UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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the quarterly period ended
OR
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Commission
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Indicate
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As of November 10, 2025, there were shares of common stock, par value $0.001 per share, outstanding.
Jerash Holdings (US), Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2025
Contents
i
JERASH HOLDINGS (US), INC.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2025 | March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Advances to suppliers, net | ||||||||
| Total Current Assets | ||||||||
| Restricted cash - non-current | ||||||||
| Long-term deposits | ||||||||
| Property, plant, and equipment, net | ||||||||
| Goodwill | ||||||||
| Operating lease right of use assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Credit facilities | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Income tax payable - current | ||||||||
| Uncertain tax provision | ||||||||
| Other payables | ||||||||
| Deferred revenue | ||||||||
| Operating lease liabilities - current | ||||||||
| Total Current Liabilities | ||||||||
| Deferred tax liabilities, net | ||||||||
| Operating lease liabilities - non-current | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 16) | ||||||||
| Equity | ||||||||
| Preferred stock, $ | $ | $ | ||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, | ( | ) | ( | ) | ||||
| Statutory reserve | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Jerash Holdings (US), Inc. Stockholders’ Equity | ||||||||
| Noncontrolling interest | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
| For
the Three Months Ended September 30, | For
the Six Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue, net | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||||
| Stock-based compensation expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Income from Operations | ||||||||||||||||
| Other Income (Expenses): | ||||||||||||||||
| Interest expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income, net | ||||||||||||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) before provision for income taxes | ( | ) | ||||||||||||||
| Income tax expenses | ||||||||||||||||
| Net income (loss) | ( | ) | ||||||||||||||
| Net (gain) loss attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) attributable to Jerash Holdings (US), Inc.’s Common Stockholders | $ | $ | $ | $ | ( | ) | ||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ) | ||||||||||
| Other Comprehensive Income (Loss): | ||||||||||||||||
| Foreign currency translation (loss) gain | ( | ) | ( | ) | ||||||||||||
| Total Comprehensive Income (Loss) | ( | ) | ||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive Income (Loss) Attributable to Jerash Holdings (US), Inc.’s Common Stockholders | $ | $ | $ | $ | ( | ) | ||||||||||
| Earnings (Loss) Per Share Attributable to Common Stockholders: | ||||||||||||||||
| Basic and diluted | $ | $ | $ | $ | ( | ) | ||||||||||
| Weighted Average Number of Shares | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Dividend per share | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
| Preferred Stock | Common Stock | Additional Paid-in | Treasury | Statutory | Retained | Accumulated Other Comprehensive Income | Noncontrolling | Total | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Stock | Reserve | Earnings | (Loss) | interest | Equity | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Stock-based compensation expense for the restricted stock units issued under stock incentive plan | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Dividend payments | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||||||
| Foreign currency translation gain | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Stock-based compensation expense for the restricted stock units issued under stock incentive plan | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Dividend payments | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)
| Preferred Stock | Common Stock | Additional Paid-in | Treasury | Statutory | Retained | Accumulated Other Comprehensive Income | Noncontrolling | Total | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Stock | Reserve | Earnings | (Loss) | interest | Equity | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Stock-based compensation expense for the restricted stock units issued under stock incentive plan | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Dividend payment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation gain | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
| Stock-based compensation expense for the restricted stock units issued under stock incentive plan | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Dividend payment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 (unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Stock-based compensation expenses | ||||||||
| Credit loss | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Changes in operating assets: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Advances to suppliers | ( | ) | ( | ) | ||||
| Changes in operating liabilities: | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Other payables | ( | ) | ||||||
| Deferred revenue | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | ( | ) | ( | ) | ||||
| Payments for construction of properties | ( | ) | ||||||
| Payment for long-term deposits | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Dividend payments | ( | ) | ( | ) | ||||
| Repayment from short-term loan | ( | ) | ( | ) | ||||
| Proceeds from short-term loan | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | ( | ) | ||||||
| NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH | ( | ) | ||||||
| CASH AND RESTRICTED CASH, BEGINNING OF THE PERIOD | ||||||||
| CASH AND RESTRICTED CASH, END OF THE PERIOD | $ | $ | ||||||
| CASH AND RESTRICTED CASH, END OF THE PERIOD | $ | $ | ||||||
| LESS: NON-CURRENT RESTRICTED CASH | ||||||||
| CASH, END OF THE PERIOD | $ | $ | ||||||
| Supplemental disclosure information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Equipment obtained by utilizing long-term deposit | $ | $ | ||||||
| Operating lease right of use assets obtained in exchange for operating lease obligations | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Jerash Holdings (US), Inc. (“Jerash Holdings”) was incorporated under the laws of the State of Delaware on January 20, 2016. Jerash Holdings is a holding company with no operations. Jerash Holdings and its subsidiaries are herein collectively referred to as the “Company.”
Jerash
Garments and Fashions Manufacturing Company Limited (“Jerash Garments”) is a wholly owned subsidiary of Jerash Holdings and
was established in Amman, the Hashemite Kingdom of Jordan (“Jordan”), as a limited liability company on November 26, 2000
with a declared capital of
Jerash
for Industrial Embroidery Company (“Jerash Embroidery”) and Chinese Garments and Fashions Manufacturing Company Limited (“Chinese
Garments”) were both established in Amman, Jordan, as limited liability companies on March 11, 2013 and June 13, 2013, respectively,
each with a declared capital of JOD
Al-Mutafaweq
Co. for Garments Manufacturing Ltd. (“Paramount”) is a contract garment manufacturer that was established in Amman, Jordan,
as a limited liability company on October 24, 2004 with a declared capital of JOD
Jerash
The First for Medical Supplies Manufacturing Company Limited (“Jerash The First”) was established in Amman, Jordan, as a
limited liability company on July 6, 2020, with a registered capital of JOD
Mustafa
and Kamal Ashraf Trading Company (Jordan) for the Manufacture of Ready-Make Clothes LLC (“MK Garments”) is a garment manufacturer
that was established in Amman, Jordan, as a limited liability company on January 23, 2003 with a declared capital of JOD
Kawkab
Venus Dowalyah Lisenaet Albesah (“Kawkab Venus”) was established in Amman, Jordan, as a limited liability company on January
15, 2015 with a declared capital of JOD
Treasure Success International Limited (“Treasure Success”) was organized on July 5, 2016 in Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong” or “HK”), as a limited liability company for the primary purpose of employing staff from the People’s Republic of China (“China”) to support Jerash Garments’ operations and is a wholly owned subsidiary of Jerash Holdings.
Ever Winland Limited (“Ever Winland”) was organized in Hong Kong, as a limited liability company. It holds office premises, which are leased to Treasure Success. On June 22, 2022, Treasure Success and the shareholders of Ever Winland entered into an agreement, pursuant to which Treasure Success acquired all of the outstanding stock of Ever Winland. Apart from the office premises used by Treasure Success, Ever Winland had no other significant assets or liabilities and no operating activities or employees at the time of this acquisition, so this transaction was accounted for as an asset acquisition. As of August 29, 2022, Ever Winland became a subsidiary of Treasure Success.
6
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)
J&B
International Limited (“J&B”) is a joint venture company established in Hong Kong on January 10, 2023. On March 20, 2023,
Treasure Success and P. T. Eratex (Hong Kong) Limited (“Eratex”) entered into a Joint Venture and Shareholders’ Agreement,
pursuant to which Treasure Success acquired
Jerash Newtech (Hong Kong) Holdings Limited (“Jerash Newtech”)
is a joint venture company established in Hong Kong on November 3, 2023. On October 10, 2023, Treasure Success and Newtech Textile (HK)
Limited entered into a Joint Venture and Shareholder’s Agreement to establish a new joint venture for the establishment of a fabric
facility in Jordan. On November 3, 2023, Jerash Newtech was established according to the aforementioned Joint Venture and Shareholder’s
Agreement. Treasure Success owns
Jiangmen
Treasure Success Business Consultancy Company Limited (“Jiangmen Treasure Success”) was organized on August 28, 2019 under
the laws of China in Jiangmen City of Guangdong Province in China with a total registered capital of HKD
Jerash Supplies, LLC (“Jerash Supplies”) was formed under the laws of the State of Delaware on November 20, 2020. Jerash Supplies is engaged in the trading of personal protective equipment products and is a wholly owned subsidiary of Jerash Holdings.
The Company is engaged primarily in the manufacturing and exporting of customized, ready-made sportswear and outerwear produced in its facilities in Jordan and sold in the United States, Jordan, and other countries.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Company’s unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the Company’s unaudited condensed consolidated financial statements. The consolidated balance sheet as of March 31, 2025 has been derived from the audited consolidated balance sheet at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, as filed with the U.S. Securities and Exchange Commission (the “SEC”). Operating results for the three and six months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending March 31, 2026.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the financial statements of Jerash Holdings, its wholly owned subsidiaries, and two non-wholly owned subsidiaries.
7
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Non-wholly
owned subsidiaries are entities that the reporting parent entity does not own equity interests in full. Noncontrolling interest is evaluated
with a depiction of the portion of a non-wholly owned subsidiary’s net assets, net income, and net comprehensive income that is
attributable to holders of equity-classified ownership interests other than the reporting parent entity. As mentioned in Note 1, the
Company holds
All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
Cash
The Company’s cash consists of cash on hand and cash deposited in financial institutions. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the original date of purchase to be cash equivalents. As of September 30, 2025 and March 31, 2025, the Company had cash equivalents.
Restricted Cash
Restricted cash consists of cash used as security deposits to obtain credit facilities from a bank and to secure customs clearance, labor import requirements, and other requirements of local regulations. The Company is required to keep certain amounts on deposit that are subject to withdrawal restrictions. These security deposits at the bank are refundable only when the bank facilities are terminated. The restricted cash is classified as a current asset if the Company intends to terminate these bank facilities within one year, and as a non-current asset if otherwise.
Accounts Receivable, Net
Accounts receivable are recognized and carried at the original invoiced amount less an estimated allowance for credit loss. The Company usually grants extended payment terms to customers with good credit standing and determines the adequacy of credit losses based on the historical level of credit loss, current economic trends, and reasonable and supportable forecasts that affect the collectability of the future cash flows.
Inventories
Inventories are stated at the lower of cost or net realizable value. Inventories include the cost of raw materials, freight, direct labor, and related production overhead. The cost of inventories is determined using the First-in, First-out method. The Company periodically reviews its inventories for excess or slow-moving items and makes provisions as necessary to properly reflect inventory value.
Advance to Suppliers, Net
Advance to suppliers consists of balances paid to suppliers for services or materials purchased that have not been provided or received. Advance to suppliers for services and materials is short-term in nature. Advance to suppliers is reviewed periodically to determine whether its carrying value has become impaired. The Company considers the assets to be impaired if the performance by the suppliers becomes doubtful. At each reporting date, the Company generally determines the adequacy of allowance for impairment by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances.
8
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Credit Loss
The Company maintains expected loss methodology that is referred to as the current expected credit loss methodology. The expected credit loss impairment model requires the entity to recognize its estimate of expected credit losses for affected financial assets using an allowance for credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
The Company’s accounts receivable and other receivables, which are included in prepaid expenses and other current assets line items in the consolidated balance sheets, are within the scope of ASC Topic 326. The Company measures expected credit losses of account receivables and other receivables, on a collective basis when similar risk characteristics exist. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the receivables, creditworthiness of the customers and other debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and other debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.
Expected credit losses are included in general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
Property, Plant, and Equipment, Net
Property,
plant, and equipment are recorded at cost, reduced by accumulated depreciation and amortization. Depreciation and amortization expense
related to property, plant, and equipment is computed using the straight-line method based on the estimated useful lives of the assets,
or in the case of leasehold improvements, the shorter of the initial lease term or the estimated useful life of the improvements. The
useful life and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent with
the expected pattern of economic benefits from items of property, plant, and equipment.
| Useful life | ||
| Land | ||
| Property and buildings | ||
| Equipment and machinery | ||
| Office and electronic equipment | ||
| Automobiles | ||
| Leasehold improvements |
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation or amortization of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
9
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of Long-Lived Assets
The Company assesses its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that may indicate potential impairment include a significant underperformance relative to the historical or projected future operating results or a significant negative industry or economic trend. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by that asset. If impairment is indicated, a loss is recognized for any excess of the carrying value over the estimated fair value of the asset. The fair value is estimated based on the discounted future cash flows or comparable market values, if available. The Company did record any impairment loss during the three and six months ended September 30, 2025 and 2024.
Goodwill
Goodwill represents the excess purchase price
paid over the fair value of the net assets of acquired companies. Goodwill is not amortized. As of September 30, 2025 and March 31, 2025,
the carrying amount of goodwill was $
Revenue Recognition
Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s customized ready-made outerwear for large brand-name retailers. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year. Virtually all of the Company’s contracts are short-term. The Company has minimal incremental costs of obtaining a contract, which are expensed when incurred. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 14 to 150 days of the invoice date. The contracts do not have significant financing components. Shipping and handling costs associated with outbound freight from Jordan export dock are not an obligation of the Company. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have been immaterial.
The Company also derives revenue from rendering cutting and making services to other apparel vendors who subcontract orders to the Company. Revenue is recognized when the service is rendered. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company’s historical experience, complete satisfaction of the performance obligation, and the Company’s best judgment at the time the estimate is made. Historically, sales returns have not significantly impacted the Company’s revenue.
The Company applies the “distinct” guidance in ASC
606-10-25-19 through ASC 606-10-25-22 to identify the specified goods or services.
10
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The
Company does not have any contract assets since the Company recognizes accounts receivable and revenue for the transfer of promised goods
to customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The
Company has an unconditional right to consideration when the Company has satisfied its performance obligation and payment to the accounts
receivable from customers is not contingent on a future event. The Company had contract liabilities of $
Segment
The Company has
Shipping and Handling
Proceeds
collected from customers for shipping and handling costs are included in revenue. Shipping and handling costs are expensed as incurred
and are included in operating expenses, as a part of selling, general, and administrative expenses. Total shipping and handling expenses
were $
Income and Sales Taxes
The Company is subject to income taxes on an entity basis on income
arising in or derived from the tax jurisdiction in which each entity is domiciled. Jerash Holdings and Jerash Supplies are incorporated/formed
in the State of Delaware and are subject to federal income tax in the United States of America. Treasure Success, Ever Winland, J&B,
and Jerash Newtech are registered in Hong Kong and are subject to Profits Tax in Hong Kong. Jiangmen Treasure Success is incorporated
in China and is subject to corporate income tax in China. Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The
First, MK Garments, and Kawkab Venus are subject to income tax in Jordan, unless an exemption is granted. In accordance with Development
Zone law, Jerash Garments and its subsidiaries were subject to corporate income tax in Jordan at a rate of
Jerash
Garments and its subsidiaries are subject to local sales tax of
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” which requires the Company to use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forwards. Under this accounting standard, any changes in tax rates and the impact on deferred income taxes are recognized in the unaudited condensed consolidated statements of operations and comprehensive income (loss) in the period when the new rates are enacted. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized.
11
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income and Sales Taxes (continued)
The Company applies the provisions of ASC 740-10-50, “Accounting
for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax
positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The
completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s
liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly
or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current
on all corporate, federal, and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized
tax benefits as income tax expense. As of September 30, 2025 and March 31, 2025, uncertain tax provision was $ and $
Foreign Currency Translation
The reporting currency of the Company is the U.S. dollar (“US$” or “$”). The Company uses JOD in Jordan companies, HKD in Treasure Success, Ever Winland, J&B, and Jerash Newtech, and Chinese Yuan (“CNY”) in Jiangmen Treasure Success as the functional currency of each above-mentioned entity. The assets and liabilities of the Company have been translated into US$ using the exchange rates in effect at the balance sheet date, equity accounts have been translated at historical rates, and revenue and expenses have been translated into US$ using average exchange rates in effect during the reporting period. Cash flows are also translated at average translation rates for the periods. Therefore, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income or loss. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the unaudited condensed consolidated statements of operations and comprehensive income (loss) as incurred, and the total amount of transaction gains and losses were immaterial for the three and six months ended September 30, 2025 and 2024.
