased to 39% from 28% for the six months ended September 30, 2023.
Previous report
Our gross profit for the six months ended September 30, 2024 was $2,430 compared to $3,761 for the six months ended September 30, 2023, a decrease of $1,331 or 35%. The decrease in gross profit is primarily attributed to a collaboration with Hugo Boss in FY24 that ended in FY24. Our gross margins were 51% compared to 55% in the prior year. Improving our gross margins remains an important focus, and we anticipate our gross margins in our current fiscal year 2025 to significantly improve year-over-year. We are making significant progress across all our margin expansion projects including opening our first U.S. distribution center in October 2024. Following the facility opening, we realized an immediate improvement in operating efficiency. We will experience reduced duty costs for ecommerce orders in the second half of this fiscal year, which will drive improved gross margins compared to last year. The decrease in gross margin for the six months ended September 30, 2024 versus the six months ended September 30, 2023 is attributed to the end of season sale for autumn/winter 2023 (AW23) that included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. We also had a greater percentage of ecommerce sales versus wholesale sales for the six months ended September 30, 2024 compared to September 30, 2023. Ecommerce margins are historically lower than wholesale.
Previous report
SG&A expenses for the six months ended September 30, 2024 were $7,223 compared to $5,176 for the six months ended September 30, 2023, an increase of $2,047 or 39%. The increase is primarily attributed to an increase in stock compensation expense of $842, an increase in people costs to support growth initiatives totaling $409, an increase in warehousing and merchant services due to increased returns totaling $331, increased legal fees and professional fees of $255 attributed to the ASC litigation that has been settled and incremental public company costs, increased insurance cost of $188 attributed to D&O, and dues and subscriptions of $129 attributed to NYSE.
Previous report
● Global media coverage during the quarter included an exclusive article in British Vogue featuring the company’s new Spring Summer 2024 (“SS24”) campaign photographed by Grace Burns, as well as coverage across Women’s Wear Daily for SS24 and the new Soho store opening, Vogue Hong Kong, Vogue Scandinavia, Vogue India, Vanity Fair, Harper’s BAZAAR, The Telegraph, WhoWhatWear, Grazia, The Impression, Elle, The Standard, Hello! Magazine, Fashion Network, and Fashion United.
Previous report
● Launch of the Perfect Moment SS24 capsule collection at Soho House & Co’s Miami Pool House, generated significant brand awareness during the off-season. The event coincided with the commencement of Miami Swim Week, where Perfect Moment hosted a brand activation that included fashion models and social media influencers with collective reach of more than 1.8 million followers.
Previous report
The $1,978 decrease in Adjusted EBITDA for the six months ended September 30, 2024 compared to the same period in 2023, is primarily attributed to lower margin of $1,331 primarily attributed to a collaboration with Hugo Boss that ended in FY24, an increase in people costs to support growth initiatives totaling $409, an increase in warehousing and merchant services due to increased returns totaling $331, increased legal fees of $255 attributed to the ASC litigation that has been settled and SEC legal fees, increased insurance cost of $188 attributed to D&O, and dues and subscriptions of $129 attributed to NYSE, all offset by favorable currency transactions totaling $419, and lower marketing and advertising of $439.
Reworded paragraphs (36)
Previous wording
The Company has deployed strategies across the entire sales and marketing funnel as we focus on building a direct relationship with our customer, which we believe is an important step of following our customer from the ski slopes, to après, to the chalet, and eventually home expanding our product offering across all seasons.
Current wording
The Company has deployed strategies across the entire sales and marketing funnel as we focus on building a direct relationship with our customers, which we believe is an important step of following our customer from the ski slopes, to après, to the chalet, and eventually home expanding our product offering across all seasons.
Previous wording
We remain one of the most followed luxury ski brands globally and increased our followers across all social media platforms (Instagram, Facebook (Meta) and TikTok) increased by 1.6% from March 31, 2024 through September 30, 2024 and increased 19.2% compared to September 30, 2023. The number of unpaid celebrities and influencers driving the top of our funnel is extraordinary for a Company our size. The strength at the top of the funnel provides opportunities to move our customers through the funnel that not only leads to sales, but more importantly allows us to build a community and ultimately customer loyalty.
Current wording
We remain one of the most followed luxury ski brands globally and increased our followers across all social media platforms (Instagram, Facebook (Meta) and TikTok) increased by 6.9% from March 31, 2024 through December 31, 2024 and increased 19.2% compared to December 31, 2023. The number of unpaid celebrities and influencers driving the top of our funnel is extraordinary for a Company our size. The strength at the top of the funnel provides opportunities to move our customers through the funnel that not only leads to sales, but more importantly allows us to build a community and ultimately customer loyalty.
Previous wording
Our gross profit for the six months ended September 30, 2024 was $2,430 compared to $3,761 for the six months ended September 30, 2023, a decrease of $1,331 or 35%. The decrease is driven by lower sales that is primarily attributed to a two-year collaboration with Hugo Boss that ended in FY24. Our gross margins were 51% compared to 55% in the prior year. Improving our gross margins remains an important focus, and we anticipate our gross margins in our current fiscal year 2025 to significantly improve year-over-year. We are making significant progress across all our margin expansion projects including opening our first U.S. distribution center last month. Following the facility opening in October 2024, we realized an immediate improvement in operating efficiency. We will experience reduced duty costs for ecommerce orders in the second half of this fiscal year, which will drive improved gross margins compared to last year. The decrease in gross margin for the six months ended September 30, 2024 versus the six months ended September 30, 2023 is attributed to the end of season sale for autumn/winter 2023 (AW23) that included an unusually high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. We also had a greater percentage of ecommerce sales versus wholesale sales for the six months ended September 30, 2024 compared to September 30, 2023. Ecommerce margins are historically lower than wholesale.
Current wording
Our gross profit for the nine months ended December 31, 2024 was $8,819 compared to $10,388 for the nine months ended December 31, 2023, a decrease of $1,569 or 15%. The decrease is driven by lower sales that is primarily attributed to a two-year collaboration with Hugo Boss that ended in FY24. Our gross margins were 54% compared to 53% in the prior year. Improving our gross margins remains an important focus, and we anticipate our gross margins to continue to improve and ultimately reflect significant improvement year-over-year. We are making significant progress across all our margin expansion projects including opening our first U.S. distribution center last month. Following the facility opening in October 2024, we realized an immediate improvement in operating efficiency. We will experience reduced duty costs for ecommerce orders in the second half of this fiscal year, which will drive improved gross margins compared to last year. For the six months ended September 30, 2024 we reported gross margins 51%. In the beginning of fiscal 2025 we sold a high percentage of product sold at a discount, making way for a significant new collection replacing many of our product lines for autumn/winter 2024 (AW24), in part due to an upcoming change in legislation in some of our markets for the use of Durable Water Repellency treatments. Based on our initiatives we anticipate additional margin improvements in Q4.
Previous wording
The Company has reclassified certain costs totaling $614 and $991 previously classified as cost of sales for the three and six months ended September 30, 2023, respectively, to SG&A expenses to conform to the current year presentation. For fiscal year ended March 31, 2024 and March 31, 2023, had we reclassified $3.2 million and $2.7 million, respectively, of costs of revenue to SG&A, the our adjusted gross margin would have been 50.9% and 48.7%.
Current wording
The Company has reclassified certain costs totaling $1,761 and $2,752 previously classified as cost of sales for the three and nine months ended December 31, 2023, respectively, to SG&A expenses to conform to the current year presentation. For fiscal year ended March 31, 2024 and March 31, 2023, had we reclassified $3.2 million and $2.7 million, respectively, of costs of revenue to SG&A, the our adjusted gross margin would have been 50.9% and 48.7%.
Previous wording
Perfect Moment expects to continue its approach to social media, building its follower base through a similar and evolving mix of celebrities, influencers, editorials and locations. It also expects to continue to pursue and scale the effective search engine optimization and paid search strategies which have contributed to online sales growth, as well as direct marketing and customer engagement via direct customer communications. Perfect Moment is developing plans to leverage a new Perfect Moment owned physical store network to deepen its brand identity and profile, as well as drive higher levels of loyalty and engagement at the local level. On August 1, 2024 the Company executed a six-month lease for our first seasonal store in SOHO, New York for AW24 and on October 25, 2024 the Company commenced a three-month lease for our second seasonal store in Bicester, England.
Current wording
Perfect Moment expects to continue its approach to social media, building its follower base through a similar and evolving mix of celebrities, influencers, editorials and locations. It also expects to continue to pursue and scale the effective search engine optimization and paid search strategies which have contributed to online sales growth, as well as direct marketing and customer engagement via direct customer communications. Perfect Moment is developing plans to leverage a new Perfect Moment owned physical store network to deepen its brand identity and profile, as well as drive higher levels of loyalty and engagement at the local level. On August 1, 2024 the Company executed a six-month lease for our first seasonal store in SOHO, New York for AW24 and on October 25, 2024 the Company commenced a three-month lease for our second seasonal store in Bicester, England (the “Bicester Lease”). The Bicester Lease was extended for an additional three months.
Previous wording
During the fiscal year ended March 31, 2024 and the six months ended September 30, 2024, we restructured and invested in our design, product development, merchandizing and production teams to create a pathway to execute this underpinning strategy. We launched our first spring / summer capsule encapsulating our new strategy at the end of Q1 FY25. We plan to then gradually increase our product offering as we evaluate demand, supply and profitability. As of this filing, we are ready to sell into the AW25 Wholesale Market which opens in December and closes in February for shipments in FY26. We have bolstered the team that includes hiring a Chief Merchant. The Chief Merchant is revising the calendar for 2026 (FY27) to increase the number of product drops, further capitalizing on opportunities to increase revenue and margin.
Current wording
During the fiscal year ended March 31, 2024 and the nine months ended December 31, 2024, we restructured and invested in our design, product development, merchandizing and production teams to create a pathway to execute this underpinning strategy. We launched our first spring / summer capsule encapsulating our new strategy at the end of Q1 FY25. We plan to then gradually increase our product offering as we evaluate demand, supply and profitability. As of this filing, we are selling to the AW25 Wholesale Market which opened in December and closes in February for shipments in FY26. We have bolstered the team that includes hiring a Chief Merchant and a new Head of Business Development. The Chief Merchant is revising the calendar for 2026 (FY27) to increase the number of product drops, further capitalizing on opportunities to increase revenue and margin. The Head of Business Development will focus on growing our wholesale relationships, online marketplaces and expand further into retail in the U.S. and globally.
Previous wording
Perfect Moment has grown to date without a Perfect Moment owned physical stand-alone store presence. Sales growth has been driven by our wholesale network and online offering. As part of our growth strategy, we believe opening directly operated stores in strategically selected major cities and pop-up stores in strategic ski resorts and high-traffic city locations would provide an excellent opportunity to generate sales in key locations, providing a luxury in-store experience, reflecting the character of the brand and providing an experiential contact point for customers.
Current wording
Perfect Moment has grown to date without a Perfect Moment owned physical stand-alone store presence. Sales growth has been driven by our wholesale network and online offering. As part of our growth strategy, we believe opening directly operated stores in strategically selected major cities and pop-up stores in strategic ski resorts and high-traffic city locations would provide an excellent opportunity to generate sales in key locations, providing a luxury in-store experience, reflecting the character of the brand and providing an experiential contact point for customers. On August 1, 2024 the Company executed a six-month lease for our first pop-up in SOHO, New York for AW24 and on October 25, 2024 the Company commenced a three-month lease for our second seasonal store in Bicester, England, which resulted in revenues of $516 for the three and nine months ended December 31, 2024. The Bicester Lease was extended for an additional three months.
