Aeries Technology expects ~$2.95M annual revenue hit
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Aeries Technology, Inc. (AERT) reported revenue of $40.066 million and net income of $3.561 million for the six months ended September 30, 2026, compared with $32.688 million and $2.320 million a year earlier. For the three months ended September 30, revenue was $18.148 million versus $17.359 million, while operating income was $0.899 million versus $1.985 million. Six-month operating cash inflow was $4.740 million, compared with $2.394 million.
At September 30, 2026, cash and cash equivalents were $3.836 million. The company said conditions raised substantial doubt about its ability to continue as a going concern, while management expected available cash, operations and debt capacity to fund the next 12 months; it also said ongoing operations depend on sufficient cash generation and additional financing, if necessary. A customer exit is expected to reduce annual revenue by approximately $2.947 million. During the six months ended September 30, AERT repurchased 678,398 Class A ordinary shares for $3.871 million, inclusive of commission. On November 5, 2026, it paid $911,000 to Sea Otter, fully settling its outstanding obligation.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointSix-month revenue was $40.066 million, versus $32.688 million a year earlier.
- Moderate pointSix-month net income was $3.561 million, versus $2.320 million a year earlier.
- Moderate pointSix-month operating cash inflow was $4.740 million, versus $2.394 million a year earlier.
Negative
- Major pointManagement disclosed conditions raising substantial doubt about the company’s ability to continue as a going concern.
- Moderate pointThree-month operating income was $0.899 million, versus $1.985 million a year earlier.
Filing Explained
The agreements specify 280.75 Class A shares per AARK share and 1.80 per ATGBA share, both subject to adjustment.
This Form 10-Q describes conditional rights for AARK and ATGBA shareholders to exchange subsidiary shares for up to all of their holdings for Aeries Class A shares or, under specified conditions, cash; an exchange for shares would reduce existing holders’ ownership percentages, absent offsetting changes.
The agreements make exchanges subject to specified conditions, including financial and share-price milestones. Each AARK share may be exchanged for 280.75 Aeries Class A shares and each ATGBA share for 1.80, subject to adjustment; cash is available only if regulatory approval is not obtained and cash-flow and debt-agreement conditions are met.
The one-for-eight share consolidation took effect on
Key Figures
Key Terms
going concern financial
share consolidation financial
redeemable noncontrolling interest financial
contract assets financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were AERT’s revenue and net income for the six months ended September 30, 2026?
How much operating cash did AERT generate in the six months ended September 30, 2026?
When did AERT’s share repurchase plan take effect and end?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarterly period ended
For the transition period from __________ to __________
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of November 12, 2026, there were
AERIES TECHNOLOGY, INC.
FORM 10-Q
For the quarterly period ended September 30, 2026
TABLE OF CONTENTS
| Page | ||||
| PART 1 – INTERIM FINANCIAL INFORMATION | ||||
| Item 1. | Condensed Consolidated Financial Statements | 1 | ||
| Condensed Consolidated Balance Sheets as of September 30, 2026 (Unaudited) and March 31, 2026 | 1 | |||
| Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2026 and 2025 (Unaudited) | 2 | |||
| Condensed Consolidated Statements of Comprehensive Income / (Loss) for the three and six months ended September 30, 2026 and 2025 (Unaudited) | 3 | |||
| Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Shareholders’ Equity / (Deficit) for the three and six months ended September 30, 2026 and 2025 (Unaudited) | 4 | |||
| Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2026 and 2025 (Unaudited) | 6 | |||
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 7 | |||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 | ||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 46 | ||
| Item 4. | Controls and Procedures | 46 | ||
| PART II – OTHER INFORMATION | ||||
| Item 1. | Legal Proceedings | 47 | ||
| Item 1A. | Risk Factors | 47 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 49 | ||
| Item 3. | Defaults Upon Senior Securities | 49 | ||
| Item 4. | Mine Safety Disclosures | 49 | ||
| Item 5. | Other Information | 49 | ||
| Item 6. | Exhibits | 50 | ||
| SIGNATURES | 51 | |||
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such statements are based on expectations as to the future and are not statements of historical fact.
The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. The following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
| ● | our ability to continue as a going concern; | |
| ● | our market opportunity; | |
| ● | our ability to maintain compliance with the Nasdaq Stock Market (“Nasdaq”) listing standards and to maintain the listing of the Class A ordinary shares and the warrants on Nasdaq, and the potential liquidity and trading of such securities; | |
| ● | our business development efforts to maximize our potential value and to retain and expand our client base; | |
| ● | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; | |
| ● | our financial performance; | |
| ● | the sufficiency of our existing cash and cash equivalents to fund our operating expenses and capital expenditure requirements; | |
| ● | our success in retaining or recruiting officers, key employees or directors, or any necessary changes to these positions; | |
| ● | changes in applicable laws or regulations in the United States and foreign jurisdictions in which we conduct business; | |
| ● | risks related to cybersecurity and data privacy; |
| ● | risks related to the rapid developments in generative artificial intelligence technologies, machine learning, and other emerging technologies, including their impact on customer demand, competitive dynamics, cybersecurity risks and the regulatory environment; |
|
● |
risks related to reputational harm, including those arising from social media, public perception, or misinformation; | |
| ● | risks related to current or future litigation, regulatory inquiries, or governmental investigations; |
| ● | geopolitical instability, armed conflicts, trade restrictions, tariffs and other international events that may adversely affect global economic conditions, customer spending and business operations, pandemics or public health emergencies, recessions, interest rates, inflation, local and national elections, fuel prices, international currency fluctuations, changes in diplomatic and trade relationships, political instability, acts of war or terrorism and natural disasters; |
ii
| ● | the expected effects of the share consolidation on the trading price, liquidity and marketability of our Class A ordinary shares; and | |
| ● | other factors discussed in this report and our other filings with the Securities and Exchange Commission. |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may be amplified in the future and there may be additional risks that we currently consider immaterial, or which are unknown. It is not possible to predict or identify all such risks. We undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by applicable law. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made.
iii
PART 1 – INTERIM FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2026 and March 31, 2026
(in thousands of United States dollars, except share and per share amounts)
| September 30, 2026 |
March 31, 2026 |
|||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance of $ |
||||||||
| Prepaid expenses and other current assets, net of allowance of $ |
||||||||
| Deferred transactions costs | ||||||||
| Total current assets | $ | $ | ||||||
| Property and equipment, net | ||||||||
| Operating right-of-use assets | ||||||||
| Deferred tax assets | ||||||||
| Long-term investments, net of allowance of $ |
||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY / (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation and related benefits, current | ||||||||
| Operating lease liabilities, current | ||||||||
| Short-term borrowings | ||||||||
| Forward purchase agreement put option liability | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | $ | $ | ||||||
| Long term debt | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Derivative warrant liabilities | ||||||||
| Deferred tax liabilities | ||||||||
| Other liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies (Note 10) | ||||||||
| Redeemable noncontrolling interest | ||||||||
| Shareholders’ equity / (deficit) | ||||||||
| Preference shares, $ |
- | - | ||||||
| Class A ordinary shares, $ |
||||||||
| Class V ordinary shares, $ |
- | - | ||||||
| Net shareholders’ investment and additional paid-in capital | ||||||||
| Less: Class A ordinary shares held in treasury at cost; |
( |
) | ( |
) | ||||
| Accumulated other comprehensive loss | ( |
) | ( |
) | ||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Aeries Technology, Inc. shareholders’ deficit | $ | ( |
) | $ | ( |
) | ||
| Noncontrolling interest | ||||||||
| Total shareholders’ equity / (deficit) | ( |
) | ( |
) | ||||
| Total liabilities, redeemable noncontrolling interest and shareholders’ equity / (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The Company’s Class A ordinary share and per-share amounts in the Company’s condensed consolidated financial statements have been retroactively adjusted to reflect the Company’s June 2026 share consolidation for all the periods presented.
1
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended September 30, 2026 and 2025
(in thousands of United States dollars, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, 2026 |
Three Months Ended September 30, 2025 |
Six Months Ended |
Six Months Ended |
|||||||||||||
| Revenue, net | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general & administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income from operations | ||||||||||||||||
| Other income / (expense) | ||||||||||||||||
| Change in fair value forward purchase agreement put option liability | - | ( |
) | ( |
) | |||||||||||
| Change in fair value of derivative warrant liabilities | ( |
) | ( |
) | ||||||||||||
| Gain on settlement of forward purchase agreement put option liability | - | - | ||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income, net | ||||||||||||||||
| Total other income / (expense), net | ( |
) | ||||||||||||||
| Income before income taxes | ||||||||||||||||
| Income tax expense | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Less: Net income attributable to noncontrolling interests | ||||||||||||||||
| Less: Net income attributable to redeemable noncontrolling interests | $ | $ | $ | $ | ||||||||||||
| Net income attributable to shareholders’ of Aeries Technology Inc. | $ | $ | $ | $ | ||||||||||||
| Weighted average shares outstanding of Class A ordinary shares: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Earning per share: | ||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The Company’s Class A ordinary share and per-share amounts in the Company’s condensed consolidated financial statements have been retroactively adjusted
to reflect the Company’s June 2026 share consolidation for all the periods presented.
2
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)
For the three and six months ended September 30, 2026 and 2025
(in thousands of United States dollars, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, 2026 |
Three Months Ended September 30, 2025 |
Six Months Ended September 30, 2026 |
Six Months Ended September 30, 2025 |
|||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Other comprehensive income / (loss), net of tax | ||||||||||||||||
| Foreign currency translation adjustments | ( |
) | ( |
) | ( |
) | ||||||||||
| Unrecognized actuarial gain on employee benefit plan obligations | ||||||||||||||||
| Total other comprehensive income / (loss), net of tax | ( |
) | ( |
) | ( |
) | ||||||||||
| Comprehensive income, net of tax | $ | $ | $ | $ | ||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | ||||||||||||||||
| Less: Comprehensive income attributable to redeemable noncontrolling interests | ||||||||||||||||
| Total comprehensive income attributable to shareholders’ of Aeries Technology, Inc. | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE
NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY (DEFICIT)
For the three and six months ended September 30, 2026 and 2025
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| Redeemable noncontrolling |
Ordinary Shares Class A |
Ordinary Shares Class V |
Ordinary Shares Treasury Shares |
Net shareholders’ investment and additional paid-in |
(Accumulated deficit) retained |
Accumulated other comprehensive |
Total Aeries Technology, Inc. shareholders’ equity |
Noncontrolling | Total shareholders’ equity |
|||||||||||||||||||||||||||||||||||||||||||
| interest | Shares | Amount | Shares | Amount | Shares | Amount | capital | Earnings | loss | (deficit) | interest | (deficit) | ||||||||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2026 | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||
| Net income for the period | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income for the period | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Purchase of additional ownership interest in subsidiary from NCI | - | - | - | - | - | - | - | ( |
) | - | - | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Purchase of Treasury Stock | - | ( |
) | - | - | - | ( |
) | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||||||||||||||||
| Cancellation of Treasury Stock | - | - | ( |
) | - | - | ( |
) | ( |
) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance as at June 30, 2026 | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||
| Net income for the period | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income for the period | ( |
) | - | - | - | - | - | - | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Purchase of Treasury Stock including FPA holder | - | ( |
) | - | - | - | ( |
) | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||||||||||||||||
| Cancellation of Treasury Stock | - | - | ( |
) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Additional shares issued to FPA holder | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as at September 30, 2026 | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||
4
| Redeemable noncontrolling |
Ordinary Shares Class A |
Ordinary Shares Class V |
Ordinary Shares Treasury Shares |
Net shareholders’ investment and additional paid-in |
(Accumulated deficit) retained |
Accumulated other comprehensive |
Total Aeries Technology, Inc. shareholders’ equity |
Noncontrolling | Total shareholders’ equity |
|||||||||||||||||||||||||||||||||||||||||||
| interest | Shares | Amount | Shares | Amount | Shares | Amount | capital | Earnings | loss | (deficit) | interest | (deficit) | ||||||||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2025 | $ | ( |
) | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||
| Net income for the period | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income for the period | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance as at June 30, 2025 | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||
| Net Income for the period | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( |
) | - | - | - | - | - | - | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares in connection with private placement | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued for professional services | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock with respect to share exchange agreement | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as on September 30, 2025 | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The Company’s Class A ordinary share and per-share amounts in the Company’s condensed consolidated financial statements have been retroactively adjusted to reflect the Company’s June 2026 share consolidation for all the periods presented.
5
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended September 30, 2026, and 2025
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| Six Months Ended September 30, 2026 |
Six Months Ended September 30, 2025 |
|||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash (used in) / provided by operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of prior service cost | - | |||||||
| Stock-based compensation expense | ||||||||
| Deferred tax benefit | ( |
) | ( |
) | ||||
| Accrued income from long-term investments | ( |
) | ( |
) | ||||
| Provision for expected credit loss | ||||||||
| Sundry balances written back | - | ( |
) | |||||
| Gain on settlement of liability | ( |
) | - | |||||
| (Profit) / loss on sale of property and equipment | ( |
) | ||||||
| Change in fair value of forward purchase agreement put option liability | ( |
) | ||||||
| Change in fair value of derivative warrant liabilities | ( |
) | ||||||
| Gain on settlement of forward purchase agreement put option liability | ( |
) | - | |||||
| Unrealized exchange loss | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Prepaid expenses and other current assets | ( |
) | ||||||
| Operating right-of-use assets | ( |
) | ||||||
| Other assets | ( |
) | ||||||
| Accounts payable | ( |
) | ( |
) | ||||
| Accrued compensation and related benefits, current | ( |
) | ( |
) | ||||
| Other current liabilities | ( |
) | ||||||
| Operating lease liabilities | ( |
) | ||||||
| Other liabilities | ( |
) | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Acquisition of property and equipment | ( |
) | ( |
) | ||||
| Sale of property and equipment | ||||||||
| Issuance of loans to affiliates | - | ( |
) | |||||
| Payments received for loans to affiliates | ||||||||
| Fixed Deposits placed with banks | - | ( |
) | |||||
| Proceeds from maturities of fixed deposits placed with banks | - | |||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Cash flows from financing activities | ||||||||
| Net repayment of short-term borrowings | ( |
) | ( |
) | ||||
| Payment of promissory note liability | ( |
) | - | |||||
| Payment of insurance financing liability | - | ( |
) | |||||
| Repayment of long-term debt | ( |
) | ( |
) | ||||
| Payment of finance lease obligations | ( |
) | ( |
) | ||||
| Payment of FPA liabilities | ( |
) | - | |||||
| Payment for purchase of treasury shares | ( |
) | - | |||||
| Purchase of additional ownership interest in subsidiary | ( |
) | - | |||||
| Net cash used in financing activities | ( |
) | ( |
) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( |
) | ( |
) | ||||
| Net decrease in cash and cash equivalents | ( |
) | ( |
) | ||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental cash flow disclosure: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes, net of refunds | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Equipment acquired under finance lease obligations | $ | $ | ||||||
| Issuance of common stock to vendor in lieu of future services | $ | - | $ | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
Note 1 - Nature of Operations
Unless the context otherwise requires, Aeries Technology, Inc. and its subsidiaries, is herein referred to as the “Company,” “ATI,” “us,” “we” and “our” in these condensed consolidated financial statements. The Company is a global leader in AI enabled value creation, business transformation, and Global Capability Center (GCC) delivery for private equity (PE) portfolio companies, supporting scalable, technology driven execution. Founded in 2012, its commitment to workforce development has earned it the Great Place to Work Certification for two consecutive years. The Company has subsidiaries in India, Mexico, Singapore and the United States.
Note 2 - Summary of Significant Accounting Policies
Basis of Preparation
The information presented below supplements the Significant Accounting Policies information presented in the annual report on Form 10-K for the year ended March 31, 2026. There have been no changes in accounting policies during the six months ended September 30, 2026, from those disclosed in the annual consolidated financial statements and related notes for the year ended March 31, 2026, except for those described below and also as described in “Recently Adopted Accounting Pronouncements” below.
All intercompany balances and transactions have been eliminated in consolidation.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
7
Amendments to Articles of Incorporation or Bylaws and Share Consolidation
At the Company’s 2026 Annual General Meeting held on March 3, 2026, the Company’s shareholders approved a proposal authorizing the Company’s Board of Directors (the “Board”) to effect a consolidation of the Company’s authorized and issued Class A ordinary shares at a ratio of up to one-for-ten (1:10), with the exact ratio and timing to be determined by the Board in its sole discretion. Pursuant to such authorization, the Board approved a one-for-eight (1:8) share consolidation (the “Share Consolidation”).
On June 11, 2026, the Company filed its Third Amended and Restated Memorandum and Articles of Association (“A&R Articles”) with the Registrar of Companies in the Cayman Islands to effect the Share Consolidation. The Share Consolidation became effective at 12:01 a.m., Eastern Time, on June 12, 2026 (the “Effective Time”). The Company’s Class A ordinary shares began trading on a split-adjusted basis on Nasdaq at the commencement of trading on June 12, 2026.
As a result of the Share Consolidation, every eight (8) Class A ordinary shares of the Company issued and outstanding immediately prior to the Effective Time were automatically combined and converted into one (1) Class A ordinary share. The Share Consolidation reduced the number of issued and outstanding Class A ordinary shares from approximately 45,914,789 shares to approximately
In connection with the Share Consolidation, on June 12, 2026, the Company issued a notice (the “Warrant Adjustment Notice”) to holders of its warrants to purchase ordinary shares (“Warrants”). In the Warrant Adjustment Notice, the Company notified Warrant holders that the Company has made the following adjustments to its outstanding Warrants, effective after the close of trading on June 11, 2026, as reflected in the Warrants upon the commencement of trading on June 12, 2026.
| ● | The number of Class A ordinary shares issuable upon the exercise of each Warrant was proportionally adjusted to reflect the Share Consolidation, such that each Warrant now represents the right to purchase one eighth of a Class A ordinary share, subject to the aggregation provisions of the warrant agreement dated October 19, 2021, by and between Worldwide Webb Acquisition Corp. (“WWAC”) and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”); and |
| ● | The exercise price of each post-Share Consolidation Warrant to purchase one whole post-Share Consolidation Class A ordinary share was proportionately increased eight-fold (relative to a pre-Share Consolidation Warrant to purchase one pre-Share Consolidation Class A ordinary share), to $92.00 per post-Share Consolidation Class A ordinary share. |
Proportionate adjustments were made to the per-share exercise price and/or the number of shares subject to all then-outstanding stock options and other equity awards (collectively, the “Equity Awards”), which resulted in a proportional decrease in the number of shares of the Company’s Class A ordinary shares reserved for issuance upon exercise or settlement of such Equity Awards. All share and per-share amounts in the Company’s condensed consolidated financial statements in this Form 10-Q and the notes thereto have been retroactively adjusted to reflect the Share Consolidation for all the periods presented.
Going Concern
The Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its obligations as they become due within one year after the date that the financial statements are issued. Management’s evaluation does not initially take into consideration the potential mitigating effects of management’s plans that have not been fully implemented as of the date the financial statements are issued. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
8
In performing this evaluation, the Company identified the following conditions that raised substantial doubt about its ability to continue as a going concern:
| ● | As of September 30, 2026, the Company had a working capital deficit of $ |
The FPAs were liquidity arrangements entered into as part of the Business Combination consummated as of November 6, 2023 (“Closing Date”). Under these liquidity arrangements, certain investors agreed not to redeem their holdings in WWAC in exchange for the Company entering into the FPAs. As of September 30, 2026, the remaining balance owed to the FPA holders (as defined below) is $
|
Sandia Investment Management LP (“Sandia”), one of the FPA holders agreed to revised terms where the remaining liability would be settled by adjusting the proceeds from FPA share sales, either via cash or additional share issuance. Further, pursuant to Amendment No. 2 dated January 22, 2026 (Amendment No. 2”) to the Letter Agreement with Sandia dated September 16, 2025 (the “Letter Agreement”), commencing March 2026, the Company is obligated to make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No. 2. Amendment No. 2 provided that the outstanding amount would be subject to 15% per annum interest calculated monthly.
On July 29, 2026, the Company paid Sandia $
On August 3, 2026,
as disclosed in further detail in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on
August 7, 2026, the Company entered into a letter agreement with Sea Otter Trading, LLC (“Sea Otter”) to restructure the
remaining maturity obligation into scheduled installment payments, among additional provisions (the “Sea Otter Letter Agreement”).
Under the agreement, the Company was required to make an initial payment of $ |
As collateral, the Company issued
|
● |
Additionally, during the period ended September 30, 2026, there is a heightened risk of non-collection, leading the Company to record an allowance for doubtful accounts of approximately $ | |
| ● | The exit of a customer is expected to result in an estimated annual revenue reduction of approximately $ |
The Company has historically financed its operations and expansions primarily with cash generated from operations and the revolving credit facility from Kotak Mahindra Bank. As of September 30, 2026, the Company had a balance of $
Following the settlement of the Sandia FPA obligation on July 29, 2026 and the execution of the Sea Otter Letter Agreement, the Company’s immediate liquidity requirements associated with these obligations have been reduced. However, the Company remains dependent on generating sufficient cash flows and obtaining additional financing, if necessary, to meet its ongoing operating needs and contractual obligations.
9
The Company has undertaken or completed the following actions to improve its available cash balances, liquidity, and cash generated from operations:
| ● | Targeted cost cutting measures have been instituted, focusing on non-core expenses including those related to inorganic growth strategy, such as reductions in the use of outside vendors and professional services, as well as selective headcount and salary reductions, which are designed to improve our cash flow position without impacting core business operations. | |
| ● | Management believes that the settlement of the Sandia obligation and the execution of the Sea Otter Letter Agreement, together with cash generated from operations, cost-management initiatives and other liquidity measures, will improve the Company’s liquidity position. |
The Company’s ability to continue as a going concern is dependent upon, among other things, successfully executing its mitigation plan, which includes, (i) raising additional funds from existing or new credit facilities, (ii) raising equity or equity linked capital, (iii) restructuring current liabilities into equity or long-term obligations, (iv) further negotiating for waivers from vendors, and (v) further reducing non-core expenses with a renewed focus on organic growth in the core geography that has been historically operated in, which is North America.
The Company is hopeful of accomplishing its objectives through these measures in the anticipated time frame and also expects that the funds available through the above-mentioned arrangements will be sufficient to alleviate the doubts about the Company’s ability to continue as a going concern. However, there is no guarantee of the success of these efforts. The condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary if the Company is unable to continue as a going concern.
Nasdaq Listing Compliance
On March 31, 2026, the Company received formal notice from the Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company’s non-compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) would result in the delisting of the Company’s securities from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”). The Company filed a timely request for a hearing before the Panel, which request stayed any further action by Nasdaq pending the issuance of a decision by the Panel and the expiration of any extension the Panel may grant to the Company following the hearing. The Company had its hearing before the Panel on May 7, 2026. On June 12, 2026, the Panel notified the Company that it determined to grant its request to continue its listing on Nasdaq subject to the Company demonstrating compliance with the Bid Price Rule on or before June 26, 2026.
On June 12, 2026, the Company implemented the Share Consolidation of the Company’s Class A ordinary shares. The Share Consolidation was intended to increase the per-share trading price of the Company’s Class A ordinary shares and to assist the Company in maintaining compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
In a letter dated July 15, 2026, Nasdaq notified the Company that it had regained compliance with the Bid Price Rule, as required by the Panel’s decision. In application of Nasdaq Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from July 15, 2026. If, within that one-year monitoring period, the Staff finds the Company again out of compliance with the Bid Price Rule that was the subject of the exception, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C). The Company’s securities may be at that time delisted from Nasdaq.
10
Use of Estimates
The preparation of condensed consolidated financial statements in accordance with generally accepted accounting practices in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, revenue recognition, allowance for credit losses, stock-based compensation, fair valuation of FPA put option liabilities and private warrant liabilities, useful lives of property and equipment, accounting for income taxes, determination of incremental borrowing rates used for operating lease liabilities and right-of-use assets and obligations related to employee benefits. Management believes that the estimates and judgments upon which it relies, are reasonable based upon information available to the Company at the time that these estimates and judgments were made. Actual results could differ from those estimates.
Segment Reporting
The Company operates as one operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance and allocating resources.
Forward Purchase Agreements
On November 3, 2023 and November 5, 2023, WWAC entered into the Forward Purchase Agreements (“FPAs”) with Sandia, Sea Otter, YA II PN, Ltd and Meteora Capital Partners, LP (“Meteora”) (collectively, the “FPA holders”). Subscription agreements (the “Subscription Agreements”) were also executed alongside the FPA for subscription of the underlying FPA shares by the FPA holders either through a new issuance or purchase of shares from existing holders. The FPAs and Subscription Agreements have been accounted for separately as discussed below.
On November 6, 2024, the Company reached an agreement with Meteora to settle the outstanding maturity consideration liability through the issuance of additional shares. As a result, the Company issued 7,226 Class A ordinary shares to Meteora in November 2024, settling its maturity consideration liability with Meteora.
On September 16, 2025, the Company entered into the Letter Agreement with Sandia, one of its FPA holders, with respect to the Sandia FPA.
| ● | The Letter Agreement primarily (1) provides for sales of FPA shares held by Sandia to offset the Company’s payment obligations to Sandia under the Sandia FPA at a sales price not lower than $8.40 per share continuing through December 31, 2025 (the “Designated Period”), (2) provides for the issuance and registration of additional Class A ordinary shares (the “Additional Shares”) to Sandia in an amount equal to (a) the result of dividing (i) the remaining liability at the end of the Designated Period by (ii)the greater of (x) the 30-day volume-weighted average price per Class A ordinary share on the Nasdaq Capital Market for the 30 trading days immediately preceding the expiration of the Designated Period or (y) $8.00 per share, minus (b) the number of remaining FPA Shares held by Sandia at the end of the Designated Period, provided that the total number of the Additional Shares issued shall not be less than 62,500 Class A ordinary shares, and (3) clarifies the Company’s payment obligations under the FPA in the case of a Change in Control (as defined in the Letter Agreement) or the delisting of the Company’s Class A ordinary shares from the Nasdaq Capital Market. On December 30, 2025, |
| ● | On December 31, 2025, the Company entered into “Amendment No. 1” to the Letter Agreement extending the Designated Period to January 9, 2026. |
11
| ● |
Further, on January 22, 2026, the Company and Sandia entered into “Amendment No. 2” to the Letter Agreement, pursuant to which the Company agreed that, commencing March 2026, the Company is obligated to make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No. 2. Additionally, the outstanding amount is subject to 15% per annum interest calculated monthly. On July 29, 2026, the Company paid Sandia $1,487 in exchange for the return of 226,509 Class A ordinary shares, which satisfied the Company’s outstanding obligations under the Sandia FPA. The Company recognized the applicable changes in fair value through the settlement dates, with any difference between the carrying amounts of the liabilities immediately prior to settlement and the corresponding settlement amounts recognized in the condensed consolidated statements of operations, as applicable.
As of the reporting date, no outstanding liabilities remain in respect of these settled instruments, and accordingly, no further fair value remeasurement is required. |
On August 3, 2026, the Company entered into the Sea Otter Letter Agreement with Sea Otter to settle its outstanding payment obligation related to an OTC Equity Prepaid Forward Transaction.
| ● | Under the agreement, the Company was required to make an initial payment of $ |
| ● | As collateral, the Company issued |
Derivative Financial Instruments and FPA Put Option Liability
The Company accounts for the Warrants (as defined below) in accordance with the guidance contained in ASC 815-40 under which the Instruments (as defined below) do not meet the criteria for equity treatment and must be recorded as liabilities. The Company accounts for the FPA put option liability as a financial liability in accordance with the guidance in ASC 480-10. Warrants and the FPAs are collectively referred to as the “Instruments”. The Instruments are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statement of operations. See Note 11 for further discussion of the pertinent terms of the Warrants and Note 14 for further discussion of the methodology used to determine the value of the Instruments.
A derivative financial instrument written by the Company which has been accounted for in accordance with the guidance contained in ASC 815-40 including subsequent re-measurement at fair value with the changes being recognized in Company’s condensed consolidated statement of operations.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value at inception and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the condensed consolidated balance sheets as current or noncurrent based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
12
Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value.
Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:
Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 – Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets but corroborated by market data.
Level 3 – Unobservable inputs that are supported by little or no market activity and reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Fair Value of Financial Instruments
Except for the Warrants as described above, the fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (the “FASB”) ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the condensed consolidated balance sheets.
Cash and Cash Equivalents
Cash consists of the Company’s cash and bank balances. The Company considers cash equivalents to be highly liquid investments with original maturities of three months or less.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents, accounts receivable, loans to affiliates, and investments. The Company holds cash at financial institutions that the Company believes are high credit quality financial institutions and limits the amount of credit exposure with any one bank and conducts ongoing evaluations of the creditworthiness of the banks with which it does business. As of both September 30, 2026 and March 31, 2026, there were two customers each that represented 10% or greater of the Company’s accounts receivable balance. The Company expects limited credit risk arising from its long-term investments as these primarily entail investments in the Company’s affiliates that have a credit rating that is above the minimum allowable credit rating defined in the Company’s investment policy. As a part of its risk management process, the Company limits its credit risk with respect to long-term investments by performing periodic evaluations of the credit standing of counterparties to its investments.
13
In respect of the Company’s revenue, there were two and three customers that each accounted for more than
| Schedule of concentration of credit risk | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Customer 1 | % | % | % | % | ||||||||||||
| Customer 2 | % | % | % | % | ||||||||||||
| Customer 3 | N/A | % | % | % | ||||||||||||
Accounts receivable, net
The Company records a receivable when an unconditional right to consideration exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. If revenue recognized on a contract exceeds the billings, then the Company records an unbilled receivable for that excess amount, which is included as part of accounts receivable, net in the Company’s condensed consolidated balance sheets.
Under ASC Topic 326, accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors. In establishing any required allowance, management considers historical losses adjusted for current market conditions, the current receivables aging, current payment terms and expectations of forward-looking loss estimates. Allowance for credit losses was $
The following table provides details of the Company’s allowance for credit losses on accounts receivable:
| Schedule of allowance for credit losses | ||||||||
| Six months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Opening balance as of April 1 | $ | $ | ||||||
| Additions charged to cost and expense | ( |
) | ||||||
| Closing balance as of September 30 | $ | $ | ||||||
Long-Term Investments
The Company’s long-term investments consist of debt and non-marketable equity investments in privately-held companies in which the Company does not have a controlling interest or significant influence, which have maturities in excess of one year and the Company does not intend to sell.
Debt investments of mandatorily redeemable preference shares, which are classified as held-to-maturity since the Company has the intent and contractual ability to hold these securities to maturity. These investments are reported at amortized cost and are subject to an ongoing impairment evaluation. Income from these investments is recorded in “Interest income” in the condensed consolidated statements of operations.
14
Under ASC Topic 326, expected credit losses are recorded and reduced from the amortized cost of the held-to-maturity securities. Expected credit losses for long-term investments are calculated using a probability of default method. Credit losses are recorded within “Selling, general & administrative expenses” in the condensed consolidated statements of operations when an event or circumstance indicates a decline in value has occurred. Allowance for credit losses was $
The following table provides details of the Company’s allowance for credit losses on long-term investments:
| Schedule of allowance for credit losses | ||||||||
| Six months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Opening balance as of April 1 | $ | $ | ||||||
| Change in provision for credit losses | - | ( |
) | |||||
| Closing balance as of September 30 | $ | $ | ||||||
The Company includes these long-term investments in “Long-term investments” on the condensed consolidated balance sheets.
Net Income / (loss) per Share
Basic net income / (loss) per share is computed by dividing income / (loss) available to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted net income / (loss) per share is computed using the weighted-average number of ordinary shares and potential dilutive ordinary shares outstanding during the period. The Company has not considered the effect of the Warrants sold in its initial public offering (the “Initial Public Offering”) in the calculation of diluted net income / (loss) per share, since the instruments are antidilutive.
Stock Based Compensation
The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable.
Recent Accounting Pronouncements not yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.
15
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the capitalization guidance by removing all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date; or follow a modified transition approach that is based on the status of the respective projects and whether software costs were capitalized before the date of adoption; or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is permitted. We are currently evaluating the provisions of this ASU.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (“ASC Topic 270”): Narrow-Scope Improvements. This ASU provides a comprehensive list of interim disclosures that are required by U.S. GAAP and incorporates disclosure principle of material events or changes occurred since the prior year-end. The ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has adopted the disclosure requirements on a prospective basis, effective for the year ended March 31, 2026.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. The Company has adopted the disclosure requirements on a prospective basis, effective for the year ended March 31, 2026. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures.
Note 3 - Short-term borrowings
| Schedule of short-term borrowings | ||||||||
| September 30, 2026 |
March 31, 2026 |
|||||||
| Short-term borrowings | $ | $ | ||||||
| Current portion of vehicle loan | ||||||||
| $ | $ | |||||||
16
As of September 30, 2026, the Company had a revolving credit facility with Kotak Mahindra Bank of INR
The funded drawdown amount under the Company’s revolving facility as of September 30, 2026 and March 31, 2026, was $
Prior to the Closing Date, WWAC modified the terms of payment owed to Shearman & Sterling LLP, a multinational law firm providing legal consultancy services to WWAC. This resulted in a reduction in the total amount owed by WWAC to Shearman & Sterling LLP from $4,800 of accounts payable to $4,000 promissory note, payable in four equal tranches. Subsequently, the promissory note was amended upon payment of $1,500, wherein the balance $2,500 was promised to be paid in two equal tranches. The Company entered into a Second Amended and Restated Promissory Note dated June 30, 2026, amending the terms of an existing $2,500 obligation to the party. The amendment provides for conditional debt forgiveness of up to $1,500, contingent on timely payment of future installments through February 2027. The Company recognized a gain on settlement of liability of $750 from the inception of the agreement, representing the credit earned upon payment of $500 under the amended arrangement based on management’s assessment that the likelihood of default is remote and that the Company is expected to comply with the remaining payment obligations required to realize the debt forgiveness benefit. Accordingly, $1,250 owed to Shearman & Sterling LLP has been disclosed as short-term debt, as the Company has an unconditional obligation to settle it within a period of less than twelve months from September 30, 2026.
For additional information on the vehicle loan see Note 4 – Long-term debt.
Note 4 - Long-term debt
Long-term debt consists of the following:
| Schedule of long-term debt | ||||||||
| September 30, 2026 |
March 31, 2026 |
|||||||
| Loan from the director of ATGBA | $ | $ | ||||||
| Non-current portion of vehicle loan | ||||||||
| $ | $ | |||||||
For additional information on the loan from the director of Aeries Technology Group Business Accelerators Private Limited (“ATGBA”), Mr. Vaibhav Rao, to a subsidiary company, see Note 8 – Related Party Transactions - point (g) and (d), respectively.
Vehicle loans
On
December 7, 2022, the Company entered into a vehicle loan, secured by the vehicle, for INR 11,450 (or approximately $
17
On August 2, 2024, the Company entered into a vehicle loan, secured by the vehicle, for INR 8,165 (or approximately $
As of September 30, 2026, the future maturities of debt by fiscal year are as follows:
| Schedule of future maturities of debt | ||||
| 2027 | $ | |||
| 2028 | $ | |||
| 2029 | $ | |||
| Total future maturities of debt | $ |
Note 5 - Revenue
Disaggregation of Revenue
The Company presents and discusses revenues by customer location. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.
The following table shows the disaggregation of the Company’s revenues by major customer location. Revenues are attributed to geographic regions based upon billed client location. Substantially all of the revenue in our North America region relates to operations in the United States.
| Schedule of disaggregation of revenue | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| North America | $ | $ | $ | $ | ||||||||||||
| Asia Pacific and Other | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Contract balances
Contract assets comprise amounts where the Company’s right to bill is contingent on something other than the passage of time. As of September 30, 2026 and March 31, 2026, the Company’s contract assets were $
Contract liabilities, or deferred revenue, comprise amounts collected from the Company’s customers for revenues not yet earned and amounts which are anticipated to be recorded as revenues when services are performed. The amount of revenue recognized in the six months ended September 30, 2026 and 2025 that was included in deferred revenue at the beginning of each period was $
As of September 30, 2026 and March 31, 2026, the Company’s deferred revenue was $
18
Contract Acquisition Costs
Direct and incremental costs incurred for acquiring contracts, such as sales commissions are contract acquisition costs and thereby classified under “Other current assets” and “Other assets” in the condensed consolidated balance sheets. Such costs are amortized over the expected duration of the relationship with customers and recorded under Selling and marketing expenses in the condensed consolidated statements of income.
Note 6 - Employee Compensation and Benefits
The Company has employee benefit plans in the form of certain statutory and other programs covering its employees.
Defined Benefit Plan - Gratuity
The Company’s subsidiaries in India have defined benefit plans comprising of gratuity under Payments of Gratuity Act, 1972 covering eligible employees in India. The present value of the defined benefits obligations and other long-term employee benefits is determined based on actuarial valuation using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the balance sheet date on Indian government bonds for the estimated term of obligations.
Actuarial gains or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions are initially recognized in the condensed consolidated statements of comprehensive income, and the unrecognized actuarial loss is amortized to the condensed consolidated statements of operations over the average remaining service period of the active employees expected to receive benefits under the plan.
Changes in “Other comprehensive income / (loss)” during the three and six months ended September 30, 2026 and 2025 were as follows:
| Schedule of other comprehensive income /(loss) | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net actuarial (loss) / gain | $ | $ | $ | $ | ||||||||||||
| Amortization of net actuarial (loss) / gain | - | |||||||||||||||
| Deferred tax benefit / (expense) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Unrecognized actuarial gain / (loss) on employee benefit plan obligations | $ | $ | $ | $ | ||||||||||||
Net defined benefit plan costs for the three and six months ended September 30, 2026 and 2025 include the following components:
| Schedule of net defined benefit plan costs | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Service costs | $ | $ | $ | $ | ||||||||||||
| Past service cost | - | - | ||||||||||||||
| Interest costs | ||||||||||||||||
| Settlements | - | - | ||||||||||||||
| Amortization of net actuarial loss | ||||||||||||||||
| Net defined benefit plan costs | $ | $ | $ | $ | ||||||||||||
19
Note 7 - Income Taxes
The Company determines its tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are considered in the relevant period. The Company updated its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company will be making a cumulative adjustment.
The Company’s effective tax rate (“ETR”) was
The Company’s ETR is
Note 8 - Related Party Transactions
| Schedule of related party transactions | ||
| Name of the related party | Relationship | |
Summary of significant transactions and balances due to and from related parties are as follows:
| Schedule of significant transactions and balances due to and from related parties | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cost sharing arrangements | ||||||||||||||||
| Bhanix Finance And Investment Limited (b) | - | |||||||||||||||
| Interest expense | ||||||||||||||||
| Aeries Technology Products And Strategies Private Limited (d) | - | - | ||||||||||||||
| Mr. Vaibhav Rao (g) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Aeries Financial Technologies Private Limited (f), (h) | ||||||||||||||||
| Aeries Technology Products And Strategies Private Limited (e), (h) | ||||||||||||||||
| Legal and professional fees paid | ||||||||||||||||
| Ralak Consulting LLP (c) | ||||||||||||||||
| Management consultancy service | ||||||||||||||||
| Aark II Pte Limited (a) | ||||||||||||||||
| Office management and support services expense | ||||||||||||||||
| Aeries Technology Products And Strategies Private Limited (i) | ||||||||||||||||
20
| September 30, | March 31, | |||||||
| 2026 | 2026 | |||||||
| Accounts receivable | ||||||||
| Aark II Pte Limited (a) | $ | $ | ||||||
| Bhanix Finance And Investment Limited (b) | - | |||||||
| Accounts payable | ||||||||
| Ralak Consulting LLP (c) | ||||||||
| Aeries Technology Products And Strategies Private Limited (i) | - | |||||||
| Prepaid expense and other current assets | ||||||||
| Receivables from Mr. Bhisham (Ajay) Khare (j) | ||||||||
| Remittance in transit – Inwards (k) | - | |||||||
| Interest payable (classified under other current liabilities) | ||||||||
| Aeries Technology Products And Strategies Private Limited (d) | ||||||||
| Interest receivable (classified under prepaid expenses and other current assets) | ||||||||
| Aeries Technology Products And Strategies Private Limited (e) | ||||||||
| Investment in 0.001% Series-A Redeemable preference share | ||||||||
| Aeries Financial Technologies Private Limited (h) | ||||||||
| Investment in 10% Cumulative redeemable preference shares | ||||||||
| Aeries Technology Products And Strategies Private Limited (h) | ||||||||
| Loan from Members of immediate families of Venu Raman Kumar | ||||||||
| Mr. Vaibhav Rao (g) | ||||||||
| Loans to affiliates (classified under other assets) | ||||||||
| Aeries Financial Technologies Private Limited (f) | ||||||||
| Aeries Technology Products And Strategies Private Limited (e) | ||||||||
| Advance to Vendor | ||||||||
| Aeries Technology Products And Strategies Private Limited (i) | ||||||||
| Other Payables | ||||||||
| Payable to Mr. Bhisham (Ajay) Khare (l) | - | |||||||
| (a) |
|
| (b) |
|
| (c) |
|
| (d) |
|
| (e) |
|
| (f) |
|
| (g) |
|
| (h) |
|
| (i) |
|
21
| (j) |
|
| (k) |
|
| (l) |
|
The Company has also executed two Exchange Agreements: (1) with AARK and Mr. Raman Kumar in his capacity as a shareholder of AARK; and (2) with ATGBA and Mr. Sudhir Appukuttan Panikassery, Mr. Ajay Khare, and Mr. Unnikrishnan Balakrishnan Nambiar, key managerial personnel of ATGBA in their capacity as shareholders of ATGBA (together referred to as “counterparties”). Under the Exchange Agreements, the counterparties would have a right to exchange the shares held by them in AARK or ATGBA into shares of ATI or cash subject to the conditions specified in the Exchange Agreement. Refer Note 10 for details. Additionally, pursuant to the Business Combination, 704,817 Class A ordinary shares have been issued to Innovo Consultancy DMCC, which is wholly owned by Mr. Kumar.
