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 | (I.R.S. Employer | |
| incorporation or organization) | 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 Stock Market | ||||
| The Stock Market |
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 18, 2024, there were Class A ordinary shares, $0.0001 par value and 1 Class V ordinary share, $0.0001 par value, issued and outstanding.
AERIES TECHNOLOGY, INC.
FORM 10-Q
For the quarterly period ended September 30, 2024
TABLE OF CONTENTS
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.
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 market opportunity; |
| ● | our ability to maintain the listing of the Class A ordinary shares and the warrants on the Nasdaq Stock Market, and the potential liquidity and trading of such securities; |
| ● | our ability to recognize the anticipated benefits of our de-SPAC transaction completed in November 2023, which may be affected by, among other things, competition, our ability to grow and manage growth profitably and retain our key employees; |
| ● | our business development efforts to maximize our potential value and to retain and expand our customer base; | |
| ● | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; | |
| ● | our financial performance; | |
| ● | our ability to continue as a going concern; | |
| ● | 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; | |
| ● | our ability to develop and maintain effective internal controls; | |
| ● | risks related to cybersecurity and data privacy; | |
| ● | general economic and political conditions, such as the effects of the Russia-Ukraine and the Israel-Hamas conflicts, pandemics such as the COVID-19 outbreak, 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; and | |
| ● | other factors discussed in this report. |
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 do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
ii
PART 1 – INTERIM FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2024 and March 31, 2024
(in thousands of United States dollars, except share and per share amounts)
| |
|
SEPTEMBER 30, 2024 |
|
|
MARCH 31, 2024 |
| ||
| (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 $ |
||||||||
| Total current assets | $ | $ | ||||||
| Property and equipment, net | ||||||||
| Operating right-of-use assets | ||||||||
| Deferred tax assets | ||||||||
| Long-term investments, net of allowance of $ |
||||||||
| Other assets, net of allowance of $ |
||||||||
| 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, $ par value; shares authorized; issued or outstanding | ||||||||
| Class A ordinary shares, $ par value; shares authorized; shares issued and outstanding as of September 30, 2024; shares issued and outstanding as of March 31, 2024 | ||||||||
| Class V ordinary shares, $ par value; share authorized, issued and outstanding | ||||||||
| Net shareholders’ investment and additional paid-in capital | ||||||||
| 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 condensed consolidated financial statements.
1
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended September 30, 2024 and 2023
(in thousands of United States dollars, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, 2024 |
Three Months Ended September 30, 2023 |
Six Months Ended September 30, 2024 |
Six Months Ended September 30, 2023 |
|||||||||||||
| 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 | ( |
) | ||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income / (expense), net | ||||||||||||||||
| Total other income / (expense), net | ||||||||||||||||
| Income / (loss) before income taxes | ( |
) | ( |
) | ||||||||||||
| Income tax (expense) / benefit | ( |
) | ( |
) | ||||||||||||
| Net income / (loss) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Less: Net income / (loss) attributable to noncontrolling interests | ( |
) | ( |
) | ||||||||||||
| Net income / (loss) attributable to redeemable noncontrolling interests | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Net income / (loss) attributable to shareholders’ of Aeries Technology Inc. | $ | ( |
) | ( |
) | |||||||||||
| Weighted average shares outstanding of Class A ordinary shares, basic and diluted(1) | ||||||||||||||||
| Basic and diluted net loss per Class A ordinary share(1) | $ | ) | $ | ) | ||||||||||||
| (1) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)
For the three and six months ended September 30, 2024 and 2023
(in thousands of United States dollars, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, 2024 |
Three Months Ended September 30, 2023 |
Six Months Ended September 30, 2024 |
Six Months Ended September 30, 2023 |
|||||||||||||
| Net income / (loss) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Other comprehensive income / (loss), net of tax | ||||||||||||||||
| Foreign currency translation adjustments | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Unrecognized actuarial gain / (loss) on employee benefit plan obligations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Total other comprehensive income / (loss), net of tax | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Comprehensive income / (loss), net of tax | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Less: Comprehensive income / (loss) attributable to noncontrolling interests | ( |
) | ( |
) | ||||||||||||
| Less: Comprehensive income / (loss) attributable to redeemable noncontrolling interests | ( |
) | ( |
) | ||||||||||||
| Total comprehensive income / (loss) 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, 2024 and 2023
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| Redeemable | Ordinary Shares Class A/ |
Ordinary Shares | Net shareholders’ investment and additional |
Accumulated other | Total Aeries Technology, Inc. | Total Shareholders’ |
||||||||||||||||||||||||||||||||||||||
| noncontrolling | Common shares | Class V | paid-in | Accumulated | comprehensive | shareholders | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||
| interest | Shares | Amount | Shares | Amount | Capital | deficit | loss | deficit | interest | (deficit) | ||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||
| Net loss for the period prior to share exchange | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
| Other comprehensive loss for the period prior to share exchange | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares with respect to share exchange agreement | - | ( |
) | |||||||||||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares in connection with private placement | - | |||||||||||||||||||||||||||||||||||||||||||
| Settlement of accounts payable through issuance of Class A ordinary shares | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||||||||||
| Net income / (loss) for the period post share exchange | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
| Other comprehensive loss for the period post share exchange | ( |
) | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance as at June 30, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||||||
| Net Loss for the period | ( |
) | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( |
) | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares in connection with private placement | - | |||||||||||||||||||||||||||||||||||||||||||
| Settlement of accounts payable through issuance of Class A ordinary shares | - | |||||||||||||||||||||||||||||||||||||||||||
| Balance as at September 30, 2024 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
|
Ordinary Shares Common stock |
Net stockholders’ investment and Additional paid-in |
Retained | Accumulated other comprehensive |
Total Aark Singapore Pte. Ltd.’s stockholders’ |
Noncontrolling | Total stockholders’ |
||||||||||||||||||||||||||
| Shares* | Amount | Capital | earnings | loss | equity | Interest | equity | |||||||||||||||||||||||||
| Balance as of April 1, 2023 | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
| Transition period adjustment pursuant to ASC 326, net of tax | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Adjusted Balance as of April 1, 2023 | ( |
) | ||||||||||||||||||||||||||||||
| Net income for the period | - | |||||||||||||||||||||||||||||||
| Other comprehensive loss | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Net changes in net stockholders’ investment | - | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
| Net Loss for the period | - | |||||||||||||||||||||||||||||||
| Other comprehensive loss | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Balance as at September 30, 2023 | ( |
) | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
AERIES TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended September 30, 2024, and 2023
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| Six Months Ended September 30, 2024 |
Six Months Ended September 30, 2023 |
|||||||
| Cash flows from operating activities | ||||||||
| Net income / (loss) | $ | ( |
) | $ | ||||
| Adjustments to reconcile net income / (loss) to net cash (used in) / provided by operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Stock-based compensation expense | ||||||||
| Deferred tax (benefit) / expense | ( |
) | ( |
) | ||||
| Accrued income from long-term investments | ( |
) | ( |
) | ||||
| Provision for expected credit loss | ||||||||
| Profit on sale of property and equipment | ( |
) | ||||||
| Others | ( |
) | ( |
) | ||||
| Change in fair value of forward purchase agreement put option liability | ( |
) | ||||||
| Change in fair value of derivative warrant liabilities | ( |
) | ||||||
| Loss on issuance of shares against accounts payable | ||||||||
| Unrealized exchange gain | ( |
) | ( |
) | ||||
| 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 | ||||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Cash flows from financing activities | ||||||||
| Net proceeds from short term borrowings | ( |
) | ||||||
| Payment of insurance financing liability | ( |
) | ||||||
| Proceeds from long-term debt | ||||||||
| Repayment of long-term debt | ( |
) | ( |
) | ||||
| Payment of finance lease obligations | ( |
) | ( |
) | ||||
| Payment of deferred transaction costs | ( |
) | ( |
) | ||||
| Net changes in net shareholders’ investment | ( |
) | ||||||
| Proceeds from issuance of Class A ordinary shares, net of issuance cost | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( |
) | ||||||
