A.K.A. BRANDS HOLDING CORP. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the fiscal year covered by this Annual Report on Form 10-K. 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 Interim 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 Interim Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2023. 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 GAAP. 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 GAAP. 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 GAAP, and that our receipts and expenditures are being made only in accordance with management and directors of the Company's authorization; and • 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 Interim 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, 2023. Based on this evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023 given the previously identified material weaknesses having 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. 108 Table of Contents Material Weaknesses 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, 2023. 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 Interim Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2023: • We had 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 had 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 processes. We have taken numerous steps to address the underlying causes of this material weakness. We hired additional experienced financial reporting personnel and put new processes in place to achieve complete, accurate and timely financial reporting. We also hired a third-party consulting firm with expertise to help us design, implement and document our internal controls across the organization. We have continued with controls implementation, enhanced documentation and understanding of certain processes and provided additional training to individuals performing and overseeing these processes and controls. We 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. Over the past year, we continued the 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, (iv) increase the training of accounting and finance staff in relevant areas and (v) started an Enterprise Resource Planning (“ERP”) system implementation project. While progress has been made to remediate both of the material weaknesses above, as of December 31, 2023, we were still in the process of developing and implementing the enhanced processes and procedures and testing the operating effectiveness of these improved controls. We provided process and controls training and have incorporated ongoing training and monitoring as part of our overall control environment. We implemented and continue to implement control improvements and have focused on the increased operational effectiveness of our controls. We selected an ERP system, hired an implementation partner and are in the process of implementation which will provide improvements to our IT-dependent and application controls to help prevent and detect errors, enforce segregation of duties and strengthen controls around manual journal entries. 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 were not remediated as of December 31, 2023. Changes in Internal Control over Financial Reporting 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. 109 Table of Contents ITEM 9B. OTHER INFORMATION Rule 10b5-1 Trading Plans During the three months ended December 31, 2023, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.” ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 110 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”) to be filed with the SEC within 120 days of our fiscal year ended December 31, 2023 and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this item will be set forth in our 2024 Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item will be set forth in our 2024 Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item will be set forth in our 2024 Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be set forth in our 2024 Proxy Statement and is incorporated herein by reference. 111 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements See Index to Consolidated Financial Statements at “Item 8. Financial Statements and Supplementary Data.” 2. Financial Statement Schedules Schedules have been omitted because they are either not required, not applicable, not present in amounts sufficient to require submission of the schedule or the required information is included elsewhere in this Annual Report on Form 10-K. 3. Exhibits The following exhibits are filed herewith or incorporated by reference herein: Incorporated by Reference Exhibit No. Description Form File No. Filing Date Exhibit No. 3.1 Amended and Restated Certificate of Incorporation of a.k.a. Brands Holding Corp., filed with the Delaware Secretary of State on September 21, 2021 8-K 001-40828 September 27, 2021 3.1 3.2 C ertificate of Amendment to the Amended and Restated Certificate of a.k.a. Brands Holding Corp., filed with the Delaware Secretary of State on September 25, 2023 8-K 001-40828 September 29, 2023 3.1 3.3 Amended and Restated Bylaws of a.k.a. Brands Holding Corp., effective September 21, 2021 8-K 001-40828 September 27, 2021 3.2 4.1 Registration Rights Agreement, dated September 24, 2021, by and among a.k.a. Brands Holding Corp. and the other signatories party thereto 8-K 001-40828 September 27, 2021 4.1 4.2 Description of a.k.a. Brands Holding Corp.’s securities 10-K 001-40828 March 9, 2023 4.2 10.1 Stockholders Agreement, dated June 23, 2021, by and among a.k.a. Brands Holding Corp., New Excelerate, L.P., and certain other equityholders of the Registrant party thereto S-1 333-259028 August 24, 2021 10.2 10.2 Form of Indemnification Agreement between a.k.a. Brands Holding Corp. and its directors and officers S-1 333-259028 August 24, 2021 10.3 10.3 Director Nomination Agreement, dated as of September 24, 2021, by and among a.k.a. Brands Holding Corp. and the other signatories party thereto 8-K 001-40828 September 27, 2021 10.1 10.4 Syndicated Facility Agreement, dated as of September 24, 2021, by and among a.k.a. Brands Holding Corp., KeyBank National Association and the other signatories party thereto 8-K 001-40828 September 27, 2021 10.2 10.5 † a.k.a. Brands Holding Corp. 2021 Omnibus Incentive Plan S-8 333-259753 September 24, 2021 10.1 10.6 † A mendment No. 1 to the a.k.a. Brands Holding Corp Omnibus Incentive Plan 8-K 001-40828 May 30, 2023 10.1 10.7 † Form of Incentive Stock Option Agreement S-8 333-259753 September 24, 2021 10.2 10.8 † Form of Restricted Stock Unit Agreement S-8 333-259753 September 24, 2021 10.3 10.9 † Form of Restricted Stock Agreement S-8 333-259753 September 24, 2021 10.4 10.10 † a.k.a. Brands Holding Corp. 2021 Employee Stock Purchase Plan S-8 333-259753 September 24, 2021 10.5 10.11 † Employment Agreement, dated April 8, 2021, by and between Excelerate US, Inc. and Ciaran Long 10-K 001-40828 March 9, 2023 10.11 10.12 † Employment Agreement, dated October 15, 2020, by and between Excelerate US, Inc. and Michael Trembley S-1 333-259028 August 24, 2021 10.12 112 Table of Contents 10.13 † O ffer Letter, dated November 7, 2023, by and between Excelerate US, Inc. and Jill Ramsey 8-K 001-40828 November 9, 2023 10.1 21.1* Subsidiaries of a.k.a. Brands Holding Corp. 23.1* Consent of Independent Registered Public Accounting Firm 31.1* Certification of Interim Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Interim Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1* a .k.a. Brands Holding Corp. Executive Incentive Compensation Recoupment Policy 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Calculation Linkbase Document 104* Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) __________ † Management contract or compensatory plan or arrangement. * Filed herewith. ** Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing. ITEM 16. FORM 10-K SUMMARY Not Applicable. 113 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. a.k.a. Brands Holding Corp. Dated: March 7, 2024 By: /s/ Ciaran Long Name: Ciaran Long Title: Interim Chief Executive Officer and Chief Financial Officer 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. Signature Title Date /s/ Ciaran Long Interim Chief Executive Officer and Chief Financial Officer March 7, 2024 Ciaran Long (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) /s/ Wesley Bryett Director March 7, 2024 Wesley Bryett /s/ Christopher Dean Chairman of the Board of Directors March 7, 2024 Christopher Dean /s/ Ilene Eskenazi Director March 7, 2024 Ilene Eskenazi /s/ Sourav Ghosh Director March 7, 2024 Sourav Ghosh /s/ Matthew Hamilton Director March 7, 2024 Matthew Hamilton /s/ Myles McCormick Director March 7, 2024 Myles McCormick /s/ Jill Ramsey Director March 7, 2024 Jill Ramsey /s/ Kelly Thompson Director March 7, 2024 Kelly Thompson 114