What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-06 compared with 2024-03-07 · 217 added, 399 removed, 787 unchanged (44% of the section changed)

4 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PricewaterhouseCoopers LLP, New York, New York, Auditor Firm ID:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PricewaterhouseCoopers, Melbourne, Australia, Auditor Firm ID:

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, PARTNERS' CAPITAL AND REDEEMABLE NONCONTROLLING INTEREST

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Description of Business

S ignificant Accounting Poli cies

P repaid Expenses and Other Current Assets

P rop erty and Equipment, Net

I ntan gible Assets

I ncome Taxes

A ccrued Liabilities

D eferred Re venue

E quity- based Compensation

S tockholders ’ Equity

N et Loss Per Share

C ommitments and Contin gencies

S egment Information

S ubsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of a.k.a.

We have audited the accompanying consolidated balance sheet of a.k.a.

Brands Holding Corp.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, partners’ capital and redeemable noncontrolling interest and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the "Company") as of December 31, 2024, and the related consolidated statement of income, of comprehensive income, of stockholders’ equity and of cash flows for the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

March 6, 2025

We have served as the Company’s auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of a.k.a.

Brands Holding Corp.

Opinion on the Financial Statements

We have audited the consolidated balance sheet of a.k.a.

Brands Holding Corp.

and its subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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March 7, 2024

We have served as the Company’s auditor since 2021.

We served as the Company’s auditor from 2021 through 2024.

BRANDS HOLDING CORP.

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$ 24,192 $ 21,859

Restricted cash

Accounts receivable

Inventory, net

Accounts receivable, net

95,750 91,024

Prepaid income taxes — 6,089

Prepaid expenses and other current assets

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Other long-term liabilities

Deferred income taxes

Total liabilities

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

* Adjusted for the one-for-12 Reverse Stock Split.

Refer to Note 14, “Stockholders’ Equity.”

BRANDS HOLDING CORP.

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337,826 383,689 509,286

(Loss) income from operations

Loss from operations

( 10,321 ) ( 83,409 ) ( 172,039 )

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Interest expense ( 10,296 ) ( 11,165 ) ( 7,043 )

Loss on extinguishment of debt — — ( 10,924 )

Other expense ( 1,044 ) ( 2,391 ) ( 1,532 )

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$ ( 25,990 ) $ ( 98,886 ) $ ( 176,697 )

Net loss attributable to noncontrolling interests

Net loss attributable to a.k.a.

Brands Holding Corp.

$ ( 98,886 ) $ ( 176,697 ) $ ( 5,968 )

Net loss per share, basic and diluted*

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$ ( 36,570 ) $ ( 103,970 ) $ ( 210,802 )

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to a.k.a.

Brands Holding Corp.

$ ( 103,970 ) $ ( 210,802 ) $ ( 22,886 )

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

BRANDS HOLDING CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, PARTNERS’ CAPITAL (1) AND REDEEMABLE NONCONTROLLING INTEREST

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share and unit data)

Common Stock Partnership Units

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings (Accumulated Deficit)

Non-controlling Interest Total Equity Redeemable Noncontrolling Interest

Amount Units Amount

Common Stock Additional Paid-In Capital

Accumulated Other Comprehensive Loss

Retained Earnings (Accumulated Deficit) Total Equity

Balance as of December 31, 2021 10,720,653 $ 129 $ 453,807 $ ( 11,080 ) $ 8,170 $ 451,026

Issuance of units — — 25,746,282 82,669 — — — — 82,669 —

Noncontrolling interest from purchase of Culture Kings — — — — — — — — — 142,718

Purchase of Petal & Pup noncontrolling interest — — — — ( 10,599 ) — — ( 9,599 ) ( 20,198 ) —

Purchase of Culture Kings noncontrolling interest 1,817,483 22 — — 132,256 — — — 132,278 ( 132,278 )

Reorganization transactions 7,898,363 95 ( 139,914,124 ) ( 190,866 ) 190,771 — — — — —

Issuance of common stock upon initial public offering, net issuance costs 833,333 10 — — 95,711 — — — 95,721 —

Issuance of common stock in the acquisition of mnml 171,474 2 — — 17,303 — — — 17,305 —

Change in tax bases of Culture Kings’ assets related to purchase of Culture Kings’ noncontrolling interest — — — — 19,595 — — — 19,595 —

Equity-based compensation — — 6,730 — — 6,730

Issuance of common stock under employee equity plans, net of shares withheld 29,933 — 123 — — 123

Cumulative translation adjustment — — — ( 34,105 ) — ( 34,105 )

Net (loss) income

— — — — — — ( 5,968 ) 622 ( 5,346 ) ( 746 )

Net loss — — — — ( 176,697 ) ( 176,697 )

Balance as of December 31, 2022 10,750,586 129 460,660 ( 45,185 ) ( 168,527 ) 247,077

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Issuance of common stock under employee equity plans, net of shares withheld 137,801 — ( 28 ) — — ( 28 )

Repurchase of shares ( 320,506 ) ( 1 ) ( 2,100 ) — — ( 2,101 )

Cumulative translation adjustment — — — ( 5,084 ) — ( 5,084 )

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Repurchase of shares ( 131,037 ) — ( 1,515 ) — — ( 1,515 )

( 320,506 ) ( 1 ) — — ( 2,100 ) — — — ( 2,101 ) —

Cumulative translation adjustment — — — ( 10,580 ) — ( 10,580 )

— — — — — ( 5,084 ) — — ( 5,084 ) —

— — — — — — ( 98,886 ) — ( 98,886 ) —

Net loss — — — — ( 25,990 ) ( 25,990 )

Balance as of December 31, 2024

10,669,649 $ 128 $ 471,758 $ ( 60,849 ) $ ( 293,403 ) $ 117,634

(1) Excelerate, L.P.

was the predecessor entity to a.k.a.

Brands Holding Corp.

Refer to Note 1, “Description of Business,” for additional information.

(1) Adjusted for the one-for-12 Reverse Stock Split.

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Amortization of debt issuance costs 597 624 647

Loss on extinguishment of debt — — 10,924

Lease incentives — 1,596 1,722

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Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable ( 1,283 ) ( 602 ) ( 858 )

Inventory 32,149 ( 16,257 ) ( 32,131 )

Accounts receivable, net

( 3,294 ) ( 1,283 ) ( 602 )

( 10,657 ) 32,149 ( 16,257 )

Prepaid expenses and other current assets 1,539 ( 2,789 ) 6,134

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Accrued liabilities 7,138 ( 13,982 ) ( 7,419 )

Returns reserve 5,566 ( 2,678 ) 3,091

Sales returns reserve

( 1,849 ) 5,566 ( 2,678 )

Deferred revenue 856 522 267

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— — ( 5,321 )

Purchase of noncontrolling interest — — ( 20,198 )

Purchases of intangible assets

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Cash flows from financing activities:

Proceeds from initial public offering, net of issuance costs — — 96,863

Payments of costs related to initial public offering — — ( 1,142 )

Proceeds from line of credit, net of issuance costs 11,500 40,000 34,150

Proceeds from line of credit

49,500 11,500 40,000

Repayment of line of credit ( 26,200 ) ( 51,500 ) —

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Proceeds from issuances under equity-based compensation plans 224 162 227

Proceeds from issuance of units — — 82,669

Repurchase of shares

( 1,515 ) ( 2,100 ) —

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

15,506 ( 52,829 ) 33,260

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$ 24,192 $ 21,859 $ 46,319

Restricted cash

Restricted cash, included in prepaid expenses and other current assets

577 2,170 2,054

Restricted cash, included in other assets

Total cash, cash equivalents and restricted cash $ 26,479 $ 24,029 $ 48,373

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$ 9,770 $ 10,515 $ 6,296

Income tax (refund received) paid, net

( 4,039 ) 2,329 20,626

Supplemental disclosure of non-cash investing activities:

Consideration payable in connection with a business acquisition

Income tax paid (refund received), net

2,056 ( 4,039 ) 2,329

Fair value of common stock issued in connection with the purchase of mnml — — 17,305

Supplemental disclosure of non-cash activities:

Right-of-use asset additions under operating leases $ 38,534 $ 8,447 $ 22,237

Offering costs not yet paid — — 1,142

Debt issuance costs not yet paid — — 121

Property and equipment expenditures included in accounts payable and accrued liabilities

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

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The Company is headquartered in San Francisco, California, with buying, studio, marketing, fulfillment and administrative functions primarily in Australia and the United States.

Initial Public Offering

In September 2021, the Company completed an initial public offering (the “IPO”), in which the Company issued and sold 833,333 shares of its newly authorized common stock for $ 132.00 per share, both as adjusted for the one-for-12 Reverse Stock Split (as defined in Note 14, “Stockholders’ Equity”), for net proceeds of $ 95.7 million, after deducting underwriting discounts and commissions of $ 6.6 million, and offering costs of $ 7.7 million.

Reorganization Transactions

Brands Holding Corp.

was formed as a Delaware corporation on May 20, 2021 to be the issuer of common stock in the IPO.

Excelerate, L.P.

(“Excelerate”), a Cayman limited partnership, and the predecessor entity to a.k.a.

Brands Holding Corp., was the holding company of the entities that owned and operated the a.k.a.

businesses prior to the IPO.

The equity interests of Excelerate, which included the Series A partner units and incentive units, were owned by affiliates of Summit Partners LP (“Summit”), certain other investors and certain of our executive officers and directors and other members of management.

In connection with the IPO, a reorganization was undertaken to cause Excelerate to become a wholly-owned subsidiary of a.k.a.

Brands Holding Corp.

Immediately prior to the reorganization, Summit, management and certain other investors exchanged their limited partnership interests in Excelerate for limited partnership interests in New Excelerate, L.P.

(“New Excelerate”), and New Excelerate became a limited partner of Excelerate.

Immediately prior to the pricing of the IPO, New Excelerate and other Excelerate investors transferred their interests in Excelerate to a.k.a.

Brands Holding Corp., in exchange for common stock in a.k.a.

Brands Holding Corp (the “New Excelerate Reorganization”).

As a result, Excelerate became a wholly-owned subsidiary of a.k.a.

Brands Holding Corp.

As a result of the Culture Kings acquisition in March 2021 (refer to Note 3, “Acquisitions,” for additional information on the Culture Kings acquisition), Excelerate indirectly owned 55 % of the equity interests in CK Holdings, LP (“CK Holdings”), which owned 100 % of the Company’s Culture Kings business prior to the IPO.

The remaining 45 % of the equity interests in CK Holdings were held by certain minority investors.

Immediately following the New Excelerate Reorganization, the Company completed a series of transactions in which the minority investors exchanged their remaining interests in CK Holdings for 1,817,483 newly issued shares of a.k.a.

Brands Holding Corp.’s common stock, as adjusted for the one-for-12 Reverse Stock Split.

The number of shares issued in exchange for the minority interests was determined based on the relative valuations of CK Holdings and consolidated a.k.a.

at the time of the IPO.

Excelerate historically owned 66.7 % of the equity interests in P&P Holdings, LP (“P&P Holdings”), which operated the Company’s Petal & Pup business prior to the IPO.

The remaining 33.3 % of the equity interests in P&P Holdings were held by certain minority investors.

On August 19, 2021, the Company repurchased approximately 6.0 % of the equity held by the P&P minority investors for AUD $ 5.0 million.

In connection with the completion of the IPO, the Company used a portion of the net proceeds from the IPO to fund the acquisition of the remaining 27.3 % of the equity interests in P&P Holdings then owned by the P&P minority investors for cash of approximately AUD $ 22.8 million.

Following the completion of this purchase, P&P Holdings became a wholly-owned subsidiary of a.k.a.

Brands Holding Corp.

Refinancing Transactions

In March 2021, certain subsidiaries of the Company entered into senior secured credit facilities that provided the Company with a $ 125.0 million senior secured term loan facility and up to $ 25.0 million aggregate principal in revolving borrowings (the “Fortress Credit Facilities”), and also issued $ 25.0 million in senior subordinated notes to an affiliate of Summit (the “Summit Notes”) to provide financing for the Company’s acquisition of Culture Kings.

In connection with the IPO, certain subsidiaries of the Company entered into a senior secured credit facility inclusive of a $ 100 million term loan and a $ 50 million revolving line of credit.

The Company used borrowings under this senior secured credit facility’s term loan, together with a portion of the proceeds from the IPO, to repay the Fortress Credit Facilities in full and to redeem the Summit Notes in full and subsequently terminated them.

Refer to Note 8, “Debt,” for additional information.

Historical Units

Prior to the IPO, incentive units had been issued to certain directors and members of management.

These incentive units had a requirement that such shares could not participate in distributions and earnings of Excelerate until after the holders of the Series A partner units received their return of capital plus a specified threshold amount per unit.

At no time prior to IPO had such threshold been met.

In September 2021, in connection with the IPO, all previous ownership interests in Excelerate, held by New Excelerate and other Excelerate investors were exchanged for shares of common stock in a.k.a.

Brands Holdings Corp.

in direct proportion to their respective Series A partner units and incentive units, subject to a reverse split factor of 61.25 %.

All unit, per unit and related information presented in the accompanying consolidated financial statements have been retroactively adjusted, where applicable, to reflect the impact of the split of units held by New Excelerate investors into a proportionate amount of shares of a.k.a.

Brands Holdings Corp.’s common stock.

The terms of the incentive units remained unchanged and individual holders of such units will only be entitled to participate in the distributions and earnings of New Excelerate once the holders of the Series A partner units receive their return of capital plus a specified threshold amount per unit.

However, as New Excelerate was issued shares of common stock in direct proportion to its combined Series A partner units and incentive units, New Excelerate will participate in all distributions and returns of the Company in relation to the total amount of shares of a.k.a.

Brands Holdings Corp.’s common stock that it holds.

Prior to the IPO, the Company used the two-class method in calculating earnings per unit and had not deemed the incentive units to be potentially dilutive because such shares cannot participate in distributions and earnings of the Company until after the Series A units receive their return of capital plus a specified threshold amount per unit, and such threshold had not been met.

Accordingly, basic and diluted earnings per share presented on the consolidated statements of income for all periods prior to the IPO are the same.

Post-IPO, the common stock held by New Excelerate includes shares issued in proportion to the ownership interests in respect to the incentive units.

Therefore, the impact of the incentive unit ownership is included in the common stock issued and outstanding after the IPO.

Significant Accounting Policies

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On an ongoing basis, the Company evaluates items subject to significant estimates and assumptions.

Concentration of Credit Risk

Certain Risks and Concentrations

The Company is subject to certain risks, including credit risk, dependence on third-party technology providers and hosting services for website servers, exposure to risks associated with online commerce security, credit card fraud, as well as the interpretation of state and local laws and regulations in regard to the collection and remittance of sales and use taxes.

The Company does not have significant customer or vendor concentrations.

Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, restricted cash and accounts receivable.

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Cash equivalents are carried at cost, which approximates fair value.

Restricted Cash

Restricted cash primarily relates to amounts held by counterparties as collateral under various lease agreements.

Restricted cash is presented separately from cash and cash equivalents on the accompanying consolidated balance sheets.

Accounts Receivable

Accounts receivable consists of trade accounts receivable that are reported net of an allowance for doubtful accounts.

The Company had $ 0.2 million in allowance for doubtful accounts as of December 31, 2023.

The Company had no allowance for doubtful accounts as of December 31, 2022.

Inventory, Net

The Company had $ 0.1 million and $ 0.2 million in allowance for doubtful accounts as of December 31, 2024 and 2023, respectively.

Inventories are accounted for using an average cost method and are valued at the lower of cost or net realizable value.

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Prepaid expenses and other current assets consist primarily of advance payments on inventory to be delivered from vendors, security deposits, prepaid packaging and insurance.

Deferred Offering Costs

Deferred offering costs consisted primarily of legal, accounting and other fees related to the IPO, which were recorded in prepaid expenses and other current assets on the consolidated balance sheets prior to the IPO.

After the completion of the IPO in September 2021, deferred offering costs of $ 7.7 million were reclassified to stockholders’ equity and recorded net against the proceeds from the IPO.

Property and Equipment, Net

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Property and equipment that is fully depreciated as of the last day of a fiscal year is written off during the first quarter of the following year.

The Company has incurred costs related to the development of the Company’s websites.

The Company capitalizes these website development costs, as applicable, in accordance with ASC Subtopic 350-50, Intangibles—Goodwill and Other—Website Development Costs (“ASC 350-50”) .

ASC 350-50 requires that costs incurred during the website development stage be capitalized.

The Company incurs costs related to the development of the Company’s websites and capitalizes these website development costs incurred during the website development stage.

Capitalized website costs include salary and benefit costs for Company employees and contractors that develop the website.

When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are depreciated using the straight-line method over the three-year useful life.

Business Combinations

The Company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are recorded at their acquisition date fair values.

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets.

Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows.

Identifiable intangible assets with finite lives are amortized over their useful lives.

Amortization of intangible assets is recorded in general and administrative expense.

While the Company uses its best estimates and assumptions as a part of the determination of fair value to accurately value assets acquired, liabilities assumed and any noncontrolling interest on the business combination date, the Company’s estimates and assumptions are inherently subject to refinement.

As a result, during the preliminary determination of fair value, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired or liabilities assumed subsequent to the completion of the determination of fair value in the Company’s operating results in the period in which the adjustments were determined.

Noncontrolling interest is part of the aggregate consideration paid for an acquisition.

It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition by the Company, subject to possible adjustments for up to one year from the business combination date, and the minorities’ share of changes in equity since the date of acquisition.

The Company also incurs acquisition-related and other expenses including legal, banking, accounting and other advisory fees of third parties which are recorded as general and administrative expenses as incurred.

The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date.

When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are depreciated using the straight-line method over the useful life.

Goodwill and Intangible Assets

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An impairment charge is recorded equal to any shortfall between the fair value of a reporting unit and its carrying value.

No goodwill impairment was required for the year ended December 31, 2024 .

However, as of the annual testing date of October 31, 2024, the estimated fair value of the mnml reporting unit exceeded the carrying value by 11.2 % and the carrying value of the related goodwill was $ 30.0 million.

In 2023, the Company concluded that the carrying value of the Culture Kings and Petal & Pup reporting units exceeded their fair values as of August 31, 2023.

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Refer to Note 5, “Goodwill,” for further information.

No goodwill impairment was recorded for the year ended December 31, 2021.

The Company reviews finite-lived intangible assets and property and equipment for possible impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

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The Company will continue to use judgment in evaluating the assumptions related to its equity-based compensation on a prospective basis.

Partnership Units Valuations

For the partnership units granted prior to IPO, the Company relied on valuations prepared by an independent third-party valuation firm in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation .

Such valuations were aligned with the Company’s internal valuation approach.

Subsequent to the IPO, it is no longer necessary for the Company to estimate the fair value of partnership units, as no further incentive partnership unit awards will be granted.

See Note 13, “Equity-based Compensation,” for additional information.

Employee Benefit Programs

The Company has a 401(k) defined contribution plan covering eligible employees.

Participants may contribute a percentage of their pre-tax earnings annually, subject to limitations imposed by the Internal Revenue Service.

The Company matches contributions, subject to Internal Revenue Service limitations, and contributions vest immediately.

The Company’s short-term obligations, which represent wages and salaries for vacation days earned, non-monetary benefits and accumulated sick leaves that are expected to settle wholly within 12 months after the end of the period in which the employees render the related service, are recognized in respect of employee services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

The liabilities are included in accrued liabilities in the consolidated balance sheets.

Foreign Currencies

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Revenue Recognition

Revenue is primarily derived from the sale of apparel merchandise through the Company’s online websites, stores, third-party marketplaces and, when applicable, shipping revenue.

Revenue is primarily derived from the sale of apparel merchandise through the Company’s online websites, stores, third-party marketplaces, wholesale partnerships and, when applicable, shipping revenue.

Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products.

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and amortization associated with the Company’s intangible assets, including acquired brand names, customer relationships and trademarks.

Other Expense, Net

Other expense, net, consists primarily of interest expense of $ 11.2 million, $ 7.0 million and $ 9.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, foreign currency losses of $ 0.8 million, $ 1.6 million and $ 1.7 million for the years ended December 31, 2023, 2022 and 2021, respectively, and $ 10.9 million of loss on extinguishment of debt for the year ended December 31, 2021.

Net Income (Loss) Per Share

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The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market.

The carrying amounts for the Company’s cash and cash equivalents, accounts receivable, accounts payable, line of credit and accrued liabilities approximate fair value due to their short-term maturities.

The carrying amounts for the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short-term maturities.

Using level 2 inputs, the fair value of the Company’s borrowings under its term debt and revolving line of credit were below fair value.

Refer to Note 7, “Debt,” for further information.

When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

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The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Certain Risks and Concentrations

The Company is subject to certain risks, including dependence on third-party technology providers and hosting services for website servers, exposure to risks associated with online commerce security, credit card fraud, as well as the interpretation of state and local laws and regulations in regard to the collection and remittance of sales and use taxes.

The Company does not have significant customer or vendor concentrations.

Commitments and Contingencies

The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible.

Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss.

Although the Company cannot predict with assurance the outcome of any litigation or tax matters, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s operating results, financial position or cash flows.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters.

The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the consolidated financial statements.

Segment Information

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The Company has aggregated its operating segments into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics.

Reclassification

As of December 31, 2023, the Company reclassified restricted cash of $ 2.2 million from its separate balance sheet line item to be included within prepaid expenses and other current assets on the balance sheet.

This reclassification had no effect on total current assets or total assets previously reported.

Recent Accounting Pronouncements

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This ASU becomes effective for annual periods beginning in 2024 and interim periods in 2025.

The Company is assessing the impact of this ASU.

The Company has adopted this ASU.

Refer to Note 16, “Segment Information,” for further information.

In December 2023, FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which will require incremental income tax disclosures on an annual basis for all public entities.

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The Company is currently evaluating the incremental disclosures that will be required in the Company’s consolidated financial statements.

Culture Kings

On March 31, 2021, pursuant to a share sale agreement, the Company, through its subsidiary CK Holdings, acquired a 55 % ownership stake in Culture Kings.

The previous shareholders of Culture Kings retained a 45 % noncontrolling interest in Culture Kings by receipt of an equity interest in CK Holdings.

The Company recognized goodwill as the excess of the fair value of the total purchase consideration and noncontrolling interests over the net fair value of the identifiable assets acquired and the liabilities assumed.

The purchase price consisted of AUD $ 307.4 million ($ 235.9 million) in cash consideration and noncontrolling interest with a fair value of AUD $ 186.0 million ($ 142.7 million).

In connection with the IPO, the Company completed a series of transactions in which the minority investors exchanged their interests in CK Holdings for newly issued shares of the Company’s common stock.

Culture Kings is focused on street apparel aimed at the young adult age group and has a combination of online sales as well as stores based in Australia.

Culture Kings expanded the Company’s consumer market to include male consumers and further expanded the Company’s presence in the United States.

The following table sets forth the final allocation of the total consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, as of the date of the acquisition, with the excess recorded to goodwill:

Purchase consideration:

Total purchase price, net of cash acquired of $ 8,831

Fair value of noncontrolling interest

Total consideration

Identifiable net assets acquired:

Account receivable, net

Inventory (1)

Prepaid expenses and other current assets

Property and equipment, net

Intangible assets, net (2)

Operating lease right-of-use assets

Accounts payable

Deferred revenue

Income taxes payable

Other current liabilities

Operating lease liabilities

Deferred income taxes, net

Accrued liabilities, non-current

Net assets acquired

The purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed.

The valuations involving the most significant assumptions, estimates and judgment are:

(1) Inventory was adjusted by $ 15.1 million to step-up inventory cost to estimated fair value.