Previous wording
As our product range expands, we see the potential to further grow our community with a physical presence by opening directly operated stores. We already have a physical presence in department stores, operated under wholesale arrangements. Operating Perfect Moment owned stores would provide our community a home for the brand and act as a beacon for new or potential customers, but they also add extra complexity and risk. In order to test our retail model, we plan to first establish seasonal store locations. We evaluate each potential store location based on lease availability and projected viability, and plan to open popups in the fiscal year ending March 31, 2025 and year-round stores beginning the fiscal year ending March 31, 2027. On August 1, 2024 the Company executed a six-month lease for our first pop-up in SOHO, New York for AW24 and on October 25, 2024 the Company commenced a three-month lease for our second seasonal store in Bicester, England.
Current wording
As our product range expands, we see the potential to further grow our community with a physical presence by opening directly operated stores. We already have a physical presence in department stores, operated under wholesale arrangements. Operating Perfect Moment owned stores would provide our community a home for the brand and act as a beacon for new or potential customers, but they also add extra complexity and risk. In order to test our retail model, we plan to first establish seasonal store locations. We evaluate each potential store location based on lease availability and projected viability, and plan to open year-round stores beginning the fiscal year ending March 31, 2027.
Previous wording
The decrease in United States revenue as a percentage of total revenue is primarily attributed to a collaboration with Hugo Boss in FY24 totaling $2,024 that ended in FY24.
Current wording
The decrease in United States revenue as a percentage of total revenue is primarily attributed to the termination of a collaboration with Hugo Boss in FY24 totaling $3,169.
Previous wording
For the three months ended September 30, 2024 and 2023, the largest single supplier of manufactured goods produced 45% and 57%, respectively, of the Company’s products. For the three months ended September 30, 2024 and 2023, the single largest fabric supplier supplied 44% and 45%, respectively, of the fabric used to manufacture the Company’s products.
Current wording
For the three months ended December 31, 2024 and 2023, the largest single supplier of manufactured goods produced 62% and 92%, respectively, of the Company’s products. For the three months ended December 31, 2024 and 2023, there were no fabric purchases
Previous wording
For the six months ended September 30, 2024 and 2023, the largest single supplier of manufactured goods produced 45% and 57%, respectively, of the Company’s products. For the six months ended September 30, 2024 and 2023, the single largest fabric supplier supplied 46% and 63%, respectively, of the fabric used to manufacture the Company’s products.
Current wording
For the nine months ended December 31, 2024 and 2023, the largest single supplier of manufactured goods produced 40% and 75%, respectively, of the Company’s products. For the nine months ended December 31, 2024 and 2023, the single largest fabric supplier supplied 46% and 63%, respectively, of the fabric used to manufacture the Company’s products.
Previous wording
For the three months ended September 30, 2024, we had one major customer, which accounted for approximately 15% or $580 of total revenue. For the six months ended September 30, 2024, we had two major customers, which accounted for approximately 23% or $1,089 of total revenue. The related accounts receivable balance for these customers was $1,027 as of September 30, 2024, and $71 as of March 31, 2024.
Current wording
No single customer accounted for more than 10% of total revenue for the three months ended December 31, 2023. For the nine months ended December 31, 2023, we had one major customer, which accounted for approximately 16% or $3,168 of total revenue. The related accounts receivable balance for this customer was $0 as of December 31, 2023, and $41 as of March 31, 2023.
Previous wording
Cost of goods sold for the three months ended September 30, 2024 was $1,762 compared to $2,609 for the three months ended September 30, 2023, a decrease of $847 or 32%. The change in cost of goods sold is primarily attributed to a decline in sales.
Current wording
Cost of goods sold for the three months ended December 31, 2024 was $5,269 compared to $6,099 for the three months ended December 31, 2023, a decrease of $830 or 14%. The change in cost of goods sold is primarily attributed to a decline in sales.
Previous wording
The Company has reclassified certain costs totaling $614 and $991 previously classified as cost of sales for the three and six months ended September 30, 2023, respectively, to SG&A expenses to conform to the current year presentation.
