{"url_path":"/sec/jrsh/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-18","source_url":"https://www.sec.gov/Archives/edgar/data/1696558/0001213900-26-070227-index.html","accession_number":"0001213900-26-070227","cik":"0001696558","ticker":"JRSH","issuer_name":"Jerash Holdings (US), Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1696558/0001213900-26-070227-index.html","primary_entity_key":"0001696558","primary_entity_name":"Jerash Holdings (US), Inc."},"word_count":3894,"has_tables":true,"body_markdown":"** **\n\n**Item 7. Management’s Discussion and Analysis of Financial\nCondition and Results of Operations.**\n\n* *\n\n*The following discussion of our financial condition\nand results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere\nin this annual report.*\n\n \n\n**Executive Overview**\n\n \n\n**Seasonality of Sales**\n\n \n\nWe used to have strong seasonality due to higher\nvalues of fall and winter orders, which are normally shipped in the first two quarters of our fiscal years. We have been working on smoothing\nout seasonality through expansions of customer base and product offerings. In fiscal 2026, we managed to reverse the trend to have\nhigher sales in the second half of the year through introduction of a new customer and expansion in sales of some existing customers for\nspring and summer season orders. We will continue our efforts in this direction in order to produce more consistent results throughout\na fiscal year.  One of our strategies is to increase sales with other customers where clothing lines are stronger during the spring\nmonths. This strategy also reflects our current plan to increase our number of customers to mitigate our current concentration risk with\nVF Corporation.\n\n  \n\n**Results of Operations**\n\n \n\nThe following table presents certain information\nfrom our consolidated statements of operations and comprehensive income (loss) for the fiscal years ended March 31, 2026 and 2025 and\nshould be read, along with all of the information in this management’s discussion and analysis, in conjunction with the consolidated\nfinancial statements and related notes included elsewhere in this annual report.\n\n \n\n21\n\n \n\n \n\n(All amounts, other than percentages, in thousands\nof U.S. dollars)\n\n \n\n  \nFiscal Years Ended March 31,  \n   \n  \n\n  \n2026  \n2025  \n  \n\n  \n   \nAs % of  \n   \nAs % of  \nYear over Year \n\nStatement of Income Data: \nAmount  \nSales  \nAmount  \nSales  \nAmount  \n% \n\nRevenue \n$166,264  \n 100% \n$145,812  \n 100% \n$20,452  \n 14%\n\nCost of goods sold \n 139,481  \n 84% \n 123,493  \n 85% \n 15,988  \n 13%\n\nGross profit \n 26,783  \n 16% \n 22,319  \n 15% \n 4,464  \n 20%\n\nSelling, general, and administrative expenses \n 20,456  \n 12% \n 20,872  \n 14% \n (416) \n (2)%\n\nOther expenses, net \n 1,580  \n 1% \n 1,296  \n 1% \n 284  \n 22%\n\nNet income before taxation \n$4,747  \n 3% \n$151  \n 0% \n$4,596  \n 3,044%\n\nIncome tax expense \n 1,120  \n 1% \n 991  \n 1% \n 129  \n 13%\n\nNet income (loss) \n$3,627  \n 2% \n$(840) \n (1)% \n$4,467  \n 532%\n\n**  **\n\n**Revenue.**Our revenue was $166.3\nmillion for fiscal 2026, compared to $145.8 million for fiscal 2025, an increase of $20.5 million, or 14%, primarily due to increases\nin shipments to businesses from new customers such as Hansoll Group and growth in sales from some of the customers introduced in the past\nfew years such as Acushnet and Tharanco.\n\n \n\nThe following table outlines the dollar amount\nand percentage of total sales to our customers for the fiscal years ended March 31, 2026 and 2025, respectively.\n\n \n\n(All amounts, other than percentages, in thousands\nof U.S. dollars)\n\n \n\n  \nFiscal 2026  \nFiscal 2025 \n\n  \nSales  \n   \nSales  \n  \n\n  \n(Amount)  \n%  \n(Amount)  \n% \n\n  \n   \n   \n   \n  \n\nVF Corporation(1) \n$87,020  \n 52.3% \n$94,151  \n 64.6%\n\nNew Balance \n 22,760  \n 13.7% \n 17,872  \n 12.2%\n\nSuzhou Unitex \n 10,332  \n 6.2% \n 5,696  \n 3.9%\n\nTharanco \n 7,663  \n 4.6% \n 4,673  \n 3.2%\n\nHansoll \n 6,952  \n 4.2% \n -  \n 0%\n\nSWC Inc. \n 5,532  \n 3.3% \n 5,049  \n 3.5%\n\nG-III \n 3,799  \n 2.3% \n 2,352  \n 1.6%\n\nHugo Boss \n 1,315  \n 0.8% \n 4,018  \n 2.8%\n\nOthers \n 20,891  \n 12.6% \n 12,001  \n 8.2%\n\nTotal \n$166,264  \n 100.0% \n$145,812  \n 100.0%\n\n \n\n(1)\nA large portion of our products are sold under The North Face, Timberland, and Vans brands owned by VF Corporation.