The fair value of the inventory was determined utilizing the net realizable value method, which was based on the expected selling price of the inventory to customers adjusted for related disposal costs and a profit allowance for the post-acquisition selling effort.

(2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:

Fair Value at Acquisition Date

Annual Amortization Expense

Estimated Useful

Life in Years

$ 68,354 $ 6,835 10 years

Customer relationships

4,855 1,214 4 years

Total $ 73,209

Brand names are valued using a relief from royalty approach, which estimates the license fee that would need to be paid by Culture Kings if it was deprived of the brand names and domain names, and instead had to pay a license fee for their use.

The fair value is the present value of the expected future license fee cash flows.

Customer relationship intangible assets are valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible asset after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues.

Key assumptions included discounted cash flow, estimated life cycle and customer attrition rates.

Total acquisition costs incurred by the Company in connection with its purchase of Culture Kings primarily related to third-party legal, accounting and tax diligence fees, which were $ 3.3 million.

These costs are recorded in general and administrative expenses in the consolidated statements of income for the year ended December 31, 2021.

Goodwill of $ 264.5 million, no ne of which is deductible for tax purposes, represents the excess purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed.

The goodwill arising from the acquisition consists largely of anticipated synergies related to combining Culture Kings with the Company’s existing operations.

See Note 6, “Goodwill,” for additional information about goodwill impairment.

The fair value of the noncontrolling interest was determined by measuring the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition, adjusted for a discount to factor the non-marketable, noncontrolling holding.

The noncontrolling interest in Culture Kings contained a put right whereby the minority investors could have caused CK Holdings to purchase all of their units at a per unit price equal to six times the EBITDA of CK Holdings, calculated as of the twelve-month period ending on the end of the most recent fiscal quarter.

The put right was only exercisable after December 31, 2023.

In accordance with ASC 810, Consolidation , as this put right was redeemable outside of the Company’s control, the noncontrolling interest was classified outside the permanent equity section of the Company’s consolidated balance sheets prior to the IPO.

In connection with the IPO, the Company completed a series of transactions in which the CK Holdings minority investors exchanged their interests in CK Holdings for newly issued shares of the Company’s common stock, thereby eliminating the noncontrolling interest classified outside of permanent equity.

Since the date of acquisition, March 31, 2021, the results of Culture Kings have been included in the Company’s consolidated results.

For the year ended December 31, 2021, Culture Kings’ net sales of $ 196.5 million and a net loss of $( 5.9 ) million are included in the accompanying consolidated statements of income.

The unaudited pro forma financial information below is presented to illustrate the estimated effects of the acquisition of Culture Kings and the associated financing as if they had occurred on January 1, 2020:

Year Ended December 31, 2021

Net income attributable to a.k.a.

Brands Holding Corp.

Net income per share, basic and diluted:

The pro forma information was prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations .

The unaudited pro forma financial information has been prepared for informational purposes only and is not indicative of what the Company’s results of operations would have been had the transactions occurred on January 1, 2020, nor does it project the results of operations of the combined company following the transaction.

On October 14, 2021, the Company acquired all of the equity interests of Third Estate LLC (“mnml”) for total consideration of $ 46.1 million, including cash consideration of $ 28.2 million, net of cash acquired of $ 0.6 million, and subject to working capital adjustments.

The remaining consideration of $ 17.3 million was paid in the form of 171,474 shares of the Company’s common stock.

mnml is an LA-based streetwear brand that offers competitively priced on-trend wardrobe staples.

This acquisition allowed the Company to continue its growth into the U.S.

market and provides opportunities for customer cross-sell.

The final fair values of assets acquired and liabilities assumed, as of the date of the acquisition, are as follows:

Accounts receivable, net

Inventory (1)

Prepaid expenses and other current assets

Intangible assets (2)

Accounts payable

Deferred income

Accrued liabilities

Sales and use tax liability

Deferred income taxes, net

Total net assets acquired

Total purchase price, net of cash acquired of $ 605

The purchase price allocation includes significant judgments, assumptions and estimates to determine the fair value of assets acquired and liabilities assumed.

The valuations involving the most significant assumptions, estimates and judgment are:

(1) Inventory was adjusted by $ 1.9 million to step-up inventory cost to estimated fair value.

(2) The fair value of the acquired intangible assets was determined with the assistance of a valuation specialist and include:

Fair Value at Acquisition Date

Amortization Period

Brand $ 11,800 10 years

Customer relationships 2,500 3 years

Total intangible assets $ 14,300

The results of operations of mnml are included in the Company’s consolidated statements of income beginning October 14, 2021.

For the year ended December 31, 2021, mnml’s net sales of $ 11.6 million and net income attributable to the Company of $ 1.0 million are included in the accompanying consolidated statements of income.

Goodwill of $ 30.0 million, no ne of which is deductible for tax purposes, represents the excess purchase price over the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed.

The goodwill arising from the acquisition consists largely of anticipated synergies related to combining mnml with the Company’s existing operations.

Total acquisition costs incurred by the Company in connection with the purchase primarily related to third-party legal, accounting and tax diligence fees, which were $ 1.3 million.

These costs are recorded in general and administrative expenses in the consolidated statement of income for the year ended December 31, 2021.

Purchase of Noncontrolling Interests

Immediately following the New Excelerate Reorganization (as described in Note 1, “Organization and Description of Business”), the Company completed a series of transactions in which the CK Holdings minority investors exchanged their interests in CK Holdings for 1,817,483 newly issued shares of a.k.a.

Brands Holding Corp.’s common stock, as adjusted for the one-for-12 Reverse Stock Split.

The number of shares issued in exchange for the minority interests was determined based on the relative valuations of CK Holdings and a.k.a.

Brands Holding Corp.’s consolidated group at the time of the IPO.

This exchange resulted in the elimination of the noncontrolling interest in Culture Kings, with a value of $ 132.3 million , and an increase in additional paid-in capital with a nominal amount recorded as common stock at a value of $ 0.001 per issued share in the exchange.

Following the completion of this transaction, CK Holdings became a wholly-owned subsidiary of a.k.a.

Brands Holding Corp.

The Company had historically owned 66.7 % of the equity interests in P&P Holdings, which operated the Company’s Petal & Pup business prior to the IPO.

The remaining 33.3 % of the equity interests in P&P Holdings were held by certain minority investors.

On August 19, 2021, the Company repurchased approximately 6.0 % of the equity held by the P&P minority investors for AUD $ 5.0 million .

As a result of the transaction, noncontrolling interest of $ 9.6 million was eliminated and the $ 10.6 million paid in excess of the noncontrolling interest was recorded as a reduction to additional paid-in capital.

Following the completion of this purchase, P&P Holdings became a wholly-owned subsidiary of the Company.

In March 2023, the Company completed the sale of its Rebdolls reporting unit back to its founder.

Upon close of the transaction, the Company recorded a pre-tax loss of $ 1.0 million in other expense, net in its condensed consolidated statements of income in the first quarter of fiscal year 2023.

As part of the sale, the Company retained an 18 % economic interest in Rebdolls but retained no further rights related to Rebdolls.

Such investment was determined to have no value, as recovery of any amount was deemed remote.

In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date, which clarified the effective date of ASU 2024-03.

ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Company’s consolidated statements of income, as well as qualitatively describe remaining amounts included in those captions.

The Company intends to adopt ASU 2024-03 for the Company’s fiscal year ended December 31, 2027 using a prospective transition method.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are comprised of the following:

Security deposits $ 610 $ 2,945

Inventory prepayments $ 6,693 $ 4,982

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48,968 43,658

Less accumulated depreciation

accumulated depreciation

( 17,706 ) ( 16,504 )

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$ 31,262 $ 27,154

Total depreciation expense for the years ended December 31, 2023, 2022 and 2021 was $ 7.6 million, $ 6.2 million and $ 2.7 million, respectively.

Depreciation expense consisted of the following:

Year Ended December 31,

2024 2023 2022

Selling expenses

$ 5,478 $ 5,264 $ 3,615

General and administrative expenses

1,072 2,341 2,541

Total depreciation expense

$ 6,550 $ 7,605 $ 6,156

The carrying value of goodwill, as of December 31, 2024 and 2023, was $ 89.3 million and $ 94.9 million, respectively.

There was no goodwill impairment recorded for the year ended December 31, 2024.

The goodwill of acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition.

The goodwill of acquired companies is generally not deductible for tax purposes.

2023 Impairment

In August 2023, due to elevated interest rates and unfavorable demand in Australia, the Company reduced its forecasts and expectations for the Culture Kings and Petal & Pup reporting units.

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As of December 31, 2023, $ 11.3 million of goodwill related to Petal & Pup remained on the consolidated balance sheet, while the goodwill related to Culture Kings was fully impaired.

Additionally, as of the testing date, the estimated fair value of the mnml reporting unit exceeded the carrying value by 1.4 % and the carrying value of the related goodwill was $ 30.0 million.

Holding all other assumptions used in the fair value measurement of the mnml reporting unit constant, a 2 % increase in the selected discount rate would result in impairment.

2022 Impairment

As part of the annual goodwill impairment test conducted in the fourth quarter of 2022, the Company determined that the carrying value of its Culture Kings and Rebdolls reporting units exceeded their fair values and recorded a total non-cash goodwill impairment charge of $ 173.8 million during the year ended December 31, 2022.

The worsening economic trends in the fourth quarter of 2022, including continued inflation and rising interest rates, as well as unfavorable demand due to changing customer preferences towards a mix of online and physical store shopping led the Company to lower its earnings forecasts and expectations for the Culture Kings and Rebdolls reporting units, driving the reduction in their fair values.

The goodwill of acquired companies is generally not deductible for tax purposes.

Goodwill Activity

The following table summarizes goodwill activity:

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91,070 105,770

Less accumulated amortization

accumulated amortization

( 38,716 ) ( 41,448 )

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Year ending December 31:

2024 $ 10,263

Thereafter 9,510

Total amortization expense $ 52,354

Debt Financing for the Culture Kings Acquisition

To fund the acquisition of Culture Kings (refer to Note 3, “Acquisitions,” for additional information), on March 31, 2021, Polly Holdco Pty Ltd.

(“Polly Holdco”), a wholly-owned subsidiary of the Company, entered into a debt agreement with a syndicated group, with an affiliate of Fortress Credit Corp as administrative agent, consisting of a $ 125.0 million term-loan facility and a $ 25.0 million revolving credit facility.

Polly Holdco also issued $ 25.0 million in senior subordinated notes to certain debt funds of Summit, a related party of the Company (refer to Note 17, “Related Party Transactions,” for additional information).

The combined term loan and senior subordinated notes provided the Company with $ 144.1 million, net of loan fees of approximately $ 5.9 million.

The Company incurred debt issuance costs of $ 6.9 million, of which $ 1.0 million related to the revolving credit facility, which were capitalized and included in prepaid and other current assets as deferred financing costs and were being amortized over the life of the facility, or 6 years.

The remaining $ 5.9 million of debt issuance costs relating to the term loan and senior subordinated notes were presented net of the outstanding debt and were being amortized over the life of the outstanding debt, using the effective interest rate method.

The Company repaid the term loan, revolving credit facility and senior subordinated notes in full and terminated them in September 2021 in connection with the IPO, as described further below.

Senior Secured Credit Facility

On September 24, 2021, in connection with the closing of the IPO, certain subsidiaries of the Company entered into a senior secured credit facility comprised of a $ 100.0 million term loan and a $ 50.0 million revolving line of credit, as well as an option for additional term loan of up to $ 50.0 million through an accordion feature.

On September 24, 2021, certain subsidiaries of the Company entered into a senior secured credit facility comprised of a $ 100.0 million term loan and a $ 50.0 million revolving line of credit, as well as an option for additional term loan of up to $ 50.0 million through an accordion feature.

The senior secured credit facility also allows for the issuance of one or more letters of credit from time to time by syndicate lenders.

Effective April 4, 2023, the Company modified its senior secured credit facility under existing contractual provisions to yield interest based on interest rates based on Term SOFR, as defined in the credit agreement for the senior secured credit facility (the “Credit Agreement”).

Effective April 4, 2023, the Company modified its senior secured credit facility under existing contractual provisions to yield interest from interest rates based on Term SOFR, as defined in the credit agreement for the senior secured credit facility (the “Credit Agreement”).

Key terms and conditions of each facility were as follows:

• The $ 100.0 million term loan matures five years after closing and requires the Company to make amortized annual payments of 5.0 % during the first and second years, 7.5 % during the third and fourth years and 10.0 % during the fifth year with the balance of the loan due at maturity.

Borrowings under the term loan accrue interest at Term SOFR plus an applicable margin dependent upon our net leverage ratio, as defined in the Credit Agreement.

• The $ 100.0 million term loan matures five years after closing (September 2026) and requires the Company to make amortized annual payments of 5.0 % during the first and second years, 7.5 % during the third and fourth years and 10.0 % during the fifth year with the balance of the loan due at maturity.

Borrowings under the term loan accrue interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio, as defined in the Credit Agreement.

The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75 x, yielding an interest rate of Term SOFR plus 3.25 %.

• The $ 50.0 million revolving line of credit, which matures five years after closing, accrues interest at Term SOFR plus an applicable margin dependent upon our net leverage ratio.

• The $ 50.0 million revolving line of credit, which matures five years after closing (September 2026), accrues interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio.

The highest interest rate under the Credit Agreement occurs at a net leverage ratio of greater than 2.75 x, yielding an interest rate of Term SOFR plus 3.25 %.

Additionally, a margin fee of 25 - 35 basis points is assessed on unused amounts under the revolving line of credit, subject to adjustment based on our net leverage ratio.

Additionally, a margin fee of 25 - 35 basis points is assessed on unused amounts under the revolving line of credit, subject to adjustment based on the Company’s net leverage ratio.

• The $ 50.0 million accordion feature allows the Company to enter into additional term loan borrowings at terms to be agreed upon at the time of issuance, but on substantially the same basis as the original term loan, which includes the requirement to make amortized annual payments at the same cadence as that of the original term loan.

The senior secured credit facility requires that the Company maintain a maximum total net leverage ratio of 3.50 to 1.00 as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2021 through maturity.

The senior secured credit facility also requires that the Company maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 as of the last day of any fiscal quarter, beginning with the fiscal quarter ended December 31, 2021 through maturity.

The senior secured credit facility requires that the Company maintain a maximum total net leverage ratio of 3.50 to 1.00 and maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, each as of the last day of any fiscal quarter.

In the event that the Company fails to comply with the financial covenant, the Company will have the option to make certain equity contributions, directly or indirectly, to cure any non-compliance with such covenant, subject to certain other conditions and limitations.

Beginning with the fiscal year ending December 31, 2022, and continuing annually thereafter, the Company is required to make a mandatory prepayment as a percentage of excess cash flows, as defined in the Credit Agreement, in the period based on the Company triggering certain net debt leverage ratios.

The Company is required to make a mandatory prepayment as a percentage of excess cash flows, as defined in the Credit Agreement, in the period based on the Company triggering certain net debt leverage ratios.

Specifically, a mandatory prepayment of 50 % of excess cash flows is required if the Company’s net leverage ratio exceeds 2.75 x, and a mandatory prepayment of 25 % of excess cash flows is required if the Company’s net leverage ratio is greater than or equal to 2.25 x.

As of December 31, 2023 , the Company was in compliance with all debt covenants.

As of December 31, 2024 , the Company was in compliance with all financial debt covenants.

The Company incurred $ 2.7 million of debt issuance costs in relation to the senior secured credit facility.

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Debt issuance costs are amortized over the life of the outstanding debt, using the effective interest rate method.

In September 2021, the Company used borrowings from the term loan under this senior secured credit facility, together with a portion of the proceeds from the IPO, to repay in full and terminate the previous term loan, revolving credit facility and senior subordinated notes entered into in March 2021 in relation to the Culture Kings acquisition.

As part of the repayment, the Company also paid $ 4.5 million in prepayment penalties and wrote off $ 6.4 million of unamortized debt issuance costs, all of which is included in the loss on extinguishment of debt in the consolidated statements of income.

In October 2021, the Company borrowed $ 15.0 million under the revolving line of credit at an initial applicable interest rate of 3.37 % and final payoff due on September 24, 2026.

The borrowings on the revolving line of credit were used in the acquisition of mnml.

In November 2021, subsequent to the draw on the revolver, the Company borrowed $ 12.0 million of additional term loan under the accordion feature at substantially the same terms as the original term loan.

In December 2021, the borrowings from the accordion feature, along with cash on hand, were used to completely repay the borrowings from the revolving line of credit.

In connection with the borrowings under the accordion feature, additional debt issuance costs of $ 0.3 million were incurred and presented net of outstanding debt in long term debt on the balance sheet, to be amortized over the life of the accordion, using the effective interest rate method.

In January 2022, the Company borrowed $ 15.0 million under the revolving line of credit at an initial applicable interest rate of 3.52 % and final payoff due on September 24, 2026.

Additionally, in March 2022, the Company borrowed $ 10.0 million under the revolving line of credit at an initial applicable interest rate of 3.60 % and final payoff due on September 24, 2026.

In October 2022, the Company borrowed $ 15.0 million under the revolving line of credit at an initial applicable rate of 6.50 % and final payoff due on September 24, 2026.

In October 2023 and November 2023, the Company borrowed $ 5.5 million and $ 6.0 million, respectively, under the revolving line of credit at an initial applicable interest rate of 8.70 % and 8.69 %, respectively, with final payoffs due on September 24, 2026.

During the year ended December 31, 2023, the Company voluntarily repaid all of the outstanding amount owed under its revolving line of credit and made an early prepayment of $ 5.1 million of the outstanding amount owed under its term loan in addition to required quarterly repayments.

During 2024, the Company borrowed $ 49.5 million under its revolving line of credit, with final payoff due on September 24, 2026, and voluntarily repaid $ 26.2 million of the amounts outstanding under its revolving line of credit.

As of December 31, 2024, the all-in rate (Term SOFR plus the applicable margin) for the Company’s term loan and borrowings under the revolving line of credit was 7.68 %.

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Additionally, as of December 31, 2024 , the Company had $ 2.2 million of outstanding letters of credit.

As of December 31, 2024, the carrying value of the Company’s total debt was $ 111.7 million, while the fair value of the Company’s total debt, valued using level 2 inputs, was $ 103.0 million.

As of December 31, 2024, the maturities of principal amounts of our total debt obligations were as follows:

The Company leases office locations, warehouse facilities and stores under various non-cancellable operating lease agreements.

27 unchanged sentences

As of December 31, 2024, the maturities of operating lease liabilities were as follows:

2025 $ 13,201

Total remaining lease payments

3 unchanged sentences

Long-term operating lease liabilities

As of December 31, 2024, the Company had obligations under several lease agreements with expected commencement dates in the first half of 2025 and terms of between seven and ten years .

The Company expects to classify these leases as operating leases and recognize lease obligations totaling $ 18.3 million over the terms of the leases.

Loss before income taxes consisted of the following:

18 unchanged sentences

$ 4,329 $ 1,921 $ ( 3,917 )

The (benefit from) provision for income taxes differs from the tax computed using the statutory U.S.

The provision for (benefit from) income taxes differs from the tax computed using the statutory U.S.

federal income tax rate of 21% as a result of the following items:

1 unchanged sentence

2024 2023 2022

(Benefit from) provision for income taxes at U.S.

Benefit from income taxes at U.S.

statutory rate

2 unchanged sentences

Permanent differences

555 266 1,121

Foreign tax rate differential

( 1,532 ) ( 8,220 ) ( 14,900 )

Transaction costs

Equity-based compensation

3 unchanged sentences

Change in valuation allowance

9,186 6,987 —

Change in tax basis of Culture Kings’ inventory and intangibles

6 unchanged sentences

The foreign tax rate differential relates to differences between the income tax rates in effect in the foreign countries in which the Company operates, in particular Australia where the corporate tax rate is 30%.

The components of net deferred tax assets (liabilities) were as follows:

The components of net deferred tax assets were as follows:

Year Ended December 31,

1 unchanged sentence

Transaction costs $ 341 $ 843

Property and equipment

Accruals and reserves 6,175 5,201

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Property and equipment

( 754 ) ( 749 )

Intangible assets ( 5,069 ) ( 6,850 )

1 unchanged sentence

( 18,066 ) ( 11,472 )

Foreign exchange gains / losses ( 200 ) —

Asset retirement obligations

Total deferred tax liabilities ( 23,988 ) ( 19,071 )

Net deferred assets

$ 1,569 $ 786

Net deferred tax assets

The Company had gross deferred tax assets of $ 42.8 million and $ 32.8 million and gross deferred tax liabilities of $ 24.0 million and $ 19.1 million at December 31, 2024 and 2023, respectively.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

When weighing all available evidence associated with the realizability of its deferred tax assets, in particular, uncertainties related to the future generation of taxable income, the recent negative trends in the Australian market and cumulative losses in the Australian market, the Company determined that it was not “more likely than not” that it would be able to realize the tax benefits associated with certain of its net deferred tax assets.

Based on this evaluation, a full valuation allowance of $ 11.8 million has been recorded on the net deferred tax assets in the Company’s Australian business.

Additionally, a full valuation allowance of $ 0.4 million has been recorded on the U.S.

capital loss carryforward related to the sale of Rebdolls in March 2023.

For the year ended December 31, 2023, the valuation allowance increased by $ 7.4 million, primarily due to incremental net operating losses in Australia that were not considered realizable.

When weighing all available evidence associated with the realizability of its deferred tax assets, in particular, uncertainties related to the future generation of taxable income, the Company determined that it was not “more likely than not” that it would be able to realize the tax benefits associated with certain of its net deferred tax assets.

Based on this evaluation, a full valuation allowance of $ 18.8 million has been recorded on the net deferred tax assets in the Company’s United States and Australian businesses.

For the year ended December 31, 2024 , the valuation allowance increased by $ 6.6 million, primarily due to the Company placing a valuation allowance on its U.S.

deferred tax assets.

As of December 31, 2024, the Company had a $ 18.0 million Australian net operating loss carryforward and a $ 14.3 million Australian capital loss carryforward, as well as a U.S.

capital loss carryforward of $ 1.0 million on the sale of Rebdolls.

As of December 31, 2022, the Company had a $ 7.1 million Australian net operating loss carryforward and a $ 15.8 million Australian capital loss carryforward on the intra-entity transfer of certain intellectual property rights from Australia to the U.S.

The net operating loss and capital loss carryforwards have no expiration.

As of December 31, 2023 , the Company had a $ 26.0 million Australian net operating loss carryforward and a $ 15.8 million Australian capital loss carryforward, as well as a U.S.

capital loss carryforward of $ 1.7 million on the sale of Rebdolls.

The net operating losses and the Australian capital loss carryforwards have no expiration.

capital loss carryforward will expire in 2028.

The Company has not provided deferred taxes on unremitted earnings attributable to foreign subsidiaries that have been considered permanently reinvested.

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2021 Omnibus Incentive Plan

In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Omnibus Incentive Plan (the “2021 Plan”) which became effective in connection with the IPO.

In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Omnibus Incentive Plan (the “2021 Plan”) which became effective in connection with the Company’s initial public offering of common stock in September 2021 (the “IPO”).

The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other forms of equity and cash compensation.

A total of 408,355 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split, were initially reserved for issuance under the 2021 Plan.

The number of shares of common stock reserved and available for issuance under the 2021 Plan automatically increases on January 1 of each year by 1 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors.

On May 30, 2023, the Company’s stockholders approved an amendment to the 2021 Plan to increase the number of shares available for issuance under the 2021 Plan by 833,333 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split.

As of December 31, 2023, there were 1,456,396 shares reserved for issuance under the 2021 Plan, as adjusted for the one-for-12 Reverse Stock Split.

A total of 408,355 shares of the Company’s common stock, as adjusted for the Reverse Stock Split (refer to Note 13, “Stockholders’ Equity”), were initially reserved for issuance under the 2021 Plan.

The number of shares of common stock reserved and available for issuance under the 2021 Plan increases on January 1 of each year by 1 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors.

On May 22, 2024, the Company’s stockholders approved an amendment to the 2021 Plan to increase the number of shares available for issuance under the 2021 Plan by 1,100,000 shares of the Company’s common stock.

As of December 31, 2024, there were 2,662,075 shares reserved for issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”) which became effective in connection with the IPO.

A total of 102,088 shares of the Company’s common stock, as adjusted for the one-for-12 Reverse Stock Split, were initially reserved for issuance under the ESPP.

A total of 102,088 shares of the Company’s common stock, as adjusted for the Reverse Stock Split, were initially reserved for issuance under the ESPP.

The number of shares reserved and available for issuance under the ESPP automatically increases on January 1 of each year by 1 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors.

As of December 31, 2023, there were 316,797 shares reserved for issuance under the ESPP, as adjusted for the one-for-12 Reverse Stock Split.

As of December 31, 2024, there were 422,475 shares reserved for issuance under the ESPP.

The offering periods of the ESPP are six months long and are anticipated to be offered twice per year.

2 unchanged sentences

2018 Stock and Incentive Compensation Plan

Prior to the IPO, the 2018 Stock and Incentive Compensation Plan, as amended (the “2018 Plan”), provided for the issuance of time-based incentive units and performance-based incentive units issued by Excelerate (the predecessor entity of a.k.a.

(the predecessor entity of a.k.a.

Brands Holding Corp.).

In connection with the reorganization transactions and the IPO, all of the equity interests in Excelerate, including outstanding incentive units issued as equity-based compensation under the 2018 Plan, were transferred to New Excelerate.

The incentive units issued under the 2018 Plan participate in distributions from New Excelerate, but only after investors receive their return of capital plus a specified threshold amount per unit.

In connection with the reorganization transactions and the IPO, all of the equity interests in Excelerate, L.P., including outstanding incentive units issued as equity-based compensation under the 2018 Plan, were transferred to New Excelerate, L.P.

The incentive units issued under the 2018 Plan participate in distributions from New Excelerate, L.P., but only after investors receive their return of capital plus a specified threshold amount per unit.

The total incentive pool size under the 2018 Plan was 16,475,735 units.

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Stock options have a contractual term, the period during which they are exercisable, not to exceed ten years from the date of grant, and generally vest over time, based on performance or based on the achievement of a market condition.

In September 2023, an award, including 416,667 performance-based stock options (the “Bryett Award”), was issued to Wesley Bryett, a member of the Company’s board of directors, co-founder of Princess Polly and the Global CEO of Culture Kings.

In September 2023, an award, including 416,667 performance-based stock options (the “Bryett Award”), was issued to Wesley Bryett, a member of the Company’s board of directors and co-founder of Princess Polly.

This award expires after ten years , or upon the termination of Mr.

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As of December 31, 2024, no options issued as part of the Bryett Award had vested, the options held no intrinsic value, and total unrecognized compensation cost related to the Bryett Award was $ 0.9 million which is expected to be recognized over 4.2 years.

A summary of the Company's time-based stock option activity under the 2021 Plan for the years ended December 31, 2023, 2022 and 2021, as adjusted for the one-for-12 Reverse Stock Split, is as follows:

A summary of the Company's time-based stock option activity under the 2021 Plan for the years ended December 31, 2024 and 2023, as adjusted for the Reverse Stock Split, is as follows:

Number of Options

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Forfeited/Repurchased

( 2,468 ) 114.00

Balance as of December 31, 2023

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Forfeited/Repurchased

( 2,468 ) 114.00

Balance as of December 31, 2024

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As of December 31, 2024, there was $ 0.2 million of total unrecognized compensation cost related to unvested time-based stock options issued under the 2021 Plan, which is expected to be recognized over a weighted average period of 0.6 years.

The assumptions that the Company used to determine the grant date fair value of time-based stock options granted under the 2021 Plan during the year ended December 31, 2022, were as follows, presented on a weighted-average basis:

Year Ended December 31, 2022

Risk free interest rate

Expected volatility

Expected dividend yield

Expected term

Restricted Stock Units

The 2021 Plan provides for the issuance of restricted stock units (“RSUs”).

RSUs issued prior to March 31, 2022, vest over four years while all RSUs issued after that date vest over three years .

A summary of the Company's RSU activity under the 2021 Plan for the years ended December 31, 2023, 2022 and 2021, as adjusted for the one-for-12 Reverse Stock Split, is as follows:

Time-based RSUs issued prior to March 31, 2022, vest over four years while all time-based RSUs issued after that date vest over three years .

In May 2024, an award (the “Interim CEO Award”) of 150,000 performance-based RSUs (“PSUs”) was issued to Ciaran Long, Interim Chief Executive Officer and Chief Financial Officer of the Company.

The Interim CEO Award expires after five years , or upon the termination of Mr.

Long’s service to the Company, and includes ten tranches of PSUs that will vest based upon the achievement of various common stock price targets.

If any common stock price target is achieved for one or more tranches of PSUs prior to April 1, 2025, the vesting date for the applicable tranche(s) will be April 1, 2025.

At time of grant, each PSU had a fair value of $ 29.50 and each tranche of PSUs has a different derived service period, the average of which is approximately 2.9 years.

As of December 31, 2024, the common stock price target for two tranches of PSUs issued as part of the Interim CEO Award had been achieved, and the total unrecognized compensation cost related to the Interim CEO Award was $ 0.3 million, which is expected to be recognized over a weighted average period of 1.9 years.

A summary of the Company's time-based RSU activity under the 2021 Plan for the years ended December 31, 2024 and 2023, as adjusted for the Reverse Stock Split, is as follows:

Number of Shares

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( 130,550 ) 34.20

( 21,911 ) 118.20

Forfeited/Repurchased

3 unchanged sentences

403,458 14.86

( 274,201 ) 16.37

Forfeited/Repurchased

2 unchanged sentences

651,287 $ 14.93

As of December 31, 2023, there was $ 8.3 million of total unrecognized compensation cost related to unvested RSUs issued under the 2021 Plan, which is expected to be recognized over a weighted average period of 1.9 years.

As of December 31, 2024, there was $ 8.2 million of total unrecognized compensation cost related to unvested time-based RSUs issued under the 2021 Plan, which is expected to be recognized over a weighted average period of 1.8 years.

Incentive Units

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As it was not deemed probable until it occurred, all compensation expense related to these awards was recognized at the date of the IPO.

The market condition is satisfied upon the initial investor in Excelerate receiving an aggregate return equal to three times its aggregate investment.

The market condition is satisfied upon the initial investor in Excelerate, L.P.

receiving an aggregate return equal to three times its aggregate investment.

As of December 31, 2024, all outstanding performance-based incentive units had been fully expensed.

Transition Agreement

During the year ended December 31, 2020, the Company entered into a transition agreement with a former executive whereby all unvested incentive units were forfeited upon their termination.

Pursuant to the terms of this transition agreement, the former executive retained 261,287 vested incentive units following their termination.

As permitted by the original terms of the incentive units, the Company exercised its right to repurchase the former executive’s remaining 802,634 vested incentive units for total cash consideration of $ 1.1 million payable within a certain period following their termination.

As of December 31, 2021, the consideration payable was deducted from additional paid-in capital as it did not exceed the fair value of the repurchased incentive units as of the date of repurchase.

The units were repurchased in 2022.

ESPP Purchase Rights

A summary of the Company's ESPP activity under the 2021 Plan for the years ended December 31, 2023 and 2022, as adjusted for the one-for-12 Reverse Stock Split, was as follows:

A summary of the Company's ESPP activity under the 2021 Plan for the years ended December 31, 2024, 2023 and 2022, as adjusted for the Reverse Stock Split, was as follows:

Year Ended December 31,

2024 2023 2022

Shares purchased using ESPP purchase rights

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The Company recognizes compensation expense in general and administrative expenses within operating expenses for stock options, RSUs, ESPP purchase rights and time-based incentive units granted prior to the IPO by amortizing the grant date fair value on a straight-line basis over the expected vesting period to the extent the vesting of the grant is considered probable.

The Company recognized compensation expense for performance-based incentive units granted prior to the IPO at the date of IPO.

The Company recognizes equity-based award forfeitures in the period such forfeitures occur.

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Time-based incentive units 1,557 2,664 3,104

Performance-based incentive units — — 4,903

Total $ 7,980 $ 7,640 $ 6,730

2 unchanged sentences

In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $ 0.001 per share with rights and preferences, including voting rights, designated from time to time by the Company’s board of directors.

There were no shares of preferred stock issued and outstanding as of December 31, 2024.

The Company has one class of common stock.

3 unchanged sentences

No fractional shares were issued in connection with the Reverse Stock Split and all holders of such fractional interests received cash equal to such fraction multiplied by the average of the closing sales prices of the Company’s common stock during the regular trading hours for the five consecutive trading days immediately preceding the effective date of the Reverse Stock Split, with such average closing sales prices being adjusted to give effect to the Reverse Stock Split.

All references in these financial statements to the Company’s outstanding common stock, including per share information, have been retrospectively adjusted to reflect the Reverse Stock Split.

All references in these financial statements to the Company’s outstanding common stock, including per share information, prior to the Reverse Stock Split have been retrospectively adjusted to reflect the Reverse Stock Split.

Share Repurchase Program & Share Forfeitures

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The Share Repurchase Program may be suspended or discontinued at any time and has no expiration date.

All repurchased shares under the Share Repurchase Program will be retired.

Additionally, from time to time, the Company’s employees may surrender shares of the Company’s common stock to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares of common stock issued under the 2021 Plan.

5 unchanged sentences

2024 2023 2022

Net loss attributable to a.k.a.

Brands Holding Corp.

$ ( 25,990 ) $ ( 98,886 ) $ ( 176,697 )

4 unchanged sentences

$ ( 2.46 ) $ ( 9.24 ) $ ( 16.47 )

Due to the reorganization transactions as described in Note 1 “Description of Business,” for periods prior to our IPO in September 2021, a split of units held by New Excelerate investors into a proportionate amount of shares of the Company’s common stock is reflected in the weighted-average common shares outstanding.

The Company used the two-class method in calculating net income per share historically, as it related to the outstanding incentive units.

However, for all periods prior to the IPO, there were no potentially dilutive securities.

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to a.k.a.

Brands Holding Corp.

for the period by the weighted-average number of shares of common stock for the period.

Basic net income (loss) per share is calculated by dividing net income (loss) for the period by the weighted-average number of shares of common stock outstanding for the period.

Diluted net income (loss) per share has been calculated in a manner consistent with that of basic net income (loss) per share while giving effect to shares issuable upon exercise and/or vesting of potentially dilutive stock option and RSU grants, as well as ESPP purchase rights, outstanding during the period, if applicable.

Due to the net loss attributable to a.k.a.

Brands Holding Corp.

for all periods shown, no potentially dilutive securities had an impact on diluted loss per share for any period.

Due to the net loss for all periods shown, no potentially dilutive securities had an impact on diluted loss per share for any period.

For the years ended December 31, 2024 , 2023 and 2022 , 402,873 , 333,327 and 112,904 shares, respectively, were excluded from the calculation of weighted-average diluted common shares outstanding as they had an anti-dilutive effect.

Commitments and Contingencies

Contingencies

The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible.

Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss.

Indemnifications

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters.

The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the consolidated financial statements.

Related Party Transactions

The Company may enter into transactions with related parties from time to time.

Related Party Debt Financing

In connection with the acquisition of Culture Kings (refer to Note 3, “Acquisitions,” for additional information), on March 31, 2021, Polly Holdco, a wholly-owned subsidiary of the Company, issued $ 25.0 million in senior subordinated notes to an affiliate of Summit, a global investment firm who has a majority ownership interest in the Company.

The senior subordinated notes were subsequently paid in full and terminated in connection with the IPO (refer to Note 8, “Debt,” for additional information).

Legal Proceeding

In April 2024, the Company received a cease and desist letter alleging copyright infringement and related claims.

This matter has not proceeded to litigation as of the date that these condensed consolidated financial statements are issued, and the Company has accrued $ 2.0 million to general and administrative expenses for current estimated losses in connection with these claims.

The accrual for estimated losses is based on currently available information and may change as new information becomes available or circumstances change.

Segment Information

The Company has determined that its four brands are each an operating segment and has aggregated its operating segments into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics.

The Chief Executive Officer of the Company is the Chief Operating Decision Maker (the “CODM”).

The CODM uses both gross margin and Adjusted EBITDA as measures of profit or loss to evaluate performance and allocate resources.

Gross margin is disclosed below as the segment profit measure as it is most consistent with the amounts included in the Company’s consolidated financial statements.

The following table sets forth gross margin for the periods shown:

Year Ended December 31,

2024 2023 2022

$ 574,697 $ 546,258 $ 611,738

Cost of sales

247,192 245,978 274,491

$ 327,505 $ 300,280 $ 337,247

57.0 % 55.0 % 55.1 %

Subsequent Events

The Company has evaluated subsequent events occurring through March 7, 2024, the date that these financial statements were originally available to be issued, and determined the following subsequent events occurred that would require disclosure in these financial statements.

Draw on Revolving Line of Credit

On January 30, 2024, the Company borrowed $ 9.5 million under the revolving line of credit, which is part of the Company’s senior secured credit facility.

The initial applicable interest rate for the borrowings is 8.45 % and final payoff is due on September 24, 2026.

On February 12, 2024, the Company borrowed $ 7.0 million under the revolving line of credit, which is part of the Company’s senior secured credit facility.

The initial applicable interest rate for the borrowings is 8.43 % and final payoff is due on September 24, 2026.

The Company has evaluated subsequent events occurring through the date that these financial statements were issued, and determined the following subsequent event occurred that would require disclosure in these financial statements.

Draws on Revolving Line of Credit

In January 2025, the Company borrowed $ 21.5 million under the revolving line of credit, which is part of the Company’s senior secured credit facility.

The initial weighted average applicable interest rate for the borrowings is 7.68 % and final payoff is due on September 24, 2026.

CEO Employment Agreement

On January 7, 2025, the board of directors of the Company appointed Ciaran Long, the Interim Chief Executive Officer and Chief Financial Officer of the Company (“Chief Financial Officer”), to the position of Chief Executive Officer of the Company and removed him from the position of Chief Financial Officer, in each case effective January 13, 2025.

In connection with Mr.

Long’s appointment, on January 13, 2025, a.k.a.

Brands, Inc., an indirectly wholly-owned subsidiary of the Company, entered into an employment agreement with Mr.

Long (the “CEO Employment Agreement”), which supersedes the employment agreement between Mr.

Long and a.k.a.

dated March 23, 2021.

The CEO Employment Agreement has an initial term of four years , subject to automatic renewals for additional one-year periods.

In connection with Mr.

Long’s appointment, on January 7, 2025, the board of directors, upon the recommendation of the Compensation Committee of the board, approved a grant, effective January 13, 2025, of performance-based stock options (the “Options”) to Mr.

Long under the 2021 Plan, representing a contingent right to purchase 100,000 shares of the Company’s common stock at a specified price, upon the vesting of the Options.

The Options expire after ten years , or upon the termination of Mr.

Long’s service to the Company, and include four tranches that will each vest and become exercisable based upon the achievement of various common stock price targets.

The weighted average exercise price for the Options is $ 120.00 .

The total unrecognized compensation cost related to the Options is $ 1.0 million, which is expected to be recognized over 4.2 years.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 7A. Quantitative and Qualitative Disclosures About Market Risk