Perfect Moment Ltd.
For the period ended Mar 31, 2025. Filed Jun 30, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jun 30, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-03-31; filed 2024-07-01.
0001493152-24-025792
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-03-31; filed 2025-06-30.
0001641172-25-017186
ITEM 7. 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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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (60)
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 fiscal year ended March 31, 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
In May 2025 we entered two agreements with lenders in which we borrowed gross proceeds of $1,900, $500 of which were pursuant to a note with an entity controlled by the Chairman of our board of directors. Refer to Note 17 to our consolidated financial statements included in Item 8 of this Form 10-K.
Current report
On June 30, 2025, the Company closed a public offering of 10,000,000 shares of its common stock at an offering price of $0.30 per share (the “Offering”), pursuant to its registration statement on Form S-3 (File No. 333-285612). The Offering generated gross proceeds of $3.0 million. After underwriting discounts, non-accountable expenses, legal expense reimbursement, and other offering-related costs, the Company received net proceeds of approximately $2,686,850.
Current report
In connection with the Offering, the Company issued to ThinkEquity LLC, the representative of the underwriters, warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.38 per share. These warrants are exercisable beginning on the date of issuance and expire five years thereafter. The underwriters were also granted a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or pre-funded warrants to cover over-allotments, if any. As of the date of this filing, the over-allotment option has not been exercised.
Current report
Concurrently with the closing off the Offering, the May 2025 Note was extinguished through the issuance of 1,692,694 shares of the Company’s common stock at a per share price of $0.30.
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
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 Annual 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 $5,375 decrease in Adjusted EBITDA for the year ended March 31, 2025 compared to the same period in 2024 was primarily driven by a $2,013 decline in gross profit, reflecting lower revenue and a reduction in gross margin from 50.9% to 48.5%. Additionally, selling, general and administrative expenses increased by $5,352, including higher stock-based compensation expense of $595, amortization of prepaid stock-based marketing services of $910, legal fees of $1,510, and labor costs of $698 to support growth and public company readiness. Further cost increases included retail store expenses of $497, travel of $192, audit fees of $189, information technology of $170, insurance of $170, and postage of $121. These impacts were partially offset by a $1,244 reduction in marketing and advertising expenses, primarily due to lower agency fees and event-related costs.
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 year ended March 31, 2025, was $21,501 compared to $24,443 for the year ended March 31, 2024, a decrease of $2,942 or 12.1%. The decrease is primarily attributed to the termination of a collaboration with Hugo Boss during the year ended March 31, 2024 totaling $3,169. The remaining increase of $227 is attributed to retail revenue of $775 from our New York and London pop-up locations, plus $555 in revenue from our collaborations entered into during the year ended March 31, 2025, offset by $780 lower wholesale revenue and $323 lower ecommerce revenue.
Current report
SG&A expenses for the year ended March 31, 2025 were $20,685 compared to $15,333 for the year ended March 31, 2024, an increase of $5,352 or 34.9%. The increase was primarily driven by higher stock-based compensation expense of $595, amortization of prepaid stock-based marketing services of $910, legal fees of $1,510, and labor costs of $698 to support growth. Additional increases included retail store expenses of $497, travel of $192, audit fees of $189, information technology of $170, insurance of $170, and postage of $121.
Current report
Marketing and advertising expense consist of agency, contractor and consulting expense, content production, promotional operating expense, and advertising costs. Marketing is an important driver of growth and we intend to continue to make significant investments in our marketing organization.
Current report
Marketing and advertising expenses for the year ended March 31, 2025 were $3,540 compared to $4,784 for the year ended March 31, 2024, a decrease of $1,244 or 26.0%. The decrease was primarily due to reductions in agency expenses of $920 and event costs of $400, partially offset by investments of $200 in brand awareness initiatives aimed at driving eCommerce revenue and sell-through, including advertising, photoshoots, and digital marketing.
Current report
Cash Flow Activities
Current report
Cash used in investing activities was $302 in the year ended March 31, 2025 and $211 in the year ended March 31, 2024, an increase of $91. The increase primarily reflects continued investment in our website infrastructure to enhance the customer experience and support our digital growth initiatives.
Current report
Net cash obtained from financing activities during the year ended March 31, 2025 was $9,692, resulting from $5,148 in net proceeds from the issuance of preference shares, $2,000 in net proceeds from the issuance of a convertible note, $5,792 in net proceeds from short-term borrowing and $2,845 in net proceeds from trade finance facilities, offset by $5,742 in repayment of short-term borrowings and $351 in repayment of trade finance facilities.
Current report
Sources of Liquidity
Current report
As of March 31, 2025, we had cash and cash equivalents of $6,159 and restricted cash of $1,350, compared to $7,910 and $nil as of March 31, 2024.
Current report
Trade finance facility
Current report
As of March 31, 2025, we had an available secured, committed revolving trade finance facility, which provides for borrowings up to $2,700. We were in compliance with all associated covenants and there was an outstanding balance of $2,495 under the facility as of March 31, 2025 which was due June 2025. Refer to Note 8 in Part II, Item 8 of this Form 10-K for further information regarding our trade finance facility.
Current report
Capital Requirements
Current report
Our expected short-term and long-term cash needs are primarily for working capital, including deposits with our suppliers. We expect to meet these short-term and long-term cash needs primarily with cash flows from operations and, if needed, borrowings from our existing credit facilities. As of March 31, 2025, we have $6,728 of minimum purchase obligations with our suppliers for our product lines that will be sold during the year ended March 31, 2026.
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 (93)
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 60 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 revenue for the year ended March 31, 2024, was $24,443 compared to $23,438 for the year ended March 31, 2023, an increase of $1,005 or 4.3%. The increase is primarily attributed to an increase in ecommerce revenue of $1,833 or 21.4% versus the prior year. The increase in ecommerce is attributed to enhanced brand awareness and the Company’s focus on ecommerce. The overall increase is offset by a decrease in wholesale revenue of $828 or 5.6%. The decrease is attributed to higher purchases from our wholesale customers in fiscal year 2023 due to the post COVID-19 rebound.
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 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.
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) by 19% from March 31, 2023 through March 31, 2024. The number of unpaid celebrities and influencers driving the top of our funnel is extraordinary for a company of 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
For the year ended March 31, 2024, our digital strategies have aligned our customers with the expectations of a luxury brand allowing us to reach new milestones. Our focus for fiscal year 2024 was to drive full price retail by reducing the number of products on discount and shortening our discount windows. The strategy was deployed throughout the year including Black Friday where we discounted a smaller product range than in prior years while providing our customers with a balance between full price and promotional items. The result was our biggest Black Friday as we delivered $1,833 of gross sales, a 52% increase versus the prior year, while achieving higher margins.
Previous report
Gross Profit and Margin
Previous report
Our gross profit for the year ended March 31, 2024 was $9,231 compared to $8,756 for the year ended March 31, 2023, an increase of $475 or 5.4%. Our gross margins were 37.8% and flat compared to the 37.4% achieved in the prior year. The increase was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain with Global-E, offset by a decrease in wholesale margin as well as a shift in revenue to lower margin ecommerce revenue.
Previous report
Improving our gross margins in ecommerce was a focus in fiscal year 2024, with anticipated improvements to our gross margins in fiscal year 2025. Currently, all ecommerce orders are 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 are paying duties at full retail and not at a transfer price. We plan on opening third party operated distribution centers in key markets to lower our duty costs. The local distribution centers will improve our customer experience, lower our duty cost plus reduce outbound and return shipping cost. Our first third party distribution center outside of the United Kingdom will be in the United States in FY24.
Previous report
We anticipate our ecommerce margins to surpass wholesale margins in FY26.
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.
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
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Having used the wholesale channel to establish our brand globally, we believe we will become less reliant on wholesale partners during the next 5 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 ecommerce 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 1,000 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
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Although in the next 5 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 surfwear, 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 several benefits:
Previous report
During the fiscal year ended March 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.
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Establish Perfect Moment Owned Physical Retail
Previous report
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.
Previous report
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 pop-up 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.
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Segment Reporting
Previous report
The Company applies ASC Topic 280, Segment Reporting, in determining reportable segments for its financial statement disclosure. The Chief Operating Decision Maker has been identified as the Chief Executive Officer. The Company reports segments based on the financial information it uses in assessing performance and deciding how to allocate resources. Management has determined that the Company operates in one business segment, product sales. Key financial measures including but not limited to gross profit, Adjusted EBITDA and net loss are not reported at a disaggregated level for wholesale and ecommerce and resource allocation decisions to the business strategy are not made based solely on our key financial measures.
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Previous wording
The following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2024 and 2023, should be read in conjunction with our consolidated financial statements and the related notes and the other financial information that are included elsewhere in this Annual Report. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. The following discussion contains forward-looking statements that involve risks and uncertainties such as our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to those differences in our actual results include, but are not limited to, those discussed below and those discussed elsewhere within this Annual Report, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and the Item entitled “Risk Factors.”
Current wording
The following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2025 and 2024, should be read in conjunction with our consolidated financial statements and the related notes and the other financial information that are included elsewhere in this Annual Report. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to those differences in our actual results include, but are not limited to, those discussed below and those discussed elsewhere within this Annual Report, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and the Item entitled “Risk Factors.” Unless otherwise indicated, all dollar amounts are in thousands.
Previous wording
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; and 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
Cost of goods sold for the year ended March 31, 2024 was $15,212 compared to $14,682 for the year ended March 31, 2023, an increase of $530 or 3.6%. The change in cost of goods sold is primarily attributed to an increase in revenues.
Current wording
Cost of goods sold for the year ended March 31, 2025 was $11,072 compared to $12,001 for the year ended March 31, 2024, a decrease of $929 or 7.8%. The change in cost of goods sold is primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain.
Previous wording
Our gross profit for the year ended March 31, 2024 was $9,231 compared to $8,756 for the year ended March 31, 2023, an increase of $475 or 5.4%.
Current wording
Our gross profit for the year ended March 31, 2025 was $10,429 compared to $12,442 for the year ended March 31, 2024, a decrease of $2,013 or 16.2%.
Previous wording
Our gross margins were 37.8% and flat compared to the 37.4% achieved in the prior year. The increase was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain with Global-E, offset by a decrease in wholesale margin as well as a shift in revenue to lower margin ecommerce revenue.
Current wording
Our gross margins were 48.5% compared to 50.9% achieved in the prior year. The decrease was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply chain, offset by a decrease in collaboration revenue.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $7,910 and an accumulated deficit of $48,977. Historically, Perfect Moment has generated negative cash flows from operations and has primarily financed its operations through private sales of equity securities, debt and working capital finance. Overall, cash and cash equivalents and restricted cash, in aggregate, increased by $3,198 million, from $4,712 million as of March 31, 2023 to $7,910 million as of March 31, 2024. This increase is primarily due to net proceeds from financing activities totaling $8,162 from the sale of our common stock offset by net cash used in operating activities totaling $4,453.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $7,509, including restricted cash of $1,350 and an accumulated deficit of $64,916. Historically, Perfect Moment has generated negative cash flows from operations and has primarily financed its operations through private sales of equity securities, debt and working capital finance.
Previous wording
As of March 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 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.
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 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 below 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 below 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
During the year ended March 31, 2023, operating activities used $3,510 in cash and cash equivalents, primarily resulting from a net loss of $10,305, offset by non-cash charges of $8,555 and a net cash outflow from changes in operating assets and liabilities of $1,760.
Current wording
During the year ended March 31, 2025, operating activities used $9,861 in cash and cash equivalents primarily resulting from a net loss of $15,939, offset by non-cash charges of $6,062 and a net cash inflow from changes in operating assets and liabilities of $16.
Previous wording
The changes in operating assets and liabilities during the year ended March 31, 2023 consisted primarily of a $812 increase in inventories, $759 decrease in accounts payables, a $519 increase in trade receivables, and a $515 decrease in unearned revenue, offset by a $514 increase in accrued expenses, and a $321 decrease in prepaid and other current assets.
Current wording
The changes in operating assets and liabilities during the year ended March 31, 2025 consisted primarily of a $1,536 increase in accrued expenses, a $903 increase in trade payables, $937 increase in inventories, $1,493 increases in prepaid expenses and other current assets and, offset by a $155 decrease in unearned revenue and a $160 decrease in accounts receivable.
Previous wording
During the year ended March 31, 2024, operating activities used $4,453 in cash and cash equivalents primarily resulting from a net loss of $8,722, offset by non-cash charges of $3,167 and a net cash inflow from changes in operating assets and liabilities of $1,102.
Current wording
During the year ended March 31, 2024, operating activities used $4,453 in cash and cash equivalents primarily resulting from a net loss of $8,722, offset by non-cash charges of $2,442 and a net cash inflow from changes in operating assets and liabilities of $1,827.
Previous wording
The changes in operating assets and liabilities during the year ended March 31, 2024 consisted primarily of a $1,304 increase in accrued expenses, a $295 increase in trade payables, and a $240 increase in unearned revenue, offset by a $349 increase in inventory, a $238 increase in accounts receivable, a $219 increase in prepaid expense and other current assets, and a $106 decrease in operating leases.
Current wording
The changes in operating assets and liabilities during the year ended March 31, 2024 consisted primarily of a $2,029 increase in accrued expenses, a $295 increase in trade payables, and a $240 increase in unearned revenue, offset by a $349 increase in inventory, a $238 increase in accounts receivable, a $219 increase in prepaid expense and other current assets, and a $106 decrease in operating leases.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cash and cash equivalents and restricted cash