\n\n \n\n**Revenue by Geographic Area**\n\n(All amounts, other than percentages, in thousands\nof U.S. dollars)\n\n \n\n  \nFiscal Years Ended March 31,  \n  \n\n  \n2026  \n2025  \nYear over Year \n\nRegion \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\nUnited States \n$138,158  \n 83% \n$128,577  \n 88% \n$9,581  \n 7%\n\nChina and Hong Kong \n 16,851  \n 10% \n 8,941  \n 6% \n 7,910  \n 88%\n\nRepublic of Korea (“Korea”) \n 6,952  \n 4% \n -  \n 0% \n 6,952  \n -%\n\nJordan \n 2,198  \n 2% \n 3,081  \n 2% \n (883) \n (29)%\n\nOthers \n 2,105  \n 1% \n 5,213  \n 4% \n (3,108) \n (60)%\n\nTotal \n$166,264  \n 100% \n$145,812  \n 100% \n$20,452  \n 14%\n\n \n\n22\n\n \n\n \n\nSince January 2010, all apparel manufactured in\nJordan can be exported to the U.S. without customs duty being imposed, pursuant to the United States-Jordan Free Trade Agreement entered\ninto in December 2001. This free trade agreement provides us with substantial competitiveness and benefit that allowed us to expand our\ngarment export business in the U.S. Effective from April 5, 2025, the U.S. imposed a baseline tariff of 10% on imports from almost all\ncountries, including Jordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified\ncountries, amongst them Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst\nthe 10% baseline tariff persists. The tariff had been modified to 15% according to an executive order of presidential actions on July\n31, 2025. In February 2026, the U.S. Supreme Court ruled that the “reciprocal” tariffs were illegal, and the U.S. Customs\nhas since then stopped to impose the “reciprocal” tariff and established a new process to refund importers for voided “reciprocal”\ntariff. Following the ruling, the U.S. Government then invoked Section 122 of the Trade Act of 1974 to impose an across the board 10%\ntariff for a period of 150 days expiring in July 2026, including on the imports from Jordan. While the payment of the tariff is typically\nthe responsibility of the importer (Jerash’s customers), the impact of the tariff on customers’ demand would be affected by\nthe comparative levels of the tariffs on imports from Jordan compared to other.\n\n \n\nThe increase of approximately 7% in sales to the\nU.S. during fiscal 2026 was mainly attributable to an increase in sales to some of our U.S. customers introduced in the past few years,\nincluding Acushnet, Tharanco, and American Eagle.\n\n \n\nDuring fiscal 2026, aggregate sales to Jordan,\nChina and Hong Kong, Korea, and other locations, such as Germany, and Mexico, increased by 63% from approximately $17.2 million in fiscal\n2025 to $28.1 million. This increase can be attributed mainly to the introduction of a new customer, Hansoll Group and an increase in\nrevenue from Suzhou Unitex.\n\n \n\n**Cost of goods sold***.* Our cost\nof goods sold experienced an increase of approximately $16.0 million to approximately $139.5 million in fiscal 2026 from approximately\n$123.5 million in fiscal 2025. As a percentage of revenue, the cost of goods sold decreased by approximately 1 percentage point to 84%\nin fiscal 2026 from 85% in fiscal 2025. The decrease in the cost of goods sold as a percentage of revenue was primarily attributable to\nimproved efficiency from economy of scale, continued automation such as installation of hanging systems, and better control of import\ncosts.\n\n \n\nFor the fiscal year ended March 31, 2026 and 2025,\nwe purchased approximately 13% and 10% of our garments and raw materials from one major supplier, respectively.\n\n \n\n**Gross profit margin**. Our gross profit\nmargin was approximately 16% in fiscal 2026, representing an increase by approximately 1 percentage point from 15% in fiscal 2025. The\nincrease in gross profit margin was primarily influenced by our improvements in efficiency through automation and economy of scale.\n\n \n\n**Selling, general, and administrative expenses.**Selling, general, and administrative expenses decreased by approximately 2% from approximately $20.9 million in fiscal 2025 to\n$20.5 million in fiscal 2026. The decrease was mainly attributable to better control of the export logistic expenses and lower share-based\npayment expenses in fiscal 2026.\n\n \n\n**Other expenses, net***.* Other\nexpenses, net were approximately $1.6 million in fiscal 2026, compared to other expenses, net of approximately $1.3 million in fiscal\n2025. The increase in other expenses from fiscal 2025 to fiscal 2026 was primarily due to a currency exchange loss and lower interest\nincome in 2026.\n\n** **\n\n**Taxation.**Income tax expenses\nfor fiscal 2026 were approximately $1.1 million, compared to income tax expenses of approximately $1.0 million for fiscal 2025. The\neffective tax rate for fiscal 2026 decreased to 24%, compared to 656% for fiscal 2025. The decrease in the effective tax rate mainly\nresulted from lower Subpart F income impacts, favorable foreign tax rate differentials, favorable return-to-provision and valuation\nallowance adjustments, and the absence of uncertain tax position adjustments related to amended tax returns that were recorded in\nfiscal 2025.\n\n \n\n**Net income (loss).** Net income for\nfiscal 2026 was $3.6 million, compared to net loss of approximately $0.8 million for fiscal 2025. The net income is mainly attributable\nto the improvement in efficiency through automation and economy of scale, better control of the export logistic expenses and lower share-based\npayment expenses and the lower effect tax rate in fiscal 2026.\n\n \n\n23\n\n \n\n \n\n**Liquidity and Capital Resources**\n\n \n\nJerash Holdings is a holding company incorporated\nin Delaware. As a holding company, we rely on dividends and other distributions from our Jordanian and Hong Kong subsidiaries to satisfy\nour liquidity requirements. Current Jordanian regulations permit our Jordanian subsidiaries to pay dividends to us only out of their accumulated\nprofits, if any, determined in accordance with Jordanian accounting standards and regulations. In addition, our Jordanian subsidiaries\nare required to set aside at least 10% of their respective accumulated profits each year until the reserve is equal to 100% of the entity’s\nshare capital, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends. We have relied on direct\npayments of expenses by our subsidiaries to meet our obligations to date. To the extent payments are due in U.S. dollars, we have occasionally\npaid such amounts in JOD to an entity controlled by our management capable of paying such amounts in U.S. dollars. Such transactions have\nbeen made at prevailing exchange rates and have resulted in immaterial losses or gains on currency exchange.\n\n \n\nAs of March 31, 2026, our cash and cash equivalents\nbalance was approximately $10.8 million and restricted cash was approximately $1.7 million, compared to cash and cash equivalents of approximately\n$13.3 million and restricted cash of approximately $1.7 million as of March 31, 2025. The decrease in total cash and cash equivalents\nduring fiscal 2026 was primarily due to the payment for new factory premises and plant and equipment, offsetting the bank loan of $2.8\nmillion related to the premises in fiscal 2026.\n\n \n\nOur current assets as of March 31, 2026 were approximately $58.4 million,\nand our current liabilities were approximately $21.6 million, which resulted in a current ratio of approximately 2.7 to 1. Our current\nassets as of March 31, 2025 were approximately $54.4 million, and our current liabilities were approximately $19.8 million, which resulted\nin a current ratio of approximately 2.7:1. For fiscal 2026, the increase in current assets were primarily due to increases in accounts\nreceivable from shipments close to the year end, and increases in inventory and advances to suppliers for the shipments mostly planned\nin early to mid-fiscal 2027, offsetting the decrease in cash balance.\n\n \n\nWe had net working capital of $36.7 million and $34.6 million as of\nMarch 31, 2026 and 2025, respectively. Based on our current operating plan, we believe that cash on hand and cash generated from operation\nwill be sufficient to support our working capital needs for the next 12 months from the date of this Annual Report.\n\n \n\nSince May and October 2021, we have participated in supply chain financing\nprograms of two of our major customers, respectively. The programs allow us to receive early payments for approved sales invoices submitted\nby us through the bank the customer cooperates with. For any early payments received, we are subject to an early payment charge imposed\nby the customer’s bank, for which the rate is SOFR plus a spread. The arrangement allows us to have better liquidity without the\nneed to incur administrative charges and handling fees as in bank financing. In March 2024, we participated in an additional supply chain\nfinancing program with one customer.\n\n \n\nWe have funded our working capital needs from\noperations. Our working capital requirements are influenced by the level of our operations, the numerical and dollar volume of our sales\ncontracts, the progress of execution on our customer contracts, and the timing of accounts receivable collections.\n\n \n\n**Credit Facilities and Bank Loan**\n\n \n\n**DBS Facility Letter**\n\n** **\n\nPursuant to the DBS facility letter dated January\n12, 2022, DBSHK provided a bank facility of up to $5.0 million to Treasure Success, which was amended pursuant to a facility letter dated\nJanuary 4, 2024. Pursuant to the amended agreement, DBSHK agreed to finance cargo receipt, trust receipt, account payable financing, and\ncertain types of import and export invoice financing up to an aggregate of $5.0 million, subject to certain financial covenants. The DBSHK\nfacility bears interest at 1.5% per annum over HIBOR for HKD bills and 1.1% to 1.3% per annum over DBSHK’s cost of funds for foreign\ncurrency bills. The facility is guaranteed by Jerash Holdings and became available to the Company on June 17, 2022. As of March 31, 2026\nand 2025, the outstanding balances were $4.9 million and $4.5 million, respectively, under this DBSHK facility.\n\n \n\n**Bank al Etihad Credit Facility**\n\n \n\nOn July 31, 2025, Bank al Etihad offered to provide\na credit facility of up to $6.0 million to Jerash Garments. Pursuant to the facility, Bank al Etihad agreed to finance import invoices\nof up to $6.0 million with condition that such invoices are secured by letter of credit issued by customers. The facility bears an interest\nrate at the Prime Lending Rate announced by Bank al Etihad. As of March 31, 2026, the Company had $nil outstanding under the Bank al Etihad\nfacility. The Bank al Etihad facility is reviewed annually.\n\n \n\n24\n\n \n\n \n\n**Housing Bank Credit Facility**\n\n \n\nOn January 15, 2026, Housing Bank offered a credit facility of up to\n$14.0 million to Jerash Garments. Pursuant to the facility, Housing Bank agreed to finance import invoices of up to $14.0 million, with\ncondition that such invoices are secured by letter of credit issued by customers. The facility bears an interest rate SOFR plus a spread,\ncurrently approximately 6.1% per annum. As of March 31, 2026, the Company had $nil outstanding under the Housing Bank facility. The Housing\nBank facility is reviewed annually.\n\n \n\n**Capital Bank Facility**\n\n** **\n\nOn April 9, 2026, the Company signed a credit\nfacility agreement offered by Capital Bank. Pursuant to the facility, Capital Bank agreed to finance import invoices of up to $7.5 million\nwith condition that such invoices are secured by letter of credit issued by customers. The facility bears an SOFR interest rate plus a\nspread, with minimum 5% interest rate annually. The Capital Bank facility is reviewed annually.\n\n \n\n**Bank Loan**\n\n \n\nIn connection with the Property Purchase Request\nProperty No. 1326 on January 28, 2026, Jerash Garments entered into a loan agreement with the Housing Bank to finance the acquisition\nof Property No. 1326. Pursuant to the loan agreement, the Housing Bank agreed to provide Jerash Garments with a loan in the principal\namount of JOD 2,000,000 (approximately $2,820,000). The loan bears interest at a rate of 8% per annum, calculated on the daily outstanding\nbalance and charged monthly. Following a grace period ending January 31, 2027, the loan is repayable in 96 monthly installments of JOD\n20,833 each, with the first installment due on February 1, 2027. The loan is secured by a first-priority mortgage on Property No. 1326,\nvalued at JOD 5,500,000.\n\n \n\n**Fiscal Years ended March 31, 2026 and 2025**\n\n \n\nThe following table sets forth a summary of our\ncash flows for the fiscal years ended March 31, 2026 and 2025.\n\n \n\n(All amounts in thousands of U.S. dollars)\n\n \n\n  \nFor the fiscal years ended\nMarch 31, \n\n  \n2026  \n2025 \n\nNet cash provided by operating activities \n$2,494  \n$1,365 \n\nNet cash used in investing activities \n (5,794) \n (2,370)\n\nNet cash provided by financing activities \n 671  \n 2,053 \n\nEffect of exchange rate changes on cash and restricted cash \n 32  \n (21)\n\nNet (decrease) increase in cash, cash equivalents and restricted cash \n (2,597) \n 1,027 \n\nCash, cash equivalents and restricted cash, beginning of year \n 15,064  \n 14,037 \n\nCash, cash equivalents and restricted cash, end of year \n$12,467  \n$15,064 \n\nSupplemental disclosure information \n    \n   \n\nCash paid for interest \n$1,625  \n$1,720 \n\nIncome tax paid \n$1,273  \n$1,399 \n\nNon-cash investing and financing activities \n    \n   \n\nEquipment obtained by utilizing long-term deposit \n$296  \n$668 \n\nOperating lease right of use assets obtained in exchange for operating lease obligations \n$765  \n$187 \n\n** **\n\n**Operating Activities**\n\n \n\nNet cash provided by operating activities was\napproximately $2.5 million in fiscal 2026, compared to net cash provided by operating activities of approximately $1.4 million in fiscal\n2025. The increase in net cash provided by operating activities was primarily attributable to the following factors:\n\n \n\n \n●\nnet income of $3.6 million during fiscal 2026, compared to a net loss of $0.8 million during fiscal 2025;\n\n \n \n \n\n \n●\nan increase of $1.2 million in accrual expenses during fiscal 2026, compared to an increase of $0.2 million during fiscal 2025;\n\n \n \n \n\n \n●\nan increase of $2.7 million in accounts receivable during fiscal 2026, compared to a decrease of $2.4 million during fiscal 2025;\n\n \n\n25\n\n \n\n \n\n \n●\nan increase of $2.3 million in inventory during fiscal 2026, compared to an increase of $0.5 million during fiscal 2025;\n\n \n\n \n●\nan increase of $2.0\nmillion in advances to suppliers during fiscal 2026, compared to an increase of $3.6 million during fiscal 2025; and\n\n \n\n \n●\na decrease of $0.2 million of deferred revenue during fiscal 2026, compared to an increase of $0.5 million during fiscal 2025.\n\n \n\n**Investing Activities**\n\n \n\nNet cash used in investing activities was approximately\n$5.8 million and $2.4 million for fiscal 2026 and 2025, respectively. The increase in net cash used in fiscal year 2026 compared to 2025\nwas primarily due to acquisition of a factory premises in Jordan in fiscal 2026 for approximately $3.6 million.\n\n** **\n\n**Financing Activities**\n\n \n\nNet cash provided by financing activities was\n$0.7 million in fiscal 2026, which was primarily related to the increase in long-term loan of approximately $2.8 million to finance the\nacquisition of a factory premises in fiscal 2026 and the net draw down of short-term bank financing of approximately $0.4 million, offset\nby the distribution of dividend of $2.5 million. Net cash provided by financing activities was approximately $2.1 million for fiscal 2025,\nmainly due to the net draw down of short-term bank financing of $4.5 million, which was offset by the distribution of dividends of $2.4\nmillion.\n\n \n\n**Statutory Reserves**\n\n \n\nIn accordance with the corporate Law in Jordan,\nJerash Holdings’ subsidiaries in Jordan are required to make appropriations to certain reserve funds, based on net income determined\nin accordance with generally accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be 10%\nof net income until the reserve is equal to 100% of the entity’s share capital. Jiangmen Treasure Success is required to set aside\n10% of its net income as statutory surplus reserve until such reserve is equal to 50% of its registered capital. These reserves are not\navailable for dividend distribution. The statutory reserve was $413,821 as of March 31, 2026 and 2025.\n\n \n\nThe following table provides the amount of our\nstatutory reserves, the amount of restricted net assets, consolidated net assets, and the amount of restricted net assets as a percentage\nof consolidated net assets, as of March 31, 2026 and 2025.\n\n \n\n(All amounts, other than percentages, in thousands\nof U.S. dollars)\n\n \n\n  \nAs of March 31, \n\n  \n2026  \n2025 \n\nStatutory Reserves \n$414  \n$414 \n\nTotal Restricted Net Assets \n$414  \n$414 \n\nConsolidated Net Assets \n$64,909  \n$62,869 \n\nRestricted Net Assets as Percentage of Consolidated Net Assets \n 0.64% \n 0.66%\n\n \n\nTotal restricted net assets accounted for approximately\n0.64% of our consolidated net assets as of March 31, 2026. As our subsidiaries in Jordan are only required to set aside 10% of net profits\nto fund the statutory reserves with the maximum reserve equal to 100% of the entity’s capital, we believe the potential impact of\nsuch restricted net assets on our liquidity is limited.\n\n** **\n\n26\n\n \n\n \n\n**Capital Expenditures**\n\n \n\nWe had capital expenditures of approximately $5.8\nmillion and $2.4 million in fiscal 2026 and 2025, respectively. For the fiscal year ended March 31, 2026, our capital expenditures included\npayments for additional plant and machinery of approximately $1.5 million and payments for acquisition of properties of approximately\n$3.6 million. For the fiscal year ended March 31, 2025, our capital expenditures included payments for additional plant and machinery\nof approximately $1.0 million and payments for construction of properties of approximately $1.1 million.\n\n \n\nOn August 7, 2019, we completed a transaction\nto acquire 12,340 square meters (approximately three acres) of land in Al Tajamouat Industrial City, Jordan, from a third party to construct\na dormitory for our employees with aggregate purchase price JOD863,800 (approximately $1,218,303). Management has revised the plan to\nconstruct both dormitory and production facilities on the land in order to capture the increasing demand for our capacity. We are conducting\nengineering design and study on this project with the business growth prospect of new customers to be introduced in the coming few years.\nOn February 6, 2020, we completed a transaction to acquire 4,516 square meters (approximately 48,608 square feet) of land in Al Tajamouat\nIndustrial City, Jordan, from a third party to construct a dormitory for our employee with aggregate purchase price JOD313,501 (approximately\nUS$442,162). The dormitory and dormitory kitchen were completed in the second quarter and the fourth quarter of fiscal year 2025, respectively.\nWe have spent approximately $10.6 million in capital expenditures to build the dormitory and the dormitory kitchen.\n\n \n\nWe expect that our capital expenditures will increase\nin the following two fiscal years to create additional capacity to underpin our long-term business plan. The realization of these investments\ndepends on the progress of our business development, including expanding our client base and securing increased commitments from existing\ncustomers. We have used cash generated from operations of our subsidiaries to fund our capital commitments in the past. Our capital expenditure\nplan is highly related to customer commitments and market responses to the demand of our capacity. If growth in demand is in line\nwith our projection, other than cash generated from the operations of our subsidiaries, we may also obtain further bank financing and\nraise funds from the capital market to meet our capital expenditure plan and fund our capital commitments. As of the date of this\nreport, no material commitment has been made for the capital expenditure projections above.\n\n** **\n\n**Off-balance Sheet Commitments and Arrangements**\n\n \n\nWe have not entered into any other financial guarantees\nor other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts\nthat are indexed to our own shares and classified as stockholders’ equity, or that are not reflected in our consolidated financial\nstatements.\n\n \n\nFor Management’s Discussion and Analysis\nof the fiscal years ended March 31, 2025 and 2024, please see our Annual Report on Form 10-K for the fiscal year ended March 31, 2025,\nfiled with the SEC on June 26, 2025.\n\n** **\n\n**Critical Accounting Estimates**\n\n        \n\nWe prepare our consolidated financial statements\nin conformity with accounting principles generally accepted by the United States of America, which require us to make judgments, estimates,\nand assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although\nthere were no material changes made to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates\nand assumptions based on the most recently available information, our own historical experience, and various other assumptions that we\nbelieve to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process,\nactual results could differ from our expectations as a result of changes in our estimates. We have not identified any critical accounting\nestimates.\n\n \n\n**Recent Accounting Pronouncements**\n\n \n\nSee “Note 3—Recent Accounting Pronouncements”\nin the notes to our audited consolidated financial statements for a discussion of recent accounting pronouncements."}