17. FINANCIAL INSTRUMENTS

On January 4, 2023, the Company entered into a series of agreements with certain accredited investors, pursuant to which the Company received a net proceed of $15,000,000 in consideration of the issuance of:

The Warrant is considered a freestanding instrument issued together with the Convertible Note and measured at its issuance date fair value. Proceeds received were first allocated to the Warrant based on its initial fair value. The initial fair value of the Warrant was $3.9 million. The Warrant were marked to the market with the changes in the fair value of warrant recorded in the consolidated statements of operations and comprehensive loss. As of March 31, 2026, the balance of the Warrant was approximately $4.1 million. (March 31, 2025: $1.0 million)

The Convertible Note is classified as a liability and is subsequently stated at amortized cost with any difference between the initial carrying value and the repayment amount as interest expenses using the effective interest method over the period from the issuance date to the maturity date. The embedded conversion feature is bifurcated and separately accounted for using fair value, as this embedded feature is considered not clearly and closely related to the debt host. The bifurcated conversion feature was recorded at fair value with the changes recorded in the consolidated statements of operations and comprehensive loss. The initial fair value of the embedded conversion feature was $1.2 million. As of March 31, 2026, the fair value of the conversion option was $Nil (March 31, 2025: $1.4 million).

The Company determined that the other embedded features do not require bifurcation as they either are clearly and closely related to the Convertible Note or do not meet the definition of a derivative.

The total proceeds of the Convertible Note and the Warrants, net of issuance cost, of $15.0 million was received by the Company in January 2023, and allocated to each of the financial instruments as following:

 SCHEDULE OF FINANCIAL INSTRUMENTS

In January 2023, the Company also granted the placement agent a warrant as partial of agent fee to purchase 0.7 million shares of common stock of the Company. The warrant is matured in five years with an exercise price of $1.25 subject to adjustments under different conditions. The warrant was recognized as derivative liability and the initial fair value was $0.168 million.

The movement of the Company’s convertible notes obligations were as the following for the year ended March 31, 2026 and 2025:

 SCHEDULE OF CONVERTIBLE NOTES OBLIGATION

On July 13, 2023, the Company entered into a Waiver and Ratification Agreement with one of the holders of the Convertible Note. According to the agreement, the holder redeemed the full amount of $7.5 million for the Convertible Note and irrevocably waives any past, present or future claims, rights and obligations under the Convertible Note.

On July 3, 2024, the Company and the investor to the outstanding Note entered into an amendment to the Note, whereby the Note’s maturity date has been extended to July 4, 2025. No other provision of the Note was amended and the Note continues in full force and effect.

During the year ended March 31 2026 and 2025, approximately $3.1 million and $82,642   of the convertible notes was converted into approximately 5.7 million and 132,994 Common Stock, with average effective conversion price of $0.5327 and $0.6214 per share, respectively. As at March 31, 2026, the Convertible Note was fully redeemed or converted.

The Company’s derivative liabilities were as the following for the year ended March 31, 2026 and 2025:

SCHEDULE OF DERIVATIVE LIABILITIES