The
value of JOD against US$ and other currencies may fluctuate and is affected by, among other things, changes in Jordan’s political
and economic conditions. Any significant revaluation of JOD, HKD, and CNY may materially affect the Company’s financial condition
in terms of US$ reporting.
| September
30, 2025 | March
31, 2025 | |||||||
| Period-end spot rate | US$1=JOD | US$1=JOD | ||||||
| US$1=HKD | US$1=HKD | |||||||
| US$1=CNY | US$1=CNY | |||||||
| Average rate | US$1=JOD | US$1=JOD | ||||||
| US$1=HKD | US$1=HKD | |||||||
| US$1=CNY | US$1=CNY |
Stock-Based Compensation
The Company measures compensation expense for stock-based awards based on the awards’ initial grant-date fair value. The estimated grant-date fair value of the award is recognized as expense over the requisite service period using the straight-line method.
The Company estimates the fair value of stock options using a Black-Scholes model. This model is affected by the Company’s stock price on the date of the grant as well as assumptions regarding a number of variables. These variables include the expected term of the option, expected risk-free rates of return, the expected volatility of the Company’s common stock, and expected dividend yield, each of which is more fully described below. The assumptions for the expected term and expected volatility are the two assumptions that significantly affect the grant date fair value.
| ● | Expected Term: the expected term of a warrant or a stock option is the period of time that the warrant or a stock option is expected to be outstanding. |
| ● | Risk-free Interest Rate: the Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield at the grant date of the U.S. Treasury zero-coupon issued with an equivalent term to the stock-based award being valued. Where the expected term of a stock-based award does not correspond with the term for which a zero-coupon interest rate is quoted, the Company uses the nearest interest rate from the available maturities. |
| ● | Expected Stock Price Volatility: the Company utilizes the expected volatility of the Company’s common stock over the same period of time as the life of the warrant or stock option. When the Company’s own stock volatility information is unavailable for such period of time, the Company utilizes comparable public company volatility. |
| ● | Dividend Yield: Stock-based compensation awards granted prior to November 2018 assumed no dividend yield, while any subsequent stock-based compensation awards will be valued using the anticipated dividend yield. |
12
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Earnings or Loss per Share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, warrants, and restricted stock units (“RSUs”)) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS (See “Note 14–Earnings (Loss) per Share”).
Comprehensive Income or Loss
Comprehensive income or loss consists of two components, net income or loss and other comprehensive income or loss. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in JOD or HKD or CNY to US$ is reported in other comprehensive income or loss in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
Fair Value of Financial Instruments
ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 - Quoted prices in active markets for identical assets and liabilities. |
| ● | Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| ● | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash, accounts receivable, other current assets, credit facilities, accounts payable, accrued expenses, income tax payables, other payables and operating lease liabilities to approximate the fair value of the respective assets and liabilities at September 30, 2025 and March 31, 2025 based upon the short-term nature of these assets and liabilities.
Concentrations and Credit Risk
Credit risk
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash. As of September 30, 2025 and March 31, 2025, respectively, $
Accounts receivable are typically unsecured and derived from revenue earned from customers, and therefore are exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.
13
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Customer and vendor concentration risk
The
Company’s sales are made primarily in the United States. Its operating results could be adversely affected by U.S. government policies
on importing business, foreign exchange rate fluctuations, and changes in local market conditions. The Company has a concentration of
its revenue and purchases with specific customers and suppliers. For the three and six months ended September 30, 2025, two customers
accounted for
For the three months and six months ended September 30, 2025, the Company
purchased approximately
Risks and Uncertainties
The principal operations of the Company are located in Jordan. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Jordan, as well as by the general state of the Jordanian economy. The Company’s operations in Jordan are subject to special considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic, and legal environment, foreign currency exchange, and the recent conflicts between Israel and Hamas and between Israel and Iran. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in Jordan. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
Since the inception of the turmoil in the Middle East, the Company has been closely monitoring the situation and keeping its customers informed. Production is ongoing as usual, with no changes to customer orders or commitments, and the Company is currently mainly using the port in Aqaba, Jordan for import and export. In order to provide flexibility, the Company has also been using the Port of Jebel Ali in the United Arab Emirates as an alternative route for raw material import since December 2023. However, in the event of any potential impact on the ports, the Company has prepared a contingency plan, approved by its major customers, to temporarily relocate production to alternate regions.
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This update requires that at each interim and annual reporting period a report entity to disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions; (2) certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. In January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” This update clarifies that ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
14
NOTE 4 – ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following:
| As
of September 30, 2025 (Unaudited) | As
of March 31, 2025 | |||||||
| Trade accounts receivable | $ | $ | ||||||
| Less: allowances for credit loss | ||||||||
| Accounts receivable, net | $ | $ | ||||||
NOTE 5 – INVENTORIES
Inventories consisted of the following:
| As
of September 30, 2025 (Unaudited) | As
of March 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
As
of September 30, 2025 and March 31, 2025, the Company had $ inventory valuation reserve as the Company arranged its inventory based
on
NOTE 6 – ADVANCES TO SUPPLIERS, NET
Advances to suppliers consisted of the following:
| As
of September 30, 2025 (Unaudited) | As
of March 31, 2025 | |||||||
| Advance to suppliers | $ | $ | ||||||
| Less: allowances for impairment | ||||||||
| Advances to suppliers, net | $ | $ | ||||||
15
NOTE 7 – LEASES
The Company had 39 operating leases for manufacturing facilities, offices, and staff dormitories as of September 30, 2025. Some leases include one or more options to renew, which is typically at the Company’s sole discretion. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in measurement of the right of use (“ROU”) assets and lease liability. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.
All of the Company’s leases are classified as operating leases and primarily include office space and manufacturing facilities.
Supplemental balance sheet information related to operating leases was as follows:
| As
of September 30, 2025 (Unaudited) | As
of March 31, 2025 | |||||||
| Operating lease right of use assets | $ | $ | ||||||
| Operating lease liabilities – current | $ | $ | ||||||
| Operating lease liabilities – non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted average remaining lease terms and discount rates for all of operating leases were as follows:
Remaining lease term and discount rate:
| For the period ended | ||||||||
| September 30, 2025 (Unaudited) | March 31, 2025 | |||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
During
the three months ended September 30, 2025 and 2024, the Company incurred total operating lease expenses of $
The following is a schedule, by fiscal years, of maturities of lease liabilities as of September 30, 2025:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Less: prepayments | ( | ) | ||
| Present value of lease liabilities | $ |
16
NOTE 8 – PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant, and equipment, net consisted of the following:
| As
of September 30, 2025 (Unaudited) | As
of March 31, 2025 | |||||||
| Land | $ | $ | ||||||
| Property and buildings | ||||||||
| Equipment and machinery | ||||||||
| Office and electric equipment | ||||||||
| Automobiles | ||||||||
| Leasehold improvements | ||||||||
| Subtotal | ||||||||
| Less: Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property, plant, and equipment, net | $ | $ | ||||||
For
the three months ended September 30, 2025 and 2024, depreciation and amortization expenses were $
NOTE 9 – EQUITY
Preferred Stock
The
Company has
Common Stock
The
Company had
On
February 9, 2023, the Board of Directors approved the grant of
Statutory Reserve
In
accordance with the corporate law in Jordan, Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments,
and Kawkab Venus are required to make appropriations to certain reserve funds, based on net income determined in accordance with generally
accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be
Dividends
During
the six months ended September 30, 2025, the Board of Directors declared a cash dividend of $
During
the fiscal year ended March 31, 2025, the Board of Directors declared a cash dividend of $
17
NOTE 10 – STOCK-BASED COMPENSATION
Stock Options
On
March 21, 2018, the Board of Directors adopted the Jerash Holdings (US), Inc. 2018 Stock Incentive Plan (the “Plan”), pursuant
to which the Company may grant various types of equity awards.