| Net increase 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: | ||||||||
| Unpaid deferred transaction costs included in accounts payable and other current liabilities | $ | $ | ||||||
| Equipment acquired under finance lease obligations | $ | $ | ||||||
| Property and equipment purchase included in accounts payable | $ | $ | ||||||
| Settlement of accounts payable through issuance of Class A ordinary shares to vendors | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
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. (formerly Worldwide Webb Acquisition Corp. (“WWAC”), formed in the Cayman Islands on March 5, 2021) and its subsidiaries, excluding the fintech and investing business activities, is herein referred to as the “Company”, “ATI”, the “registrant”, “us,” “we” and “our” in these consolidated financial statements. Aark Singapore Pte. Ltd., a Singapore private company limited by shares (“AARK”) and its subsidiaries, excluding the fintech and investing business activities, is herein referred to as the “Carve-out Entity”. The Company is a global provider of professional and management services and technology consulting, specializing in the establishment and management of dedicated delivery centers known as “Global Capability Centers” (“GCCs”) for portfolio companies of private equity firms and mid-market enterprises. Our engagement models are designed to provide a mix of deep vertical specialty, functional expertise, and digital systems and solutions to scale, optimize and transform a client’s business operations. The Company has subsidiaries in India, Mexico, Singapore, UAE and the United States.
Business Combination
On March 11, 2023, WWAC entered into a Business Combination Agreement (as amended, the “Merger Agreement”) with WWAC Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares and a direct wholly owned subsidiary of WWAC (“Amalgamation Sub”), and AARK. Pursuant to the Merger Agreement, Amalgamation Sub and AARK amalgamated and continued as one company, with AARK being the surviving entity, and as a result thereof, Aeries Technology Group Business Accelerators Pvt. Ltd., an Indian private company limited by shares became an indirect subsidiary of WWAC (the “Amalgamation” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Following the closing of the Business Combination, WWAC changed its corporate name to Aeries Technology, Inc.
Pursuant to the Merger Agreement, all AARK ordinary shares that were issued and outstanding prior to the effective time of the Amalgamation remained issued and outstanding following the Amalgamation and continued to be held by the former sole shareholder of AARK. The Company issued a Class V ordinary share to NewGen Advisors and Consultants DWC-LLC (“NewGen”). NewGen is a business associate of Mr. Raman Kumar (the “Former AARK Sole Shareholder”). NewGen has agreed to hold the Class V ordinary share to protect the interest of the Former AARK Sole Shareholder, in the event of certain extraordinary events as described in ATI’s amended and restated memorandum and articles of association, including a hostile takeover or the appointment or removal of directors at ATI level. While the Class V ordinary share does not carry any direct economic rights, it does carry voting rights equal to 1.3% which will ratchet up to 51% voting rights upon occurrence of the extraordinary events described above at the ATI level. All of the shares of Amalgamation Sub that were issued and outstanding as of the transaction date were converted into a number of newly issued AARK ordinary shares. In accordance with principles of Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”) and based on the economic interest held by the shareholders post the transaction as well as the underlying rights, it was assessed that AARK is the accounting acquirer and WWAC is the accounting acquiree. The Business Combination closed on November 6, 2023 (“Closing Date”) and resulted in ATI owning
6
Reverse Recapitalization
As mentioned above – Business Combination, the Business Combination was closed on November 6, 2023 and has been accounted for as a reverse recapitalization because AARK has been determined to be the accounting acquirer under ASC 805 based on the evaluation of the following facts and circumstances taken into consideration:
| ● | The Former AARK Sole Shareholder, who controlled AARK prior to the Business Combination, will retain a majority of the outstanding shares of ATI after giving effect to the Exchange Agreements. The Exchange Agreements are further discussed in Note 10; |
| ● | AARK has the ability to elect a majority of the members of ATI’s governing body; |
| ● | AARK’s executive team makes up the executive team of ATI; |
| ● | AARK represents an operating entity (group) with operating assets, revenues, and earnings significantly larger than WWAC. |
Under a reverse recapitalization, while ATI was the legal acquirer, it has been treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of pre-combination AARK issuing stock for the net assets of ATI, accompanied by a recapitalization. The net assets of ATI have been stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of pre-combination AARK and relate to the management consulting business.
Immediately following the Business Combination, there were Class A ordinary shares outstanding with a par value of $. Additionally, there were Private Placement Warrants (defined below) and Public Warrants (defined below) outstanding with a right to purchase
Upon closing of the Business Combination, the total number of ATI’s Class A ordinary shares issued and outstanding was . Further, certain Class A ordinary shareholders entered into non-redemption agreements executed on November 3, 2023 and November 5, 2023, to reverse redemptions for an aggregate of 1,652,892 Class A ordinary shares while waiving their right to receive any “Bonus Shares” issued under the Merger Agreement. In connection with the closing, holders of Class A ordinary shares of ATI were redeemed at a price per share of approximately $10.69. AARK incurred approximately $
The number of Class A ordinary shares issued and outstanding immediately following the consummation of the Business Combination were:
| Public Shareholders (Redeemable Class A ordinary shares), including Bonus Shares(1) | ||||
| Shares held by Worldwide Webb Acquisition Sponsor, LLC (the “Sponsor”) and other initial holders(2)(3) | ||||
| Shares held by Innovo Consultancy DMCC(4) | ||||
| Shares held by FPA (as defined below) Holders(5) | ||||
| Total(6) |
| (1) | |
| (2) |
7
| (3) | |
| (4) | |
| (5) | |
| (6) |
As a result of the Business Combination, the Company’s Class A ordinary shares trade under the ticker symbol “AERT” and its public warrants (the “Public Warrants”) trade under the ticker symbol “AERTW” on the Nasdaq Stock Market. Prior to the consummation of the Business Combination, the Company’s Class A ordinary shares were traded on the Nasdaq Stock Market under the symbol “WWAC.”
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, 2024. There have been no changes in accounting policies during the six months ended September 30, 2024, from those disclosed in the annual consolidated financial statements and related notes for the year ended March 31, 2024, 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.
8
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.
In performing this evaluation, the Company identified that the following conditions that raised substantial doubt about its ability to continue as a going concern:
| ● | For the six months ended September 30, 2024, the Company reported a net loss of $ |
| ● | As of September 30, 2024, the Company had a working capital deficit of $ |
| ● | The Company received a
non-renewal notice from a significant customer related to its dedicated offshore operations managed by the Company, which is
expected to result in an annual revenue loss 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 at September 30, 2024 the Company had a balance of $
The Company has undertaken or completed the following actions to improve its available cash balances, liquidity, and cash generated from operations:
| ● | The non-renewal of the customer contract requires a one-time buy-out payment from the customer to us of approximately $ |
| ● | On November 6, 2024, the Company and one of the FPA holders, namely Meteora Capital Partners LP, which holds shares under its FPA, agreed to settle the liability through issuance of shares, leaving a remaining balance of $ |
| ● | 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 reduction and salary reductions, which are designed to improve our cashflow position without impacting core business operations. |
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, and (iv) 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 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.
9
Use of Estimates
The preparation of condensed consolidated financial statements in accordance with 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, obligations related to employee benefits and carve-out of financial statements, including the allocation of assets, liabilities and expenses. 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 Agreement
On November 3, 2023, and November 5, 2023, WWAC entered into Forward Purchase Agreements with Sandia Investment Management LP, Sea Otter Trading, LLC, YA II PN, Ltd and Meteora Capital Partners, LP (collectively known as “FPA holders”) for an over-the-counter (OTC) Equity Prepaid Forward Transaction. A Subscription Agreement (the “Subscription Agreement”) was 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 (“Recycled Shares”). The FPAs and Subscription Agreements have been accounted for separately as discussed subsequently.
The FPAs stipulate a new issuance of Class A ordinary shares to the FPA holders at the redemption price (i.e., $10.69 per share) and, purchase of Recycled Shares through redemption reversals. The amount to be received by ATI from the FPA holders on such issuance of around 3,711,667, shares, are held with the FPA holders as prepaid with respect to the forward transaction. Pursuant to the FPA, ATI was obligated to pay a prepayment amount of $
| ● | $ |
| ● | $ |
At the end of the contract period of one year, for each unsold share held by the FPA holders, ATI is obligated to pay FPA holders an amount of $
The Optional Termination Right held by the FPA holders economically results in the prepaid forward contract being akin to a written put option with the FPA holders’ right to sell all or a portion of the Class A ordinary shares to ATI. ATI is entitled over the 12-month maturity period to either a return of the prepayment or the underlying shares, which the FPA holders will determine at their sole discretion depending on the movement in ATI’s stock price.
10
On April 8, 2024, the Company completed a Private Investment in Public Equity (“PIPE”) transaction, with the Class A ordinary shares quoted at approximately $2.21 per share at that time. The Company has Forward Purchase Agreements with Sandia Investment Management LP, Sea Otter Trading, LLC, YA II PN, Ltd, and Meteora Capital Partners, LP (collectively, the “FPA Holders”). These agreements contain a price reset feature that allows for adjustments to the share price based on certain predefined conditions, including those triggered by the PIPE transaction. As of the reporting date, this price reset feature was activated, resulting in a new share price of $2.21 per share for the over-the-counter (OTC) Equity Prepaid Forward Transaction.
This adjustment has implications for the fair value of the derivative liability initially recorded on the balance sheet. Future fluctuations in this fair value will be recognized in earnings. For more details, please refer to Note 14: Fair Value Measurement
The FPAs consist of two freestanding financial instruments that are accounted for as follows:
| 1) | The total prepayment of $42,760 (“Prepayment Amount”) which includes a net cash outflow of $3,083 as discussed above. The Prepayment Amount has been accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net repurchase of the Recycled Shares and sale of newly issued shares to the FPA holders pursuant to a subscription agreement without receipt of the underlying consideration of $39,678. |
| 2) | The “FPA Put Option” includes both the in-substance written put option and the expected Maturity Consideration. The FPA Put Option is a derivative instrument that the Company has recorded as a liability and measured at fair value in accordance with ASC 480-10. The instrument is subject to remeasurement at each balance sheet date, with changes in fair value recognized in the condensed consolidated statements of operations. See Note 14. |
Derivative Financial Instruments and FPA Put Option Liability
The Company accounts for the Warrants (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 FPA are collectively referred as the “Instruments”. The Instruments are subjected 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 Warrants and FPA.
In December 2023, the Company settled vendor balances mounting to $ owed to certain vendors by issuing Class A ordinary shares. If the volume weighted average price (“VWAP”) of the Class A ordinary shares over the three trading days immediately preceding the agreement date is higher than the VWAP over the three trading days immediately preceding the six-month anniversary from the agreement date, additional Class A ordinary shares of ATI would need to be issued for the difference. This represents 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. The Company is required to settle its liabilities under the FPAs by November 6, 2024. The total amount payable under the agreements is $ |
11
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 and FPA 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 and Disclosures,” 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 September 30, 2024 and March 31, 2024, there was one customer 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.
12
In respect of the Company’s revenue, there were two and three customers that each accounted for more than
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 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 tables provides details of the Company’s allowance for credit losses (in thousands):
| Six months Ended September 30, |
||||||||
| 2024 | 2023 | |||||||
| Opening balance as of April 1 | $ | $ | ||||||
| Transition period adjustment on accounts receivables (through retained earnings) pursuant to ASC 326 | ||||||||
| Adjusted 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.
13
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 tables provides details of the Company’s allowance for credit losses:
| Six months Ended September 30, |
||||||||
| 2024 | 2023 | |||||||
| Opening balance as of April 1 | $ | $ | ||||||
| Transition period adjustment on long term investments (through retained earnings) pursuant to ASC 326 | ||||||||
| Adjusted balance as of April 1 | $ | $ | ||||||
| Additions charged to 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.
Basic net 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 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”) and private placement to purchase ordinary shares, and impact of FPA put option liability in the calculation of diluted net loss per share, since the instruments are not dilutive.
Recent Accounting Pronouncements not yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is in the process of evaluating the Impact of the amendments this ASU will have on the financial statements and related disclosures.
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 is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.
The Company is currently evaluating the effect of the updates.
14
Note 3 - Short-term borrowings
| September 30, 2024 |
March 31, 2024 |
|||||||
| Short-term borrowings | $ | $ | ||||||
| Current portion of vehicle loan | ||||||||
| $ | $ | |||||||
In May 2023, the Company amended its revolving credit facility (“Amended Credit Facility”), whereby the total borrowing capacity was increased from INR
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. $2,500 owed to Sherman & Sterling LLP has been disclosed as short-term debt, as ATI has an unconditional obligation to settle it within a period of less than twelve months from September 30, 2024.
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:
|
September 30, 2024 |
March 31, 2024 |
|||||||
| Loan from the director of ATGBA | $ | $ | ||||||
| Loan from an affiliate | ||||||||
| Non-current portion of vehicle loan | ||||||||
| $ | $ | |||||||
For additional information on the loan from the director of ATGBA, Mr. Vaibhav Rao, to a subsidiary company and loan from an affiliate, see Note 8 – Related Party Transactions - point (g) and (d), respectively.
15
Vehicle loan
On December 7, 2022, the Company entered into a vehicle loan, secured by the vehicle, for INR 11,450 (or approximately $
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, 2024, the future maturities of debt by fiscal year are as follows:
| 2025 | $ | |||
| 2026 | ||||
| 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.
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 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, 2024 and March 31, 2024, 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, 2024 and 2023 that was included in deferred revenue at the beginning of each period was $
As of September 30, 2024 and March 31, 2024 the Company’s deferred revenue was $
16
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 benefit 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, 2024 and 2023 were as follows:
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 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, 2024 and 2023 include the following components:
| Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Service costs | $ | $ | $ | $ | ||||||||||||
| Interest costs | ||||||||||||||||
| Amortization of net actuarial loss | ||||||||||||||||
| Net defined benefit plan costs | $ | $ | $ | $ | ||||||||||||
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”) is
The Company’s effective tax rate (“ETR”) is
17
Note 8 - Related Party Transactions
| Name of the related party | Relationship | |
Summary of significant transactions and balances due to and from related parties are as follows:
| Three Months Ended September 30, |
Six Months Ended September 30 |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Cost sharing arrangements | ||||||||||||||||
| Aeries Financial Technologies Private Limited (b) | ||||||||||||||||
| Bhanix Finance And Investment Limited (b) | ||||||||||||||||
| Corporate guarantee commission | ||||||||||||||||
| Bhanix Finance And Investment Limited | ||||||||||||||||
| Corporate guarantee expense | ||||||||||||||||
| Aeries Technology Products And Strategies Private Limited (j) | ||||||||||||||||
| 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) | ||||||||||||||||
| TSLC Pte Limited (a) | ||||||||||||||||
| Office management and support services expense | ||||||||||||||||
| Aeries Technology Products And Strategies Private Limited (i) | ||||||||||||||||
18
| September 30, | March 31, | |||||||
| 2024 | 2024 | |||||||
| Accounts payable | ||||||||
| Aeries Technology Products And Strategies Private Limited (i) | $ | $ | ||||||
| Accounts receivable | ||||||||
| Aark II Pte Limited (a) | ||||||||
| Aeries Financial Technologies Private Limited (b) | ||||||||
| Bhanix Finance And Investment Limited (b) | ||||||||
| TSLC Pte Limited (a) | ||||||||
| 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) | ||||||||