Current wording
The Company has reclassified certain costs totaling $1,761 and $2,752 previously classified as cost of sales for the three and nine months ended December 31, 2023, respectively, to SG&A expenses to conform to the current year presentation.
Previous wording
Marketing and advertising expenses for the six months ended September 30, 2024 were $1,158 compared to $1,597 for the six months ended September 30, 2023, a decrease of $439 or 28%. The decrease is primarily attributed to lower event costs $341 leveraging our collaboration with Diageo, no amortization of marketing services totaling $185 in the prior year offset digital marketing costs of $53 to support growth.
Current wording
Marketing and advertising expenses for the three months ended December 31, 2024 were $1,034 compared to $1,479 for the three months ended December 31, 2023, a decrease of $445 or 30%. The decrease is primarily attributed to lower costs leveraging our collaboration with Diageo.
Previous wording
● The total social audience reached by content posted by global key opinion leaders (KOLs)1 about Perfect Moment was more than 203.3 million during Q2. This represents the total combined followers of the celebrities, influencers, models, media publications, and fashion industry notables who organically posted about the brand during the quarter globally. Notable highlights include Instagram posts by Priyanka Chopra Jonas (92.1 million followers) and Nick Jonas (35.4 million followers) wearing & tagging @perfectmomentsports. Nina Dobrev also posted wearing Perfect Moment to her stories for her 26.2 million followers, as well as an Instagram story by Jasmine Tookes tagging @perfectmomentsports for her 7.5 million followers.
Current wording
● The total social audience reached by content posted by global key opinion leaders (KOLs)1 about Perfect Moment was more than 299.7 million during Q3. This represents the total combined followers of the celebrities, influencers, models, media publications, and fashion industry notables who organically posted about the brand during the quarter globally. Notable highlights include Instagram posts by Poppy Delevigne (VIP, 2.8 million followers), Victoria Brito (Influencer, 2.4 million followers), Claudia Schiffer (Model, 2.3 million followers), Kelsey Merrit (Model, Influencer, 2 million followers), Karolina Kurkova (Model, 1.1 million followers), Emma Brooks (Influencer, 1.1 million followers) and many more. Additionally this quarter, Priyanka Chopra Jonas (92.1 million followers) posted to her main feed and stories following the announcement of Perfect Moment’s collaboration with Johnnie Walker.
Previous wording
● The total number of unique visitors per month (UVPM) reached more than 1.2 billion during the period. This is the combined sum of UVPM reached by all global digital media coverage achieved during the quarter.
Current wording
● The total number of unique visitors per month (UVPM) reached more than 6.9 billion during the period. This is the combined sum of UVPM reached by all global digital media coverage achieved during the quarter.
Previous wording
Foreign currency transactions increased favourably by $818, from a loss of $817 for the three months ended September 30, 2023 to a gain of $1 for the three months ended September 30, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Current wording
Foreign currency transactions decreased unfavourably by $1,021, from a gain of $879 for the three months ended December 31, 2023 to a loss of $142 for the three months ended December 31, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Previous wording
Foreign currency translation gains (losses) result from the process of translating the financial statements of our foreign entities’ functional currency into USD. Foreign currency translation gains decreased by $718, from $739 for the three months ended September 30, 2023 to $21 for the three months ended September 30, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Current wording
Foreign currency translation gains (losses) result from the process of translating the financial statements of our foreign entities’ functional currency into USD. Foreign currency translation losses decreased by $730, from $758 for the three months ended December 31, 2023 to $28 for the three months ended December 31, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Previous wording
Six Months Ended September 30, 2024 as Compared to the Six Months Ended September 30, 2023
Current wording
Nine Months Ended December 31, 2024 as Compared to the Nine Months Ended December 31, 2023
Previous wording
The following is a comparison of our results of operations for the Six months ended September 30, 2024 and 2023.
Current wording
The following is a comparison of our results of operations for the nine months ended December 31, 2024 and 2023.
Previous wording
Cost of goods sold for the six months ended September 30, 2024 was $2,378 compared to $3,115 for the six months ended September 30, 2023, a decrease of $737 or 24%. The change in cost of goods sold is primarily attributed to a decline in sales.
Current wording
Cost of goods sold for the nine months ended December 31, 2024 was $7,647 compared to $9,214 for the nine months ended December 31, 2023, a decrease of $1,567 or 17%. The change in cost of goods sold is primarily attributed to a decline in sales.
Previous wording
Marketing and advertising expenses for the three months ended September 30, 2024 were $705 compared to $888 for the three months ended September 30, 2023, a decrease of $183 or 21%. The decrease is primarily attributed to lower event costs $277 leveraging our collaboration with Diageo as the management is focused on lowering costs and return on investment, offset by the timing of photoshoots of $67, and digital marketing costs of $55 to support growth.
Current wording
Marketing and advertising expenses for the nine months ended December 31, 2024 were $2,192 compared to $3,081 for the nine months ended December 31, 2023, a decrease of $889 or 29%. The decrease is primarily attributed to lower costs leveraging our collaboration with Diageo.
Previous wording
● The total social audience reached by content posted by global KOLs about Perfect Moment was more than 337.6 million during the period. This represents the total combined followers of the celebrities, influencers, models, media publications, and fashion industry notables who organically posted about the brand during the quarter globally. Notable highlights include Instagram posts by Priyanka Chopra (92.1 million followers), Nick Jonas (35.4 million followers) Paris Hilton (26.2 million followers) wearing and tagging @perfectmomentsports.
Current wording
● The total social audience reached by content posted by global KOLs about Perfect Moment was more than 637.3 million during the period. This represents the total combined followers of the celebrities, influencers, models, media publications, and fashion industry notables who organically posted about the brand during the quarter globally. Notable highlights include Instagram posts by Priyanka Chopra (92.1 million followers), Nick Jonas (35.4 million followers) Paris Hilton (26.2 million followers) wearing and tagging @perfectmomentsports.
Previous wording
● The total number of unique visitors per month (UVPM) reached more than 2.6 billion during the period. This is the combined sum of UVPM reached by all global digital media coverage achieved during the quarter.
Current wording
● The total number of unique visitors per month (UVPM) reached more than 9.6 billion during the period. This is the combined sum of UVPM reached by all global digital media coverage achieved during the quarter.
Previous wording
Foreign currency transactions increased favourably by $419, from a loss of $406 for the six months ended September 30, 2023 to a gain of $13 for the six months ended September 30, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Current wording
Foreign currency transactions decreased unfavourably by $602, from a gain of $473 for the nine months ended December 31, 2023 to a loss of $129 for the nine months ended December 31, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Previous wording
Foreign currency translation gains (losses) result from the process of translating the financial statements of our foreign entities’ functional currency into USD. Foreign currency translation gains decreased by $344, from $351 for the six months ended September 30, 2023 to $7 for the six months ended September 30, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Current wording
Foreign currency translation gains (losses) result from the process of translating the financial statements of our foreign entities’ functional currency into USD. Foreign currency translation losses decreased by $386, from $407 for the nine months ended December 31, 2023 to $21 for the nine months ended December 31, 2024, mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
Previous wording
The $1,038 decrease in adjusted EBITDA for the three months ended September 30, 2024 compared to the same period in 2023, is primarily attributed to lower margin of $1,208 primarily attributed to a collaboration with Hugo Boss that ended in FY24, an increase in people costs to support growth initiatives totaling $204, an increase in warehousing and merchant services due to increased returns totaling $152, increased legal fees of $119 attributed to the ASC litigation that has been settled and SEC legal fee, dues and subscriptions of $83 attributed to NYSE, and increased insurance cost of $75 attributed to D&O, all offset by favorable currency transactions totaling $818, and lower marketing and advertising of $183.