Note 9 - Stock-Based Compensation
Aeries Technology, Inc. 2023 Equity Incentive Plan
The board of directors of WWAC approved the Aeries Technology, Inc. 2023 Equity Incentive Plan (the “Plan”) on March 11, 2023, subject to approval by WWAC’s shareholders. The Plan was approved by WWAC’s shareholders on November 2, 2023 and the Plan became effective upon the consummation of the Business Combination. The number of Class A ordinary shares authorized for issuance under the Plan is
On March 27, 2025, at the Company’s annual meeting of the shareholders, the Company’s shareholders approved Amendment No. 1 (the “Plan Amendment”) to the Plan. The Plan Amendment provided for (i) increasing the total number of Class A ordinary shares authorized under the Plan to
On December 26, 2025, the Company’s Board approved
On May 28, 2026,
On August 28, 2026, the Board approved an additional 37,000 options to Mr. Khare.
The stock-based compensation expense is recognized in the condensed consolidated statements of comprehensive income using the straight-line attribution method over the requisite service period as per the accounting policy.
22
The following table summarizes the stock option activity under the Plan for the period ended September 30, 2026:
| Schedule of ESOP stock option activity | ||||||||||||||||
| # of Options |
Weighted average exercise price |
Weighted-average remaining life (in years) |
Aggregate intrinsic value (in millions) |
|||||||||||||
| Options outstanding at April 1, 2026 | - | $ | - | - | $ | - | ||||||||||
| Options granted | - | |||||||||||||||
| Options exercised | - | - | - | - | ||||||||||||
| Options canceled, forfeited or expired | - | - | - | - | ||||||||||||
| Options outstanding at June 30, 2026 | $ | $ | - | |||||||||||||
| Options granted | # | - | ||||||||||||||
| Options exercised | - | - | - | - | ||||||||||||
| Options canceled, forfeited or expired | - | - | - | - | ||||||||||||
| Options outstanding at September 30, 2026 | $ | $ | ||||||||||||||
| Vested and exercisable at September 30, 2026 | $ | n/a | $ | |||||||||||||
As of September 30, 2026, there were
The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. For employee awards subject solely to service conditions and having a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period applicable to each separately vesting tranche, treating each tranche as a separate award for attribution purposes, in accordance with ASC 718-10-35-8.
To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:
| ● | Exercise price of the option |
| ● | Fair value of the Class A ordinary shares on the date of grant | |
| ● | Expected term of the option | |
| ● | Expected volatility over the expected term of the option | |
| ● | Risk-free interest rate for the expected term of the option |
The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.
23
The Company used the following assumptions in its application of the Black-Scholes option pricing model for options granted during the six months ended September 30, 2026 and 2025:
| Schedule of assumptions used | ||||
| Six months ended September 2026 |
||||
| Options Granted | ||||
| Volatility | % | |||
| Risk-free interest rate | % | |||
| Expected term (in years) | ||||
| Expected dividend yield | % | |||
| Exercise price per Class A ordinary share | $ | |||
The weighted-average grant-date fair value per share of stock options granted during the six months ended September 2026 was $
Aeries Employees Stock Option Plan, 2020
On August 1, 2020, ATGBA’s board of directors approved and executed the Aeries Employees Stock Option Plan (“ESOP”), which was subsequently amended on July 22, 2022. Under ESOP, the company is authorized to grant up to
The options issued under the ESOP generally are subject to service conditions. The service condition is typically one year. The stock-based compensation expense is recognized in the condensed consolidated statements of comprehensive income using the straight-line attribution method over the requisite service period.
The following table summarizes the ESOP stock option activity for the six months ended September 30, 2026:
| Schedule of stock option activity | ||||||||||||||||
| Shares | Weighted average exercise price |
Weighted-average remaining contractual term (in years) |
Aggregate intrinsic value |
|||||||||||||
| Options outstanding at April 1, 2026 | $ | - | - | $ | - | |||||||||||
| Options granted | - | - | - | - | ||||||||||||
| Options exercised | - | - | - | - | ||||||||||||
| Options canceled, forfeited or expired | - | - | - | - | ||||||||||||
| Options outstanding at September 30, 2026 | $ | $ | ||||||||||||||
| Vested and exercisable at September 30, 2026 | $ | $ | ||||||||||||||
Aeries Management Stock Option Plan, 2019
On September 23, 2019, ATGBA’s board of directors approved and executed the Aeries Management Stock Option Plan 2019 (“MSOP”), which was subsequently amended on September 30, 2022. Under MSOP, ATGBA has authorized to grant up to
As of the reporting date, all options granted under the MSOP had either been fully exercised or had expired unexercised upon reaching the end of their contractual term. Accordingly, no outstanding options remain under the MSOP.
24
During the six months ended September 30, 2026, and 2025, the Company recorded stock-based compensation expense of $
During the three months ended September 30, 2026, and 2025, the Company recorded stock-based compensation expense of $
As of September 30, 2026 and 2025, there was
Note 10 - Commitments and Contingencies
Guarantee and Indemnification obligations
In the normal course of business, the Company is a party to a variety of agreements under which it may be obligated to indemnify the other parties with respect to certain matters. These obligations typically arise under contracts pursuant to which the Company customarily agrees to indemnify and hold the other party harmless against losses arising from breaches of representations or covenants relating to certain matters, infringement of third-party intellectual property rights, data privacy violations, and certain criminal and tortious conduct arising in the course of providing services. The duration of these indemnification obligations varies, and in certain cases, is indefinite.
The Company is unable to reasonably estimate the maximum potential amount of future payments under these or similar agreements due to the unique facts and circumstances of each agreement and because certain indemnification provisions do not limit the maximum potential future payments thereunder. Management is not aware of any such indemnification obligations that are expected to have a material effect on the Company’s condensed consolidated financial statements.
In addition, the Company has provided an unconditional and irrevocable guarantee in favor of a customer in connection with a master services agreement between the customer and Aeries USA, Inc., a subsidiary of the Company. The guarantee secures certain payment and performance obligations of Aeries USA, Inc. under the master services agreement and related statements of work.
Legal Proceedings
From time to time, the Company may be involved in proceedings and litigation, claims and other legal matters arising in the ordinary course of business. Some of these claims, lawsuits, and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions, or relief. Management is not currently aware of any material pending legal proceedings, except for ordinary routine litigation incidental to the business, in which we or any of our subsidiaries are involved, or where our property is subject to such proceedings.
Commercial Dispute with Two Circles Limited.
A contractual dispute has arisen between certain subsidiaries of the Company and Two Circles Limited and Two Circles India Private Limited in connection with the purported termination of a Master Services Agreement dated December 2, 2025 and certain related unpaid amounts.
On September 11, 2026, The Company (through its group entity) has commenced proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 before the High Court for the State of Telangana at Hyderabad seeking interim measures in aid of the contemplated arbitration. The High Court has granted certain interim relief, including attachment of shares, a lien over a bank account to secure unpaid invoices and restrictions on the creation of third-party rights. On October 22, 2026, the dispute proceeded to arbitration under the Rules of the London Court of International Arbitration (LCIA), with London as the seat of arbitration. Settlement discussions are also continuing in parallel.
Exchange Agreements
Upon consummation of the Business Combination, the holders of AARK ordinary shares and ATGBA ordinary shares each entered into the Exchange Agreements. Pursuant to the Exchange Agreements, subject to certain exercise conditions, the Company shall have the right to acquire all of the AARK or ATGBA ordinary share for Class A ordinary shares or cash. In addition, subject to certain exercise condition, each shareholder of ATGBA and AARK ordinary shares shall have the right to require the Company to provide Class A ordinary shares or cash in exchange for up to all of the AARK or ATGBA ordinary shares. Each share of AARK may be exchanged for 280.75 Class A ordinary shares the Company and each ATGBA ordinary share may be exchanged for 1.80 Class A ordinary shares of the Company, in each case subject to certain adjustments. The cash exchange payment may only be elected in the event approval from the Reserve Bank of India is not obtained for exchange of shares and provided that the Company has reasonable cash flow to be able to pay the cash exchange payment and such payment would not be prohibited by any then outstanding debt agreements or arrangements of the Company.
25
Note 11 - Warrant Liabilities
On October 22, 2021, pursuant to
The Company accounted for the Warrants in accordance with the guidance contained in ASC 815-40 given that certain provisions within the warrant agreement either preclude the warrants from being considered indexed to the ATI’s own stock or the fixed-for-fixed option criteria are not met. On this basis the Public and Private Placement Warrants are classified as a liability and are measured at fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s condensed consolidated statement of operations.
Each whole Warrant entitles the holder thereof to purchase one- eighth of one Class A ordinary share of the Company, par value $0.0008 per share, for $
The Company may redeem the outstanding Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per Public Warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption to each Warrant holder; and |
| ● | if, and only if, the last reported sales price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders (the “Reference Value”) equals or exceeds $ |
The Company may also redeem the outstanding Warrants:
| ● | in whole and not in part; |
| ● | at $0.10 per warrant |
| ● | upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares; |
| ● | if, and only if, the Reference Value equals or exceeds $80.00 per Class A ordinary share (as adjusted); provided that if the Reference Value equals or exceeds $ |
No fractional Class A ordinary shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder.
26
Note 12 - Redeemable Noncontrolling Interest and Shareholders’ Equity / (Deficit)
The condensed consolidated statements of changes in Redeemable Noncontrolling Interest and Shareholders’ Equity (Deficit) reflect the reverse recapitalization and Business Combination.
Share Consolidation
On June 12, 2026 (the “Effective Time”), the Company implemented the one for-eight Share Consolidation of the Company’s Class A ordinary shares and the Company’s Class A ordinary shares began trading on a split-adjusted basis on the Nasdaq Stock Market at the commencement of trading on June 12, 2026. Refer to further details as discussed in Note 1 Organization and Basis of Presentation.
Preference shares
The Company is authorized to issue
Class A ordinary shares
Due to the Share Consolidation, the total authorized number of Class A ordinary shares was correspondingly reduced from 500,000,000 with a par value of $0.0001 per share to
As of September 30, 2026, the number of issued and outstanding shares of the Company’s Class A ordinary shares was 5,528,968. Each Class A ordinary share carries one vote and entitles the shareholders to ratable rights in dividends and distributions as well as in the event of liquidation.
Class V ordinary shares
The Company is authorized to issue
Treasury Stock
As of September 30, 2026, the Company has
Share Repurchase Program
The Company established a 10b5-1 plan (the “March 10b5-1 Plan”) on March 23, 2026 to repurchase Class A ordinary shares, par value $0.0008 per share, and under which Roth Capital Partners, LLC (“Broker”) acts as its exclusive agent to execute the Plan.
During the March 10b5-1 Plan period, Broker purchased on a daily basis the number of the Company’s Class A ordinary equal to the lesser of (i) the maximum number of shares permitted by the volume limitations and other conditions contained in Rule 10b-18 and any other applicable legal, regulatory or self-regulatory requirements, and (ii) the number of shares that may be purchased using the dollar amounts set forth below. The maximum amount for cumulative purchases was $3,000 (exclusive of commissions). Under the program, shares could be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. As of June 2026, the Company repurchased the maximum dollar amount of shares under the March 10b5-1 Plan and it was completed in accordance with its terms.
27
On June 23, 2026, the Company adopted a Rule 10b5-1 share repurchase plan with Broker to facilitate repurchases of its Class A ordinary shares in accordance with Rule 10b5-1 and the safe harbor provisions of Rule 10b-18 under the Exchange Act (the “June 10b5-1 Plan”). The June 10b5-1 Plan became effective on June 24, 2026, and authorized Broker, as the Company’s exclusive broker, to repurchase shares pursuant to predetermined terms and conditions. The Company terminated the June 10b5-1 Plan on July 24, 2026.
During the period ending September 30, 2026, the Company repurchased
Equity financing
On April 8, 2024, the Company entered into a private placement transaction (the “Private Placement”), pursuant to a Share Subscription Agreement (the “Share Subscription Agreement”) with an institutional accredited investor (the “Investor”) for aggregate gross proceeds of $
As of the closing of the Private Placement, the Company issued an aggregate of
Exchange Pursuant to Exchange Agreement
Upon consummation of the Business Combination, the holders of AARK ordinary shares and ATGBA ordinary shares each entered into the Exchange Agreements. Pursuant to the Exchange Agreements, subject to certain exercise condition, each shareholder of AARK ordinary shares shall have the right to require the Company to provide Class A ordinary shares or cash in exchange for up to all of the AARK ordinary share. Each share of AARK may be exchanged for 280.75 Class A ordinary shares the Company subject to certain adjustments.
On September 22, 2025, the Company issued
Shares Issued to FPA Holders
On August 3, 2026, the Company entered into the Sea Otter Letter Agreement with Sea Otter to settle its outstanding payment obligation related to the Sea Otter FPA.
The Company issued
28
Redeemable Noncontrolling Interest
As of September 30, 2026, the prior investors of AARK own
Note 13 - Non-renewal of Customer Contract and Buyout Notice from Significant Customer
The exit of a customer is expected to result in an estimated annual revenue reduction of approximately $
Note 14 - Fair Value Measurements
As of September 30, 2026, the Company had financial instruments which were measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Significant changes in the inputs could result in a significant change in the fair value measurements. See each respective footnote for information on the assumptions used in calculating the fair value of financial instruments.
The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of September 30, 2026 and March 31, 2026, including the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
Summary of Liabilities Measured at Fair Value on a Recurring Basis:
| Summary of liabilities measured at fair value on a recurring basis | ||||||||||||||||
| September 30, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities: | ||||||||||||||||
| Forward Purchase Agreement put option liability | $ | - | $ | - | $ | $ | ||||||||||
| Public Warrants | - | - | ||||||||||||||
| Private Placement Warrants | - | - | ||||||||||||||
| Total liabilities | $ | $ | - | $ | $ | |||||||||||
| March 31, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities: | ||||||||||||||||
| Forward Purchase Agreement put option liability | $ | - | $ | - | $ | $ | ||||||||||
| Public Warrants | - | - | ||||||||||||||
| Private Placement Warrants | - | - | ||||||||||||||
| Total liabilities | $ | $ | - | $ | $ | |||||||||||
29
The change in the fair value of the FPA put option liability and warrant liability of ($
During the six months ended September 30, 2026, the liability in respect of these instruments remains either settled or fixed as per the settlement arrangement entered with FPA holders and accordingly, no further fair value re- measurement is required. The Company remains obligated to pay $
Given that the Public Warrants have a listed price available, the Company classified them as Level 1. The Company has classified the Private Placement Warrants within Level 3 of the hierarchy as the fair value derived using the Black-Scholes option pricing model, which uses a combination of observable (Level 2) and unobservable (Level 3) inputs. There were no transfers between fair value levels during the three months ended September 30, 2026.
The valuation of the liability for the Private Placement Warrants was made using the following assumptions as of September 30, 2026:
| Schedule of derivative contract assumptions | ||||
| Term (years) | ||||
| Stock price at measurement date | $ |
The following table presents a summary of the changes in the fair value of Derivative Liabilities:
| Summary of the changes in the fair value of derivative warrant liabilities | ||||||||||||||||
| Forward Purchase Agreement Put Option Liability |
Public Warrant Liability |
Private Placement Liability |
Total | |||||||||||||
| Fair value at April 1, 2026 | $ | $ | $ | $ | ||||||||||||
| Change in fair value (gain) / loss | ( |
) | ( |
) | ( |
) | ||||||||||
| Settlement of FPA put option liability | ( |
) | - | - | ( |
) | ||||||||||
| Fair value as of September 30, 2026 | $ | $ | $ | $ | ||||||||||||
Based on the expected VWAP as of inception and as of September 30, 2026 it is not expected that ATI would be required to issue additional Class A ordinary shares to certain vendors. On this basis, fair value of the derivative financial instrument representing ATI’s obligation to issue additional Class A ordinary shares has been determined to be insignificant on initial recognition as well as of September 30, 2026 and accordingly the quantitative disclosures in relation to the fair value have not been provided.
30
Note 15 - Net Income per share
Basic net income per share (“EPS”) attributable to Class A ordinary shareholders is calculated by dividing net income attributable to Class A ordinary shareholders by the weighted number of Class A ordinary shares outstanding during the reporting period. Diluted EPS is computed using the weighted number of Class A ordinary shares and, when dilutive, potential outstanding shares during the period.
The Company’s Class V ordinary share does not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net income per Class V ordinary share under the two-class method has not been presented.
The following table sets forth the computation of basic and diluted net income per share for the period three and six months ended September 30, 2026 and September 30, 2025 (in thousands, except share and per share amounts):
| Schedule of reconciliation of net income per share | ||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Income attributable to controlling interest for the period for Basic and Dilutive Earning per share (A) | $ | $ | $ | $ | ||||||||||||
| Weighted average shares outstanding of Class A ordinary shares, basic (B) | ||||||||||||||||
| Weighted average shares outstanding of Class A ordinary shares, diluted (C) | ||||||||||||||||
| Net Income per share: | ||||||||||||||||
| Basic (A/B) | $ | $ | $ | $ | ||||||||||||
| Diluted (A/C) | $ | $ | $ | $ | ||||||||||||
Note 16 - Subsequent Events
| 1. | Settlement Agreement with Sea Otter Trading, LLC |
As previously disclosed, on August 3, 2026, the Company entered into the Sea Otter Letter Agreement to amend the settlement terms of the maturity consideration payable under the existing FPA with Sea Otter. Under the Sea Otter Letter Agreement, the Company agreed to satisfy the outstanding payment obligation through an initial cash payment of $
As security for the outstanding obligation, the Company agreed to issue
On October 30, 2026, the Company entered into a Settlement Agreement with Sea Otter to settle its outstanding obligations under the Forward
Purchase Agreement and related Letter Agreement. Pursuant to the Settlement Agreement, the Company agreed to make a cash payment of $911
through an escrow arrangement in exchange for the return of
On November
5, 2026, the Company paid the entire outstanding amount of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis together with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. Among other things, the condensed consolidated financial statements include more detailed information regarding the basis of presentation for the financial data than included in the following discussion.
In addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements regarding our expectations for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” discussed in this quarterly report, our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2026, and our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q. It is impossible for us to predict new events or circumstances that may arise in the future or how they may affect us. Unless otherwise required by law, we undertake no obligation to update forward looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Aeries,” “Aeries Technology,” and “the Company” refer to the business and operations of AARK and its consolidated subsidiaries prior to the Business Combination (excluding the associated legacy financial technology and investing business activities) and to Aeries Technology, Inc. and its consolidated subsidiaries, following the consummation of the Business Combination.
Overview
Aeries Technology is a global professional services and technology consulting firm that provides specialized expertise to private equity (“PE”) firms’ portfolio companies and middle-market, technology-enabled enterprises. We focus on the strategic planning, establishment, and operational management of Global Capability Centers (“GCCs”), which serve as offshore and nearshore operational hubs that extend and enhance our clients’ business capabilities. Our service portfolio combines industry-specific expertise, functional depth, and digital technology solutions to deliver comprehensive support throughout the GCC journey, from strategic planning and center establishment to continuous operational oversight. By integrating AI, process optimization, and strategic talent acquisition in cost-advantaged regions, we can help our clients significantly reduce costs. Drawing on more than a decade of industry experience, we deliver business solutions that improve operational effectiveness, drive innovation, and accelerate strategic growth, creating measurable value for our clients.
Our approach is specifically engineered to enable clients to realize tangible business benefits—accelerating revenue expansion through enhanced innovation capabilities and superior customer experiences, while simultaneously improving operational efficiency via streamlined cost structures and scalable service delivery models. GCCs developed by Aeries serve as strategic enablement platforms that help clients integrate and use advanced technologies, including AI, advanced analytics, and modern enterprise systems and methodologies. Clients retain comprehensive strategic control and operational governance, and they can adjust GCC ownership frameworks as organizational requirements change. Our integrated service delivery model positions Aeries to drive organizational change, helping enterprises speed up decision-making, improve customer service, and build sustainable competitive advantages.
We help our clients expand globally by providing professional advisory and operations management services to establish and manage GCCs in strategically selected, cost-effective geographic locations that align with their operational requirements. Emphasizing digital enterprise transformation, these GCCs are architected to function as integrated extensions of client organizations, delivering access to talent and specialized capabilities. We believe this model helps our clients maintain competitive positioning and organizational agility, achieve sustainable cost optimization, operational excellence, and value-creation objectives, all without compromising functional authority or operational flexibility.
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Our advisory practice encompasses direct engagement from senior leadership, delivering strategic guidance and industry best practices across operating model architecture and comprehensive organizational consulting. This includes end-to-end support spanning the GCC lifecycle, encompassing initial strategic planning, operating model design, and ongoing delivery framework optimization; talent market analysis; resource availability assessment for specialized roles within the proposed service framework; regulatory compliance management; tax structure optimization; and additional strategic considerations. Clients can tailor service configurations based on our recommendations and options, after which we collaborate to finalize and execute implementation strategies.
A core part of our service offering focuses on AI and digital transformation. The Company has developed A1 GCC, a proprietary technology platform engineered to facilitate the planning, execution, and operational management of GCC initiatives. With advanced automation, data analytics, and the integration of artificial intelligence, we can innovate and streamline operations. Our technology services are designed to improve decision-making, automate operational workflows, and deliver measurable business impact. We believe this technology-enabled GCC approach enhances operational effectiveness, enabling us to provide digital transformation services that support our clients’ growth objectives and strengthen their competitive positioning in a rapidly evolving digital marketplace.
Our clients leverage our services for comprehensive organizational operations management, encompassing application engineering, information technology systems, data analytics and business intelligence, cybersecurity, finance and accounting, human resources, and customer service operations. We recruit and employ qualified professionals, place them on our payroll, and deploy them strategically across client operations. We work closely with clients to identify the best candidates and integrate with their organizational structures. Our talent professionals serve as operational extensions of client teams, and Aeries retains responsibility for career development, recognition programs, and advancement opportunities, which we believe contribute to stronger employee engagement and lower voluntary turnover. We oversee regulatory compliance, tax administration, talent acquisition, human resources management, and brand alignment for each GCC we establish.
Our business model is designed to build a more agile, cost-efficient talent deployment framework for client operations and to promote innovation through strategic alignment at the executive level and comprehensive organizational visibility. This model helps clients navigate regulatory and tax complexities while offering operational flexibility to scale teams in response to evolving business demands. We use proven methodologies and success frameworks, drawing on insights from successful engagements across multiple client organizations, to address the fundamental limitations of traditional outsourcing and offshoring approaches.
AI Transformation Strategy
Aeries is advancing its strategy to become an AI transformation and enterprise operations company, helping organizations modernize business functions, improve operational performance, and create enterprise value through the practical application of artificial intelligence. The Company is evolving beyond traditional managed operations by combining AI innovation, engineering expertise and operational execution within a unified business model designed to support customers across the enterprise AI lifecycle.
As enterprises increasingly seek to move AI initiatives from experimentation into production, Aeries has expanded its capabilities to address this evolving market opportunity. The Company recently launched AxAI, its Agentic AI business, which is focused on helping organizations identify high-value AI opportunities, rapidly prototype solutions, develop production-ready AI applications, and support enterprise-scale deployment. AxAI combines domain consulting, AI engineering and implementation capabilities to help customers integrate AI into business processes, workflows and enterprise systems while remaining technology-agnostic and aligned with customer requirements.
Complementing AxAI is AeriesOne, the Company’s AI-native enterprise operations platform, which provides operational visibility, governance, orchestration and workflow management across enterprise operations. AeriesOne is designed to support the deployment and ongoing management of AI-enabled business functions by bringing together operational data, automation and AI-driven insights within a unified operating environment. Together, AxAI and AeriesOne extend Aeries’ ability to support customers from strategy and solution development through deployment, governance and managed operations.
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The Company believes that the convergence of AI transformation and enterprise operations is creating opportunities for organizations to improve productivity, optimize operating models and accelerate business transformation. As customer requirements continue to evolve, Aeries intends to further develop its AI capabilities, expand its portfolio of AI-enabled solutions and continue integrating AI across its service offerings and operational platforms. The Company expects these initiatives to enhance the breadth of services it can provide, deepen client relationships and support participation in larger enterprise transformation engagements over time.
Aeries’ AI strategy remains focused on practical implementation and measurable business outcomes. By combining consulting, engineering, AI-enabled operations and managed services, the Company seeks to help enterprises move from AI experimentation to production deployment while supporting the long-term operation and continuous optimization of AI-enabled business functions. The Company believes this integrated approach positions Aeries to address the increasing demand for enterprise AI transformation while continuing to build on its established expertise in managed operations.
The Company expects to continue investing in its AI capabilities, platforms and engineering expertise in support of its long-term strategy. Future developments, including the adoption of AI-enabled services, continued enhancement of AxAI and AeriesOne, customer demand for AI transformation initiatives and the Company’s ability to execute its strategic plans, remain subject to market conditions, customer adoption, technological developments and other risks and uncertainties described elsewhere in this Quarterly Report on Form 10-Q.
As of September 30, 2026, Aeries had more than 30 clients spanning across industry segments, including companies in the industries of e-commerce, telecom, security, healthcare, engineering and others.
Recent Events
Nasdaq Listing Compliance
On March 31, 2026, the Company received formal notice from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Exchange (“Nasdaq”) indicating that the Company’s non-compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) would result in the delisting of the Company’s securities from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”). The Company did file a timely request for a hearing before the Panel, which request stayed any further action by Nasdaq pending the issuance of a decision by the Panel and the expiration of any extension the Panel may grant to the Company following the hearing. The Company had its hearing before the Panel on May 7, 2026. On June 12, 2026, the Panel notified the Company that it determined to grant its request to continue its listing on Nasdaq subject to the Company demonstrating compliance with the Bid Price Rule on or before June 26, 2026.
On June 12, 2026, the Company implemented a one for-eight share consolidation (the “Share Consolidation”) of the Company’s Class A ordinary shares. The Share Consolidation was intended to increase the per-share trading price of the Company’s Class A ordinary shares and to assist the Company in maintaining compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
In a letter dated July 15, 2026, Nasdaq notified the Company that it had regained compliance with the Bid Price Rule, as required by the Panel’s decision. In application of Nasdaq Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from July 15, 2026. If, within that one-year monitoring period, Staff finds the Company again out of compliance with the Bid Price Rule that was the subject of the exception, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C). The Company’s securities may be at that time delisted from Nasdaq.
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Share Consolidation
On June 12, 2026, our Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) took effect to implement the Share Consolidation of our issued and outstanding shares of Class A ordinary shares, par value $0.0001 per share, at a ratio of 1-for-8.
The Share Consolidation became effective at 12:01 a.m., Eastern Time, on June 12, 2026 (the “Effective Time”). The Company’s Class A ordinary shares began trading on a split-adjusted basis on Nasdaq at the commencement of trading on June 12, 2026.
As a result of the Share Consolidation, every eight (8) Class A ordinary shares of the Company issued and outstanding immediately prior to the Effective Time were automatically combined and converted into one (1) Class A ordinary share. The Share Consolidation reduced the number of issued and outstanding Class A ordinary shares from approximately 45,914,789 shares to approximately 5,739,349 shares. The total authorized number of Class A ordinary shares were correspondingly reduced from 500,000,000 with a par value of $0.0001 per share to 62,500,000 with a par value of $0.0008 per share. No fractional shares were issued in connection with the Share Consolidation, and any fractional shares resulting from the Share Consolidation were rounded up to the nearest whole share.
Non-renewal of Customer Contract and Buyout Notice from Significant Customer
The exit of a customer is expected to result in an estimated annualized revenue reduction of approximately $2.9 million.
Entry into Settlement Agreement with Sea Otter
As previously disclosed, on August 3, 2026, the Company entered into a letter agreement with Sea Otter Trading, LLC (“Sea Otter,” and such agreement, the “Sea Otter Letter Agreement”) to amend the settlement terms of the maturity consideration payable under the existing FPA (as defined below) with Sea Otter. Pursuant to the Settlement Agreement, the Company issued 145,183 Class A ordinary shares to Sea Otter as collateral for its obligations.
On October 30, 2026, the Company entered into a Settlement Agreement with Sea Otter to settle its outstanding obligations under the Forward Purchase Agreement and related Letter Agreement. Pursuant to the Settlement Agreement, the Company agreed to make a cash payment of $0.91 million through an escrow arrangement in exchange for the return of 145,183 Class A ordinary shares held by Sea Otter as collateral. Upon completion of the share transfer and release of the settlement payment, the parties will provide mutual general releases, and the prior transaction agreements will terminate, subject to certain surviving provisions.
On November 5, 2026, the Company paid the entire outstanding amount of $0.91 million to Sea Otter, thereby fully settling its outstanding obligation to Sea Otter. No principal balance remains payable to Sea Otter.
Key Factors Affecting Performance and Comparability
Market Opportunity
Our primary market focus centers on North America, particularly within the private equity ecosystem and mid-market enterprise segments.
Companies are looking for vendors who not only have the experience and expertise in providing the right-sized solution in this age of ever shortening business cycles but also serve as a trusted partner with a transparent engagement model to handhold them through their digital transformation journey. Aeries’ model is designed to deliver this experience, expertise and transparent engagement approach to accelerate and enhance our clients’ business.
Private Markets
As private market investing evolves and the landscape of venture-backed and late-stage private growth companies transforms, our service offerings will adapt accordingly, aligning with the shifting dynamics of potential investors and portfolio companies seeking our expertise. While periods of macroeconomic growth in the United States, particularly in private equity markets, typically foster an upsurge in overall investment activity, any economic slowdowns, downturns, or volatility in the broader market and private equity landscape could potentially dampen this growth momentum.
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Macro-economic headwinds
Our operational performance is influenced by prevailing economic conditions, including macroeconomic conditions, the overall inflationary climate, and business sentiment. During the three and six months ended September 30, 2026, there was persistent economic and geopolitical uncertainty in many markets around the world, including concerns over wage inflation, the potential of decelerating global economic growth, and increased volatility in foreign currency exchange rates. These factors have impacted and may continue to impact our business operations.
Customer Retention and Early Termination of Long-Term Contracts
Maintaining long-term customer relationships is important to our business, as a significant portion of our revenue is derived from these contracts. Although we have auto-renewal service agreements with clients, they may choose to terminate or not renew, in which case they must provide a notice period, typically ranging from 90 to 180 days, and pay a termination fee based on the commercial margin if termination occurs without cause. There is an increasing likelihood that clients may choose to terminate our service agreements after we have established and operated delivery centers for them, as it becomes more feasible and cost-efficient for them to take over. While the above-described contractual provisions provide some financial protection, the termination fee may not fully offset the long-term revenue loss, and replacing clients can be challenging due to the lengthy customer acquisition cycle. To mitigate this risk, we focus on maintaining strong relationships, expanding our customer base, diversifying service offerings, and delivering high-quality service to encourage renewals or alternative service arrangements when terminations occur. Our operational results and financial condition may still be negatively affected if multiple key customers terminate their agreements around the same time, as replacing this revenue can take time.
Income Taxes
We are incorporated in the Cayman Islands and have operations in India, Mexico, Singapore and the United States. Our effective tax rate has historically varied and will continue to vary from year to year based on the tax rate in the jurisdiction of our organization, the geographical sources of our earnings and the tax rates in those countries, the tax relief and incentives available to us, the financing and tax planning strategies employed by us, changes in tax laws or the interpretation thereof, and movements in our tax reserves, if any.
Currently, the Company is liable to pay income tax in India, Mexico, Singapore, and the United States. In India, the Company has chosen to pay taxes according to the newly introduced tax regime in 2019 while forgoing some exemptions and deductions. Consequently, the Company calculates its consolidated provision for income taxes based on the asset and liability method. This involves determining deferred tax assets and liabilities based on temporary differences between the consolidated financial statements and income tax bases of assets and liabilities. These deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the year in which these temporary differences are anticipated to be settled or recovered. If there is evidence that indicates some portion or all of the recorded deferred tax assets will not be realized in future periods, the deferred tax assets are recorded net of a valuation allowance. The Company evaluates uncertain tax positions to determine if they are likely to be sustained upon examination, and a liability is recorded when such uncertainties fail to meet the “more likely than not” threshold.
Financing Costs
We regularly evaluate our variable and fixed-rate debt obligations. We have historically used short and long-term debt to finance our working capital requirements, capital expenditures and other investments. As of September 30, 2026, the Company had a revolving credit facility with Kotak Mahindra Bank of INR 320 million (or approximately $3.3 million at the exchange rate in effect on September 30, 2026). The revolving facility is available for Aeries’ operational requirements. The interest rate is equal to the 3-months Repo Rate plus a margin of 3.90% as of September 30, 2026 and March 31, 2026. Aeries is required to pay interest on the outstanding balance of the credit facility at this financing cost basis, calculated based on the actual number of days for which the funds are utilized. Any changes in the prevailing Repo rate and the interest rate charged by the bank will affect the financing cost basis and the overall cost of borrowing.
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Aeries also has an outstanding unsecured loan from director of Aeries Technology Group Business Accelerators Pvt Ltd., Mr. Vaibhav Rao, amounting to $0.7 million at an interest rate of 12% per annum. The principal amount of the loan was outstanding in entirety as of and for the period ended September 30, 2026 and 2025, and year ended March 31, 2026.
On December 7, 2022, the Company entered into a vehicle loan, secured by the vehicle, for INR 11.5 million (or approximately $0.1 million at the exchange rate in effect on September 30, 2026) at 10.75% from Mercedes-Benz Financial Services India Pvt. Ltd. The Company is required to repay the loan in 48 monthly instalments beginning January 4, 2023.
On August 2, 2024, the Company entered into a vehicle loan, secured by the vehicle, for INR 8.2 million (or approximately $0.1 million at the exchange rate in effect on September 30, 2026) at 10.25% from Mercedes-Benz Financial Services India Pvt. Ltd. The Company is required to repay the loan in 48 monthly instalments beginning September 4, 2024.
Refer to the notes to our condensed consolidated financial statements titled “Short-term borrowings” and “Long-term debt” included elsewhere in this Quarterly Report on Form 10-Q for additional information on our indebtedness.
For information about the risks we face, see “Risk Factors.”
Results of Operations
Overview
The Company has one operating segment and presents and discusses revenues by customer location. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.
The following table shows the disaggregation of the Company’s revenues by major customer location. Substantially all of the revenue in our North America region relates to business with customers in the United States.
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| North America | $ | 15,263 | $ | 15,880 | $ | 33,854 | $ | 29,280 | ||||||||
| Asia Pacific and Other | 2,885 | 1,479 | 6,212 | 3,408 | ||||||||||||
| Total revenue | $ | 18,148 | $ | 17,359 | $ | 40,066 | $ | 32,688 | ||||||||
Our revenues were primarily earned in U.S. dollars. Our costs were primarily incurred in Indian rupees, U.S. dollars and Mexican pesos. We bear a substantial portion of the risk of inflation and fluctuations in currency exchange rates, and therefore our operating results could be negatively affected by adverse changes in inflation rates and foreign currency exchange rates.
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Comparison of the Three Months Ended September 30, 2026 and 2025
The following table presents selected financial data for the three months ended September 30, 2026, and 2025 (in thousands, except percentages):
| Three months Ended September 30, |
$ | % | ||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||
| Revenues, net | $ | 18,148 | $ | 17,359 | $ | 789 | 5 | % | ||||||||
| Cost of Revenue | 14,091 | 12,337 | (1,754 | ) | (14 | )% | ||||||||||
| Gross Profit | $ | 4,057 | $ | 5,022 | $ | (965 | ) | (19 | )% | |||||||
| Gross Profit Margin | 22 | % | 29 | % | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general & administrative expenses | 3,158 | 3,037 | (121 | ) | (4 | )% | ||||||||||
| Total operating expenses | $ | 3,158 | $ | 3,037 | $ | (121 | ) | (4 | )% | |||||||
| Income from operations | $ | 899 | $ | 1,985 | $ | (1,086 | ) | (55 | )% | |||||||
| Other income / (expense) | ||||||||||||||||
| Change in fair value of derivative liabilities | 82 | (240 | ) | 322 | 134 | % | ||||||||||
| Change in fair value of FPA | - | (360 | ) | 360 | 100 | % | ||||||||||
| Gain on settlement of FPA | 38 | - | 38 | 100 | % | |||||||||||
| Interest income | 79 | 76 | 3 | 4 | % | |||||||||||
| Interest expense | (79 | ) | (94 | ) | 15 | 16 | % | |||||||||
| Other income, net | 766 | 69 | 697 | 1,010 | % | |||||||||||
| Total other income / (expense), net | 886 | (549 | ) | 1,435 | 261 | % | ||||||||||
| Income before income taxes | 1,785 | 1,436 | 349 | 24 | % | |||||||||||
| Income tax expense | (437 | ) | (794 | ) | 357 | 45 | % | |||||||||
| Net income | $ | 1,348 | $ | 642 | $ | 706 | 110 | % | ||||||||
| Less: Net income attributable to noncontrolling interest | 26 | 128 | (102 | ) | (80 | )% | ||||||||||
| Less: Net income attributable to redeemable noncontrolling interests | 46 | 273 | (227 | ) | (83 | )% | ||||||||||
| Net income attributable to the shareholders of Aeries Technology, Inc. | $ | 1,276 | $ | 241 | $ | 1,035 | 429 | % | ||||||||
Revenue, net
For the three months ended September 30, 2026, our revenue on a consolidated basis increased by $0.79 million or 5%, to $18.15 million from $17.36 million for the three months ended September 30, 2025. We experienced increase in revenue of $5.56 million due to the new client additions and higher business volumes from existing clients. This increase was partially offset by $3.09 million related to ramp-down in our existing client engagements and the completion and closure of certain consulting projects and decrease of $1.68 million of one- time revenue related to buy- out fees.
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Cost of Revenue
For the three months ended September 30, 2026, our cost of revenue increased by $1.75 million, or 14%, to $14.09 million from $12.34 million for the three months ended September 30, 2025. The primary drivers for the increase included a $1.83 million increase in employee compensation costs and $0.44 million increase in legal and professional charges. These cost increases were partially offset by a $0.52 million decrease on account of fees paid to external consultant, recruitment and training charges, other administrative expense, staff welfare expense and travelling expense.
Gross Profit
For the three months ended September 30, 2026, gross profit decreased by $0.96 million, or 19%, compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $1.75 million increase in cost of revenue, mainly driven by higher employee compensation costs attributable to higher headcount and increments. This increase in cost of revenue was partially offset by a $0.79 million increase in revenue during the period.
Gross Profit Margin
For the three months ended September 30, 2026, our gross profit margin decreased by 658 basis points compared to the three months ended September 30, 2025. The decrease in Gross Profit Margin is primarily driven by the recognition of $1.68 million in one- time termination fees during the prior three months ended September 30, 2025.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $0.12 million, or 4%, to $3.16 million for the three months ended September 30, 2026, compared to $3.04 million for the three months ended September 30, 2025. The increase was primarily attributable to a $0.25 million increase in provision for expected credit losses. This increase was partially offset by decreases of $0.08 million in employee benefit expenses and $0.05 million in stock-based compensation expenses.
Total Other Income (Expense), net
Total other income/ (expense), net was $0.89 million for the three months ended September 30, 2026 compared to $(0.55) million for the three months ended September 30, 2025, improved by $1.44 million or 261%. The improvement was primarily attributable to a $0.53 million increase in gain on settlement of liabilities, a $0.17 million increase in foreign exchange gains, and a $0.68 million favorable change in the fair value of the FPA put option liability and warrant liabilities. The improvement was further supported by a $0.04 million increase in gain on settlement of the FPA put option liability and a $0.02 million decrease in interest expense.
Income tax expenses
The income tax expense for the three months ended September 30, 2026 was $0.44 million, representing a decline of $0.36 million or 45% compared to the income tax expense of $0.79 million for the three months ended September 30, 2025. For the three months ended September 30, 2026, the effective tax rate was 24.5% as compared to 55.3% for the three months ended September 30, 2025. The decrease in the ETR for the three months ended September 30, 2026, compared to the corresponding period in 2025, was primarily attributable to changes in the tax effects of losses in jurisdictions with lower tax rates, for which deferred tax benefits were not recognized.
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Comparison of the Six Months Ended September 30, 2026 and 2025
The following table presents selected financial data for the six months ended September 30, 2026, and 2025 (in thousands, except percentages):
| Six months Ended September 30, |
$ | % | ||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||
| Revenues, net | $ | 40,066 | $ | 32,688 | $ | 7,378 | 23 | % | ||||||||
| Cost of Revenue | 29,630 | 23,888 | (5,742 | ) | (24 | )% | ||||||||||
| Gross Profit | $ | 10,436 | $ | 8,800 | $ | 1,636 | 19 | % | ||||||||
| Gross Profit Margin | 26 | % | 27 | % | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general & administrative expenses | 6,177 | 5,995 | (182 | ) | (3 | )% | ||||||||||
| Total operating expenses | $ | 6,177 | $ | 5,995 | $ | (182 | ) | (3 | )% | |||||||
| Income from operations | $ | 4,259 | $ | 2,805 | $ | 1,454 | 52 | % | ||||||||
| Other income / (expense) | ||||||||||||||||
| Change in fair value of derivative liabilities | 82 | (217 | ) | 299 | 138 | % | ||||||||||
| Change in fair value of FPA | (7 | ) | 895 | (902 | ) | (101 | )% | |||||||||
| Gain on settlement of FPA | 38 | - | 38 | 100 | % | |||||||||||
| Interest income | 156 | 148 | 8 | 5 | % | |||||||||||
| Interest expense | (195 | ) | (263 | ) | 68 | 26 | % | |||||||||
| Other income, net | 543 | 77 | 466 | 605 | % | |||||||||||
| Total other income, net | 617 | 640 | (23 | ) | (4 | )% | ||||||||||
| Income before income taxes | 4,876 | 3,445 | 1,431 | 42 | % | |||||||||||
| Income tax expense | (1,315 | ) | (1,125 | ) | (190 | ) | (17 | )% | ||||||||
| Net income | $ | 3,561 | $ | 2,320 | $ | 1,241 | 53 | % | ||||||||
| Less: Net income attributable to noncontrolling interest | 181 | 190 | (9 | ) | (5 | )% | ||||||||||
| Less: Net income attributable to redeemable noncontrolling interests | 322 | 375 | (53 | ) | (14 | )% | ||||||||||
| Net income attributable to the shareholders of Aeries Technology, Inc. | $ | 3,058 | $ | 1,755 | $ | 1,303 | 74 | % | ||||||||
Revenue, net
For the six months ended September 30, 2026, consolidated revenue increased by $7.38 million, or 23%, to $40.07 million, compared to $32.69 million for the six months ended September 30, 2025. The increase was primarily driven by $12.94 million in incremental revenue from new client additions and higher business volumes from existing clients, together with $0.75 million in incremental one-time revenue from buyout fees. This growth was partially offset by a $6.31 million decline in revenue resulting from the ramp-down of existing client engagements and the completion or closure of certain consulting projects.
Cost of Revenue
For the six months ended September 30, 2026, cost of revenue increased by $5.74 million, or 24%, to $29.63 million, compared to $23.89 million for the six months ended September 30, 2025. The increase was primarily attributable to higher employee compensation and benefits costs of $5.04 million due to salary increments, an increase of $0.77 million in professional charges, and an increase of $0.17 million in rent expense. These increases were partially offset by decreases of $0.10 million in fees paid to external consultants, $0.09 million in other administrative expenses, and $0.05 million in rates and taxes and recruitment expenses.
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Gross Profit
For the six months ended September 30, 2026, our gross profit increased by $1.64 million or 19%, compared to the six months ended September 30, 2025. The increase in gross profit was primarily due to a $7.38 million increase in revenue, mainly driven by one-time buy-out fees, partially offset by a $5.74 million increase in cost of revenue.
Gross Profit Margin
For six months ended September 30, 2026, our gross profit margin decreased by 87 basis points compared to the six months ended September 30, 2025. The decrease in Margin is primarily due to increase in cost of revenue driven by increased employee compensation costs.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $0.18 million, or 3%, to $6.18 million for the six months ended September 30, 2026, compared to $5.99 million for the six months ended September 30, 2025. The increase was primarily attributable to higher stock-based compensation expense of $0.63 million, an increase of $0.24 million in provision for expected credit losses, and an increase of $0.27 million in professional charges and fees paid to external consultants. These increases were partially offset by decreases of $0.63 million in employee benefit expenses, $0.24 million in marketing and office expenses, and $0.09 million in rent expense.
Total Other Income (expense), net
Total other income (expense), net, was $0.62 million for the six months ended September 30, 2026, compared to $0.64 million for the six months ended September 30, 2025, a decrease of $0.02 million, or 4%. The decrease of $0.60 million in change in the fair value of the FPA put option liability and warrant liabilities, $0.26 million decreased due to foreign exchange loss and $0.03 million decreased due to loss on sale of asset. These were partially offset by $0.79 million increase in gain on settlement of liability and $0.08 million increased due to reduction in interest expense.
Income tax expenses/ (benefit)
Income tax expense increased by $0.19 million, or 17%, to $1.32 million for the six months ended September 30, 2026, compared to $1.13 million for the six months ended September 30, 2025. Despite the increase in income tax expense, the effective tax rate decreased to 27.0% from 32.7% in the prior-year period. The decrease in the effective tax rate was primarily attributable to changes in the tax effects of losses incurred in jurisdictions with lower tax rates, for which the related deferred tax benefits were not recognized.
Non-GAAP Financial Measures
We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency as to how we evaluate the business. We use non-GAAP financial measures to budget, make operating and strategic decisions, and evaluate our performance. We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below. The adjustments generally fall within the categories of non-cash items, other than costs related to the Business Combination and M&A transaction related costs, which represent non-recurring legal, professional, personnel and other fees and expenses incurred in connection with potential mergers and acquisition-related activities. We believe the non-GAAP measures presented herein should always be considered along with, and not as a substitute for or superior to, the related US GAAP financial measures. We have provided the reconciliations between the US GAAP and non-GAAP financial measures below, and we also discuss our underlying US GAAP results throughout the Management’s Discussion and Analysis of Financial Condition and Results of Operations section. The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
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Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, further adjusted to exclude stock-based compensation, Business Combination-related costs, changes in fair value of derivative liabilities and gain on settlement of FPA liability. Adjusted EBITDA is a key performance indicator that we use to evaluate our operating performance and in making financial, operating, and planning decisions.
We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the reporting period.
We believe these non-GAAP measures provide useful insight to investors by offering a clearer view of Aeries’ operating performance. This information has been used by our management for internal reporting and planning procedures, including aspects of our consolidated operating budget and capital expenditure planning.
The following table provides a reconciliation from net income (US GAAP measure) to Adjusted EBITDA, and Adjusted EBITDA margin for the three and six months ended September 30, 2026, and 2025 (in thousands):
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 1,348 | $ | 642 | $ | 3,561 | $ | 2,320 | ||||||||
| Income tax expense | 437 | 794 | 1,315 | 1,125 | ||||||||||||
| Interest income | (79 | ) | (76 | ) | (156 | ) | (148 | ) | ||||||||
| Interest expense | 79 | 94 | 195 | 263 | ||||||||||||
| Depreciation and amortization | 199 | 205 | 423 | 410 | ||||||||||||
| EBITDA | $ | 1,984 | $ | 1,659 | $ | 5,338 | $ | 3,970 | ||||||||
| Adjustments | ||||||||||||||||
| (+) Stock-based compensation | 236 | 293 | 946 | 293 | ||||||||||||
| (-)/+ Change in fair value of derivative liabilities | (82 | ) | 600 | (75 | ) | (678 | ) | |||||||||
| (-) Gain on settlement of FPA liability | (38 | ) | - | (38 | ) | - | ||||||||||
| Adjusted EBITDA | $ | 2,100 | $ | 2,552 | $ | 6,171 | $ | 3,585 | ||||||||
| Revenue | 18,148 | 17,359 | 40,066 | 32,688 | ||||||||||||
| Adjusted EBITDA margin [Adjusted EBITDA/ Revenue] | 11.6 | % | 14.7 | % | 15.4 | % | 11.0 | % | ||||||||
Adjusted EBITDA and Adjusted EBITDA margins are supplemental non-GAAP measures and should not be considered in isolation or as substitute for measures prepared in accordance with US GAAP. These measures exclude certain items as reflected in the reconciliation above.
Liquidity and Capital Resources
The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. However, certain conditions as listed below raise substantial doubt about the Company’s ability to continue as a going concern:
| ● | As of September 30, 2026, the Company had a working capital deficit of $4.9 million, primarily due to current liabilities related to the FPAs (as defined below) of $2.4 million, short term borrowings of $2.7 million and remaining due to other current liabilities such as accrued compensation benefits and other accruals. |
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|
These FPAs were liquidity arrangements entered into as part of the Business Combination consummated as of November 6, 2023. Under these liquidity arrangements, certain investors agreed not to redeem their holdings in WWAC in exchange for the Company entering into the FPAs. As of the date of this Quarterly Report on Form 10-Q, the remaining balance owed to the FPA holders (as defined below) is approximately $2.4 million. The maturity consideration may be settled either in cash or equity at the option of the FPA holders. Paying the maturity consideration in cash would reduce the amount of cash on hand or available debt capacity to fund our operations, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations.
Sandia Investment Management LP (“Sandia”), one of the FPA holders agreed to revised terms where the remaining liability would be settled by adjusting the proceeds from FPA share sales, either via cash or additional share issuance. Further, pursuant to Amendment No. 2 dated January 22, 2026 (Amendment No. 2”) to the Letter Agreement with Sandia dated September 16, 2025 (the “Letter Agreement”) commencing March 2026, the Company was obligated to make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No, 2. The outstanding amount will be subject to 15% per annum interest calculated monthly.
During July 2026, the Company paid Sandia $1.49 million in exchange for return of 226,509 Class A ordinary shares, which satisfied the Company’s outstanding obligations under the Sandia FPA.
On August 3, 2026, the Company entered into the Sea Otter Letter Agreement with Sea Otter to amend the settlement terms of the maturity consideration payable under the existing FPA with Sea Otter. Under the Sea Otter Letter Agreement, the Company agreed to satisfy the outstanding payment obligation through an initial cash payment of $0.1 million followed by monthly principal payments of $0.08 million commencing September 15, 2026, with interest accruing at 7.5% per annum on the outstanding balance.
As security for the outstanding obligation, the Company issued 145,183 Class A ordinary shares to Sea Otter as collateral. On October 30, 2026, the Company entered into a Settlement Agreement with Sea Otter to settle its outstanding obligations under the Forward Purchase Agreement and related Letter Agreement. Pursuant to the Settlement Agreement, the Company agreed to make a cash payment of $0.9 million through an escrow arrangement in exchange for the return of 145,183 Class A ordinary shares held by Sea Otter as collateral. Upon completion of the share transfer and release of the settlement payment, the parties will provide mutual general releases, and the prior transaction agreements will terminate, subject to certain surviving provisions. |
On November 5, 2026, the Company paid the entire outstanding amount of $0.91 million to Sea Otter, thereby fully settling its outstanding obligation to Sea Otter. No principal balance remains payable to Sea Otter.
| ● | Additionally, during the six months ended September 30, 2026, the Company identified an increased risk of non-collection of certain outstanding receivables. Accordingly, the Company recorded an allowance for doubtful accounts of approximately $1.6 million as of September 30, 2026, compared to approximately $1.3 million as of March 31, 2026. | |
| ● | The exit of a customer is expected to result in an estimated annualized reduction in revenue of approximately $2.9 million. |
Our working capital needs are primarily to finance our payroll and other administrative and information technology expenses in advance of the receipt of accounts receivable, as well as increased expenses due to being a public reporting company. Our primary capital requirements include expanding existing operations to support our growth, financing acquisitions and enhancing capabilities, including building certain digital solutions.
The Company has historically financed its operations and expansions primarily with cash generated from operations and the revolving credit facility from Kotak Mahindra Bank. As of September 30, 2026, the Company had a balance of $3.8 million in cash and cash equivalents and also generated positive operating cash flows for the period ended September 30, 2026. Management expects to have sufficient cash from the operations, cash reserves and debt capacity for the next 12 months and for the foreseeable future to finance our operations, growth, expansion plans.
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The Company has undertaken or completed the following actions to improve its available cash balances, liquidity, and cash generated from operations:
| ● | Targeted cost cutting measures have been instituted, focusing on non-core expenses including those related to inorganic growth strategy, such as reductions in the use of outside vendors and professional services, which are designed to improve our cash flow position without impacting core business operations. | |
| ● | Management believes that the settlement of the Sandia obligation, together with cash generated from operations, cost-management initiatives and other liquidity measures, will improve the Company’s liquidity position. |
The Company’s ability to continue as a going concern is dependent upon, among other things, successfully executing its mitigation plan, which includes, (i) raising additional funds from existing or new credit facilities, (ii) raising equity or equity linked capital, (iii) restructuring current liabilities into equity or long-term obligations, (iv) further negotiating for waivers from vendors, and (v) further reducing non-core expenses with a renewed focus on organic growth in the core geography that has been historically operated in, which is North America. There is no guarantee that these measures will be successful or that additional funding will be available on acceptable terms. Any future equity financing could significantly dilute existing shareholders’ ownership.
Moreover, we have generated positive operating cashflow of $4.7 million for the six months ended September 30, 2026 and our future profitability depends on our ability to generate revenue in excess of our expenses, including costs relating to the maintenance of our business and debt service requirements. The Company is hopeful of accomplishing its objectives through these measures in the anticipated time frame and also expects that the funds available through the above-mentioned arrangements will be sufficient to alleviate the doubts about the Company’s ability to continue as a going concern. However, there is no guarantee of the success of these efforts.
Cash Flow for the Six Months ended September 30, 2026 and 2025
The following table presents net cash provided by operating activities, investing activities and financing activities for the six months ended September 30, 2026, and 2025 (in thousands):
| Six Months Ended September 30, |
$ | |||||||||||
| 2026 | 2025 | Change | ||||||||||
| Cash at the beginning of period | $ | 4,878 | $ | 2,764 | $ | 2,114 | ||||||
| Net cash provided by operating activities | 4,740 | 2,394 | 2,346 | |||||||||
| Net cash used in investing activities | (462 | ) | (934 | ) | 472 | |||||||
| Net cash used in financing activities | (5,259 | ) | (2,328 | ) | (2,931 | ) | ||||||
| Effects of exchange rates on cash | (61 | ) | (30 | ) | (31 | ) | ||||||
| Cash at the end of period | $ | 3,836 | $ | 1,866 | $ | 1,970 | ||||||
Analysis of Cash Flow Changes between the six months ended September 30, 2026 and 2025
Operating Activities - Net cash provided by operating activities increased by $2.35 million for the six months ended September 30, 2026, compared to the six months ended September 30, 2025. The increase was primarily attributable to an improvement of $1.58 million in cash generated from operating performance and a $0.77 million favorable impact from changes in working capital requirements during the period.
Investing Activities - Net cash used in investing activities was $0.46 million for the six months ended September 30, 2026. The cash outflows primarily related to purchases of property and equipment amounting to approximately $0.47 million, partially offset by $0.01 million in repayments received against loans extended to affiliates.
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Net cash used in investing activities during the six months ended September 30, 2025 was $0.93 million, of which $0.63 million was used for the purchase of property and equipment, $0.14 million loans was issued to affiliates and $0.61 million was placed as fixed deposit with banks. The outflows were offset by inflow from property, plant and equipment of $0.08 million, $0.11 million repayments received from loans to affiliates and $0.25million proceeds from maturities of fixed deposits placed with banks.
Financing Activities - Net cash used in financing activities was $5.26 million for the six months ended September 30, 2026. The cash outflows primarily consisted of $2.38 million towards the purchase of treasury shares, $1.89 million towards the settlement of FPA liabilities, $0.50 million towards the repayment of promissory note liabilities, and $0.43 million in net repayments of short-term borrowings. Additionally, the Company made payments of $0.05 million towards finance lease obligations and $0.01 million towards the repayment of long-term debt.
Net cash used in financing activities during the six months ended September 30, 2025 was $2.33 million, primarily from net repayment of short-term borrowings of $1.88 million, payment of insurance financing liability of $0.16 million, repayment of long-term debt of $0.12 million and payment of finance lease obligation of $0.17 million.
Off-Balance Sheet Arrangements
As of September 30, 2026 and currently, we do not have any material off-balance sheet arrangements, other than as disclosed in “Commitments and Contingencies” in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
New Accounting Pronouncements
See “Summary of Significant Accounting Policies”, in the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Application of Significant Accounting Policies and Estimates
General
The following is a summary of the basis of preparation and significant accounting policies which have been applied in the preparation of the accompanying condensed consolidated financial statements. The accounting policies have been applied consistently in preparation of these condensed consolidated financial statements. A full description of significant accounting policies is provided in our consolidated financial statements for the fiscal years ended March 31, 2026 and 2025.
Critical Accounting Policies and Management Estimates
Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements included elsewhere in this Quarterly Report. The preparation of our condensed consolidated financial statements in accordance with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Our critical accounting policies are those that materially affect our condensed consolidated financial statements and involve difficult, subjective or complex judgments by management. A thorough understanding of these critical accounting policies is essential when reviewing our condensed consolidated financial statements. We believe the current assumptions, judgments and estimates used to determine amounts reflected in our condensed consolidated financial statements are appropriate; however, actual results may differ under different conditions. This discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included in this document. Refer to “Critical Accounting Policies and Estimates” contained in Part II, Item 7 of our annual report on Form 10-K for the year ended March 31, 2026 (the “2026 Form 10-K”) for a complete discussion of our critical accounting estimates. There have been no material changes to the Company’s critical accounting estimates since the date of the filing of the 2026 Form 10-K.
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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
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the fiscal quarter ended September 30, 2026. Based on this evaluation, our Chief Executive Officer has concluded that, as of September 30, 2026, our disclosure controls and procedures were effective.
Material Weaknesses in Internal Control Over Financial Reporting
As previously reported in 2023, our management identified material weaknesses in internal control over financial reporting that are primarily attributable to improper segregation of duties, inadequate processes for timely recording of significant events and material transactions, and inadequate design and implementation of information and communication policies, procedures, and monitoring activities.
Remediation
In light of these facts, our management, including our Chief Executive Officer, implemented the processes and controls including (i) designing and implementing manual controls to validate the completeness and accuracy of data; (ii) enhancing review controls, improving documentation standards, and strengthening oversight over key financial reporting processes; and (iii) hiring and training personnel at all levels.
Based on management’s evaluation of the effectiveness of the Company’s internal controls as of September 30, 2026, management concluded that the previously identified material weakness had been successfully remediated as of March 31, 2026. Additionally, management has concluded that the condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with US GAAP.
Inherent Limitations on Effectiveness of Controls
If we are unable to maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us and the value of our Class A ordinary shares could be materially and adversely affected and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities. Effective process and controls over financial reporting are necessary for us to provide reliable and timely financial reports and are designed to reasonably detect and prevent fraud. For as long as we are a “smaller reporting company” under the U.S. securities laws, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of internal control over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.
Moreover, we do not expect that process and controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The failure of our control systems to prevent error or fraud could materially adversely impact us.
Changes in Internal Control Over Financial Reporting
Except as described above, there was not any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may be involved in various proceedings and litigation, claims and other legal matters arising in the ordinary course of business. Some of these claims, lawsuits, and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, nonmonetary sanctions, or relief. Management is not currently aware of any material pending legal proceedings, except for ordinary routine litigation incidental to the business, in which we or any of our subsidiaries are involved, or where our property is subject to such proceedings except as noted below:
Commercial Dispute with Two Circles Limited.
A contractual dispute has arisen between certain subsidiaries of the Company and Two Circles Limited and Two Circles India Private Limited in connection with the purported termination of a Master Services Agreement dated December 2, 2025 and certain related unpaid amounts.
On September 11, 2026, The Company (through its group entity) has commenced proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 before the High Court for the State of Telangana at Hyderabad seeking interim measures in aid of the contemplated arbitration. The High Court has granted certain interim relief, including attachment of shares, a lien over a bank account to secure unpaid invoices and restrictions on the creation of third-party rights. On October 22, 2026, the dispute proceeded to arbitration under the Rules of the London Court of International Arbitration (LCIA), with London as the seat of arbitration. Settlement discussions are also continuing in parallel.
ITEM 1A. RISK FACTORS.
A description of the risk factors associated with our business is contained in the “Risk Factors” section of the 2026 Form 10-K and our Quarterly Report on Form 10-Q for the fiscal period ended June 30, 2026. There have been no material changes to our Risk Factors as therein previously reported, except as noted below:
We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern, including obligations under the FPAs and the termination of a significant customer contract.
In connection with the Company’s assessment of going concern considerations, management has identified conditions that raise substantial doubt about the Company’s ability to continue as a going concern. As of September 30, 2026, the Company had a cash balance of $3.8 million with a net operating cash inflow of $4.7 million for the six months ended September 30, 2026. The Company reported a net profit of $3.6 million for this period.
As of September 30, 2026, the Company had a working capital deficit of $4.9 million, primarily due to current liabilities related to the FPAs of $2.4 million (as defined below), short term borrowings of $2.7 million and remaining due to other current liabilities such as accrued compensation benefits and other accruals.
These FPAs (as defined below) were liquidity arrangements entered into as part of the Business Combination consummated as of November 6, 2023. Under these liquidity arrangements, certain investors agreed not to redeem their holdings in WWAC in exchange for the Company entering into the FPAs. As of September 30, 2026, the remaining balance owed to the FPA holders is approximately $2.4 million. The maturity consideration may be settled either in cash or equity at the option of the FPA holders. Paying the maturity consideration in cash would reduce the amount of cash on hand or available debt capacity to fund our operations, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations.
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Management’s plans to address these challenges include (i) raising additional funds through existing or new credit facilities, (ii) raising equity or equity-linked capital, (iii) restructuring current liabilities into equity or long-term obligations, (iv) further negotiating for waivers from vendors, and (v) further reducing non-core expenses with a renewed focus on organic growth in the core geography we historically operate in, which is North America. There is no guarantee that these measures will be successful or that additional funding will be available on acceptable terms. Any future equity financing could significantly dilute existing shareholders’ ownership. Our future profitability depends on our ability to generate revenue in excess of our expenses, including costs relating to the maintenance of our business and debt service requirements. The Company is hopeful of accomplishing its objectives through these measures in the anticipated time frame and also expects that the funds available through the above-mentioned arrangements will be sufficient to alleviate the doubts about the Company’s ability to continue as a going concern. However, there is no guarantee of the success of these efforts.
If we are unable to continue as a going concern, we may be forced to liquidate our assets, potentially at less than their carrying value, which could result in a substantial or complete loss of investor capital. Future SEC filings may also contain statements expressing doubt about our ability to continue as a going concern, which could deter investors or other financing sources from providing funding on favorable terms, if at all.
We may be required to make a cash payment of approximately $2.4 million or issue certain additional Class A ordinary shares to the investors with whom we entered into Forward Purchase Agreements in connection with the closing of the Business Combination, which would reduce the amount of cash available to us to fund our operations or dilute the percentage ownership held by the investors.
On and around November 3, 2023 and November 5, 2023, we entered into FPAs with Sandia, Sea Otter, YA II PN, Ltd and Meteora (the “FPA holders”), for an OTC Equity Prepaid Forward Transaction. Subscription Agreements (the “Subscription Agreements”) were also executed alongside the FPAs for subscription of the underlying FPA shares by the FPA holders either through a new issuance or purchase of shares from existing holders. The FPAs and Subscription Agreements have been accounted for separately as discussed below.
On November 6, 2024, the Company reached an agreement with Meteora to settle the outstanding maturity consideration liability through the issuance of additional shares. As a result, the Company issued 7,226 Class A ordinary shares to Meteora in November 2024, settling its maturity consideration liability with Meteora.
On September 16, 2025, the Company entered into a Letter Agreement (the “Letter Agreement”) with Sandia with respect to the Sandia FPA.
On December 31, 2025, the Company entered into “Amendment No. 1” to the Letter Agreement extending the Designated Period to January 9, 2026.
On January 22, 2026, the Company and Sandia entered into “Amendment No. 2” to the Letter Agreement, pursuant to which the Company agreed, commencing March 2026, obligated to make monthly cash payments toward the outstanding amount, subject to reductions in such outstanding amount resulting from sell-downs of shares in accordance with the terms of the Letter Agreement and Amendment No. 2. The outstanding amount is subject to 15% per annum interest calculated monthly. On July 29, 2026, the Company paid Sandia $1.49 million in exchange for the return of 226,509 Class A ordinary shares, which satisfied the Company’s outstanding obligations under the Sandia FPA.
On August 3, 2026, the Company entered into the Sea Otter Letter Agreement to restructure the settlement of the maturity consideration payable under the Forward Purchase Agreement with Sea Otter. The agreement provides for an initial cash payment of $0.1 million, followed by monthly principal payments of $0.08 million with interest at 7.5% per annum on the outstanding balance. As collateral, the Company issued 145,183 Class A ordinary shares. On October 30, 2026, the Company entered into a Settlement Agreement with Sea Otter Trading, LLC to settle its outstanding obligations under the Forward Purchase Agreement and related Letter Agreement. Pursuant to the Settlement Agreement, the Company agreed to make a cash payment of $0.91 million through an escrow arrangement in exchange for the return of 145,183 Class A ordinary shares held by Sea Otter as collateral. Upon completion of the share transfer and release of the settlement payment, the parties will provide mutual general releases, and the prior transaction agreements will terminate, subject to certain surviving provisions. On November 5, 2026, the Company paid the entire outstanding amount of $0.91 million to Sea Otter, thereby fully settling its outstanding obligation to Sea Otter. No principal balance remains payable to Sea Otter.
If we are required to satisfy our obligations under the FPA with cash payments to the FPA holders, as we are with respect to Sandia pursuant to Amendment No. 2 and Sea Otter pursuant to the Sea Otter Letter Agreement and Settlement Agreement, the amount of cash on hand to fund our operations would be reduced accordingly, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations. If we are required to issue additional Class A ordinary shares in respect of the FPA Shares, the ownership percentage held by our current shareholders will be diluted.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
There were no unregistered sales of equity securities in the period ended September 30, 2026 which have not been previously reported in the Company’s Current Reports on Form 8-K.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Shares repurchase activity during the three months ended September 30, 2026, was as follows:
| Periods | Total Number of Shares Purchased(1)(2) |
Average Price Paid Per Share(2) |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(3) |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1) |
||||||||||||
| July 1, 2026 to July 31, 2026: | 259,125 | $ | 6.62 | 32,616 | 2,088,723 | |||||||||||
| August 1, 2026 to August 31, 2026: | - | $ | - | - | - | |||||||||||
| September 1, 2026 to September 30, 2026: | - | $ | - | - | - | |||||||||||
| Total | 259,125 | $ | 6.62 | 32,616 | ||||||||||||
| (1) | On February 25, 2026, the Company authorized a Share Repurchase Program of up to $5.0 million of the Company’s Class A ordinary shares, to be effected over a period of twelve (12) months through February 24, 2027. |
|
In connection therewith, the board approved the adoption of a Rule 10b5-1 issuer share repurchase trading plan on March 23, 2026 (the “March Trading Plan”), pursuant to which the Company repurchased its ordinary shares from time to time in accordance with applicable laws and regulations, including Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The maximum amount of cumulative purchases under the March Trading Plan was $3.0 million (exclusive of commission).
Following the completion of the March Trading Plan in accordance with its terms, the Company adopted a second Rule 10b5-1 plan with Roth Capital Partners, LLC on June 23, 2026, effective June 24, 2026, authorizing additional repurchases of Class A ordinary shares under predetermined terms (the “June Trading Plan”). The June Trading Plan was terminated by the Company on July 24, 2026. | |
| (2) | During the three months ended September 30, 2026, as part of our publicly announced program, we purchased 32,616 shares of our common stock for an aggregate purchase consideration of $0.23 million, including commission and other charges, representing an average purchase price per share of $6.96. |
| (3) | On July 29, 2026, the Company paid Sandia approximately $1.49 million to repurchase and retire 226,509 Class A ordinary shares, thereby fully satisfying its remaining obligations under the Sandia FPA. The Board approved this repurchase outside of the scope of the Share Repurchase Program and accordingly, such shares are included in the total shares repurchased but excluded from shares repurchased under the Company’s publicly announced Share Repurchase Program, as applicable. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable
ITEM 5. OTHER INFORMATION.
During the quarter ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, or the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined under Item 408 of Regulation S-K).
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Exhibit | Incorporation by Reference | |||||||||
| Number | Exhibit Title | Form | File No. | Exhibit | Filing Date | |||||
| 3.1 | Third Amended and Restated Memorandum and Articles of Association of Aeries Technology, Inc.. effective June 12, 2026 | 8-K | 001-40920 | 3.1 | 6/12/2026 | |||||
| 10.1 | Letter Agreement, dated August 3, 2026 between the Company and Sea Otter Trading, LLC | 8-K | 001-40920 | 10.1 | 8/7/2026 | |||||
| 10.2# | Employment Agreement, effective May 14, 2026, between Aeries USA, Inc. and Bhisham Khare | Filed herewith | ||||||||
| 10.3# | Notice of and Consent to Intercompany Transfer of Employment Agreement, dated May 14, 2026, between Aeries Technology Solutions Inc. and Bhisham Khare | Filed herewith | ||||||||
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith | ||||||||
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith | ||||||||
| 101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 with applicable taxonomy extension information contained in Exhibits 101). | Filed herewith | ||||||||
| * | The certification furnished in Exhibit 32.1 hereto is deemed to accompany this Quarterly Report on Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in such filing. |
| # | Denotes a management contract or compensatory plan, contract or arrangement. |
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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, thereunto duly authorized.
| AERIES TECHNOLOGY, INC. | ||
| Date: November 12, 2026 | By: | /s/ Bhisham (Ajay) Khare |
| Name: | Bhisham (Ajay) Khare | |
| Title: |
Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer) | |
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