Perfect Moment Ltd.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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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.
Jun 30, 2025 · Filed Aug 14, 2025
PMNT$0.11-10.7%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious 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 OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001493152-25-011988
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.
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Tables are not compared: 11 previous and 5 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 (61)
Current report
Perfect Moment is a luxury lifestyle brand offering high-performance skiwear and complementary apparel categories that merge technical functionality with fashion-led design. We develop collections for women, men, and children that reflect a combination of technical integrity, elevated aesthetics, and versatility across seasons and use cases.
Current report
We design all products in-house and rely on a network of manufacturing partners across Europe and Asia, including China. Our merchandise is sold in over 60 countries through a combination of direct-to-consumer ecommerce, wholesale partnerships with premium retailers, select concession formats, and licensed international wholesalers.
Current report
We are focused on generating long-term, brand-right growth and improving profitability. During the three months ended June 30, 2025, we continued to scale our direct-to-consumer business, launched a new spring/summer capsule, and increased our annual style count from approximately 75 to over 200. We also implemented a tiered pricing architecture across key categories to support value perception and drive margin enhancement.
Current report
We intend to grow our business over time by expanding our digital and retail footprint, diversifying our product portfolio, enhancing international reach, and pursuing selective collaborations. Our marketing efforts—both brand-building and performance-driven—are designed to increase awareness, strengthen customer engagement, and support customer acquisition and retention.
Current report
Recent Developments
Current report
On July 21, 2025, the representative of the underwriters partially exercised the over-allotment option for an additional 313,128 shares of the Company’s common stock, generating net proceeds of approximately $87, after deducting underwriting discounts and commissions and estimated offering expenses.
Current report
On July 21, 2025, in connection with the underwriters’ exercise of the over-allotment option, the Company additionally issued the representative of the underwriters a warrant to purchase up to 15,656 shares of the Company common stock at an exercise price of $0.38 (the “July 2025 Warrant”). The July 2025 Warrant is exercisable beginning on the date of issuance and expires five years thereafter.
Current report
Comparability of Financial Information
Current report
Our historical operations and statements of assets and liabilities may not be comparable to our operations and statements of assets and liabilities as a result of completing our IPO in February 2024 and becoming a public company.
Current report
The following table sets forth our results of operations for the:
Current report
Non-GAAP Measures
Current report
We analyze operational and financial data to evaluate our business, allocate our resources, and assess our performance. In addition to total net sales, net loss, and other results under GAAP, the following information includes key operating metrics and non-GAAP financial measures that we use to evaluate our business. We believe that these measures are useful for period-to-period comparisons of the Company’s performance. We have included these non-GAAP financial measures in this Quarterly Report because they are key measures management uses to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating to operating expenses and the allocation of our resources. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.
Current report
Adjusted EBITDA
Current report
Adjusted EBITDA is a non-GAAP financial measure that displays our net loss from continuing operations, adjusted to eliminate the effect of certain items as described below. We define Adjusted EBITDA as net loss excluding interest expense, income tax benefit (expense), depreciation and amortization and stock-based compensation expense. Adjusted EBITDA is a measure that is not defined in US GAAP. We believe that it is useful to exclude these expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.
Current report
The $331 improvement in Adjusted EBITDA for the three months ended June 30, 2025 compared to the same period in 2024 was primarily driven by a $533 increase in gross profit, reflecting higher revenue and an increase in gross margin from 36.6% to 60.3%. The margin expansion was largely attributed to the contribution from our partnership revenue stream, which had not been in effect during the three months ended June 30, 2024, as well as improved channel and product mix.
Current report
Selling, general and administrative (SG&A) expenses increased $117 during the quarter, with key drivers including the $199 amortization of stock-based services, increased legal and professional fees in connection with public company fundraising efforts, higher payroll and related costs to support operational expansion, and incremental spending across key areas such as IT, insurance, travel, and retail operations. While these investments contributed to higher SG&A, they were necessary to support the Company’s transition and strategic objectives for growth. Additionally, a $76 increase in marketing and advertising expense, primarily from agency fees and promotional activities, further supported brand awareness and sales efforts.
Current report
The improvement in Adjusted EBITDA demonstrates operating leverage on higher revenue and margin despite ongoing investments in infrastructure and brand development.
Current report
Non-GAAP financial measures have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:
Current report
Total revenue for the three months ended June 30, 2025 was $1,472, compared to $974 for the same period in 2024, an increase of $498, or 51.1%. Growth was primarily driven by contributions from new revenue streams, including collaboration revenue. Wholesale and ecommerce channels also contributed modest growth year-over-year.
Current report
The year-over-year increase in revenue reflects the Company’s strategic efforts to diversify its sales channels and expand into new geographies while strengthening brand presence through collaborations and flagship retail exposure.
Current report
Cost of goods sold
Current report
Cost of goods sold for the three months ended June 30, 2025 was $583, compared to $618 for the same period in 2024, a decrease of $35, or 5.6%. The decrease was primarily driven by improved inventory efficiency and disciplined cost management. The Company continues to focus on optimizing its supply chain and sourcing practices to support long-term margin expansion.
Current report
Gross profit for the three months ended June 30, 2025 was $889, compared to $356 for the same period in 2024, an increase of $533, or 149.7%. Gross margin improved to 60.3%, up from 36.6% in the prior-year period. This increase reflects the favorable impact of channel mix, particularly growth in higher-margin revenue streams, and the Company’s ongoing focus on disciplined pricing and supply chain reengineering. The margin expansion demonstrates progress toward achieving improved profitability while continuing to scale the business.
Current report
SG&A expenses for the three months ended June 30, 2025 were $3,415, compared to $3,298 for the same period in 2024, an increase of $117, or 3.5%. The increase reflects strategic investments to support the Company’s growth trajectory. Key contributors included amortization of stock-based services, professional fees related to fundraising activities, and higher payroll and personnel costs (due to timing). The Company also incurred targeted increases across areas such as technology, compliance, and insurance to support operations and future scalability. Importantly, SG&A expenses remained relatively flat as a percentage of revenue, highlighting enhanced operating leverage and improved cost discipline.
Current report
Marketing and advertising expenses for the three months ended June 30, 2025 were $529, compared to $453 for the same period in 2024, an increase of $76, or 16.7%. The increase reflects the Company’s continued investment in brand visibility and customer engagement initiatives. Higher spend was primarily driven by increased agency support and event-based activations aimed at driving growth across both direct-to-consumer and wholesale channels. The Company remains focused on maintaining marketing efficiency while building global brand awareness and desire.
Current report
As of June 30, 2025, we had cash and cash equivalents of $2,986, including an accumulated deficit of $68,735. Historically, we have generated negative cash flows from operations and have primarily financed our operations through sales of equity securities, issuance of debt instruments and working capital finance facilities.
Current report
Cash Flow Activities
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Cash Flows Used in Operating Activities
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Cash Flows Provided by Financing Activities
Current report
There were no cash flows associated with financing activities during the three months ended June 30, 2024.
Current report
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of significant judgment. Actual results may vary from our estimates in amounts that may be material to the financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements.
Current report
Our critical accounting policies, estimates, and judgements are as follows, and see Note 2. Summary of Significant Accounting Policies included in Item 8 of Part II for additional information:
Current report
Revenue reserves
Current report
The amount of consideration we receive and recognize as revenue, net across both wholesale and DTC channels varies with changes in sales returns and other accommodations and incentives we offer to our customers. When we give our customers the right to return products or provide other accommodations such as chargebacks and markdowns, we estimate the expected sales returns and miscellaneous claims from customers and record sales reserves to reduce revenue, net.
Current report
As of March 31, 2025, our sales-related reserves were $0.6 million compared to $0.3 million as of March 31, 2024. The most significant variable affecting these reserve balances is sales levels. As a percentage of Net sales, the sales reserves balances were 2.8% as of March 31, 2025 compared to 1.3% as of March 31, 2024. The reserve for returns from customers is the component of our sales-related reserves most susceptible to estimation uncertainty. These estimates are based on 1) historical rates of product returns and claims; and 2) events and circumstances that indicate changes to such historical rates are warranted, such as our customers’ inventory positions and their anticipated sell-through rates. However, actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates. As a result, we adjust our estimates of revenue at the earlier of when the most likely amount of consideration we expect to receive changes or when the amount of consideration becomes fixed. If actual or expected future returns and claims are significantly different than the sales reserves established, we record an adjustment to Net sales in the period in which such determination was made.
Current report
Accounts Receivable and Credit Losses
Current report
We make ongoing estimates relating to the collectability of accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the reserve, we consider historical levels of credit losses and significant economic developments within the retail environment that could impact the ability of our customers to pay outstanding balances and make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Because we cannot predict future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from estimates. If the financial condition of customers were to deteriorate, resulting in their inability to make payments, a larger reserve might be required. In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expenses in the period in which such a determination was made.
Current report
Inventory Reserves
Current report
The Company periodically reviews its inventory for potential excess, obsolescence, or slow-moving items and records reserves as necessary to reflect inventory at the lower of cost or net realizable value. This assessment is inherently judgmental and considers multiple factors including current inventory levels, historical and projected sales trends, seasonality, planned markdowns, and liquidation history. Management places particular focus on unsold units from prior seasons and styles that have been carried forward, taking into account their performance over time and expected sell-through.
Current report
Inventory is tracked at the SKU level, and the Company’s provision methodology involves a cross-functional process with the merchandising and planning teams to identify items at risk of non-recovery. This includes analysis of aged inventory by collection season, unit sales velocity, and margin erosion. Provisions are updated quarterly and recorded in the period in which such assessments are made.
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Removed paragraphs (139)
Previous report
(Amounts in this Item 2 are presented in thousands, except (i) share and per share data and (ii) percentages)
Previous report
Perfect Moment is a high-performance, luxury skiwear and lifestyle brand that fuses technical excellence with fashion-led designs. We create apparel and products that feature what we believe is an unmatched combination of fashion, form, function and fun for women, men and children.
Previous report
Across all revenue channels, Perfect Moment distributes to over sixty countries. We design our products in-house and work with a variety of suppliers to manufacture materials and finished goods. Our collections are worn by an evolving list of celebrities and influencers whose perfect moments are captured across a range of social media platforms.
Previous 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.
Previous 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.
Previous 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.
Previous report
Ecommerce
Previous report
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 report
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 report
Gross Profit and Margin
Previous 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. 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 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
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Third-Party Distribution Center Update
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Historically, all ecommerce orders were dispatched from a third-party distribution center in the United Kingdom and in most instances the Company is paying duties to cross international borders. Compounding the margin dilution is the fact we were paying duties at full retail and not at a transfer price.
Previous report
On July 15, 2024 we executed an agreement with Quiet Platforms to be our third party operated distribution center in the United States. The U.S. distribution center will improve our customer experience, lower our duty cost plus reduce outbound and return shipping cost in the U.S. market, which represented over 40% of our revenue for the fiscal year ended March 31, 2024. In fiscal year 2025 our ecommerce revenue will flow through the U.S. distribution center with Wholesale revenue running through the U.S. distribution center in fiscal year 2026. We are reviewing our European distribution strategy to improve margins in the fiscal year 2026, which represented over 30% of our revenue for the fiscal year ended March 31, 2024.
Previous report
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 report
Summary of Key Strategies to Improve Margin
Previous report
Our Business Strategy
Previous report
Perfect Moment sits at the intersection of three large and growing markets (luxury ski apparel, premium outerwear and athleisure and lifestyle). Based on the characteristics of these respective markets, we believe we have the right brand profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant market share. We believe we are also well-positioned to drive sustainable growth and profitability by executing on the following strategies:
Previous report
Grow Brand Awareness and Attract New Customers
Previous report
Building brand awareness among potential new customers and strengthening our connections with those who already know us will be a key driver of our growth. While we believe our brand has achieved substantial traction globally and those who have experienced our products demonstrate loyalty, our presence is relatively nascent in many of our markets. We believe we have a significant opportunity to increase brand awareness and attract new customers to Perfect Moment through word of mouth, brand marketing and performance marketing.
Previous report
In the past, Perfect Moment’s strong skiing heritage has been used to engage with a core ski audience for whom we believe the combination of technical performance and retro inspired designs resonate strongly. We believe the nature of skiing as a largely affluent, international pursuit means there is a large opportunity in aspirational, lifestyle-led social media engagement. We believe Perfect Moment has captured this social media opportunity to great effect, combining the style and form of the brand with celebrities, influencers, top-tier editorial, collaborations and luxury locations to create a distinct, fun and engaging aspirational lifestyle narrative. Beyond social media, we believe Perfect Moment has been able to deploy this same core brand proposition and narrative to direct digital marketing and traditional media, elevating brand profile and driving high levels of engagement simultaneously. Perfect Moment has also been able to build an effective online marketing engine driving large volumes of direct, organic search and paid search traffic to our ecommerce website, www.perfectmoment.com
Previous report
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 report
Brand marketing and performance marketing also work together to drive millions of visits to our digital platforms. Brand marketing includes differentiated content, our network of ambassadors, and social media, all of which result in what we believe is outsized engagement with our community. Our performance marketing efforts are designed to drive customers from awareness to consideration to conversion. These efforts include retargeting, paid search and product listing advertisements, paid social media advertisements, search engine optimization and personalized email. We believe our highly productive, diversified strategy generates a significant return on brand equity, driving sales and building a growing customer database.
Previous report
We approach this strategy as a funnel, with brand awareness at the top and customer conversion at the bottom, allocating resources across the top, middle and bottom, and measuring returns on these respective investments.
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Accelerate Digital Growth
Previous report
Having used the wholesale channel to establish our brand globally, we believe we will become less reliant on wholesale partners during the next five years by committing more resources to our direct-to-consumer strategy and accelerating our digital growth. We believe technology and partnerships are the key underpinning factors in any e-commerce business and as such we will continue to enhance customer experience, focusing on mobile as the dominant growth channel and leveraging the emerging benefits of social and conversational commerce.
Previous report
Pursue International Expansion and Enter New Markets
Previous report
We believe there is an opportunity to increase penetration across our existing markets and selectively enter new regions. Although the Perfect Moment brand is recognized globally, our past investments have been focused on North America, the United Kingdom and the EU and have driven revenue growth in the United States during the past fiscal year.
Previous report
While we expect the majority of our near-term growth to continue to come from the United States, the United Kingdom and the EU, we believe there is a tremendous opportunity over the long term throughout the rest of the world. In the fiscal year ended March 31, 2024, we increased our outreach in what we believe are the most promising countries in continental Europe. As part of the plan to enter new markets, we will start with China, as we seek to enhance our ability to serve our international customers and further establish Perfect Moment as a global brand.
Previous report
We believe there is a significant opportunity beyond our existing markets, with China representing the next market opening for Perfect Moment. China is projected to become the largest winter sports market, with people participating expected to reach 50 million by 2025 with one thousand ski resorts to be open by 2030, according to reports by Daxue Consulting and Capital Mind. We allocated a small amount of inventory to test the Chinese market directly in November 2024 on Tmall, using local partners to operate, with a digital approach to selling. We were originally forecasting to run losses with respect to such activities for two years, then become profitable from the third year of such activities, with China representing less than 10% of our revenue by 2027. The data we now have on this small test has led to exploring partnership models such as a Joint Venture, where we could benefit for local distribution, market expertise and financial support for inventory and marketing. We still believe the most significant hurdle to overcome with respect to our plan to enter the Chinese market is liquidity to fund the initial operating losses.
Previous report
In order to offer a more localized experience to customers internationally, we intend to offer market-specific languages, currency and content, as well as strategic international shipping and distribution hubs. We plan to leverage our social media strategy and expand our network of social media ambassadors to grow our brand awareness globally.
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Enhance Our Wholesale Network
Previous report
Although in the next five years we will be mainly focused on accelerating digital growth and our direct-to-consumer channel, we still intend to continue broadening customer access and strengthening our global foothold in new and existing markets by strategically expanding our wholesale network and deepening current relationships. In all of our markets, we have an opportunity to increase sales by adding new wholesale partners and increasing volume in existing retailers. Additionally, we are focused on strengthening relationships with our retail partners through broader offerings, exclusive products and shop-in-shop formats, which are dedicated spaces within another company’s retail store on a short-term rental basis. We believe our retail partners have a strong incentive to showcase our brand as our products drive customer traffic and consistent full-price sell-through in their stores.
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Broaden Our Product Offering
Previous report
Continuing to enhance and expand our product offering represents a meaningful growth driver for Perfect Moment. We expect that broadening our product line will allow us to strengthen brand loyalty with the existing Perfect Moment customer base, drive higher penetration in our existing markets and expand our appeal across new geographies. We intend to continue developing our offering through the following strategies.
Previous report
Elevate Fall and Winter. Perfect Moment will continue to focus on quality materials and distinctive designs to create luxury products which aim to deliver technical performance and style impact. However, believing that people want to bring the functionality of our ski apparel into their everyday lives, Perfect Moment is broadening the product range beyond the core “on-slope” skiwear to encompass less technical lifestyle products and a wide range of exceptional products for any occasion, including all year-round accessories.
Previous report
*Expand Spring and Summer.*We intend to continue building our successful Spring and Summer collections in categories such as activewear, loungewear and swimwear. We believe offering inspiring new and complementary product categories that are consistent with our values of heritage, functionality and quality and can become part of our core business represents an opportunity to develop a closer relationship with our customers and expand our addressable market. In June 2024, we launched an Ibiza-inspired Summer Capsule Collection across our global eCommerce channels. The collection was highlighted in a photoshoot published in British Vogue featuring photographer, Grace Burns, and models Stella Jones and Paloma Baygual wearing items from the collection.
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We believe this strategy will deliver a number of benefits:
Previous report
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.
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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current wording
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in thousands, except number of countries, style count and share and per share data)
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We present adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA in developing our internal budgets, forecasts, and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; and in making compensation decisions and in communications with our board of directors concerning our financial performance. Adjusted EBITDA has limitations as an analytical tool, which includes, among others, the following:
Current wording
Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations in that period. We present adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA in developing our internal budgets, forecasts, and strategic plan; in analyzing the effectiveness of our business strategies; in evaluating potential acquisitions; in making compensation decisions; and in communications with our board of directors concerning our financial performance.
Previous wording
Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations in that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Current wording
Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including our net loss and our other financial results presented in accordance with GAAP. You are encouraged to evaluate the above adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Previous wording
Our business is seasonal with revenue concentrated in northern hemisphere countries. Revenue is elevated in the quarters ending September 30, December 31 and March 31 driven by sales of ski and outerwear through the fall and winter months. Our growth rate fluctuates quarter-on-quarter as a result of the seasonality of our business. We expect this fluctuation to continue. In addition to seasonality, quarter-on-quarter results are expected to be impacted by the timing of goods production and delivery, promotional activities and the addition of new products and geographies as the business grows. The business is also subject to the impact of economic cycles that influence retail apparel trends.
Current wording
Our business is seasonal with revenue concentrated in northern hemisphere countries. Revenue is elevated in the quarters ending September 30, December 31 and March 31 driven by sales of ski and outerwear through the fall and winter months. In the quarter ending June 30 sales are driven by swimwear and activewear. Our growth rate fluctuates quarter-on-quarter as a result of the seasonality of our business. We expect this fluctuation to continue. In addition to seasonality, quarter-on-quarter results are expected to be impacted by the timing of goods production and delivery, promotional activities and the addition of new products and geographies as the business grows. The business is also subject to the impact of economic cycles that influence retail apparel trends.
Previous wording
As of December 31, 2024, our cash and cash equivalents and restricted cash are mainly held in U.S. dollar, U.K. pound sterling, Hong Kong dollar, and euro cash accounts with high credit quality financial institutions. As a result of the seasonality of our business, we typically draw down on our trade finance facilities during summer, fall and early winter to meet a large proportion of the cost of goods associated with the manufacture of our fall/winter collection. Trade finance and debt factoring facilities support our working capital cycle through to the late fall/winter season when wholesale receivables are paid and ecommerce revenues increase.
Current wording
As a result of the seasonality of our business, we typically draw down on our finance facilities during summer, fall and early winter to meet a large proportion of the cost of goods associated with the manufacture of our fall/winter collection. Finance and debt factoring facilities support our working capital cycle through to the late fall/winter season when wholesale receivables are paid and ecommerce revenues increase.
Previous wording
Our ability to fund inventory, capital expenditures, and growth will depend on our ability to generate cash in the future. Our future ability to generate cash from operations is, to a certain extent, subject to general economic, financial, competitive, regulatory and other conditions. Based on our current level of operations, we believe our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements, will be sufficient to meet our operating requirements for at least the next 6 months, excluding financing to support production (i.e. timing of working capital). We may seek additional or alternative debt and equity financing to that set out above. If we raise equity financing, our shareholders may experience significant dilution of their ownership interests. If we conduct additional debt financing, the terms of such debt financing may be similar or more restrictive that the terms of our current financing arrangements and we would have additional debt service obligations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be harmed. See the sections set forth in our other filings with the Securities and Exchange Commission, including the Form 10-K, titled “Risk Factors – Risks Related to Ownership of Our Common Stock – Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could result in additional dilution of the percentage ownership of our stockholders” and “Risk Factors – Risks Related to Our Business, Our Brand, Our Products and Our Industry – We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, our management has identified and our auditors reported that there is a substantial doubt about our ability to continue as a going concern.”
Current wording
Our ability to fund inventory purchases, capital expenditures, and growth will depend on our ability to generate cash in the future. Our future ability to generate cash from operations is, to a certain extent, subject to general economic, financial, competitive, regulatory and other conditions. Based on our current level of operations, we believe our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements, will be sufficient to meet our operating requirements for at least the next 12 months, excluding financing to support production (i.e. timing of working capital). We may seek additional or alternative debt and equity financing to that set out above. If we raise equity financing, our shareholders may experience significant dilution of their ownership interests. If we conduct additional debt financing, the terms of such debt financing may be similar or more restrictive that the terms of our current financing arrangements and we would have additional debt service obligations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be harmed. See the sections included in our annual report filed on Form 10-K titled “Risk Factors – Risks Related to Ownership of Our Common Stock – Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could result in additional dilution of the percentage ownership of our stockholders” and “Risk Factors – Risks Related to Our Business, Our Brand, Our Products and Our Industry – We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, our management has identified and our auditors reported that there is a substantial doubt about our ability to continue as a going concern.”
Previous wording
The following table shows summary consolidated cash flow information for the periods presented:
Current wording
The following table shows summary cash flow information for the periods presented:
Previous 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.
Current wording
During the three months ended June 30, 2025, operating activities used $3,892 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $3,819, an adjustment to add back non-cash charges of $1,249 and a net cash outflow from changes in operating assets and liabilities of $1,322. Net cash used by changes in operating assets and liabilities during the three months ended June 30, 2025 consisted primarily of an outflow of cash from a decrease in accrued expenses of $1,824, a decrease in trade payables of $272, and an increase in prepaid and other current assets of $260, partially offset by an inflow of cash from an increase in deferred revenue of $542 and a decrease in inventory of $228.
Previous 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.
Current wording
During the three months ended June 30, 2024, operating activities used $3,880 in cash and cash equivalents and restricted cash, primarily resulting from a net loss of $3,388, an adjustment to add back non-cash charges of $398 and a net cash outflow from changes in operating assets and liabilities of $890. Net cash used by changes in operating assets and liabilities during the three months ended June 30, 2024 consisted primarily of an outflow of cash from a $1,645 increase in prepaid expenses and other current assets related to supplier deposits and a $857 decrease in accrued deferred revenue and an $375 decrease in inventories.
Previous 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.
Current wording
Cash Flows Used in Investing Activities
Previous wording
Three Months Ended December 31, 2024 as Compared to the Three Months Ended December 31, 2023
Current wording
There was no cash used in investing activities for the three months ended June 30, 2025 as compared to the $64 that was used for the three months ended June 30, 2024 as we did not have requirement to purchase any property and equipment during the current period.
Previous 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.
Current wording
During the three months ended June 30, 2025, financing activities used $466 in cash and cash equivalents, primarily attributed to $2,538 of net proceeds from the sale of our common stock, $1,330 of net proceeds from short term borrowings, and $500 of net proceeds related to the issuance of a note payable to a related party, offset by a $2,241 repayment of short term borrowings, $2,495 repayment of trade finance facilities, and $98 payment of dividends on our Series AA Convertible Preferred Stock.
Previous wording
For recent accounting pronouncements, see Note 2 of our unaudited condensed consolidated financial statements included in this report.
Current wording
For recent accounting pronouncements, see Note 2 of our audited consolidated financial statements included in this Annual Report.
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.
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 is composed of a fixed spread over HIBOR or SOFR. The interest rate associated with our short-term borrowings is 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.
Previous wording
To date, revenue has primarily been generated in U.S. dollar, U.K. pound sterling and euro. As a result, our revenue may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in U.K. pound sterling and euros relative to the U.S. dollar. Our foreign exchange risk is less pronounced for our cost of sales as to our cost of goods sold being predominantly U.S. dollar denominated. Our selling, general and administrative expenses are primarily made up of U.S. dollar, Hong Kong dollar, U.K. pound sterling and euro amounts. Although a portion of our non-U.S. dollar costs offset non-U.S. dollar revenue, a currency mismatch arises as to the amount and timing of our different currency cash flows. To date, we have not hedged our foreign currency exposure. We will continue to monitor the impact of foreign exchange risk and review whether to implement a hedging strategy to minimize this risk in future accounting periods. Hedging strategies where implemented are unlikely to completely mitigate this risk. To the extent that foreign exchange risk is not hedged it may result in harm to our business, results of operations and financial condition.
Current wording
To date, revenue has primarily been generated in U.S. dollar, U.K. pound sterling and euro. As a result, our revenue may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in U.K. pound sterling and euros relative to the U.S. dollar. Our foreign exchange risk is less pronounced for our cost of sales as our cost of goods sold is predominantly U.S. dollar denominated. Our selling, general and administrative expenses are primarily made up of U.S. dollar, Hong Kong dollar, U.K. pound sterling and euro amounts. Although a portion of our non-U.S. dollar costs offset non-U.S. dollar revenue, a currency mismatch arises as to the amount and timing of our different currency cash flows. To date, we have not hedged our foreign currency exposure. We will continue to monitor the impact of foreign exchange risk and review whether to implement a hedging strategy to minimize this risk in future accounting periods. Hedging strategies where implemented are unlikely to completely mitigate this risk. To the extent that foreign exchange risk is not hedged it may result in harm to our business, results of operations and financial condition.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Nine Months Ended December 31, 2024 as Compared to the Nine Months Ended December 31, 2023
Previous report — wording carried elsewhere
Selling, general and administrative expenses (“SG&A”)