Current wording
The $4,403 decrease in Adjusted EBITDA for the nine months ended December 31, 2024 compared to the same period in 2023, is primarily attributed to lower margin of $1,569 primarily attributed to a collaboration with Hugo Boss that ended in FY24, an increase in stock compensation expense and amortization of pre-paid services performed for equity totaling $1,315, increased legal and professional fees of $966 related to incremental public company costs and the ASC litigation, an increase in people costs to support growth initiatives totaling $747, unfavorable currency transactions totaling $602, and an increase in retail development and planning costs of $273 to support new retail locations, all offset by lower marketing and advertising of $889.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $725, restricted cash of $1,825 and an accumulated deficit of $55,109. Historically, Perfect Moment has generated negative cash flows from operations and has primarily financed its operations through private and public sales of equity securities, debt and working capital finance. Overall, cash and cash equivalents and restricted cash, in aggregate, decreased by $5,360 million, from $7,910 million as of March 31, 2024 to $2,550 million as of September 30, 2024.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $2,772, restricted cash of $1,351 and an accumulated deficit of $57,591. Historically, Perfect Moment has generated negative cash flows from operations and has primarily financed its operations through private and public sales of equity securities, debt and working capital finance. Overall, cash and cash equivalents and restricted cash, in aggregate, decreased by $3,787 million, from $7,910 million as of March 31, 2024 to $4,123 million as of December 31, 2024.
Previous wording
As of September 30, 2024 and March 31, 2024 the outstanding balance under the trade finance facility was $906 and $0 respectively. As of September 30, 2024 and March 31, 2024, there was $1,941 and $0, respectively, in outstanding pledged letters of credit by HSBC. As of September 30, 2024 , total pledged letters of credit and trade loans sum to $2,845, which was secured by a charge of $1,825, held as restricted cash held with HSBC. The trade finance facility is also secured by a guarantee by Perfect Moment Ltd. in the amount of $2.0 million.
Current wording
As of December 31, 2024 and March 31, 2024 the outstanding balance under the trade finance facility was $2,703 and $0 respectively. As of December 31, 2024 and March 31, 2024, there were no outstanding pledged letters of credit by HSBC. As of December 31, 2024 , total pledged letters of credit and trade loans sum to $2,703, which was secured by a charge of $1,351, held as restricted cash held with HSBC. The trade finance facility is also secured by a guarantee by Perfect Moment Ltd. in the amount of $2.0 million.
Previous wording
During the six months ended September 30, 2023, operating activities used $1,850 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $4,184, an adjustment to add back non-cash charges of $1,718 and a net cash inflow from changes in operating assets and liabilities of $616. Net cash used by changes in operating assets and liabilities during the six months ended September 30, 2023 consisted primarily of an inflow of cash as a result of a $1,891 increase in unearned revenue, an increase of $1,469 in trade payables, an increase of $305 in accrued expenses and a decrease of $122 in prepaids and other current assets, offset by an outflow of cash as a result of a $1,399 increase in accounts receivable, and a $1,769 increase in inventories. The movements being general timing of working capital receipts and payments.
Current wording
During the nine months ended December 31, 2024, operating activities used $8,780 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $8,614, an adjustment to add back non-cash charges of $2,827 and a net cash outflow from changes in operating assets and liabilities of $2,993. Net cash used by changes in operating assets and liabilities during the nine months ended December 31, 2024 consisted primarily outflows of cash from a $2,039 increase in inventory, a $1,740 increase in accounts receivable, offset by a cash inflows as a result of a $721 increase in accrued expenses.
Previous wording
During the six months ended September 30, 2024, operating activities used $7,734 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $6,132, an adjustment to add back non-cash charges of $961 and a net cash outflow from changes in operating assets and liabilities of $2,563. Net cash used by changes in operating assets and liabilities during the six months ended September 30, 2024 consisted primarily of an inflow of cash from a $2,559 increase in trade payables, a $908 increase in unearned revenue, offset by a cash outflow as a result of a $2,811 increase in inventories, $1,435 increase in accounts receivable, $1,425 increase in prepaids and other current assets and a $359 decrease in accrued expenses.