All stock option activities are summarized as follows:
| Option to | Weighted Average | |||||||
| Acquire
Shares | Exercise Price | |||||||
| Stock options outstanding as of March 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Stock options outstanding as of September 30, 2025 | $ | |||||||
All
these outstanding options were fully vested and exercisable. As of September 30, 2025, there were
Restricted Stock Units
On
February 9, 2023, the Board of Directors approved the grant of
On
March 25, 2024, the Board of Directors approved the grant of
RSU activities are summarized as follows:
| Number of Shares |
Weighted- Average Grant Date Fair Value Per Share |
|||||||
| RSUs outstanding as of March 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ( |
) | ||||||
| RSUs outstanding as of September 30, 2025 | ||||||||
Total
expenses related to the RSUs issued were $
18
NOTE 11 – RELATED PARTY TRANSACTIONS
The relationship and the nature of related party transactions are summarized as follow:
| Name of Related Party | Relationship to the Company | Nature of Transactions | ||
| Yukwise Limited (“Yukwise”) | ||||
| Multi-Glory Corporation Limited (“Multi-Glory”) |
Consulting agreements
On
January 12, 2018, Treasure Success and Yukwise entered into a consulting agreement, pursuant to which Mr. Choi will serve as Chief Executive
Officer and provide high-level advisory and general management services for $
On
January 16, 2018, Treasure Success and Multi-Glory entered into a consulting agreement, pursuant to which Multi-Glory will provide high-level
advisory, marketing, and sales services to the Company for $
NOTE 12 – CREDIT FACILITIES
Starting
from May and October 2021, the Company has participated in a financing program with two customers, in which the Company may receive early
payments for approved sales invoices submitted by the Company through the bank the customer cooperates with. In March 2024, the Company
joined a supply chain financing program with one additional customer. For any early payments received, the Company is subject to an early
payment charge imposed by the customer’s bank, for which the rate is based on Secured Overnight Financing Rate (“SOFR”)
plus a spread. In certain scenarios, the Company submits the sales invoice and receives payments prior to the shipment of the relative
products. In that case, instead of recording the cash receipts as a reduction to accounts receivables, the Company records the cash receipts
as receipts in advance from a customer until products are entitled to transfer. The Company records the early payment charge in interest
expenses on the unaudited condensed consolidated statements of operations and comprehensive income (loss). For the three months ended
September 30, 2025 and 2024, the early payment charge was $
On
January 12, 2022, DBS Bank (Hong Kong) Limited (“DBSHK”) offered to provide a banking facility of up to $
As
of September 30, 2025 and March 31, 2025, the Company had $
On
July 31, 2025, Bank al Etihad offered to provide a
credit facility of up to $
19
NOTE 13 – NONCONTROLLING INTEREST
On
March 20, 2023, Treasure Success and P.T. Eratex (Hong Kong) Limited entered into a Joint Venture and Shareholders’ Agreement,
pursuant to which Treasure Success and P.T Eratex (Hong Kong) Limited acquired
On
October 10, 2023, Treasure Success and Newtech Textile (HK) Limited entered into a Joint Venture and Shareholders’ Agreement, pursuant
to which Treasure Success and Newtech Textile (HK) Limited acquired
For the three months ended September 30, 2025, the net income or (loss)
generated by J&B and Jerash Newtech was $
For the six months ended September 30, 2025, the net income or (loss)
generated by J&B and Jerash Newtech was $
Noncontrolling
interest as of September 30, 2025 in J&B and Jerash Newtech was $
On June 16, 2025, Treasure Success and P.T. Eratex (Hong Kong) Limited attended a meeting of shareholders of J&B and approved the termination of J&B’s business operations and the dissolution of J&B, which is expected to complete in April 2027.
On August 20, 2025, Treasure Success and Newtech Textile (HK) Limited attended a meeting of shareholders of Jerash Newtech and agreed to and authorized an application to be made for the deregistration of Jerash Newtech.
NOTE 14 – EARNINGS (LOSS) PER SHARE
The
following table sets forth the computation of basic and diluted earnings (loss) per share for the three and six months ended September
30, 2025 and 2024. As of September 30, 2025,
| Three Months Ended September 30, (Unaudited) | Six Months Ended September 30, (Unaudited) | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) attributable to Jerash Holdings (US), Inc.’s Common Stockholders | $ | $ | $ | $ | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Denominator for basic earnings per share (weighted-average shares) | ||||||||||||||||
| Dilutive securities – RSUs | ||||||||||||||||
| Denominator for diluted earnings per share (adjusted weighted-average shares) | ||||||||||||||||
| Basic and diluted earnings (loss) per share | $ | $ | $ | $ | ( | ) | ||||||||||
20
NOTE 15 – SEGMENT REPORTING
ASC 280, “Segment Reporting,” establishes standards for
reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well
as information about geographical areas, business segments, and major customers in financial statements for details on the Company’s
business segments. The amendment of ASC 280 requires incremental disclosures in annual and interim periods to reportable segments and
clarifies entities with a single reportable segment are also required to provide new disclosures in significant segment expenses, profit
and loss, assets, and other segment items for better understanding company business activities and overall financial performance and assess
potential future cash flow for the business. The Company uses the “management approach” in determining reportable operating
segments.
| For the Three Months Ended September 30, (Unaudited) | For the Six Months Ended September 30, (Unaudited) | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Less: Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Other income | ||||||||||||||||
| Expenses | ||||||||||||||||
| Staff payroll and other related cost | ||||||||||||||||
| Inventory export and related cost | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Other selling, general, and administrative expenses | ||||||||||||||||
| Total selling, general, and administrative expenses | ||||||||||||||||
| Stock-based compensation expenses | ||||||||||||||||
| Interest expenses | ||||||||||||||||
| Total expenses | ||||||||||||||||
| Net income (loss) before provision for income taxes | $ | $ | $ | $ | ( | ) | ||||||||||
Other selling, general, and administrative expenses include consultancy fees and director remunerations, audit and professional fees, staff travelling and transportation expenses, rental, and general office expenses.
21
NOTE 15 – SEGMENT REPORTING (continued)
The
Company’s major product is outerwear. For the three months ended September 30, 2025 and 2024, outerwear accounted for approximately
The following table summarizes sales by geographic areas for the three months ended September 30, 2025 and 2024, respectively.
| For the Three
Months Ended September 30, | ||||||||
| (Unaudited) | ||||||||
| 2025 | 2024 | |||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Hong Kong | ||||||||
| Germany | ||||||||
| Jordan | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
The following table summarizes sales by geographic areas for the six months ended September 30, 2025 and 2024, respectively.
| For the Six
Months Ended September 30, | ||||||||
| (Unaudited) | ||||||||
| 2025 | 2024 | |||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Hong Kong | ||||||||
| Germany | ||||||||
| Jordan | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
As
of September 30, 2025 and March 31, 2025, there were
NOTE 16 – COMMITMENTS AND CONTINGENCIES
Commitments
On
August 28, 2019, Jiangmen Treasure Success was incorporated under the laws of the People’s Republic of China in Jiangmen City,
Guangdong Province, China, with a total registered capital of HKD
Contingencies
From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would not have a material adverse impact on the Company’s consolidated financial position, results of operations, and cash flows.
22
NOTE 16 – COMMITMENTS AND CONTINGENCIES (continued)
In
2020, Jerash Garments had business with a personal protective equipment (“PPE”) customer (the “PPE Customer”)
to produce PPE products for them. The PPE products were delivered in 2020 against some postdated checks issued by the PPE Customer. Delivery
was also supported by delivery documents signed by persons of the PPE Customer for inspection and receiving. The PPE Customer declined
to honor the postdated checks. Jerash Garment brought the case to the court and won in the Cassation Court. For the same PPE products,
the PPE Customer filed another case claiming that certain lengths/widths of the PPE products were inconsistent with the specifications.
The Court of First Instance ruled in favor of the PPE Customer. Jerash Garment was ordered to pay to the PPE Customer an amount of US$
The management has consulted two external legal advisors of Jordanian laws. Both opined that Jerash Garments has a strong position in the appeal as Jerash Garments will be allowed to present witnesses with additional evidence including the proof of inspections and receipts in the appeal. Also, given the appeal process mentioned above, the case would take a considerable long period of time to reach conclusion.
The management, based on the legal opinion of external advisors, the fact that the Court of Appeal and Cassation’s previous favorable verdicts on Jerash Garments’ lawful right to collect proceeds for the PPE products, and the proceedings of the appeal, concluded that the chance of loss is remote. Therefore, there was no accrual in the financial statements.
NOTE 17 – INCOME TAX
Jerash
Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are subject to the regulations
of the Income Tax Department in Jordan. Effective January 1, 2019, the Jordanian government reclassified the area where Jerash Garments
and its subsidiaries are to a Development Zone. In accordance with the Development Zone law, Jerash Garments and its subsidiaries were
subject to income tax at income tax rate of
On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act imposed tax on previously untaxed accumulated earnings and profits (“E&P”) of foreign subsidiaries (the “Toll Charge”). The Toll Charge is based in part on the amount of E&P held in cash and other specific assets as of December 31, 2017. The Toll Charge can be paid over an eight-year period, starting in 2018, and will not accrue interest. Additionally, under the provisions of the Tax Act, for taxable years beginning after December 31, 2017, the foreign earnings of Jerash Garments and its subsidiaries are subject to U.S. taxation at the Jerash Holdings level under the new Global Intangible Low-Taxed Income (“GILTI”) regime. All Toll Charge had been paid as of September 30, 2025.
The Company tax provision or benefit from income taxes for interim
periods is determined using an estimate of Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken
into account in the relevant period. Each quarter the Company updates the estimate of annual effective rate and a cumulative adjustment
is made if the estimated tax rate changed. For the three months ended September 30, 2025 and 2024, the Company’s consolidated effective
tax rate was
NOTE 18 – SUBSEQUENT EVENTS
The Company has evaluated all subsequent events through the date of the filing of this Quarterly Report on Form 10-Q with the SEC to ensure that this filing includes appropriate disclosure of events both recognized in the condensed consolidated financial statements as of September 30, 2025, and events which occurred subsequent to September 30, 2025 but were not recognized in the condensed consolidated financial statements. The Company has determined that there were no subsequent events that required recognition, adjustment to, or disclosure in the condensed consolidated financial statements, except for the following:
On
November 7, 2025, the Board of Directors approved the payment of a dividend of $
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth in the “Risk Factors” section included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and in subsequent reports that we file with the SEC.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Quarterly Report. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.
The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on June 26, 2025. References to fiscal 2026 and fiscal 2025 in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to our fiscal year ending March 31, 2026, and fiscal year ended March 31, 2025, respectively.
Results of Operations
Three months ended September 30, 2025 and 2024
The following table summarizes the results of our operations during the three-month periods ended September 30, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Three
Months Ended September 30, 2025 | Three
Months Ended September 30, 2024 | Period
over Period Increase (Decrease) | ||||||||||||||||||||||
| Statement of Income Data: | Amount | As
% of Sales | Amount | As
% of Sales | Amount | % | ||||||||||||||||||
| Revenue | $ | 41,969 | 100 | % | $ | 40,240 | 100 | % | $ | 1,729 | 4 | % | ||||||||||||
| Cost of goods sold | 35,679 | 85 | % | 33,182 | 82 | % | 2,497 | 8 | % | |||||||||||||||
| Gross profit | 6,290 | 15 | % | 7,058 | 18 | % | (768 | ) | (11 | )% | ||||||||||||||
| Selling, general, and administrative expenses | 4,972 | 12 | % | 5,450 | 14 | % | (478 | ) | (9 | )% | ||||||||||||||
| Stock-based compensation expenses | 229 | 0 | % | 474 | 1 | % | (245 | ) | (52 | )% | ||||||||||||||
| Other expenses, net | 456 | 1 | % | 364 | 1 | % | 92 | 25 | % | |||||||||||||||
| Net income before taxation | 633 | 2 | % | 770 | 2 | % | (137 | ) | (18 | )% | ||||||||||||||
| Income tax expenses | 154 | 0 | % | 106 | 0 | % | 48 | 45 | % | |||||||||||||||
| Net income | $ | 479 | 1 | % | $ | 664 | 2 | % | $ | (185 | ) | (28 | )% | |||||||||||
Revenue. Revenue increased by approximately $1.7 million, or 4%, to $42.0 million, for the three months ended September 30, 2025, from approximately $40.2 million for the same period in fiscal 2025. The increase was mainly due to an increase in shipments to the U.S. resulting from a more diverse customer base in fiscal 2026.
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The following table outlines the dollar amount and percentage of total sales to our customers for the three months ended September 30, 2025 and 2024.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Three
Months Ended September 30, 2025 | Three
Months Ended September 30, 2024 | |||||||||||||||
| Sales | Sales | |||||||||||||||
| Amount | % | Amount | % | |||||||||||||
| VF Corporation (1) | $ | 25,203 | 60 | % | $ | 27,192 | 68 | % | ||||||||
| New Balance | 4,943 | 12 | % | 3,524 | 9 | % | ||||||||||
| Suzhou Unitex | 2,342 | 6 | % | 2,941 | 7 | % | ||||||||||
| American Eagle Outfitter | 2,107 | 5 | % | 880 | 2 | % | ||||||||||
| G-III | 1,969 | 5 | % | 1,695 | 4 | % | ||||||||||
| Acushnet | 934 | 2 | % | - | - | % | ||||||||||
| Hugo Boss | 794 | 2 | % | 822 | 2 | % | ||||||||||
| Others | 3,677 | 8 | % | 3,186 | 8 | % | ||||||||||
| Total | $ | 41,969 | 100 | % | $ | 40,240 | 100 | % | ||||||||
| (1) | A large portion of our products are sold under The North Face, Timberland, and Vans brands owned by VF Corporation. |
Revenue by Geographic Area
(All amounts, other than percentages, in thousands of U.S. dollars)
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | Period over Period Increase (Decrease) | ||||||||||||||||||||||
| Region | Amount | % | Amount | % | Amount | % | ||||||||||||||||||
| United States | $ | 37,279 | 89 | % | $ | 34,531 | 86 | % | $ | 2,748 | 8 | % | ||||||||||||
| China (including Hong Kong) | 3,277 | 8 | % | 3,258 | 8 | % | 19 | 1 | % | |||||||||||||||
| Germany | 794 | 2 | % | 822 | 2 | % | (28 | ) | (3 | )% | ||||||||||||||
| Jordan | 474 | 1 | % | 990 | 2 | % | (516 | ) | (52 | )% | ||||||||||||||
| Others | 145 | 0 | % | 639 | 2 | % | (494 | ) | (77 | )% | ||||||||||||||
| Total | $ | 41,969 | 100 | % | $ | 40,240 | 100 | % | $ | 1,729 | 4 | % | ||||||||||||
Between January 2010 and March 2025, all apparel manufactured in Jordan could be exported to the U.S. without customs duty being imposed, pursuant to the United States-Jordan Free Trade Agreement entered into in December 2001. This free trade agreement provided us with substantial competitiveness and benefit that allowed us to expand our garment 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 countries, including Jordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified countries, amongst them Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst the 10% baseline tariff persists. Up to the date of this report, the tariff has been modified to 15% according to an executive order of presidential actions on July 31, 2025. While the payment of the tariff is typically the responsibility of the importer (Jerash’s customers), the impact of the tariff on customers demand would be affected by the comparative levels of the tariffs on imports from Jordan compared to other countries.
The increase of approximately 8% in sales to the U.S. during the three months ended September 30, 2025, was mainly attributable to our effort on diversification of customer base in the region, which resulted in increases in demands in most of our top U.S. customers in the period.
During the three months ended September 30, 2025, aggregate sales to China, Germany, Jordan, and other locations decreased by 18% from $5.7 million to $4.7 million from the same period last year. This decrease was mainly because more capacity has been devoted to U.S. orders.
Cost of goods sold. Following the increase in sales revenue, our cost of goods sold increased by approximately $2.5 million, or 8%, to approximately $35.7 million, for the three months ended September 30, 2025, from approximately $33.2 million for the same period in fiscal 2025. As a percentage of revenue, the cost of goods sold increase by approximately 3 percentage points, from 82% for the same period in fiscal 2025 to 85% for the three months ended September 30, 2025. The increase in the cost of goods sold as a percentage of revenue was primarily attributable to catch-up production of some outerwear orders that carried higher margin, which were originally schedule for the first quarter of fiscal 2025 and deferred to the second quarter of fiscal 2025. For the three months ended September 30, 2025, the production and shipments were back to normal level that on average produced lower profit margins.
For the three months ended September 30, 2025 and 2024, we purchased 14% and 10% of our total purchase in garments and raw materials from one major supplier, respectively.
Gross profit margin. Gross profit margin was approximately 15% for the three months ended September 30, 2025, which decreased by 3 percentage points from approximately 18% for the same period in fiscal 2025. The decrease in gross profit margin was primarily driven by one-off higher margin outerwear orders originally scheduled for the first quarter of fiscal 2025 and deferred to the second quarter of fiscal 2025.
Operating expenses. Operating expenses decreased by 12%, or approximately $0.7 million, from approximately $5.9 million for the three months ended September 30, 2024, to approximately $5.2 million for the three months ended September 30, 2025. The decrease was primarily due to better control of export costs and lower stock-based compensation expenses in fiscal 2026.
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Other expenses, net. Other expenses, net were approximately $456,000 for the three months ended September 30, 2025, as compared to other expenses, net of approximately $364,000 for the same period in fiscal 2025. The increase was primarily due to an increase in financing needs to fund growth in business, which was in turn, due to less interest income from fixed term deposits.
Income tax expenses. Income tax expenses for the three months ended September 30, 2025, were approximately $154,000 compared to income tax expenses of approximately $106,000 for the same period in fiscal 2025. The increase in the income tax expenses was mainly due to the increase in operating profit of Treasure Success, related to the inclusion of Subpart F income under the U.S. Internal Revenue Code, offset by uncertain tax provision, which was provided in the prior year and subsequently amended the overstatement of approximately $150,000 in fiscal 2026. The effective tax rate increased to 24.3% for the three months ended September 30, 2025, as compared to 13.7% for the three months ended September 30, 2024.
Net income. Net income for the three months ended September 30, 2025, was approximately $0.5 million compared to net income of approximately $0.7 million for the same period in fiscal 2025. The decrease in net income was mainly attributable to the different customer mix and product mix in fiscal 2025 that on average produced lower profit margins, partially offset by the decrease in operating expenses due to better control of export costs and lower stock-based compensation expenses in fiscal 2026.
Six months ended September 30, 2025 and 2024
The following table summarizes the results of our operations during the six-month periods ended September 30, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Six
Months Ended September 30, 2025 | Six
Months Ended September 30, 2024 | Period
over Period Increase (Decrease) | ||||||||||||||||||||||
| Statement of Income Data: | Amount | As
% of Sales | Amount | As
% of Sales | Amount | % | ||||||||||||||||||
| Revenue | $ | 81,598 | 100 | % | $ | 81,176 | 100 | % | $ | 422 | 1 | % | ||||||||||||
| Cost of goods sold | 69,219 | 85 | % | 69,478 | 86 | % | (259 | ) | (0 | )% | ||||||||||||||
| Gross profit | 12,379 | 15 | % | 11,698 | 14 | % | 681 | 6 | % | |||||||||||||||
| Selling, general, and administrative expenses | 9,879 | 12 | % | 10,449 | 13 | % | (570 | ) | (5 | )% | ||||||||||||||
| Stock-based compensation expenses | 451 | 0 | % | 943 | 1 | % | (492 | ) | (52 | )% | ||||||||||||||
| Other expenses, net | 763 | 1 | % | 790 | 1 | % | (27 | ) | (3 | )% | ||||||||||||||
| Net income/(loss) before taxation | 1,286 | 2 | % | (484 | ) | (1 | )% | 1,770 | 366 | % | ||||||||||||||
| Income tax expense | 483 | 1 | % | 218 | 0 | % | 265 | 122 | % | |||||||||||||||
| Net income/(loss) | $ | 803 | 1 | % | $ | (702 | ) | (1 | )% | $ | 1,505 | 214 | % | |||||||||||
Revenue. Revenue increased by approximately $0.4 million, or 1%, to $81.6 million, for the six months ended September 30, 2025, from approximately $81.2 million for the same period in fiscal 2025. The slight increase was mainly due to the increase in the overall demand of most of our major customers following the Company’s effort in diversification of the customer base.
The following table outlines the dollar amount and percentage of total sales to our customers for the six months ended September 30, 2025 and 2024, respectively.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Six Months Ended September 30, 2025 | Six Months Ended September 30, 2024 | |||||||||||||||
| Sales | Sales | |||||||||||||||
| Amount | % | Amount | % | |||||||||||||
| VF Corporation (1) | $ | 50,359 | 62 | % | $ | 57,166 | 70 | % | ||||||||
| New Balance | 9,739 | 12 | % | 7,590 | 9 | % | ||||||||||
| Suzhou Unitex | 6,123 | 7 | % | 4,219 | 5 | % | ||||||||||
| G-III | 2,391 | 3 | % | 1,725 | 2 | % | ||||||||||
| American Eagle Outfitter | 2,184 | 3 | % | 1,213 | 2 | % | ||||||||||
| Tharanco | 1,382 | 2 | % | 1,160 | 2 | % | ||||||||||
| Hugo Boss | 1,331 | 2 | % | 1,942 | 2 | % | ||||||||||
| Acushnet | 1,197 | 1 | % | 633 | 1 | % | ||||||||||
| Others | 6,892 | 8 | % | 5,528 | 7 | % | ||||||||||
| Total | $ | 81,598 | 100 | % | $ | 81,176 | 100 | % | ||||||||
| (1) | A large portion of our products are sold under The North Face, Timberland and Vans brands that are owned by VF Corporation. |
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Revenue by Geographic Area
(All amounts, other than percentages, in thousands of U.S. dollars)
| Six
Months Ended September 30, 2025 | Six
Months Ended September 30, 2024 | Period
over Period Increase (Decrease) | ||||||||||||||||||||||
| Region | Amount | % | Amount | % | Amount | % | ||||||||||||||||||
| United States | $ | 69,331 | 85 | % | $ | 71,566 | 88 | % | $ | (2,235 | ) | (3 | )% | |||||||||||
| China (including Hong Kong) | 9,403 | 11 | % | 4,768 | 6 | % | 4,635 | 97 | % | |||||||||||||||
| Germany | 1,331 | 2 | % | 1,942 | 2 | % | (611 | ) | (31 | )% | ||||||||||||||
| Jordan | 930 | 1 | % | 1,730 | 2 | % | (800 | ) | (46 | )% | ||||||||||||||
| Others | 603 | 1 | % | 1,170 | 2 | % | (567 | ) | (48 | )% | ||||||||||||||
| Total | $ | 81,598 | 100 | % | $ | 81,176 | 100 | % | $ | 422 | 1 | % | ||||||||||||
Between January 2010 and March 2025, all apparel manufactured in Jordan could be exported to the U.S. without customs duty being imposed, pursuant to the United States-Jordan Free Trade Agreement entered into in December 2001. This free trade agreement provided us with substantial competitiveness and benefit that allowed us to expand our garment 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 countries, including Jordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified countries, amongst them Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst the 10% baseline tariff persists. Up to the date of this report, the tariff has been modified to 15% according to an executive order of presidential actions on July 31, 2025. While the payment of the tariff is typically the responsibility of the importer (Jerash’s customers), the impact of the tariff on customers demand would be affected by the comparative levels of the tariffs on imports from Jordan compared to other countries.
The decrease of approximately 3% in sales to the U.S. during the six months ended September 30, 2025, was mainly attributable to a decrease in shipments to our top customer in the period, which was partially compensated by the increases in shipments to our other customers in the U.S.
During the six months ended September 30, 2025, aggregate sales to China, Germany, Jordan, and other locations increased by 28% from approximately $9.6 million to $12.3 million from the same period last year due to higher demands of our capacity for the customers in those regions.
Cost of goods sold. In contrast to the increase in sales revenue, our cost of goods sold decreased by approximately $0.3 million, or 0.4%, to approximately $69.2 million, for the six months ended September 30, 2025, from approximately $69.5 million for the same period in fiscal 2025. As a percentage of revenue, the cost of goods sold decreased by approximately 1 percentage point to 85% for the six months ended September 30, 2025 from 86% for the same period in fiscal 2025. The decrease in cost of goods sold as a percentage of revenue was primarily attributable to better control of the import logistic costs and lower average production costs resulted from economy of scale.
For the six months ended September 30, 2025 and 2024, we purchased 12% and 11% of our garments and raw materials from one major supplier, respectively.
Gross profit margin. Gross profit margin was approximately 15% for the six months ended September 30, 2025, which increased by 1 percentage point from 14% for the same period in fiscal 2025. The increase in gross profit margin was primarily driven by better control of import costs and lowered average costs due to economy of scale.
Operating expenses. Operating expenses for the six months ended September 30, 2025 decreased by 9%, or approximately $1.1 million, to approximately $10.3 million, compared to the same period in fiscal 2025. The decrease was primarily due to better control of export costs, decrease in stock-based compensation expenses, and reduced spending in repair and maintenance in fiscal 2026.
Other expenses, net. Other expenses, net was approximately $763,000 for the six months ended September 30, 2025, as compared to other expenses, net of approximately $790,000 for the same period in fiscal 2025. The slight decrease was primarily due to more shipments completed around the end of September 2025 while the proceeds from certain customers’ supply chain financing programs were not processed by end of the quarter in fiscal 2026, resulting in relatively lower interest expense in current period.
Income tax expenses. Income tax expenses for the six months ended September 30, 2025 were approximately $0.5 million compared to income tax expenses of approximately $0.2 million for the same period in fiscal 2025. The increase in the income tax expenses was mainly due to increased operating profit of Treasure Success, related to the inclusion of Subpart F income under the U.S. Internal Revenue Code, offset of uncertain tax provision, which was provided in the prior year and subsequently amended the overstatement of approximately $150,000 in fiscal 2026. The effective tax rate increased to 37.5% for the six months ended September 30, 2025, as compared to (44.9%) for the six months ended September 30, 2024.
Net income/(loss). Net income for the six months ended September 30, 2025 was approximately $0.8 million compared to net loss of approximately $0.7 million for the same period in fiscal 2025. The increase in net income was mainly attributable the increase in the overall demand of most of our major customers, better control of import costs, and the lower average costs due to economy of scale.
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Liquidity and Capital Resources
Jerash Holdings is a holding company incorporated in Delaware. As a holding company, we rely on dividends and other distributions from our subsidiaries formed in Jordan and Hong Kong to satisfy our liquidity requirements. Current Jordanian regulations permit our Jordanian subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Jordanian accounting standards and regulations. In addition, our Jordanian subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends. We have relied on direct payments of expenses by our subsidiaries to meet our obligations to date. To the extent payments are due in U.S. dollars, we have occasionally paid such amounts in JOD to an entity controlled by our management capable of paying such amounts in U.S. dollars. Such transactions have been made at prevailing exchange rates and have resulted in immaterial losses or gains on currency exchange.
As of September 30, 2025, we had cash of approximately $12.0 million and restricted cash of approximately $1.7 million compared to cash of approximately $13.3 million and restricted cash of approximately $1.7 million as of March 31, 2025. The decrease in total cash was mainly a result of higher accounts receivable due to more goods shipped around the end of September 2025 with advances to suppliers for shipments to be completed in the following quarters.
Our current assets as of September 30, 2025 were approximately $55.6 million and our current liabilities were approximately $20.4 million, which resulted in a ratio of approximately 2.7 to 1. Our current assets as of March 31, 2025 were approximately $54.4 million, and our current liabilities were approximately $19.8 million, which resulted in a current ratio of approximately 2.7 to 1.
The primary drivers in the increase in current assets were the increase in accounts receivable due to more goods shipped around the end of September 2025 with advances to suppliers for shipments to be completed in the following quarters. The primary driver in the increase in current liabilities was the increase in accounts payable supporting the purchases for shipments in the following quarters.
Total equity as of September 30, 2025 was approximately $62.8 million compared to $62.9 million as of March 31, 2025.
We had net working capital of $35.2 million and $34.6 million as of September 30, 2025 and March 31, 2025, respectively. Based on our current operating plan, we believe that cash on hand and cash generated from operating activities will be sufficient to support our working capital needs for the next 12 months from the date this Quarterly Report is released.
Since May and October 2021, we have participated in supply chain financing programs of two of our major customers, respectively. The programs allow us to receive early payments for approved sales invoices submitted by us through the bank the customer cooperates with. For any early payments received, we are subject to an early payment charge imposed by the customer’s bank, for which the rate is SOFR plus a spread. The arrangement allows us to have better liquidity without the need to incur administrative charges and handling fees as in bank financing. In March 2024, we participated in an additional supply chain financing program with one customer.
We have funded our working capital needs from our operations. Our working capital requirements are influenced by the level of our operations, the numerical and dollar volume of our sales contracts, the progress of execution on our customer contracts, and the timing of accounts receivable collections.
Credit Facilities
DBS Facility Letter
Pursuant to the DBS facility letter dated January 12, 2022, DBSHK provided a bank facility of up to $5.0 million to Treasure Success, which was amended pursuant to a facility letter dated January 4, 2024. Pursuant to the amended agreement, DBSHK agreed to finance cargo receipt, trust receipt, account payable financing, and certain types of import and export invoice financing up to an aggregate of $5.0 million, subject to certain financial covenants. The DBSHK facility 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 currency bills. The facility is guaranteed by Jerash Holdings and became available to the Company on June 17, 2022. As of September 30, 2025 and March 31, 2025, we had $4.9 million and $4.5 million outstanding under this DBSHK facility, respectively.
Bank al Etihad Credit Facility
On July 31, 2025, Bank al Etihad offered to provide a credit facility of up to $6.0 million to Jerash Garments. Pursuant to the facility, Bank al Etihad agreed to finance import invoices of up to $6.0 million with condition that such invoices are secured by letter of credit issued by customers. The facility bears an interest rate at the Prime Lending Rate announced by Bank al Etihad. As of September 30, 2025, the Company had $247,520 outstanding under the Bank al Etihad facility.
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Six months ended September 30, 2025 and 2024
The following table sets forth a summary of our cash flows for the periods indicated:
(All amounts in thousands of U.S. dollars)
| Six
Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by operating activities | $ | 318 | $ | 2,426 | ||||
| Net cash used in investing activities | (1,054 | ) | (936 | ) | ||||
| Net cash (used in) provided by financing activities | (606 | ) | 2,341 | |||||
| Effect of exchange rate changes on cash and restricted cash | (19 | ) | 16 | |||||
| Net (decrease) increase in cash and restricted cash | (1,361 | ) | 3,847 | |||||
| Cash and restricted cash, beginning of six-month period | 15,064 | 14,037 | ||||||
| Cash and restricted cash, end of six-month period | $ | 13,703 | $ | 17,884 | ||||
Operating Activities
Net cash provided by operating activities was approximately $0.3 million for the six months ended September 30, 2025, compared to approximately $2.4 million for the same period in fiscal 2025. The decrease in net cash provided by operating activities was primarily attributable to the following factors:
| ● | a decrease in inventory of $1.4 million in the six months ended September 30, 2025, compared to a decrease of $7.0 million in the same period in fiscal 2025; |
| ● | an increase in accounts receivable of $2.7 million in the six months ended September 30, 2025, compared to an increase of $0.4 million in the same period in fiscal 2025; |
| ● | an increase in advance to suppliers of $1.4 million in the six months ended September 30, 2025, compared to an increase of $2.9 million in the same period in fiscal 2025; |
| ● | an increase in accounts payable of $1.2 million in the six months ended September 30, 2025, compared to a decrease of $1.9 million in the same period in fiscal 2025; and |
| ● | net income of $0.8 million in the six months ended September 30, 2025, compared to a net loss of $0.7 million in the same period in fiscal 2025. |
Investing Activities
Net cash used in investing activities was approximately $1.1 million for the six months ended September 30, 2025, compared to approximately $0.9 million in the same period in fiscal 2025. The increase was primarily due to higher capital expenditure in property, plant, and equipment.
Financing Activities
Net cash used in financing activities was approximately $0.6 million for the six months ended September 30, 2025, which primarily consisted the payments of $1.3 million of dividend, partially offset by a slight increase in proceeds from short-term loans. Net cash provided by financing activities was approximately $2.3 million for the six months ended September 30, 2024, which was the net effect of proceeds from short-term loans of approximately $3.6 million and the payments of $1.2 million of dividend.
Statutory Reserves
In accordance with the corporate law in Jordan, subsidiaries of Jerash Holdings in Jordan are required to make appropriations to certain reserve funds, based on net income determined in accordance with generally accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be 10% of net income until the reserve is equal to 100% of the entity’s share capital. Jiangmen Treasure Success is required to set aside 10% of its net income as statutory surplus reserve until such reserve is equal to 50% of its registered capital. These reserves are not available for dividend distribution. The statutory reserve was $0.4 million as of September 30, 2025 and 2024.
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The following table provides the amount of our statutory reserves, the amount of restricted net assets, consolidated net assets, and the amount of restricted net assets as a percentage of consolidated net assets, as of September 30, 2025 and 2024.
(All amounts, other than percentages, in thousands of U.S. dollars)
| As of September 30, | ||||||||
| 2025 | 2024 | |||||||
| Statutory Reserves | $ | 414 | $ | 414 | ||||
| Total Restricted Net Assets | $ | 414 | $ | 414 | ||||
| Consolidated Net Assets | $ | 62,846 | $ | 63,459 | ||||
| Restricted Net Assets as Percentage of Consolidated Net Assets | 0.66 | % | 0.65 | % | ||||
Total restricted net assets accounted for approximately 0.66% of our consolidated net assets as of September 30, 2025. As our subsidiaries in Jordan are only required to set aside 10% of net profits to fund the statutory reserves, we believe the potential impact of such restricted net assets on our liquidity is limited.
Capital Expenditures
We had capital expenditures of approximately $1.1 million and $0.9 million for the six months ended September 30, 2025 and 2024, for plant and machinery in both periods and the construction of a dormitory in fiscal 2025. For the six months ended September 30, 2025, our capital expenditures in payments for additional plant and machinery were approximately $1.1 million. For the six months ended September 30, 2024, payments for additional plant and machinery and the construction of a dormitory amounted to approximately $0.6 million and $0.3 million respectively.
On August 7, 2019, we completed a transaction to acquire 12,340 square meters (approximately three acres) of land in Al Tajamouat Industrial City, Jordan, from a third party to construct a dormitory for our employees with aggregate purchase price JOD 863,800 (approximately $1,218,303). Management has revised the plan to construct both dormitory and production facilities on the land in order to capture the increasing demand for our capacity. We are conducting engineering design and study on this project with the business growth prospect of new customers to be introduced in the coming few years. On February 6, 2020, we completed a transaction to acquire 4,516 square meters (approximately 48,608 square feet) of land in Al Tajamouat Industrial City, Jordan, from a third party to construct a dormitory for our employee with aggregate purchase price JOD 313,501 (approximately $442,162). The dormitory is completed in second quarter of fiscal year 2025. The dormitory and dormitory kitchen were completed in the second quarter and the fourth quarter of fiscal year 2025, respectively. We have spent approximately $10.6 million in capital expenditures to build the dormitory and the dormitory kitchen.
We expect that our capital expenditures will increase in the future as our business continues to develop and expand. We project that there will be an aggregate of approximately $7.8 million, $14.5 million, $16.5 million, $3.5 million and $2 million of capital expenditures, respectively, in each of the five fiscal years from the fiscal year ending March 31, 2026 to the fiscal year ending March 31, 2030, for further enhancement of production capacity to meet future sales growth based on the current market response and communication with key customers. The realization of these investments depends on the progress of our business development, including expanding our client base and securing increased commitments from existing customers. We have used cash generated from operations of our subsidiaries to fund our capital commitments in the past. Our capital expenditure plan is highly related to customer commitments and market responses to the demand of our capacity. If growth in demand is in line with our projection, other than cash generated from the operations of our subsidiaries, we may also obtain further bank financing and raise funds from the capital market to meet our capital expenditure plan and fund our capital commitments. As of the date of this report, no material commitment has been made for the capital expenditure projections above.
Off-balance Sheet Commitments and Arrangements
We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as stockholders’ equity, or that are not reflected in our consolidated financial statements.
Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with accounting principles generally accepted by the United States of America (“U.S. GAAP”), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. We have not identified any critical accounting estimates.
Recent Accounting Pronouncements
See “Note 3—Recent Accounting Pronouncements” in the notes to our unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide this information.
Item 4. Controls and Procedures
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Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), based on their evaluation of our disclosure controls and procedures as of September 30, 2025, concluded that our disclosure controls and procedures were effective as of that date.
Based on the assessment using those criteria, management concluded that, as of March 31, 2024, our internal control over financial reporting was not effective because there were ineffective information technology general controls in the areas of privileged user access and the review of user access over certain information technology systems that support our financial reporting processes.
Although some remedial actions have been implemented to address the issues, in the annual report for fiscal 2025 filed on June 26, 2025, the management concluded that, as of March 31, 2025, our internal control over financial reporting was still ineffective as some of the control deficiencies surrounding the information technology environment were not sufficiently remediated.
Additional remedial actions have then been implemented to address the issues. In the assessment in fiscal 2026, the management concluded that, as of September 30, 2025, our internal control over financial reporting was effective after review and testing of the effectiveness of the remedial actions.
Our management has concluded that the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report present fairly, in all material respects, our financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America.
Changes in Internal Control Over Financial Reporting
Other than our ongoing remediation efforts with respect to our disclosure controls and procedures, which extend to our internal control over financial reporting, there were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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JERASH HOLDINGS (US), INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently involved in any material legal proceedings. From time-to-time we are, and we anticipate that we will be, involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. We could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide the information required by this item.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
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Index to Exhibits
| Exhibit | Incorporated
by Reference (Unless Otherwise Indicated) | |||||||||
| Number | Exhibit Title | Form | File | Exhibit | Filing Date | |||||
| 3.1 | Amended and Restated Certificate of Incorporation | POS AM | 333-222596 | 3.1 | September 19, 2018 | |||||
| 3.2 | Amended and Restated Bylaws | 8-K | 001-38474 | 3.1 | July 24, 2019 | |||||
| 4.1 | Specimen Certificate for Common Stock | S-1 | 333-218991 | 4.1 | June 27, 2017 | |||||
| 10.1 | Credit Facility Agreement dated July 31, 2025, by and between Bank al Etihad and Jerash Garments and Fashions Manufacturing Company Limited | — | — | — | Filed herewith | |||||
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | — | — | — | Filed herewith | |||||
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | — | — | — | Filed herewith | |||||
| 32.1* | Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | — | — | — | Furnished herewith | |||||
| 32.2* | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | — | — | — | Furnished herewith | |||||
| 101.INS | Inline XBRL Instance Document | — | — | — | Filed herewith | |||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | — | — | — | Filed herewith | |||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | — | — | — | Filed herewith | |||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | — | — | — | Filed herewith | |||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | — | — | — | Filed herewith | |||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | — | — | — | Filed herewith | |||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | — | — | — | Filed herewith | |||||
| * | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 12, 2025 | Jerash Holdings (US), Inc. | |
| By: | /s/ Gilbert K. Lee | |
| Gilbert K. Lee | ||
| Chief Financial Officer (Principal Financial Officer) | ||
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