UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38474

Jerash Holdings (US), Inc.

(Exact name of registrant as specified in its charter)

Delaware		81-4701719
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

277 Fairfield Road, Suite 338

Fairfield, New Jersey 07004

(Address of principal executive offices) (Zip Code)

(201) 285-7973

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		JRSH		The Nasdaq Stock Market LLC

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 of 1934 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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 the 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	☐
Non-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 ☐ No ☒

As of February 10, 2026, there were 12,699,940 shares of common stock, par value $0.001 per share, outstanding.

Jerash Holdings (US), Inc.

Form 10-Q

For the Quarterly Period Ended December 31, 2025

Contents

Part I	Financial Information	1

Item 1	Financial Statements	1

	Condensed Consolidated Balance Sheets as of December 31, 2025 (Unaudited) and March 31, 2025	1

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended December 31, 2025 and 2024	2

	Unaudited Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended December 31, 2025 and 2024	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2025 and 2024	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4	Controls and Procedures	33

Part II	Other Information	34

Item 1	Legal Proceedings	34

Item 1A	Risk Factors	34

Item 2	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	34

Item 3	Defaults Upon Senior Securities	34

Item 4	Mine Safety Disclosures	34

Item 5	Other Information	34

Item 6	Exhibits	35

Signatures		36

JERASH HOLDINGS (US), INC.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

JERASH HOLDINGS (US), INC.,

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2025			March 31, 2025
	(Unaudited)
ASSETS
Current Assets:
Cash	$	11,454,016		$	13,346,791
Accounts receivable, net		7,831,553			3,076,074
Inventories		26,030,818			27,704,829
Prepaid expenses and other current assets		3,360,827			3,648,321
Advances to suppliers, net		8,092,421			6,644,194
Total Current Assets		56,769,635			54,420,209

Restricted cash - non-current		1,701,752			1,717,248
Long-term deposits		604,511			464,934
Property, plant, and equipment, net		23,995,370			25,023,681
Goodwill		499,282			499,282
Operating lease right of use assets		644,380			850,172
Total Assets	$	84,214,930		$	82,975,526
LIABILITIES AND EQUITY

Current Liabilities:
Credit facilities	$	9,339,758		$	4,512,462
Accounts payable		3,587,871			6,507,308
Accrued expenses		3,963,303			4,342,436
Income tax payable - current		1,124,150			1,305,386
Uncertain tax provision		-			175,290
Other payables		1,888,950			2,149,185
Deferred revenue		294,616			487,004
Operating lease liabilities - current		180,040			339,699
Total Current Liabilities		20,378,688			19,818,770

Deferred tax liabilities, net		120			120
Operating lease liabilities - non-current		184,914			287,527
Total Liabilities		20,563,722			20,106,417

Commitments and Contingencies (Note 16)

Equity
Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding	$	-		$	-
Common stock, $0.001 par value; 30,000,000 shares authorized; 12,939,418 shares issued; 12,699,940 shares outstanding as of December 31, 2025 and March 31, 2025, respectively		12,939			12,939
Additional paid-in capital		26,355,155			25,674,835
Treasury stock, 239,478 shares		(1,169,046	)		(1,169,046	)
Statutory reserve		413,821			413,821
Retained earnings		38,442,766			38,396,901
Accumulated other comprehensive loss		(465,745	)		(513,122	)
Total Jerash Holdings (US), Inc. Stockholders’ Equity		63,589,890			62,816,328

Noncontrolling interest		61,318			52,781
Total Equity		63,651,208			62,869,109

Total Liabilities and Equity	$	84,214,930		$	82,975,526

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

JERASH HOLDINGS (US), INC.,

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2025			2024			2025			2024

Revenue, net	$	41,769,186		$	35,384,737		$	123,367,028		$	116,560,580
Cost of goods sold		34,720,025			30,001,947			103,939,307			99,480,036
Gross Profit		7,049,161			5,382,790			19,427,721			17,080,544

Selling, general, and administrative expenses		4,877,501			4,200,975			14,756,182			14,650,105
Stock-based compensation expenses		228,825			474,088			680,320			1,417,111
Total Operating Expenses		5,106,326			4,675,063			15,436,502			16,067,216

Income from Operations		1,942,835			707,727			3,991,219			1,013,328

Other Income (Expenses):
Interest expenses		(393,190	)		(364,939	)		(1,242,520	)		(1,348,291	)
Other (expenses) income, net		(25,250	)		113,240			61,217			306,441
Total other expenses, net		(418,440	)		(251,699	)		(1,181,303	)		(1,041,850	)

Net income (loss) before provision for income taxes		1,524,395			456,028			2,809,916			(28,522	)

Income tax expenses		367,935			449,714			850,523			667,312

Net income (loss)		1,156,460			6,314			1,959,393			(695,834	)

Net (loss) income attributable to noncontrolling interest		(14,115	)		12,120			8,537			(100	)
Net income (loss) attributable to Jerash Holdings (US), Inc.’s Common Stockholders	$	1,170,575		$	(5,806	)	$	1,950,856		$	(695,734	)

Net income (loss)	$	1,156,460		$	6,314		$	1,959,393		$	(695,834	)
Other Comprehensive Income (Loss):
Foreign currency translation income (loss)		55,028			(140,969	)		47,377			(124,473	)
Total Comprehensive Income (Loss)		1,211,488			(134,655	)		2,006,770			(820,307	)
Comprehensive (loss) income attributable to noncontrolling interest		(14,115	)		12,120			8,537			(100	)
Comprehensive Income (Loss) Attributable to Jerash Holdings (US), Inc.’s Common Stockholders	$	1,225,603		$	(146,775	)	$	1,998,233		$	(820,207	)

Earnings (Loss) Per Share Attributable to Common Stockholders:
Basic and diluted	$	0.09		$	(0.00	)	$	0.15		$	(0.06	)

Weighted Average Number of Shares
Basic		12,699,940			12,294,840			12,699,940			12,294,840
Diluted		13,221,380			12,294,840			13,158,039			12,294,840

Dividend per share	$	0.05		$	0.05		$	0.15		$	0.15

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

JERASH HOLDINGS (US), INC.,

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024

	Preferred Stock				Common Stock				Additional Paid-in		Treasury			Statutory		Retained			Accumulated Other Comprehensive			Noncontrolling			Total
	Shares		Amount		Shares		Amount		Capital		Stock			Reserve		Earnings			Income (Loss)			interest			Equity
Balance at March 31, 2024		-	$	-		12,534,318	$	12,534	$	23,917,094	$	(1,169,046	)	$	413,821	$	41,704,238		$	(492,319	)	$	44,341		$	64,430,663

Stock-based compensation expense for the restricted stock units issued under stock incentive plan		-		-		-		-		1,417,111		-			-		-			-			-			1,417,111
Net loss		-		-		-		-		-		-			-		(695,734	)		-			(100	)		(695,834	)
Dividend payments		-		-		-		-		-		-			-		(1,844,226	)		-			-			(1,844,226	)
Foreign currency translation loss		-		-		-		-		-		-			-		-			(124,473	)		-			(124,473	)
Balance at December 31, 2024 (unaudited)		-	$	-		12,534,318	$	12,534	$	25,334,205	$	(1,169,046	)	$	413,821	$	39,164,278		$	(616,792	)	$	44,241		$	63,183,241

Balance at March 31, 2025		-	$	-		12,939,418	$	12,939	$	25,674,835	$	(1,169,046	)	$	413,821	$	38,396,901		$	(513,122	)	$	52,781		$	62,869,109

Stock-based compensation expense for the restricted stock units issued under stock incentive plan		-		-		-		-		680,320		-			-		-			-			-			680,320
Net income		-		-		-		-		-		-			-		1,950,856			-			8,537			1,959,393
Dividend payments		-		-		-		-		-		-			-		(1,904,991	)		-			-			(1,904,991	)
Foreign currency translation income		-		-		-		-		-		-			-		-			47,377			-			47,377
Balance at December 31, 2025 (unaudited)		-	$	-		12,939,418	$	12,939	$	26,355,155	$	(1,169,046	)	$	413,821	$	38,442,766		$	(465,745	)	$	61,318		$	63,651,208

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2025 AND 2024 (UNAUDITED)

									Additional										Accumulated Other
	Preferred Stock				Common Stock				Paid-in		Treasury			Statutory		Retained			Comprehensive			Noncontrolling			Total
	Shares		Amount		Shares		Amount		Capital		Stock			Reserve		Earnings			Income (Loss)			interest			Equity
Balance at September 30, 2024 (unaudited)		-	$	-		12,534,318	$	12,534	$	24,860,117		(1,169,046	)	$	413,821	$	39,784,826		$	(475,823	)	$	32,121		$	63,458,550

Stock-based compensation expense for the restricted stock units issued under stock incentive plan		-		-		-		-		474,088		-			-		-			-			-			474,088
Net (loss) income		-		-		-		-		-		-			-		(5,806	)		-			12,120			6,314
Dividend payment		-		-		-		-		-		-			-		(614,742	)		-			-			(614,742	)
Foreign currency translation loss		-		-		-		-		-		-			-		-			(140,969	)		-			(140,969	)
Balance at December 31, 2024 (unaudited)		-	$	-		12,534,318	$	12,534	$	25,334,205	$	(1,169,046	)	$	413,821	$	39,164,278		$	(616,792	)	$	44,241		$	63,183,241

Balance at September 30, 2025 (unaudited)		-	$	-		12,939,418	$	12,939	$	26,126,330	$	(1,169,046	)	$	413,821	$	37,907,188		$	(520,773	)	$	75,433		$	62,845,892

Stock-based compensation expense for the restricted stock units issued under stock incentive plan		-		-		-		-		228,825		-			-		-			-			-			228,825
Net income (loss)		-		-		-		-		-		-			-		1,170,575			-			(14,115	)		1,156,460
Dividend payment		-		-		-		-		-		-			-		(634,997	)		-			-			(634,997	)
Foreign currency translation income		-		-		-		-		-		-			-		-			55,028			-			55,028
Balance at December 31, 2025 (unaudited)		-	$	-		12,939,418	$	12,939	$	26,355,155	$	(1,169,046	)	$	413,821	$	38,442,766		$	(465,745	)	$	61,318		$	63,651,208

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

JERASH HOLDINGS (US), INC.,

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended December 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	1,959,393		$	(695,834	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		2,274,388			1,968,992
Stock-based compensation expenses		680,320			1,417,111
Credit loss recovery, net		-			(17,054	)
Amortization of operating lease right-of-use assets		451,890			447,646
Uncertain tax provision		-			(273,582	)

Changes in operating assets:
Accounts receivable		(4,755,479	)		(1,803,392	)
Inventories		1,674,011			8,123,439
Prepaid expenses and other current assets		287,497			(930,084	)
Advances to suppliers		(1,448,228	)		(4,776,571	)
Changes in operating liabilities:
Accounts payable		(2,919,438	)		(2,452,154	)
Accrued expenses		(379,132	)		(335,251	)
Other payables		(260,235	)		(408,900	)
Deferred revenue		(192,388	)		48,442
Operating lease liabilities		(508,370	)		(505,317	)
Income tax payable		(355,724	)		(388,766	)
Net cash used in operating activities		(3,491,495	)		(581,275	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant, and equipment		(936,444	)		(491,676	)
Payments for construction of properties		-			(585,715	)
Payment for long-term deposits		(435,650	)		(594,442	)
Net cash used in investing activities		(1,372,094	)		(1,671,833	)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments		(1,904,991	)		(1,844,226	)
Repayment from short-term loan		(16,118,301	)		(9,288,656	)
Proceeds from short-term loan		20,945,597			14,256,600
Net cash provided by financing activities		2,922,305			3,123,718

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH		33,013			(124,559	)

NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH		(1,908,271	)		746,051

CASH AND RESTRICTED CASH, BEGINNING OF THE PERIOD		15,064,039			14,036,867

CASH AND RESTRICTED CASH, END OF THE PERIOD	$	13,155,768		$	14,782,918

CASH AND RESTRICTED CASH, END OF THE PERIOD	$	13,155,768		$	14,782,918
LESS: NON-CURRENT RESTRICTED CASH		1,701,752			1,563,809
CASH, END OF THE PERIOD	$	11,454,016		$	13,219,109

Supplemental disclosure information:
Cash paid for interest	$	1,242,520		$	1,348,291
Income tax paid	$	1,214,074		$	1,329,150

Non-cash investing and financing activities
Equipment obtained by utilizing long-term deposit	$	296,099		$	289,451
Operating lease right of use assets obtained in exchange for operating lease obligations	$	242,493		$	186,726

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Jerash Holdings (US), Inc. (“Jerash Holdings”) was incorporated under the laws of the State of Delaware on January 20, 2016. Jerash Holdings is a holding company with no operations. Jerash Holdings and its subsidiaries are herein collectively referred to as the “Company.”

Jerash Garments and Fashions Manufacturing Company Limited (“Jerash Garments”) is a wholly owned subsidiary of Jerash Holdings and was established in Amman, the Hashemite Kingdom of Jordan (“Jordan”), as a limited liability company on November 26, 2000 with a declared capital of 150,000 Jordanian Dinar (“JOD”) (approximately US$212,000).

Jerash for Industrial Embroidery Company (“Jerash Embroidery”) and Chinese Garments and Fashions Manufacturing Company Limited (“Chinese Garments”) were both established in Amman, Jordan, as limited liability companies on March 11, 2013 and June 13, 2013, respectively, each with a declared capital of JOD 50,000 (approximately US$71,000). Jerash Embroidery and Chinese Garments are wholly owned subsidiaries of Jerash Garments.

Al-Mutafaweq Co. for Garments Manufacturing Ltd. (“Paramount”) is a contract garment manufacturer that was established in Amman, Jordan, as a limited liability company on October 24, 2004 with a declared capital of JOD 100,000 (approximately US$141,000). On December 11, 2018, Jerash Garments and the sole shareholder of Paramount entered into an agreement pursuant to which Jerash Garments acquired all of the outstanding shares of stock of Paramount. Jerash Garments assumed ownership of all of the machinery and equipment owned by Paramount. Paramount had no other significant assets or liabilities and no operating activities or employees at the time of this acquisition, so this transaction was accounted for as an asset acquisition. As of June 18, 2019, Paramount became a subsidiary of Jerash Garments.

Jerash The First for Medical Supplies Manufacturing Company Limited (“Jerash The First”) was established in Amman, Jordan, as a limited liability company on July 6, 2020, with a registered capital of JOD 150,000 (approximately US$212,000). Jerash The First is engaged in the production of medical supplies in Jordan and is a wholly owned subsidiary of Jerash Garments.

Mustafa and Kamal Ashraf Trading Company (Jordan) for the Manufacture of Ready-Make Clothes LLC (“MK Garments”) is a garment manufacturer that was established in Amman, Jordan, as a limited liability company on January 23, 2003 with a declared capital of JOD 100,000 (approximately US$141,000). On June 24, 2021, Jerash Garments and the sole shareholder of MK Garments entered into an agreement, pursuant to which Jerash Garments acquired all of the outstanding stock of MK Garments. As of October 7, 2021, MK Garments became a subsidiary of Jerash Garments.

Kawkab Venus Dowalyah Lisenaet Albesah (“Kawkab Venus”) was established in Amman, Jordan, as a limited liability company on January 15, 2015 with a declared capital of JOD 50,000 (approximately US$71,000). It holds land with factory premises, which are leased to MK Garments. On July 14, 2021, Jerash Garments and the sole shareholder of Kawkab Venus entered into an agreement, pursuant to which Jerash Garments acquired all of the outstanding stock of Kawkab Venus. Apart from the land and factory premises, Kawkab Venus had no other significant assets or liabilities and no operation activities or employees at the time of acquisition, so the acquisition was accounted for as an asset acquisition. As of August 21, 2022, Kawkab Venus became a subsidiary of Jerash Garments.

Treasure Success International Limited (“Treasure Success”) was organized on July 5, 2016 in Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong” or “HK”), as a limited liability company for the primary purpose of employing staff from the People’s Republic of China (“China”) to support Jerash Garments’ operations and is a wholly owned subsidiary of Jerash Holdings.

Ever Winland Limited (“Ever Winland”) was organized in Hong Kong, as a limited liability company. It holds office premises, which are leased to Treasure Success. On June 22, 2022, Treasure Success and the shareholders of Ever Winland entered into an agreement, pursuant to which Treasure Success acquired all of the outstanding stock of Ever Winland. Apart from the office premises used by Treasure Success, Ever Winland had no other significant assets or liabilities and no operating activities or employees at the time of this acquisition, so this transaction was accounted for as an asset acquisition. As of August 29, 2022, Ever Winland became a subsidiary of Treasure Success.

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

J&B International Limited (“J&B”) is a joint venture company established in Hong Kong on January 10, 2023. On March 20, 2023, Treasure Success and P. T. Eratex (Hong Kong) Limited (“Eratex”) entered into a Joint Venture and Shareholders’ Agreement, pursuant to which Treasure Success acquired 51% of the equity interests in J&B on April 11, 2023. The declared capital is 500,000 Hong Kong Dollars (“HKD”) (approximately $64,000). J&B engages in the garment trading and manufacturing business for orders from customers. On June 16, 2025, Treasure Success and Eratex attended a meeting of shareholders of J&B and approved the termination of J&B’s business operations and the dissolution of J&B, which is expected to complete in April 2027.

Jerash Newtech (Hong Kong) Holdings Limited (“Jerash Newtech”) is a joint venture company established in Hong Kong on November 3, 2023. On October 10, 2023, Treasure Success and Newtech Textile (HK) Limited entered into a Joint Venture and Shareholder’s Agreement to establish a new joint venture for the establishment of a fabric facility in Jordan. On November 3, 2023, Jerash Newtech was established according to the aforementioned Joint Venture and Shareholder’s Agreement. Treasure Success owns 51% of the equity interests in Jerash Newtech. The declared capital of Jerash Newtech is US$100,000. On August 20, 2025, Treasure Success and Newtech Textile (HK) Limited attended a meeting of shareholders of Jerash Newtech and agreed to and authorized an application to be made for the deregistration of Jerash Newtech.

Jiangmen Treasure Success Business Consultancy Company Limited (“Jiangmen Treasure Success”) was organized on August 28, 2019 under the laws of China in Jiangmen City of Guangdong Province in China with a total registered capital of HKD15 million (approximately $1.9 million) to provide support in sales and marketing, sample development, merchandising, procurement, and other areas. Treasure Success owns 100% of the equity interests in Jiangmen Treasure Success.

Jerash Supplies, LLC (“Jerash Supplies”) was formed under the laws of the State of Delaware on November 20, 2020. Jerash Supplies is engaged in the trading of personal protective equipment products and is a wholly owned subsidiary of Jerash Holdings.

The Company is engaged primarily in the manufacturing and exporting of customized, ready-made sportswear and outerwear produced in its facilities in Jordan and sold in the United States, Jordan, and other countries.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the Company’s unaudited condensed consolidated financial statements. The consolidated balance sheet as of March 31, 2025 has been derived from the audited consolidated balance sheet at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, as filed with the U.S. Securities and Exchange Commission (the “SEC”). Operating results for the three and nine months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the year ending March 31, 2026.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the financial statements of Jerash Holdings, its wholly owned subsidiaries, and two non-wholly owned subsidiaries.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Principles of Consolidation (continued)

Non-wholly owned subsidiaries are entities that the reporting parent entity does not own equity interests in full. Noncontrolling interest is evaluated with a depiction of the portion of a non-wholly owned subsidiary’s net assets, net income, and net comprehensive income that is attributable to holders of equity-classified ownership interests other than the reporting parent entity. As mentioned in Note 1, the Company holds 51% of equity interest in J&B and Jerash Newtech through its wholly owned subsidiary, Treasure Success. The Company consolidates J&B and Jerash Newtech and reports noncontrolling interest to reflect the portion of their equity that is not attributable to the Company as the controlling shareholder. As of December 31, 2025 and 2024, noncontrolling interest was $61,318 and $44,241, respectively.

All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash

The Company’s cash consists of cash on hand and cash deposited in financial institutions. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the original date of purchase to be cash equivalents. As of December 31, 2025 and March 31, 2025, the Company had no cash equivalents.

Restricted Cash

Restricted cash consists of cash used as security deposits to obtain credit facilities from a bank and to secure customs clearance, labor import requirements, and other requirements of local regulations. The Company is required to keep certain amounts on deposit that are subject to withdrawal restrictions. These security deposits at the bank are refundable only when the bank facilities are terminated. The restricted cash is classified as a current asset if the Company intends to terminate these bank facilities within one year, and as a non-current asset if otherwise.

Accounts Receivable, Net

Accounts receivable are recognized and carried at the original invoiced amount less an estimated allowance for credit loss. The Company usually grants extended payment terms to customers with good credit standing and determines the adequacy of credit losses based on the historical level of credit loss, current economic trends, and reasonable and supportable forecasts that affect the collectability of the future cash flows.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories include the cost of raw materials, freight, direct labor, and related production overhead. The cost of inventories is determined using the First-in, First-out method. The Company periodically reviews its inventories for excess or slow-moving items and makes provisions as necessary to properly reflect inventory value.

Advances to Suppliers, Net

Advances to suppliers consists of balances paid to suppliers for services or materials purchased that have not been provided or received. Advances to suppliers for services and materials is short-term in nature. Advances to suppliers is reviewed periodically to determine whether its carrying value has become impaired. The Company considers the assets to be impaired if the performance by the suppliers becomes doubtful. At each reporting date, the Company generally determines the adequacy of allowance for impairment by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Credit Loss

The Company maintains expected loss methodology that is referred to as the current expected credit loss methodology. The expected credit loss impairment model requires the entity to recognize its estimate of expected credit losses for affected financial assets using an allowance for credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The Company’s accounts receivable and other receivables, which are included in prepaid expenses and other current assets line items in the consolidated balance sheets, are within the scope of ASC Topic 326. The Company measures expected credit losses of account receivables and other receivables, on a collective basis when similar risk characteristics exist. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the receivables, creditworthiness of the customers and other debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and other debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.

Expected credit losses are included in general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Property, Plant, and Equipment, Net

Property, plant, and equipment are recorded at cost, reduced by accumulated depreciation and amortization. Depreciation and amortization expense related to property, plant, and equipment is computed using the straight-line method based on the estimated useful lives of the assets, or in the case of leasehold improvements, the shorter of the initial lease term or the estimated useful life of the improvements. The useful life and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant, and equipment. The estimated useful lives of depreciation and amortization of the principal classes of assets are as follows:

		Useful life
Land		Infinite
Property and buildings		15-25 years
Equipment and machinery		3-5 years
Office and electronic equipment		3-5 years
Automobiles		5 years
Leasehold improvements		Lesser of useful life and lease term

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation or amortization of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-Lived Assets

The Company assesses its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Factors that may indicate potential impairment include a significant underperformance relative to the historical or projected future operating results or a significant negative industry or economic trend. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by that asset. If impairment is indicated, a loss is recognized for any excess of the carrying value over the estimated fair value of the asset. The fair value is estimated based on the discounted future cash flows or comparable market values, if available. The Company did not record any impairment loss during the three and nine months ended December 31, 2025 and 2024.

Goodwill

Goodwill represents the excess purchase price paid over the fair value of the net assets of acquired companies. Goodwill is not amortized. As of December 31, 2025 and March 31, 2025, the carrying amount of goodwill was $499,282. Goodwill is tested for impairment on an annual basis, or in interim periods if indicators of potential impairment exist, based on the one reporting unit. The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. When performing the quantitative impairment test, the Company compares the fair value of its only reporting unit with the carrying amounts. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company concluded that no impairment of its goodwill occurred for the three and nine months ended December 31, 2025 and 2024.

Revenue Recognition

Substantially all of the Company’s revenue is derived from product sales, which consist of sales of the Company’s customized ready-made outerwear for large brand-name retailers. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year. Virtually all of the Company’s contracts are short-term. The Company has minimal incremental costs of obtaining a contract, which are expensed when incurred. The Company recognizes revenue for the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due from customers within 14 to 150 days of the invoice date. The contracts do not have significant financing components. Shipping and handling costs associated with outbound freight from Jordan export dock are not an obligation of the Company. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have been immaterial.

The Company also derives revenue from rendering cutting and making services to other apparel vendors who subcontract orders to the Company. Revenue is recognized when the service is rendered. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company’s historical experience, complete satisfaction of the performance obligation, and the Company’s best judgment at the time the estimate is made. Historically, sales returns have not significantly impacted the Company’s revenue.

The Company applies the “distinct” guidance in ASC 606-10-25-19 through ASC 606-10-25-22 to identify the specified goods or services. The Company evaluates the indicators in ASC 606-10-55-39 along with all relevant facts and circumstances in relation to our assessment. As the Company is primarily responsible for fulfilling the promise to provide the specified good and service; the Company has inventory risk before the specified good or service has been transferred to a customer, or after transfer of control to the customer; and the Company has discretion in establishing the prices for the specified goods or service, the Company concluded that it is the principal of the sales transactions and revenue should be recognized on a gross basis.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition (continued)

The Company does not have any contract assets since the Company recognizes accounts receivable and revenue for the transfer of promised goods to customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company has an unconditional right to consideration when the Company has satisfied its performance obligation and payment to the accounts receivable from customers is not contingent on a future event. The Company had contract liabilities of $294,616 and $487,004 as of December 31, 2025 and March 31, 2025, respectively. As of December 31, 2025, $294,616 deferred revenue was expected to be recognized within fiscal 2026.

Segment

The Company has one revenue generating reportable geographic segment under ASC Topic 280 “Segment Reporting” and derives its sales primarily from its sales of customized ready-made outerwear. Chief Operational Decision Makers (“CODM”), including Chief Executive Officer and Chief Financial Officer, are making operating decisions and assessing performance as the source for determining the Company’s reportable segments. CODM reviews operation results on the consolidated revenue, gross profit, selling, general, and administrative expenses, interest expenses, stock-based compensation expense, and net income or loss regularly. In selling, general, and administration expense, CODM reviews staff payroll and other related expenses, inventory export and related costs, depreciation, and others major items. The Company believes disaggregation of revenue by geographic region best depicts the nature, amount, timing, and uncertainty of its revenue and cash flows (see “Note 15—Segment Reporting”).

Shipping and Handling

Proceeds collected from customers for shipping and handling costs are included in revenue. Shipping and handling costs are expensed as incurred and are included in operating expenses, as a part of selling, general, and administrative expenses. Total shipping and handling expenses were $640,252 and $557,344 for the three months ended December 31, 2025 and 2024, respectively. Total shipping and handling expenses were $2,152,986 and $2,528,487 for the nine months ended December 31, 2025 and 2024, respectively.

Income and Sales Taxes

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled. Jerash Holdings and Jerash Supplies are incorporated/formed in the State of Delaware and are subject to federal income tax in the United States of America. Treasure Success, Ever Winland, J&B, and Jerash Newtech are registered in Hong Kong and are subject to Profits Tax in Hong Kong. Jiangmen Treasure Success is incorporated in China and is subject to corporate income tax in China. Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are subject to income tax in Jordan, unless an exemption is granted. In accordance with Development Zone law, Jerash Garments and its subsidiaries were subject to corporate income tax in Jordan at a rate of 20% plus a 1% social contribution starting effective from January 1, 2024. Effective from October 1, 2025, Jerash Garments has been granted tax concession at a corporate income tax rate 10% plus a 1% social contribution in accordance with the Jordanian Income Tax Law.

Jerash Garments and its subsidiaries are subject to local sales tax of 16% on purchases. Jerash Garments was granted a sales tax exemption from the Jordanian Investment Commission for the period from June 1, 2015 to June 1, 2018 that allowed Jerash Garments to make purchases with no sales tax charge. The exemption has been extended to February 5, 2026 and further extension is being processed.

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” which requires the Company to use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forwards. Under this accounting standard, any changes in tax rates and the impact on deferred income taxes are recognized in the unaudited condensed consolidated statements of operations and comprehensive income (loss) in the period when the new rates are enacted. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income and Sales Taxes (continued)

The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal, and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2025 and March 31, 2025, uncertain tax provision was $nil and $175,290, respectively.

Foreign Currency Translation

The reporting currency of the Company is the U.S. dollar (“US$” or “$”). The Company uses JOD in Jordan companies, HKD in Treasure Success, Ever Winland, J&B, and Jerash Newtech, and Chinese Yuan (“CNY”) in Jiangmen Treasure Success as the functional currency of each above-mentioned entity. The assets and liabilities of the Company have been translated into US$ using the exchange rates in effect at the balance sheet date, equity accounts have been translated at historical rates, and revenue and expenses have been translated into US$ using average exchange rates in effect during the reporting period. Cash flows are also translated at average translation rates for the periods. Therefore, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income or loss. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the unaudited condensed consolidated statements of operations and comprehensive income (loss) as incurred, and the total amount of transaction gains and losses were immaterial for the three and nine months ended December 31, 2025 and 2024.

The value of JOD against US$ and other currencies may fluctuate and is affected by, among other things, changes in Jordan’s political and economic conditions. Any significant revaluation of JOD, HKD, and CNY may materially affect the Company’s financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31, 2025	March 31, 2025
Period-end spot rate	US$1=JOD0.7090	US$1=JOD0.7090
	US$1=HKD7.8002	US$1=HKD7.7790
	US$1=CNY6.9949	US$1=CNY7.2572
Average rate	US$1=JOD0.7090	US$1=JOD0.7090
	US$1=HKD7.8002	US$1=HKD7.7925
	US$1=CNY7.1589	US$1=CNY7.2150

Stock-Based Compensation

The Company measures compensation expense for stock-based awards based on the awards’ initial grant-date fair value. The estimated grant-date fair value of the award is recognized as expense over the requisite service period using the straight-line method.

The Company estimates the fair value of stock options using a Black-Scholes model. This model is affected by the Company’s stock price on the date of the grant as well as assumptions regarding a number of variables. These variables include the expected term of the option, expected risk-free rates of return, the expected volatility of the Company’s common stock, and expected dividend yield, each of which is more fully described below. The assumptions for the expected term and expected volatility are the two assumptions that significantly affect the grant date fair value.

●

Expected Term: the expected term of a warrant or a stock option is the period of time that the warrant or a stock option is expected to be outstanding.

●

Risk-free Interest Rate: the Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield at the grant date of the U.S. Treasury zero-coupon issued with an equivalent term to the stock-based award being valued. Where the expected term of a stock-based award does not correspond with the term for which a zero-coupon interest rate is quoted, the Company uses the nearest interest rate from the available maturities.

●

Expected Stock Price Volatility: the Company utilizes the expected volatility of the Company’s common stock over the same period of time as the life of the warrant or stock option. When the Company’s own stock volatility information is unavailable for such period of time, the Company utilizes comparable public company volatility.

●

Dividend Yield: Stock-based compensation awards granted prior to November 2018 assumed no dividend yield, while any subsequent stock-based compensation awards will be valued using the anticipated dividend yield.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings or Loss per Share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, warrants, and restricted stock units (“RSUs”)) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS (See “Note 14–Earnings (Loss) per Share”).

Comprehensive Income or Loss

Comprehensive income or loss consists of two components, net income or loss and other comprehensive income or loss. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in JOD or HKD or CNY to US$ is reported in other comprehensive income or loss in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Fair Value of Financial Instruments

ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 - Quoted prices in active markets for identical assets and liabilities.

●

Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash, accounts receivable, other current assets, credit facilities, accounts payable, accrued expenses, income tax payables, other payables and operating lease liabilities to approximate the fair value of the respective assets and liabilities at December 31, 2025 and March 31, 2025 based upon the short-term nature of these assets and liabilities.

Concentrations and Credit Risk

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of December 31, 2025 and March 31, 2025, respectively, $5,756,905 and $4,883,906 of the Company’s cash were on deposit at financial institutions in Jordan, where a maximum amount of JOD 50,000 (approximately $71,000) bank deposits are insured by each member bank under Jordan Deposit Insurance Corporation Law in the event of bank failure. As of December 31, 2025 and March 31, 2025, respectively, $43,297 and $246,394 of the Company’s cash were on deposit at financial institutions in China. Cash maintained in banks within China of less than CNY 0.5 million (equivalent to approximately $71,480) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the People’s Republic of China. As of December 31, 2025 and March 31, 2025, respectively, $7,211,678 and $9,871,227 of the Company’s cash were on deposit at financial institutions in Hong Kong, which are insured by the Hong Kong Deposit Protection Board subject to certain limitations. While management believes that these financial institutions are of high credit quality, it also continually monitors their creditworthiness. As of December 31, 2025 and March 31, 2025, respectively, $73,997 and $48,274 of the Company’s cash were on deposit in the United States and are insured by the Federal Deposit Insurance Corporation up to $250,000.

Accounts receivable are typically unsecured and derived from revenue earned from customers, and therefore are exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentrations and Credit Risk (continued)

Customer and vendor concentration risk

The Company’s sales are made primarily in the United States. Its operating results could be adversely affected by U.S. government policies on importing business, foreign exchange rate fluctuations, and changes in local market conditions. The Company has a concentration of its revenue and purchases with specific customers and suppliers. For the three and nine months ended December 31, 2025, two end-customers accounted for 46% and 16%, and 57% and 13% of the Company’s total revenue, respectively. For the three months ended December 31, 2024, three end-customers accounted for 58%, 13%, and 10% of the Company’s total revenue, respectively. For the nine months ended December 31, 2024, two end-customers accounted for 67% and 11% of the Company’s total revenue, respectively. As of December 31, 2025, three end-customers accounted for 36%, 25% and 19%, respectively, of the Company’s total accounts receivable balance. As of March 31, 2025, four end-customers accounted for 24%, 23%, 16%, and 11%, respectively, of the Company’s total accounts receivable balance.

For the three months ended December 31, 2025, the Company purchased approximately 16% and 10% of its total purchase in garments and raw materials from two major suppliers, respectively. For the nine months ended December 31, 2025, the Company purchased approximately 14% of its total purchase in garments and raw materials from one major supplier. For the three and nine months ended December 31, 2024, the Company purchased approximately 14% and 12% of its total purchase in garments and raw materials from one major supplier, respectively. As of December 31, 2025, accounts payable to the Company’s three major suppliers accounted for 16%, 14%, and 12% of the total accounts payable balance, respectively. As of March 31, 2025, accounts payable to the Company’s three major suppliers accounted for 24%, 12%, and 11% of the total accounts payable balance, respectively.

Risks and Uncertainties

The principal operations of the Company are located in Jordan. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Jordan, as well as by the general state of the Jordanian economy. The Company’s operations in Jordan are subject to special considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic, and legal environment, foreign currency exchange, and the recent conflicts between Israel and Hamas and between Israel and Iran. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in Jordan. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.

Since the inception of the turmoil in the Middle East, the Company has been closely monitoring the situation and keeping its customers informed. Production is ongoing as usual, with no changes to customer orders or commitments, and the Company is currently mainly using the port in Aqaba, Jordan for import and export. In order to provide flexibility, the Company has also been using the Port of Jebel Ali in the United Arab Emirates as an alternative route for raw material import since December 2023. However, in the event of any potential impact on the ports, the Company has prepared a contingency plan, approved by its major customers, to temporarily relocate production to alternate regions.

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This update requires that at each interim and annual reporting period a report entity to disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions; (2) certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. In January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” This update clarifies that ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

NOTE 4 – ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following:

	As of December 31, 2025 (Unaudited)		As of March 31, 2025
Trade accounts receivable	$	7,831,553	$	3,076,074
Less: allowances for credit loss		-		-
Accounts receivable, net	$	7,831,553	$	3,076,074

NOTE 5 – INVENTORIES

Inventories consisted of the following:

	As of December 31, 2025 (Unaudited)		As of March 31, 2025
Raw materials	$	9,550,953	$	13,101,508
Work-in-progress		2,008,094		2,888,090
Finished goods		14,471,771		11,715,231
Total inventory	$	26,030,818	$	27,704,829

As of December 31, 2025 and March 31, 2025, the Company had $nil inventory valuation reserve as the Company arranged its inventory based on 99.4% and 98.2% with actual orders received, respectively. As of December 31, 2025 and March 31, 2025, 0.6% and 1.8% of inventories on hand associated with garment sample and personal protective equipment orders, respectively.

NOTE 6 – ADVANCES TO SUPPLIERS, NET

Advances to suppliers consisted of the following:

	As of December 31, 2025 (Unaudited)		As of March 31, 2025
Advances to suppliers	$	8,092,421	$	6,644,194
Less: allowances for impairment		-		-
Advances to suppliers, net	$	8,092,421	$	6,644,194

NOTE 7 – LEASES

The Company had 40 operating leases for manufacturing facilities, offices, and staff dormitories as of December 31, 2025. Some leases include one or more options to renew, which is typically at the Company’s sole discretion. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in measurement of the right of use (“ROU”) assets and lease liability. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.

All of the Company’s leases are classified as operating leases and primarily include office space and manufacturing facilities.

Supplemental balance sheet information related to operating leases was as follows:

	As of December 31, 2025 (Unaudited)		As of March 31, 2025
Operating lease right of use assets	$	644,380	$	850,172

Operating lease liabilities – current	$	180,040	$	339,699
Operating lease liabilities – non-current		184,914		287,527
Total operating lease liabilities	$	364,954	$	627,226

The weighted average remaining lease terms and discount rates for all of operating leases were as follows:

Remaining lease term and discount rate:

	For the period ended
	December 31, 2025 (Unaudited)			March 31, 2025
Weighted average remaining lease term (years)		1.7			1.6

Weighted average discount rate		6.25	%		6.25	%

During the three months ended December 31, 2025 and 2024, the Company incurred total operating lease expenses of $573,910 and $561,102, respectively. During the nine months ended December 31, 2025 and 2024, the Company incurred total operating lease expenses of $1,712,894 and $1,817,127, respectively.

The following is a schedule, by fiscal years, of maturities of lease liabilities as of December 31, 2025:

2026	$	127,840
2027		396,785
2028		98,150
2029		59,237
2030		-
Thereafter		-
Total lease payments		682,012
Less: imputed interest		(37,632	)
Less: prepayments		(279,426	)
Present value of lease liabilities	$	364,954

NOTE 8 – PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant, and equipment, net consisted of the following:

	As of December 31, 2025 (Unaudited)			As of March 31, 2025
Land	$	2,200,334		$	2,200,334
Property and buildings		21,167,432			21,158,457
Equipment and machinery		14,588,168			13,540,863
Office and electric equipment		1,541,077			1,484,093
Automobiles		1,416,995			1,382,946
Leasehold improvements		4,627,596			4,513,590
Subtotal		45,541,602			44,280,283
Less: Accumulated depreciation and amortization		(21,546,232	)		(19,256,602	)
Property, plant, and equipment, net	$	23,995,370		$	25,023,681

For the three months ended December 31, 2025 and 2024, depreciation and amortization expenses were $767,595 and $759,939, respectively. For the nine months ended December 31, 2025 and 2024, depreciation and amortization expenses were $2,274,388 and $1,968,992, respectively.

NOTE 9 – EQUITY

Preferred Stock

The Company has 500,000 shares of preferred stock, par value of $0.001 per share, authorized; none were issued and outstanding as of December 31, 2025 and March 31, 2025. The preferred stock can be issued by the board of directors of Jerash Holdings (the “Board of Directors”) in one or more classes or one or more series within any class, and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, rights, qualifications, limitations, or restrictions of such rights as the Board of Directors may determine from time to time.

Common Stock

The Company had 12,699,940 shares of common stock outstanding as of December 31, 2025 and March 31, 2025.

On February 9, 2023, the Board of Directors approved the grant of 405,800 RSU (as defined below) under the Plan (as defined below) to 37 executive officers and employees of the Company, with a two-year vesting period. 405,100 RSUs were vested and additional shares were issued as of March 31, 2025.

Statutory Reserve

In accordance with the corporate law in Jordan, Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are required to make appropriations to certain reserve funds, based on net income determined in accordance with generally accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be 10% of net income until the reserve is equal to 100% of the entity’s share capital. This reserve is not available for dividend distribution. In addition, PRC companies are required to set aside at least 10% of their after-tax net profits each year, if any, to fund the statutory reserves until the balance of the reserves reaches 50% of their registered capital. The statutory reserves are not distributable in the form of cash dividends to the Company and can be used to make up cumulative prior-year losses.

Dividends

During the nine months ended December 31, 2025, the Board of Directors declared a cash dividend of $0.05 per share of common stock on May 20, 2025, August 8, 2025, and November 7, 2025, respectively. The cash dividends of $634,997 each were paid in full on June 6, 2025, August 29, 2025 and November 26, 2025, respectively.

During the fiscal year ended March 31, 2025, the Board of Directors declared a cash dividend of $0.05 per share of common stock on February 5, 2025, November 8, 2024, August 5, 2024, and May 21, 2024, respectively. Four cash dividends of $614,742 each were paid in full on February 25, 2025, November 29, 2024, August 23, 2024, and June 7, 2024, respectively.

NOTE 10 – STOCK-BASED COMPENSATION

Stock Options

On March 21, 2018, the Board of Directors adopted the Jerash Holdings (US), Inc. 2018 Stock Incentive Plan (the “Plan”), pursuant to which the Company may grant various types of equity awards. 1,484,250 shares of common stock of the Company were reserved for issuance under the Plan. In addition, on July 19, 2019, the Board of Directors approved an amendment and restatement of the Plan, which was approved by the Company’s stockholders at its annual meeting of stockholders on September 16, 2019. The amended and restated Plan increased the number of shares reserved for issuance under the Plan by 300,000, to 1,784,250, among other changes. As of December 31, 2025, the Company had 121,310 shares remaining available for future issuance under the Plan.

All stock option activities are summarized as follows:

	Option to		Weighted Average
	Acquire Shares		Exercise Price
Stock options outstanding as of March 31, 2025		150,000	$	6.25
Granted		-		-
Exercised		-		-
Expired		-		-
Stock options outstanding as of December 31, 2025		150,000	$	6.25

All these outstanding options were fully vested and exercisable. As of December 31, 2025, there were 150,000 stock options outstanding. The weighted average remaining life of the options is 3.0 years.

Restricted Stock Units

On February 9, 2023, the Board of Directors approved the grant of 405,800 RSUs under the Plan to 37 executive officers and employees of the Company, with a two-year vesting period. 405,100 RSUs were vested and additional shares were issued as of March 31, 2025.

On March 25, 2024, the Board of Directors approved the grant of 915,040 RSUs under the Plan to 35 executive officers and employees of the Company, with a three-year vesting period. The fair value of these RSUs on March 25, 2024 was $2,745,120, based on the market price of the Company’s common stock as of the date of the grant. As of December 31, 2025, there were $1,114,280 unrecognized stock-based compensation expenses to be recognized through March 2027 and 907,840 RSUs remained outstanding.

RSU activities are summarized as follows:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
RSUs outstanding as of March 31, 2025		911,440		$	3.00
Granted		-			-
Vested		-			-
Forfeited		(3,600	)		3.00
RSUs outstanding as of December 31, 2025		907,840			3.00

Total expenses related to the RSUs issued were $228,825 and $474,088 for the three months ended December 31, 2025 and 2024, respectively. Total expenses related to the RSUs issued were $680,320 and $1,417,711 for the nine months ended December 31, 2025 and 2024, respectively.