Current wording
During the nine months ended December 31, 2023, operating activities used $3,078 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $2,980, an adjustment to add back non-cash charges of $1,950 and a net cash outflow from changes in operating assets and liabilities of $2,048. Net cash used by changes in operating assets and liabilities during the nine months ended December 31, 2023 consisted primarily of an inflow of cash from a $1,537 increase in accrued expenses, a $704 increase in trade payables, offset by a cash outflow as a result of a $2,571 increase in accounts receivable and an $1,822 increase in inventories.
Previous wording
Cash used in investing activities was $102 in the six months ended September 30, 2024 and $82 in the six months ended September 31, 2023, an increase of $20, primarily due to an increase of software and website development capital expenditures.
Current wording
Cash used in investing activities was $287 in the nine months ended December 31, 2024 and $194 in the nine months ended December 31, 2023, an increase of $93, primarily due to an increase in software integration costs.
Previous wording
Net cash obtained from financing activities during the six months ended September 30, 2024 was $2,507 mainly attributed to $2,000 net proceeds from short term borrowings and $906 in net proceeds from trade finance facilities, offset by $399 in repayment of short term borrowings.
Current wording
Net cash obtained from financing activities during the nine months ended December 31, 2024 was $5,321 primarily attributed to $4,604 of net proceeds from short term borrowings, $2,849 of net proceeds from trade finance facilities, and $2,000 of net proceeds related to a convertible note, all offset by $3,846 repayment of short term borrowings.
Previous wording
Net cash obtained from financing activities during the six months ended September 30, 2023 was $2,026 primarily resulting from $2,179 net proceeds from the issuance of common shares and $847 in proceeds from trade finance facilities, offset by $875 repayment of trade finance facilities and $125 of deferred offering costs.
Current wording
Net cash obtained from financing activities during the nine months ended December 31, 2023 was $2,229 mainly attributed to $2,179 net proceeds from the issuance of common shares and $1,847 in net proceeds from trade finance facilities, offset by $923 in deferred offering costs and $874 in repayment of trade finance facilities.
Previous wording
The fair value of our cash equivalents, held primarily in cash deposits, have not been significantly impacted by increases or decreases in interest rates to date, due to the short term nature of these instruments. The interest expense associated with our letter of credit trade finance facility and debt factoring facilities are composed of a fixed spread over HIBOR or SOFR. The fee associated with revenue financing is fixed and the interest rate on our convertible bridge loan is accrued at a fixed rate also. We are exposed to interest rate risk where the interest expense associated with our financing arrangements is depending upon HIBOR or SOFR, a floating reference rate, or in the event that the fixed interest rate associated with our financing arrangements is increased upon roll-over of the financing arrangement at its contractual maturity. Fluctuations in interest rates have not been significant to date. We do not expect that interest rates will have a material impact on our results of operations, owing to the size and short-term nature of the floating rate financing arrangements and the fixed rate nature of the convertible bridge loan that is expect to convert to equity before its contractual maturity on February 15, 2024.
Current wording
The fair value of our cash equivalents, held primarily in cash deposits, have not been significantly impacted by increases or decreases in interest rates to date, due to the short term nature of these instruments. The interest expense associated with our letter of credit trade finance facility and debt factoring facilities are composed of a fixed spread over HIBOR or SOFR. The fee associated with revenue financing is fixed and the interest rate on our convertible bridge loan is accrued at a fixed rate also. We are exposed to interest rate risk where the interest expense associated with our financing arrangements is depending upon HIBOR or SOFR, a floating reference rate, or in the event that the fixed interest rate associated with our financing arrangements is increased upon roll-over of the financing arrangement at its contractual maturity. Fluctuations in interest rates have not been significant to date.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The table below reflects Ecommerce net revenues attributed to Europe (excluding the United Kingdom), United States, United Kingdom, and the rest of the world: