Perfect Moment Ltd.

Previous wording

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 wording

We are focused on generating long-term, brand-right growth and improving profitability. During the six months ended September 30, 2025, we continued to scale our direct-to-consumer business, launched a new spring/summer capsule, opened a new European distribution hub in the Netherlands as part our global logistics transformation, 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.

Previous wording

The following table sets forth our results of operations for the:

Current wording

The following tables set forth our results of operations for the:

Previous wording

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 wording

Additionally, a $343 decrease in marketing and advertising expense, primarily from agency fees and promotional activities, further supported brand awareness and sales efforts.

Previous wording

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 wording

The $1,531 improvement in adjusted EBITDA for the six months ended September 30, 2025 compared to the same period in 2024 was primarily driven by a $1,321 increase in gross profit, reflecting higher revenue and an increase in gross margin from 50.5% to 60.2%. The margin expansion was largely attributed to the contribution from our partnership revenue stream, which had not been in effect during the six months ended September 30, 2024, as well as improved channel and product mix.

Previous wording

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 wording

We continue to focus on optimizing our supply chain and sourcing practices to support long-term margin expansion.

Previous wording

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 wording

Gross profit for the three months ended September 30, 2025 was $2,862, compared to $2,071 for the same period in 2024, an increase of $791, or 38%. Gross margin improved to 60.1%, up from 54.0% in the prior-year period. This increase reflects the favorable impact of channel mix, particularly growth in higher-margin revenue streams, and our ongoing focus on disciplined pricing and supply chain reengineering.

Previous wording

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 wording

The Company remains focused on maintaining marketing efficiency while continuing to strengthen global brand awareness and customer engagement through targeted and data-driven campaigns that support both direct-to-consumer and wholesale channels.

Previous wording

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 wording

As of September 30, 2025, we had cash and cash equivalents of $393, including an accumulated deficit of $70,575. 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.

Previous 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.”

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 shareholders” 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

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.

Current 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 prepaid and other current assets and a $359 decrease in accrued expenses.

Previous 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.

Current wording

During the six months ended September 30, 2025, financing activities provided $4,338 in cash and cash equivalents, primarily attributed to $4,050 of net proceeds from the sale of our common stock, $1,330 of net proceeds from short term borrowings, and $5,590 of proceeds related to the issuance of notes payable to related parties, offset by a $3,871 repayment of short term borrowings, $2,495 repayment of trade finance facility, and $266 payment of dividends on our Series AA Convertible Preferred Stock.

Previous wording

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 wording

As of September 30, 2025, our sales-related reserves were $0.1 million compared to $0.6 million as of March 31, 2025. The most significant variable affecting these reserve balances is sales levels. As a percentage of net revenue, the sales reserves balances were 1.1% as of September 30, 2025 compared to 2.8% as of March 31, 2025 . 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.