NOTE 11 – RELATED PARTY TRANSACTIONS

The relationship and the nature of related party transactions are summarized as follow:

Name of Related Party	Relationship to the Company	Nature of Transactions

Yukwise Limited (“Yukwise”)	Wholly owned by the Company’s President, Chief Executive Officer, Chairman, and a significant stockholder	Consulting Services

Multi-Glory Corporation Limited (“Multi-Glory”)	Wholly owned by a significant stockholder	Consulting Services

Consulting agreements

On January 12, 2018, Treasure Success and Yukwise entered into a consulting agreement, pursuant to which Mr. Choi will serve as Chief Executive Officer and provide high-level advisory and general management services for $300,000 per annum. The agreement renews automatically for one-month terms. This agreement became effective as of January 1, 2018. Total consulting fees under this agreement were $75,000 and $225,000 for the three and nine months ended December 31, 2025 and 2024.

On January 16, 2018, Treasure Success and Multi-Glory entered into a consulting agreement, pursuant to which Multi-Glory will provide high-level advisory, marketing, and sales services to the Company for $300,000 per annum. The agreement renews automatically for one-month terms. The agreement became effective as of January 1, 2018. Total consulting fees under this agreement were $75,000 and $225,000 for the three and nine months ended December 31, 2025 and 2024.

NOTE 12 – CREDIT FACILITIES

Starting from May and October 2021, the Company has participated in a financing program with two customers, in which the Company may receive early payments for approved sales invoices submitted by the Company through the bank the customer cooperates with. In March 2024, the Company joined a supply chain financing program with one additional customer. For any early payments received, the Company is subject to an early payment charge imposed by the customer’s bank, for which the rate is based on Secured Overnight Financing Rate (“SOFR”) plus a spread. In certain scenarios, the Company submits the sales invoice and receives payments prior to the shipment of the relative products. In that case, instead of recording the cash receipts as a reduction to accounts receivables, the Company records the cash receipts as receipts in advance from a customer until products are entitled to transfer. The Company records the early payment charge in interest expenses on the unaudited condensed consolidated statements of operations and comprehensive income (loss). For the three months ended December 31, 2025 and 2024, the early payment charge was $293,715 and $281,256, respectively. For the nine months ended December 31, 2025 and 2024, the early payment charge was $1,020,224 and $1,159,307, respectively.

On January 12, 2022, DBS Bank (Hong Kong) Limited (“DBSHK”) offered to provide a banking facility of up to $5.0 million to Treasure Success pursuant to a facility letter dated January 12, 2022, which was amended pursuant to a facility letter dated January 4, 2024. Pursuant to the amended facility, DBSHK agreed to finance cargo receipt, trust receipt, account payable financing, and certain type of import and export invoice financing up to an aggregate of $5.0 million, with certain financial covenants. The DBSHK facility bears interest at 1.5% per annum over Hong Kong Interbank Offered Rate (“HIBOR”) for HKD bills and 1.1% to 1.3% per annum over DBSHK’s cost of funds for foreign currency bills. The facility is guaranteed by Jerash Holdings and became available to the Company on June 17, 2022.

As of December 31, 2025 and March 31, 2025, the Company had $4,527,694 and $4,512,462 outstanding under the DBSHK facility and the weighted average interest rate was 5.4% and 6.3%, respectively. The DBSHK facility is reviewed annually.

On July 31, 2025, Bank al Etihad offered to provide a credit facility of up to $6.0 million to Jerash Garments. Pursuant to the facility, Bank al Etihad agreed to finance import invoices of up to $6.0 million, with condition that such invoices are secured by letter of credit issued by customers. The facility bears an interest rate at the Prime Lending Rate announced by Bank al Etihad, currently 8% per annum. As of December 31, 2025, the Company had $4,812,064 outstanding under the Bank al Etihad facility. The Bank al Etihad facility is reviewed annually.

NOTE 13 – NONCONTROLLING INTEREST

On March 20, 2023, Treasure Success and P.T. Eratex (Hong Kong) Limited entered into a Joint Venture and Shareholders’ Agreement, pursuant to which Treasure Success and P.T Eratex (Hong Kong) Limited acquired 51% and 49% of the equity interest in J&B, respectively, on April 11, 2023.

On October 10, 2023, Treasure Success and Newtech Textile (HK) Limited entered into a Joint Venture and Shareholders’ Agreement, pursuant to which Treasure Success and Newtech Textile (HK) Limited acquired 51% and 49% of the equity interest in Jerash Newtech, respectively, on November 3, 2023.

For the three months ended December 31, 2025, the net income or (loss) generated by J&B and Jerash Newtech was $(27,236) and $(1,570), respectively. For the three months ended December 31, 2024, the net income or (loss) generated by J&B and Jerash Newtech was $25,018 and $(281) respectively.

For the nine months ended December 31, 2025, the net income or (loss) generated by J&B and Jerash Newtech was $21,094 and $(3,670), respectively. For the nine months ended December 31, 2024, the net income or (loss) generated by J&B and Jerash Newtech was $1,481 and $(1,683), respectively.

Noncontrolling interest as of December 31, 2025 in J&B and Jerash Newtech was $18,980 and $42,338, respectively.

On June 16, 2025, Treasure Success and P.T. Eratex (Hong Kong) Limited attended a meeting of shareholders of J&B and approved the termination of J&B’s business operations and the dissolution of J&B, which is expected to complete in April 2027.

On August 20, 2025, Treasure Success and Newtech Textile (HK) Limited attended a meeting of shareholders of Jerash Newtech and agreed to and authorized an application to be made for the deregistration of Jerash Newtech.

NOTE 14 – EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and nine months ended December 31, 2025 and 2024. As of December 31, 2025, 1,057,840 RSUs and stock options were outstanding. For the three and nine months ended December 31, 2025, stock options were excluded from the EPS calculation as the result would be anti-dilutive. For the three and nine months ended December 31, 2024, all RSUs and stock options were excluded from the EPS calculation as the result would be anti-dilutive.

	Three Months Ended December 31, (Unaudited)					Nine Months Ended December 31, (Unaudited)
	2025		2024			2025		2024
Numerator:
Net income (loss) attributable to Jerash Holdings (US), Inc.’s Common Stockholders	$	1,170,575	$	(5,806	)	$	1,950,856	$	(695,734	)

Denominator:
Denominator for basic earnings per share (weighted-average shares)		12,699,940		12,294,840			12,699,940		12,294,840
Dilutive securities – RSUs		521,440		-			458,099		-
Denominator for diluted earnings per share (adjusted weighted-average shares)		13,221,380		12,294,840			13,158,039		12,294,840
Basic and diluted earnings (loss) per share	$	0.09	$	(0.00	)	$	0.15	$	(0.06	)

NOTE 15 – SEGMENT REPORTING

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments, and major customers in financial statements for details on the Company’s business segments. The amendment of ASC 280 requires incremental disclosures in annual and interim periods to reportable segments and clarifies entities with a single reportable segment are also required to provide new disclosures in significant segment expenses, profit and loss, assets, and other segment items for better understanding company business activities and overall financial performance and assess potential future cash flow for the business. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. CODM, including Chief Executive Officer and Chief Financial Officer, reviews operation results on the consolidated revenue, gross profit, selling, general, and administrative expenses, and net income or loss. In selling, general, and administration expenses, CODM reviews staff payroll and other related expenses, inventory export and related costs, deprecation, and other major items. Based on CODM’s assessment, the Company has determined that it has only one operating segment as defined by amended ASC 280. The following table summarizes the operating results reviewed by CODM.

	For the Three Months Ended December 31, (Unaudited)					For the Nine Months Ended December 31, (Unaudited)
	2025			2024		2025		2024

Revenue	$	41,769,186		$	35,384,737	$	123,367,028	$	116,560,580
Less: Cost of goods sold		34,720,025			30,001,947		103,939,307		99,480,036
Gross profit		7,049,161			5,382,790		19,427,721		17,080,544

Other (expenses) income, net		(25,250	)		113,240		61,217		306,441

Expenses
Staff payroll and other related cost		2,141,266			1,891,317		6,416,064		6,105,408
Inventory export and related cost		640,252			557,344		2,152,986		2,528,487
Depreciation		114,948			115,330		347,433		346,899
Other selling, general, and administrative expenses		1,981,035			1,636,984		5,839,699		5,669,311
Total selling, general, and administrative expenses		4,877,501			4,200,975		14,756,182		14,650,105
Stock-based compensation expenses		228,825			474,088		680,320		1,417,111
Interest expenses		393,190			364,939		1,242,520		1,348,291
Total expenses		5,499,516			5,040,002		16,679,022		17,415,507

Net income (loss) before provision for income taxes	$	1,524,395		$	456,028	$	2,809,916	$	(28,522	)

Other selling, general, and administrative expenses include consultancy fees and director remunerations, audit and professional fees, staff travelling and transportation expenses, rental, and general office expenses.

NOTE 15 – SEGMENT REPORTING (continued)

The Company’s major product is outerwear. For the three months ended December 31, 2025 and 2024, outerwear accounted for approximately 90.8% and 91.4% of the total revenue, respectively. For the nine months ended December 31, 2025 and 2024, outerwear accounted for approximately 87.9% and 89.9% of the total revenue, respectively.

The following table summarizes sales by geographic areas for the three months ended December 31, 2025 and 2024, respectively.

	For the Three Months Ended December 31,
	(Unaudited)
	2025		2024
United States	$	35,427,880	$	31,062,118
China, including Hong Kong		2,984,320		2,311,556
Republic of Korea (“Korea”)		2,492,105		-
Jordan		724,027		929,623
Others		140,854		1,081,440
Total	$	41,769,186	$	35,384,737

The following table summarizes sales by geographic areas for the nine months ended December 31, 2025 and 2024, respectively.

	For the Nine Months Ended December 31,
	(Unaudited)
	2025		2024
United States	$	104,758,732	$	102,627,718
China, including Hong Kong		12,387,764		7,079,258
Korea		2,541,373		-
Jordan		1,653,933		2,659,342
Others		2,025,226		4,194,262
Total	$	123,367,028	$	116,560,580

As of December 31, 2025 and March 31, 2025, there were 75.5% and 23.6%, and 75.7% and 23.7%, of long-lived assets were located in Jordan and Hong Kong, respectively.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Commitments

On August 28, 2019, Jiangmen Treasure Success was incorporated under the laws of the People’s Republic of China in Jiangmen City, Guangdong Province, China, with a total registered capital of HKD 3 million (approximately $385,000). On December 9, 2020, shareholders of Jiangmen Treasure Success approved to increase its registered capital to HKD 15 million (approximately $1.9 million). The Company’s subsidiary, Treasure Success, as a shareholder of Jiangmen Treasure Success, is required to contribute HKD 15 million (approximately $1.9 million) as paid-in capital in exchange for 100% ownership interest in Jiangmen Treasure Success. As of December 31, 2025, Treasure Success had made capital contribution of HKD 10 million (approximately $1.3 million). Pursuant to the articles of incorporation of Jiangmen Treasure Success, Treasure Success is required to complete the remaining capital contribution before December 31, 2029 as Treasure Success’ available funds permit.

Contingencies

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would not have a material adverse impact on the Company’s consolidated financial position, results of operations, and cash flows.

NOTE 16 – COMMITMENTS AND CONTINGENCIES (continued)

In 2020, Jerash Garments had business with a personal protective equipment (“PPE”) customer (the “PPE Customer”) to produce PPE products for them. The PPE products were delivered in 2020 against some postdated checks issued by the PPE Customer. Delivery was also supported by delivery documents signed by persons of the PPE Customer for inspection and receiving. The PPE Customer declined to honor the postdated checks. Jerash Garment brought the case to the court and won in the Cassation Court. For the same PPE products, the PPE Customer filed another case claiming that certain lengths/widths of the PPE products were inconsistent with the specifications. The Court of First Instance ruled in favor of the PPE Customer. Jerash Garment was ordered to pay to the PPE Customer an amount of US$653,000. Jerash Garments filed an appeal, which is undergoing in the Court of Appeal. Upon the judgment of the appeal, the parties involved may appeal further to the Court of Cassation where judgment will be final.

The management has consulted two external legal advisors of Jordanian laws. Both opined that Jerash Garments has a strong position in the appeal as Jerash Garments will be allowed to present witnesses with additional evidence including the proof of inspections and receipts in the appeal. Also, given the appeal process mentioned above, the case would take a considerable long period of time to reach conclusion.

The management, based on the legal opinion of external advisors, the fact that the Court of Appeal and Cassation’s previous favorable verdicts on Jerash Garments’ lawful right to collect proceeds for the PPE products, and the proceedings of the appeal, concluded that the chance of loss is remote. Therefore, there was no accrual in the financial statements.

NOTE 17 – INCOME TAX

Jerash Garments, Jerash Embroidery, Chinese Garments, Paramount, Jerash The First, MK Garments, and Kawkab Venus are subject to the regulations of the Income Tax Department in Jordan. Effective January 1, 2019, the Jordanian government reclassified the area where Jerash Garments and its subsidiaries are to a Development Zone. In accordance with the Development Zone law, Jerash Garments and its subsidiaries were subject to income tax at income tax rate of 20% plus a 1% social contribution effective from January 1, 2024. Effective from October 1, 2025, Jerash Garments has been granted tax concession at a corporate income tax rate of 10% plus a 1% social contribution in accordance with the Jordanian Income Tax Law.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act imposed tax on previously untaxed accumulated earnings and profits (“E&P”) of foreign subsidiaries (the “Toll Charge”). The Toll Charge is based in part on the amount of E&P held in cash and other specific assets as of December 31, 2017. The Toll Charge can be paid over an eight-year period, starting in 2018, and will not accrue interest. Additionally, under the provisions of the Tax Act, for taxable years beginning after December 31, 2017, the foreign earnings of Jerash Garments and its subsidiaries are subject to U.S. taxation at the Jerash Holdings level under the new Global Intangible Low-Taxed Income (“GILTI”) regime. All Toll Charge had been paid as of December 31, 2025.

The Company tax provision or benefit from income taxes for interim periods is determined using an estimate of Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates the estimate of annual effective rate and a cumulative adjustment is made if the estimated tax rate changed. For the three months ended December 31, 2025 and 2024, the Company’s consolidated effective tax rate was 24.1% and 98.6%, respectively. For the nine months ended December 31, 2025 and 2024, the Company’s consolidated effective tax rate was 30.3% and (2,339.6%), respectively. The Company’s consolidated effective tax differed from the effective statutory federal income tax rate of 21.0%, primarily due to GILTI adjustments, foreign tax rate differentials, and valuation allowance adjustments. As of December 31, 2025 and March 31, 2025, there were $nil and $175,290 uncertain tax positions, respectively. The Company amended uncertain tax provision of $25,261, including penalties and interest, during the nine months ended December 31, 2025.

NOTE 18 – SUBSEQUENT EVENTS

The Company has evaluated all subsequent events through the date of the filing of this Quarterly Report on Form 10-Q with the SEC to ensure that this filing includes appropriate disclosure of events both recognized in the unaudited condensed consolidated financial statements as of December 31, 2025, and events which occurred subsequent to December 31, 2025 but were not recognized in the unaudited condensed consolidated financial statements. The Company has determined that there were no subsequent events that required recognition, adjustment to, or disclosure in the unaudited condensed consolidated financial statements, except for the following:

On February 2, 2026, Jerash Garments received the approval from the Housing Bank for Trade and Finance (the “Housing Bank”) of a property purchase request (the “Property Purchase Request”) submitted by Jerash Garments to the Housing Bank on January 20, 2026 for the purchase of a manufacturing building and associated land (the “Property”) located on Property No. 1326, Basin No. 3 Abu Sawwana, Al-Ruqaim Village, from the lands of South Amman, Jordan. The purchase price is JOD 2,400,000 (approximately $3,384,000), to be paid via down payment and bank financing from the Housing Bank. Jerash Garments has inspected the Property, accepted responsibility for all fees and expenses related to the transfer of ownership, and agreed to register the Property in its name and bear all ownership transfer fees payable by both the seller and the buyer at the Land and Survey Department.

In connection with the Property Purchase Request, on January 28, 2026, Jerash Garments entered into a loan agreement (the “Loan Agreement”) with the Housing Bank to finance the acquisition of the Property. Pursuant to the Loan Agreement, the Housing Bank agreed to provide Jerash Garments with a loan in the principal amount of JOD 2,000,000 (approximately $2,820,000). The loan bears interest at a rate of 8% per annum, calculated on the daily outstanding balance and charged monthly. Following a grace period ending January 31, 2027, the loan is repayable in 96 monthly installments of JOD 20,833 each, with the first installment due on February 1, 2027. The loan is secured by a first-priority mortgage on the Property, valued at JOD 5,500,000.

On February 3, 2026, the Board of Directors approved the payment of a dividend of $0.05 per share.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth in the “Risk Factors” section included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and in subsequent reports that we file with the SEC.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Quarterly Report. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.

The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on June 26, 2025. References to fiscal 2026 and fiscal 2025 in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to our fiscal year ending March 31, 2026, and fiscal year ended March 31, 2025, respectively.

Results of Operations

Three months ended December 31, 2025 and 2024

The following table summarizes the results of our operations during the three-month periods ended December 31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

(All amounts, other than percentages, in thousands of U.S. dollars)

	Three Months Ended December 31, 2025					Three Months Ended December 31, 2024					Period over Period Increase (Decrease)
Statement of Income Data:	Amount		As % of Sales			Amount		As % of Sales			Amount			%
Revenue	$	41,769		100	%	$	35,385		100	%	$	6,384			18	%
Cost of goods sold		34,720		83	%		30,002		85	%		4,718			16	%
Gross profit		7,049		17	%		5,383		15	%		1,666			31	%
Selling, general, and administrative expenses		4,878		12	%		4,201		12	%		677			16	%
Stock-based compensation expenses		229		1	%		474		1	%		(245	)		(52	)%
Other expenses, net		418		1	%		252		1	%		166			66	%
Net income before taxation		1,524		3	%		456		1	%		1,068			234	%
Income tax expenses		368		1	%		450		1	%		(82	)		(18	)%
Net income	$	1,156		3	%	$	6		0	%	$	1,150			19,167	%

Revenue. Revenue increased by approximately $6.4 million, or 18%, to $41.8 million, for the three months ended December 31, 2025, from approximately $35.4 million for the same period in fiscal 2025. The increase was mainly due to increases in shipments to some of the customers in the U.S. and the introduction of a new customer in Korea.

The following table outlines the dollar amount and percentage of total sales to our customers for the three months ended December 31, 2025 and 2024.

(All amounts, other than percentages, in thousands of U.S. dollars)

	Three Months Ended December 31, 2025					Three Months Ended December 31, 2024
	Sales					Sales
	Amount		%			Amount		%
VF Corporation ⁽¹⁾	$	19,344		46	%	$	20,493		58	%
New Balance		6,673		16	%		4,700		13	%
SWC (Dynamic)		4,028		10	%		3,619		10	%
Acushnet		3,473		8	%		323		1	%
Hansoll		2,492		6	%		-		0	%
Suzhou Unitex		1,379		3	%		780		2	%
GIII		767		2	%		382		1	%
Tharanco		690		2	%		587		2	%
Others		2,923		7	%		4,501		13	%
Total	$	41,769		100	%	$	35,385		100	%

⁽¹⁾

A large portion of our products are sold under The North Face, Timberland, and Vans brands owned by VF Corporation.

Revenue by Geographic Area

(All amounts, other than percentages, in thousands of U.S. dollars)

	Three Months Ended December 31, 2025					Three Months Ended December 31, 2024					Period over Period Increase (Decrease)
Region	Amount		%			Amount		%			Amount			%
United States	$	35,428		85	%	$	31,062		88	%	$	4,366			14	%
China (including Hong Kong)		2,984		7	%		2,312		6	%		672			29	%
Korea		2,492		6	%		-		0	%		2,492			-	%
Jordan		724		2	%		930		3	%		(206	)		(22	)%
Others		141		0	%		1,081		3	%		(940	)		(87	)%
Total	$	41,769		100	%	$	35,385		100	%	$	6,384			18	%

Between January 2010 and March 2025, all apparel manufactured in Jordan could be exported to the U.S. without customs duty being imposed, pursuant to the United States-Jordan Free Trade Agreement entered into in December 2001. This free trade agreement provided us with substantial competitiveness and benefit that allowed us to expand our garment export business in the U.S. Effective from April 5, 2025, the U.S. imposed a baseline tariff of 10% on imports from almost all countries, including Jordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified countries, amongst them Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst the 10% baseline tariff persists. Up to the date of this report, the tariff has been modified to 15% according to an executive order of presidential actions on July 31, 2025. While the payment of the tariff is typically the responsibility of the importer (Jerash’s customers), the impact of the tariff on customers demand would be affected by the comparative levels of the tariffs on imports from Jordan compared to other countries.

The increase of approximately 14% in sales to the U.S. during the three months ended December 31, 2025, was mainly attributable to a general increase in shipments to our major U.S. customers.

During the three months ended December 31, 2025, aggregate sales to China, Korea, Jordan, and other locations increased by 47% from $4.3 million to $6.3 million from the same period last year. This increase was mainly due to the introduction of a customer in Korea, which started to have bulk shipments during the quarter.

Cost of goods sold. Following the increase in sales revenue, our cost of goods sold increased by approximately $4.7 million, or 16%, to approximately $34.7 million, for the three months ended December 31, 2025, from approximately $30.0 million for the same period in fiscal 2025. As a percentage of revenue, the cost of goods sold decrease by approximately 2 percentage points, from 85% for the same period in fiscal 2025 to 83% for the three months ended December 31, 2025. The decrease in the cost of goods sold as a percentage of revenue was primarily attributable to improvements in efficiency through economies of scale and adjustments in product mix following the introduction of new customers.

For the three months ended December 31, 2025, we purchased 16% and 10% of our total purchase in garments and raw materials from two major suppliers, respectively.

For the three months ended December 31, 2024, we purchased 14% of our total purchase in garments and raw materials from one major supplier.

Gross profit margin. Gross profit margin was approximately 17% for the three months ended December 31, 2025, which increased by 2 percentage points from approximately 15% for the same period in fiscal 2025. The increase in gross profit margin was primarily driven by changes in product mix resulting from new customers introduced in the past few years and the growth in scale of production.

Operating expenses. Operating expenses increased by 9%, or approximately $0.4 million, from approximately $4.7 million for the three months ended December 31, 2024, to approximately $5.1 million for the three months ended December 31, 2025. The increase in operating expenses was primarily due to the increase in export-related expenses following the growth in sales and an increase in recruitment expenses in relation to headcount increase, offsetting a decrease in stock-based compensation expenses.

Other expenses, net. Other expenses, net were approximately $418,000 for the three months ended December 31, 2025, compared to other expenses, net of approximately $252,000 for the same period in fiscal 2025. The increase was primarily due to exchange loss and the increase in utilization of bank facility and customers’ supply chain financing programs to support the growth in business.

Income tax expenses. Income tax expenses for the three months ended December 31, 2025, were approximately $368,000 compared to income tax expenses of approximately $450,000 for the same period in fiscal 2025. The decrease in the income tax expenses was mainly due to tax provision adjustment in fiscal 2025 in GILTI, primarily resulting from the retroactive reinstatement of the subpart F income that was enacted for previous fiscal years and an increase in operating profit of Jordan subsidiaries related to GILTI provision. The effective tax rate declined to 24.1% for the three months ended December 31, 2025, compared to 98.6% for the three months ended December 31, 2024.

Net income. Net income for the three months ended December 31, 2025, was approximately $1.2 million compared to net income of approximately $6,000 for the same period in fiscal 2025. The increase in net income was mainly attributable to improvement of gross profit in efficiency through economies of scale with higher revenue, decrease of corporate tax in a Jordan subsidiary offset exchange loss and the increase in operating expenses.

Nine months ended December 31, 2025 and 2024

The following table summarizes the results of our operations during the nine-month periods ended December 31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

(All amounts, other than percentages, in thousands of U.S. dollars)

	Nine Months Ended December 31, 2025					Nine Months Ended December 31, 2024						Period over Period Increase (Decrease)
Statement of Income Data:	Amount		As % of Sales			Amount			As % of Sales			Amount			%
Revenue	$	123,367		100	%	$	116,561			100	%	$	6,806			6	%
Cost of goods sold		103,939		84	%		99,480			85	%		4,459			4	%
Gross profit		19,428		16	%		17,081			15	%		2,347			14	%

Selling, general, and administrative expenses		14,756		12	%		14,650			13	%		106			1	%
Stock-based compensation expenses		680		1	%		1,417			1	%		(737	)		(52	)%
Other expenses, net		1,182		1	%		1,042			1	%		140			13	%
Net income / (loss) before taxation		2,810		2	%		(28	)		(0	)%		2,838			10,136	%
Income tax expense		851		1	%		667			1	%		184			28	%
Net income / (loss)	$	1,959		1	%	$	(695	)		(1	)%	$	2,654			382	%

Revenue. Revenue increased by approximately $6.8 million, or 6%, to $123.4 million, for the nine months ended December 31, 2025, from approximately $116.6 million for the same period in fiscal 2025. The increase was mainly due to the increase in shipments to some of our major customers in the U.S. and sales increases to some of our new customers introduced during the past few years.

The following table outlines the dollar amount and percentage of total sales to our customers for the nine months ended December 31, 2025 and 2024, respectively.

(All amounts, other than percentages, in thousands of U.S. dollars)

	Nine Months Ended December 31, 2025					Nine Months Ended December 31, 2024
	Sales					Sales
	Amount		%			Amount		%
VF Corporation ⁽¹⁾	$	69,703		57	%	$	77,659		67	%
New Balance		16,412		13	%		12,291		11	%
Suzhou Unitex		7,502		6	%		4,999		4	%
Acushnet		4,670		4	%		955		1	%
SWC (Dynamic)		4,332		4	%		5,049		4	%
G-III		3,158		3	%		2,107		2	%
Hansoll		2,541		2	%		-		0	%
American Eagle Outfitter		2,264		1	%		1,406		1	%
Tharanco		2,072		1	%		1,747		1	%
Others		10,713		9	%		10,348		9	%
Total	$	123,367		100	%	$	116,561		100	%

⁽¹⁾	A large portion of our products are sold under The North Face, Timberland and Vans brands that are owned by VF Corporation.

Revenue by Geographic Area

(All amounts, other than percentages, in thousands of U.S. dollars)

	Nine Months Ended December 31, 2025					Nine Months Ended December 31, 2024					Period over Period Increase (Decrease)
Region	Amount		%			Amount		%			Amount			%
United States	$	104,759		85	%	$	102,628		88	%	$	2,131			2	%
China (including Hong Kong)		12,388		10	%		7,079		6	%		5,309			75	%
Korea		2,541		2	%		-		0	%		2,541			-	%
Jordan		1,654		1	%		2,659		2	%		(1,005	)		(38	)%
Others		2,025		2	%		4,195		4	%		(2,170	)		(52	)%
Total	$	123,367		100	%	$	116,561		100	%	$	6,806			6	%

The increase of approximately 2% in sales to the U.S. during the nine months ended December 31, 2025, was mainly attributable to a general increase in shipments to some of our major customers in the U.S.

During the nine months ended December 31, 2025, aggregate sales to China, Korea, Jordan, and other locations increased by 34% from approximately $13.9 million to $18.6 million from the same period last year, as we diversified our customer mix by introducing new customers in new locations such as Korea during the nine months ended December 31, 2025.

Cost of goods sold. Following the increase in sales revenue, our cost of goods sold increased by approximately $4.5 million, or 4%, to approximately $103.9 million, for the nine months ended December 31, 2025, from approximately $99.5 million for the same period in fiscal 2025. As a percentage of revenue, the cost of goods sold decreased by approximately 1% point to 84% for the nine months ended December 31, 2025 from 85% for the same period in fiscal 2025. The decrease in cost of goods sold as a percentage of revenue was primarily attributable to changes in product mix following the introduction of new customers and the improvement in efficiency through economies of scale.

For the nine months ended December 31, 2025 and 2024, we purchased 14% and 12% of our garments and raw materials from one major supplier, respectively.

Gross profit margin. Gross profit margin was approximately 16% for the nine months ended December 31, 2025, which increased by 1% point from 15% for the same period in fiscal 2025. The increase in gross profit margin was primarily driven by improvement in productivity from changes in product mix and economies of scale.

Operating expenses. Operating expenses for the nine months ended December 31, 2025 decreased by 4%, or approximately $0.6 million, to approximately $15.4 million, compared to the same period in fiscal 2025. The decrease was primarily due to better control over export costs, the decrease in stock-based compensation expenses, and reduced spending in repair and maintenance in fiscal 2026.

Other expenses, net. Other expenses, net was approximately $1.2 million for the nine months ended December 31, 2025, compared to other expenses, net of approximately $1.0 million for the same period in fiscal 2025. The increase was primarily due to exchange loss offsetting interesting rate decrease in net interest expenses for higher utilization of bank facility and customers’ supply chain financing programs to cope with business growth.

Income tax expenses. Income tax expenses for the nine months ended December 31, 2025 were approximately $851,000 compared to income tax expenses of approximately $667,000 for the same period in fiscal 2025. The increase in the income tax expenses was mainly due to higher operating profit in fiscal 2026. The effective tax rate declined to 30.3% for the nine months ended December 31, 2025, compared to (2,339.6%) for the nine months ended December 31, 2024. The decrease in effective tax rate primarily related to uncertain tax provision, which was provided in the prior year and subsequently amended in connection with the overstatement of approximately $150,000 in fiscal 2026.

Net income (loss). Net income for the nine months ended December 31, 2025 was approximately $2.0 million compared to net loss of approximately $0.7 million for the same period in fiscal 2025. The increase in net income was mainly attributable to improvement in productivity through changes in product mix and economies of scale, better control over logistics costs, lower interest expenses benefit from the decrease in SOFR, and lower stock-based compensation expenses during the period.

Liquidity and Capital Resources

Jerash Holdings is a holding company incorporated in Delaware. As a holding company, we rely on dividends and other distributions from our subsidiaries formed in Jordan and Hong Kong to satisfy our liquidity requirements. Current Jordanian regulations permit our Jordanian subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Jordanian accounting standards and regulations. In addition, our Jordanian subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends. We have relied on direct payments of expenses by our subsidiaries to meet our obligations to date. To the extent payments are due in U.S. dollars, we have occasionally paid such amounts in JOD to an entity controlled by our management capable of paying such amounts in U.S. dollars. Such transactions have been made at prevailing exchange rates and have resulted in immaterial losses or gains on currency exchange.

As of December 31, 2025, we had cash of approximately $11.5 million and restricted cash of approximately $1.7 million compared to cash of approximately $13.3 million and restricted cash of approximately $1.7 million as of March 31, 2025. The decrease in total cash was mainly a result of higher account receivable balances arising from sales made closer to the end of the quarter, which were mostly collected in early fourth quarter through customers’ supply chain financing programs.

Our current assets as of December 31, 2025 were approximately $56.8 million and our current liabilities were approximately $20.4 million, which resulted in a ratio of approximately 2.8 to 1. Our current assets as of March 31, 2025 were approximately $54.4 million, and our current liabilities were approximately $19.8 million, which resulted in a current ratio of approximately 2.7 to 1.

The primary drivers of the increase in current assets were the increase in accounts receivable and advances to suppliers. The primary driver of the increase in current liabilities was the increase in credit facilities which were offset partially by decreases in accounts payable, accrued expenses and other payables, and income tax payable.

Total equity as of December 31, 2025 was approximately $63.7 million compared to $62.9 million as of March 31, 2025.

We had net working capital of $36.4 million and $34.6 million as of December 31, 2025 and March 31, 2025, respectively. Based on our current operating plan, we believe that cash on hand and cash generated from operating activities will be sufficient to support our working capital needs for the next 12 months from the date this Quarterly Report is released.

Since May and October 2021, we have participated in supply chain financing programs of two of our major customers, respectively. The programs allow us to receive early payments for approved sales invoices submitted by us through the bank the customer cooperates with. For any early payments received, we are subject to an early payment charge imposed by the customer’s bank, for which the rate is SOFR plus a spread. The arrangement allows us to have better liquidity without the need to incur administrative charges and handling fees as in bank financing. In March 2024, we participated in an additional supply chain financing program with one customer.

We have funded our working capital needs from our operations. Our working capital requirements are influenced by the level of our operations, the numerical and dollar volume of our sales contracts, the progress of execution on our customer contracts, and the timing of accounts receivable collections.

Credit Facilities

DBS Facility Letter

Pursuant to the DBS facility letter dated January 12, 2022, DBSHK provided a bank facility of up to $5.0 million to Treasure Success, which was amended pursuant to a facility letter dated January 4, 2024. Pursuant to the amended agreement, DBSHK agreed to finance cargo receipt, trust receipt, account payable financing, and certain types of import and export invoice financing up to an aggregate of $5.0 million, subject to certain financial covenants. The DBSHK facility bears interest at 1.5% per annum over HIBOR for HKD bills and 1.1% to 1.3% per annum over DBSHK’s cost of funds for foreign currency bills. The facility is guaranteed by Jerash Holdings and became available to the Company on June 17, 2022. As of December 31, 2025 and March 31, 2025, we had $4.5 million and $4.5 million outstanding under this DBSHK facility, respectively.

Bank al Etihad Credit Facility

On July 31, 2025, Bank al Etihad offered to provide a credit facility of up to $6.0 million to Jerash Garments. Pursuant to the facility, Bank al Etihad agreed to finance import invoices of up to $6.0 million with condition that such invoices are secured by letter of credit issued by customers. The facility bears an interest rate at the Prime Lending Rate announced by Bank al Etihad, currently 8% per annum. As of December 31, 2025, the Company had $4.8 million outstanding under the Bank al Etihad facility.

Nine months ended December 31, 2025 and 2024

The following table sets forth a summary of our cash flows for the periods indicated:

(All amounts in thousands of U.S. dollars)

	Nine months ended December 31,
	2025			2024
Net cash used in operating activities	$	(3,491	)	$	(581	)
Net cash used in investing activities		(1,372	)		(1,672	)
Net cash provided by financing activities		2,922			3,124
Effect of exchange rate changes on cash and restricted cash		33			(125	)
Net (decrease) increase in cash and restricted cash		(1,908	)		746
Cash and restricted cash, beginning of nine-month period		15,064			14,037
Cash and restricted cash, end of nine-month period	$	13,156		$	14,783

Operating Activities

Net cash used in operating activities was approximately $3.5 million for the nine months ended December 31, 2025, compared to cash used in operating activities of approximately $581,000 for the same period in fiscal 2025. The increase in net cash used in operating activities was primarily attributable to the following factors:

●

a decrease in inventory of $1.7 million in the nine months ended December 31, 2025, compared to a decrease of $8.1 million in the same period in fiscal 2025;

●

an increase in accounts receivable of $4.8 million in the nine months ended December 31, 2025, compared to an increase of $1.8 million in the same period in fiscal 2025;

●

an increase in advances to suppliers of $1.4 million in the nine months ended December 31, 2025, compared to an increase of $4.8 million in the same period in fiscal 2025;

●

a decrease in accounts payable of $2.9 million in the nine months ended December 31, 2025, compared to a decrease of $2.5 million in the same period in fiscal 2025; and

●

net income of $2.0 million in the nine months ended December 31, 2025, from a net loss of $0.7 million in the same period in fiscal 2025.

Investing Activities

Net cash used in investing activities was approximately $1.4 million for the nine months ended December 31, 2025, compared to approximately $1.7 million in the same period in fiscal 2025. The net cash used in investing activities during the nine months ended December 31, 2025 was mainly for investments in property, plant, and equipment. The net cash used in investing activities during the nine months ended December 31, 2024 was mainly for investment in property, plant, and equipment and the construction of a dormitory.

Financing Activities

Net cash provided by in financing activities was approximately $2.9 million for the nine months ended December 31, 2025, which was net proceeds of $4.8 million from bank financing facilities and dividend payments of $1.9 million in the period. Net cash provided by financing activities was approximately $3.1 million for the nine months ended December 31, 2024, which was the net effect of proceeds from credit facilities of approximately $5.0 million and the dividend payments of approximately $1.8 million.

Statutory Reserves

In accordance with the corporate law in Jordan, subsidiaries of Jerash Holdings in Jordan are required to make appropriations to certain reserve funds, based on net income determined in accordance with generally accepted accounting principles of Jordan. Appropriations to the statutory reserve are required to be 10% of net income until the reserve is equal to 100% of the entity’s share capital. Jiangmen Treasure Success is required to set aside 10% of its net income as statutory surplus reserve until such reserve is equal to 50% of its registered capital. These reserves are not available for dividend distribution. The statutory reserve was $0.4 million as of December 31, 2025 and 2024.

The following table provides the amount of our statutory reserves, the amount of restricted net assets, consolidated net assets, and the amount of restricted net assets as a percentage of consolidated net assets, as of December 31, 2025 and 2024.

(All amounts, other than percentages, in thousands of U.S. dollars)

	As of December 31,
	2025			2024
Statutory Reserves	$	414		$	414
Total Restricted Net Assets	$	414		$	414
Consolidated Net Assets	$	63,651		$	63,183
Restricted Net Assets as Percentage of Consolidated Net Assets		0.65	%		0.66	%

Total restricted net assets accounted for approximately 0.65% of our consolidated net assets as of December 31, 2025. As our subsidiaries in Jordan are only required to set aside 10% of net profits to fund the statutory reserves, we believe the potential impact of such restricted net assets on our liquidity is limited.

Capital Expenditures

We had capital expenditures of approximately $1.4 million and $1.7 million for the nine months ended December 31, 2025 and 2024, for plant and machinery in both periods and the construction of a dormitory in fiscal 2025. For the nine months ended December 31, 2025, our capital expenditures in payments for additional plant and machinery were approximately $1.4 million. For the nine months ended December 31, 2024, payments for additional plant and machinery and the construction of a dormitory amounted to approximately $1.1 million and $0.6 million respectively.

On August 7, 2019, we completed a transaction to acquire 12,340 square meters (approximately three acres) of land in Al Tajamouat Industrial City, Jordan, from a third party to construct a dormitory for our employees with aggregate purchase price JOD 863,800 (approximately $1,218,303). Management has revised the plan to construct both dormitory and production facilities on the land in order to capture the increasing demand for our capacity. We are conducting engineering design and study on this project with the business growth prospect of new customers to be introduced in the coming few years. On February 6, 2020, we completed a transaction to acquire 4,516 square meters (approximately 48,608 square feet) of land in Al Tajamouat Industrial City, Jordan, from a third party to construct a dormitory for our employee with aggregate purchase price JOD 313,501 (approximately $442,162). The dormitory is completed in second quarter of fiscal year 2025. The dormitory and dormitory kitchen were completed in the second quarter and the fourth quarter of fiscal year 2025, respectively. We have spent approximately $10.6 million in capital expenditures to build the dormitory and the dormitory kitchen.

On February 2, 2026, Jerash Garments received the approval from the Housing Bank of the Property Purchase Request submitted by Jerash Garments to the Housing Bank on January 20, 2026 for the purchase of the Property located on Property No. 1326, Basin No. 3 Abu Sawwana, Al-Ruqaim Village, from the lands of South Amman, Jordan. The purchase price is JOD 2,400,000 (approximately $3,384,000), to be paid via down payment and bank financing from the Housing Bank. Jerash Garments has inspected the Property, accepted responsibility for all fees and expenses related to the transfer of ownership, and agreed to register the Property in its name and bear all ownership transfer fees payable by both the seller and the buyer at the Land and Survey Department.

We expect that our capital expenditures will increase in the future as our business continues to develop and expand. We project that there will be an aggregate of approximately $7.8 million, $17.9 million, $18.0 million, $2.8 million, and $2 million of capital expenditures, respectively, in each of the five fiscal years from the fiscal year ending March 31, 2026 to the fiscal year ending March 31, 2030, for further enhancement of production capacity to meet future sales growth based on the current market response and communication with key customers. The realization of these investments depends on the progress of our business development, including expanding our client base and securing increased commitments from existing customers. We have used cash generated from operations of our subsidiaries to fund our capital commitments in the past. Our capital expenditure plan is highly related to customer commitments and market responses to the demand of our capacity. If growth in demand is in line with our projection, other than cash generated from the operations of our subsidiaries, we may also obtain further bank financing and raise funds from the capital market to meet our capital expenditure plan and fund our capital commitments. As of the date of this report, no material commitment has been made for the capital expenditure projections above.

Off-balance Sheet Commitments and Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as stockholders’ equity, or that are not reflected in our consolidated financial statements.

Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with U.S. GAAP, which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. We have not identified any critical accounting estimates.

Recent Accounting Pronouncements

See “Note 3—Recent Accounting Pronouncements” in the notes to our unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide this information.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), based on their evaluation of our disclosure controls and procedures as of December 31, 2025, concluded that our disclosure controls and procedures were effective as of that date based on reasons set forth below.

Based on the assessment using those criteria, management concluded that, as of March 31, 2024, our internal control over financial reporting was not effective because there were ineffective information technology general controls in the areas of privileged user access and the review of user access over certain information technology systems that support our financial reporting processes.

Although some remedial actions have been implemented to address the issues, in the annual report for fiscal 2025 filed on June 26, 2025, the management concluded that, as of March 31, 2025, our internal control over financial reporting was still ineffective as some of the control deficiencies surrounding the information technology environment were not sufficiently remediated.

Additional remedial actions have then been implemented to address the issues. In the assessment in fiscal 2026, the management concluded that, as of December 31, 2025, our internal control over financial reporting was effective after review and testing of the effectiveness of the remedial actions.

Our management has concluded that the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report present fairly, in all material respects, our financial position, results of operations, and cash flows in conformity with U.S. GAAP.

Change in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

JERASH HOLDINGS (US), INC.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently involved in any material legal proceedings. From time-to-time we are, and we anticipate that we will be, involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. We could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.

Index to Exhibits

Exhibit		Incorporated by Reference (Unless Otherwise Indicated)
Number	Exhibit Title	Form	File	Exhibit	Filing Date

3.1	Amended and Restated Certificate of Incorporation	POS AM	333-222596	3.1	September 19, 2018

3.2	Amended and Restated Bylaws	8-K	001-38474	3.1	July 24, 2019

4.1	Specimen Certificate for Common Stock	S-1	333-218991	4.1	June 27, 2017

10.1	Property Purchase Request dated January 20, 2026 to Housing Bank by Jerash Garments and Fashions Manufacturing Company Limited	8-K	001-38474	10.1	February 5, 2026

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith

32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

101.INS	Inline XBRL Instance Document	—	—	—	Filed herewith

101.SCH	Inline XBRL Taxonomy Extension Schema Document	—	—	—	Filed herewith

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	—	—	—	Filed herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	—	—	—	Filed herewith

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	—	—	—	Filed herewith

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	—	—	—	Filed herewith

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	—	—	—	Filed herewith

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 10, 2026	Jerash Holdings (US), Inc.

	By:	/s/ Gilbert K. Lee
		Gilbert K. Lee
		Chief Financial Officer (Principal Financial Officer)

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Jerash Holdings (US), Inc. 10-Q