What changed in this filing

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Item 9A. Controls and Procedures

2023-03-09 compared with 2022-03-01 · 42 added, 55 removed, 116 unchanged (46% of the section changed)

3 unchanged sentences

This evaluation is performed to determine whether our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Due to the material weaknesses described below, our chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2021.

In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Nevertheless, based on the performance of additional procedures by management designed to ensure reliability of financial reporting, the Company’s management has concluded that, notwithstanding the material weaknesses described below, the consolidated financial statements, included in this Form 10-K, fairly present, in all material respects, the Company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our management evaluated the design and operating effectiveness of the Company's internal control over financial reporting based on the criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our internal control over financial reporting includes policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that our receipts and expenditures are being made only in accordance with management and directors of the Company's authorization;

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022.

Based on this evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2022 given the previously identified material weaknesses have not been remediated as of year end.

Our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Material Weaknesses

As disclosed in our final prospectus filed with the SEC on September 23, 2021 pursuant to Rule 424(b) under the Securities Act, we identified three material weaknesses in the design and operation of our internal control over financial reporting in connection with the preparation of our financial statements for the fiscal years ended December 31, 2020 and 2019.

We have identified two material weaknesses in the design and operation of our internal control over financial reporting in connection with the preparation of our financial statements, as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, that had not been remediated as of December 31, 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company’s management, including our chief executive officer and chief financial officer concluded that:

• We have not sufficiently designed, implemented and documented internal controls at the entity level and across the key business and financial processes to allow us to achieve complete, accurate and timely financial reporting.

• We have not designed and implemented controls to maintain appropriate segregation of duties in our manual and IT-based business processes.

• We have insufficient resources with the appropriate knowledge and experience in our accounting function related to GAAP and the SEC reporting requirements of a U.S.

domestic registrant to enable us to design and maintain an effective financial reporting process.

The Company’s management, including our chief executive officer and chief financial officer, concluded that, as of December 31, 2022:

• We have not sufficiently designed, implemented and documented internal controls at the entity level and across key business and financial processes to allow us to achieve complete, accurate and timely financial reporting.

• We have not designed and implemented controls to maintain appropriate segregation of duties in our manual and information technology-based business processes.

Remediation Status of Material Weaknesses

Material weakness related to the design, implementation and documentation of internal controls at the entity level and across key business and financial process.

Material weakness related to the design, implementation and documentation of internal controls at the entity level and across key business and financial processes.

We have taken numerous steps to address the underlying causes of this material weakness.

1 unchanged sentence

We have also hired a third-party consulting firm with expertise to help us design, implement and document our internal controls across the organization.

Material weakness related to appropriate segregation of duties in our manual and IT-based business processes.

We have commenced a process to (i) identify key systems and processes that require improved documentation, (ii) implement enhanced standards designed to meet the requirements of the Sarbanes-Oxley Act for segregation of duties, (iii) review the design of applicable internal controls and assess any required amendments and (iv) increase the training of accounting and finance staff in relevant areas.

We have continued with controls implementation, enhanced documentation, understanding of certain processes and have given additional training to individuals performing and overseeing these processes and controls.

We have also implemented a monitoring system to provide more timely information on control performance and have increased our oversight capabilities across the company.

Material weakness related to appropriate segregation of duties in our manual and information technology-based business processes.

Last year, we commenced a process to (i) identify key systems and processes that require improved documentation, (ii) implement enhanced standards designed to meet the requirements of the Sarbanes-Oxley Act for segregation of duties, (iii) review the design of applicable internal controls and assess any required amendments and (iv) increase the training of accounting and finance staff in relevant areas.

While progress has been made to remediate both of the material weaknesses above, as of December 31, 2022, we are still in the process of developing and implementing the enhanced processes and procedures and testing the operating effectiveness of these improved controls.

We have provided process and controls training and have incorporated ongoing training and monitoring as part of our overall control environment.

We have implemented and continue to implement control improvements and have focused on the increased operational effectiveness of our controls.

We believe our actions will be effective in remediating the material weaknesses, and we continue to devote significant time and attention to these efforts.

In addition, the material weaknesses will not be considered remediated until the applicable remedial processes and procedures have been in place for a sufficient period of time and management has concluded, through testing, that these controls are effective.

Accordingly, the material weaknesses above are not remediated as of December 31, 2021.

Material weakness related to insufficient resources with the appropriate knowledge and experience in our accounting function.

To address and remediate this material weakness the Company hired additional accounting and financial reporting personnel with extensive knowledge and experience related to U.S.

GAAP and the SEC reporting requirements of U.S.

domestic registrants.

Accordingly, we believe we have remediated the material weakness that the Company has insufficient resources with the appropriate knowledge and experience to enable us to design and maintain an effective financial reporting process.

Accordingly, the material weaknesses above were not remediated as of December 31, 2022.

Changes in Internal Control over Financial Reporting

Except for the remediation efforts described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management’s Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation of our independent registered public accounting firm as permitted in this transition period under the rules of the SEC for newly public companies.

There were no changes in our internal control over financial reporting during the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

60 unchanged sentences

S-1 333-259028 August 24, 2021 10.10

Employment Agreement, dated June 1, 2019, by and between Excelerate US, Inc.

and Jonathan Harvey

S-1 333-259028 August 24, 2021 10.11

Employment Agreement, dated April 8 , 2021, by and between Excelerate US, Inc.

and Ciaran Long

Employment Agreement, dated October 15, 2020, by and between Excelerate US, Inc.

1 unchanged sentence

S-1 333-259028 August 24, 2021 10.12

Employment Agreement, dated June 10, 2019, by and between Excelerate US, Inc.

and Don Allen

S-1 333-259028 August 24, 2021 10.13

Letter Agreement, dated September 25, 2020, by and between Excelerate US, Inc.

and Don Allen

S-1 333-259028 August 24, 2021 10.14

Employment Agreement, dated September 20, 2018, by and between Excelerate US, Inc.

and Shih-Fong Wang

S-1 333-259028 August 24, 2021 10.15

Letter Agreement, dated October 14, 2020, by and between Excelerate US, Inc.

and Shih-Fong Wang

S-1 333-259028 August 24, 2021 10.16

Letter Agreement, dated December 23, 2020, by and between Excelerate US, Inc.

and Shih-Fong Wang

S-1 333-259028 August 24, 2021 10.17

Letter Agreement, dated November 18, 2019, by and between Excelerate, L.P.

and Kelly Thompson

S-1 333-259028 August 24, 2021 10.18

21.1* Subsidiaries of a.k.a.

20 unchanged sentences

Not Applicable.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on March 1, 2022.

Brands Holding Corp.

March 9, 2023

/s/ Jill Ramsey

Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jill Ramsey or Ciaran Long, or any of them, his or her attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

5 unchanged sentences

Principal Accounting Officer)

/s/ Myles McCormick Director March 1, 2022

Myles McCormick

/s/ Kelly Thompson Director March 1, 2022

Kelly Thompson

/s/ Christopher Dean Chairman of the Board of Directors March 1, 2022

Christopher Dean

/s/ Matthew Hamilton Director March 1, 2022

Matthew Hamilton

/s/ Simon Beard Director March 9, 2023

/s/ Wesley Bryett Director March 9, 2023

Wesley Bryett

/s/ Simon Beard Director March 1, 2022

/s/ Christopher Dean Chairman of the Board of Directors March 9, 2023

Christopher Dean

/s/ Ilene Eskenazi Director March 9, 2023

Ilene Eskenazi

/s/ Sourav Ghosh Director March 9, 2023

/s/ Matthew Hamilton Director March 9, 2023

Matthew Hamilton

/s/ Myles McCormick Director March 9, 2023

Myles McCormick

/s/ Kelly Thompson Director March 9, 2023

Kelly Thompson

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures