What changed in this filing

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Item 9A. Controls and Procedures

2025-03-06 compared with 2024-03-07 · 68 added, 40 removed, 136 unchanged (44% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the fiscal year covered by this Annual Report on Form 10-K.

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

Due to the material weaknesses described below, our Interim Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2023.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the fiscal year covered by this Annual Report on Form 10-K.

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

Due to the material weaknesses described below, our Chief Executive Officer and our Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2024.

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

2 unchanged sentences

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

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

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

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

Internal control over financial reporting includes policies and procedures that:

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

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with management and directors of the Company's authorization;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with management and directors of the Company's authorization;

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

Under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023.

Based on this evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023 given the previously identified material weaknesses having not been remediated as of year end.

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

Material Weaknesses

We have identified two material weaknesses in the design and operation of our internal control over financial reporting in connection with the preparation of our financial statements, as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, that had not been remediated as of December 31, 2023.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024.

Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2024 due to the material weaknesses described below.

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

The Company’s management, including our Interim Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2023:

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

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

The following material weaknesses were identified as of December 31, 2024:

• We did not design and maintain an effective internal control environment commensurate with the financial reporting requirements of a public company.

Specifically, we lacked a sufficient complement of personnel with an appropriate level of knowledge, experience and training in internal control over financial reporting and the reporting requirements of a public company.

In addition, we did not formally delegate authority or establish appropriate segregation of duties in our finance and accounting functions, including as it relates to the preparation and approval of journal entries.

As a result, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting.

These material weaknesses contributed to the following additional material weakness:

• We did not design and maintain effective controls with respect to certain information technology general controls (ITGCs) for information systems relevant to the preparation of our financial statements, specifically, (i) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately;

(ii) user access controls to adequately restrict user and privileged access to appropriate personnel;

(iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored;

and (iv) program development controls to ensure that new software development is tested, authorized and implemented appropriately.

These material weaknesses resulted in immaterial errors to various accounts to our 2024 and 2023 annual and interim consolidated financial statements.

Additionally, each of these material weaknesses could result in a misstatement of substantially all account balances or disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected.

Remediation Status of Material Weaknesses

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

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

We have taken, and continue to take, steps to address the underlying causes of the material weaknesses, including the following:

• We hired additional experienced financial reporting personnel and put new processes in place to achieve complete, accurate and timely financial reporting.

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

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

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

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

Over the past year, we continued the process to (i) identify key systems and processes that require improved documentation, (ii) implement enhanced standards designed to meet the requirements of the Sarbanes-Oxley Act for segregation of duties, (iii) review the design of applicable internal controls and assess any required amendments, (iv) increase the training of accounting and finance staff in relevant areas and (v) started an Enterprise Resource Planning (“ERP”) system implementation project.

While progress has been made to remediate both of the material weaknesses above, as of December 31, 2023, we were still in the process of developing and implementing the enhanced processes and procedures and testing the operating effectiveness of these improved controls.

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

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

We selected an ERP system, hired an implementation partner and are in the process of implementation which will provide improvements to our IT-dependent and application controls to help prevent and detect errors, enforce segregation of duties and strengthen controls around manual journal entries.

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

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

Accordingly, the material weaknesses above were not remediated as of December 31, 2023.

Changes in Internal Control over Financial Reporting

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

• We also hired a third-party consulting firm with expertise to help us design, implement and document our internal controls in response to the material weaknesses.

• We increased the training of accounting and finance staff related to internal control over financial reporting.

• We are in the process of formalizing and performing a risk assessment process that includes the identification and walkthrough of key business processes to ensure controls are designed and implemented in response to identified risks.

• We continue with the process to (i) identify key systems and processes that require the design and implementation of new controls and enhanced documentation related to existing controls, (ii) design and implement controls for segregation of duties, (iii) assess the design of ITGCs and (iv) implement an enterprise resource planning (“ERP”) system.

• We are completing a segregation of duties assessment and identifying key conflicts and mitigating controls.

• We are developing policies and procedures for the periodic user access review of all users with access to financially relevant systems.

While the material weaknesses have not been remediated as of December 31, 2024, management is devoting substantial resources to the ongoing remediation efforts.

As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above.

The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.

Changes in Internal Control over Financi al Reporting

There were no changes in our internal control over financial reporting during the quarterly period ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

26 unchanged sentences

8-K 001-40828 September 27, 2021 3.1

3.2 C ertificate of Amendment to the Amended and Restated Certificate of a.k.a.

3.2 Certificate of Amendment to the Amended and Restated Certificate of a.k.a.

Brands Holding Corp., filed with the Delaware Secretary of State on September 25, 2023

27 unchanged sentences

S-8 333-259753 September 24, 2021 10.1

Amendment No.

1 to the a.k.a.

Brands Holding Corp.

Omnibus Incentive Plan

8-K 001-40828 May 30, 2023 10.1

A mendment No.

2 to the a.k.a.

Brands Holding Corp Omnibus Incentive Plan

Brands Holding Corp.

Omnibus Incentive Plan

8-K 001-40828 May 28, 2024 10.1

Form of Incentive Stock Option Agreement

S-8 333-259753 September 24, 2021 10.2

001-40828 January 13, 2025 10.2

Form of Restricted Stock Unit Agreement

S-8 333-259753 September 24, 2021 10.3

001-40828 January 13, 2025 10.4

Form of Restricted Stock Agreement

6 unchanged sentences

March 9, 2023 10.11

E mployment Agreement, dated January 13, 2025, by and betw een a.k.a.

and Ciaran Long

January 13, 2025 10.1

E mployment Agreement, dated January 13, 2025, by and between a.k.a.

and Kevin Grant

January 13, 2025 10.3

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

1 unchanged sentence

S-1 333-259028 August 24, 2021 10.12

O ffer Letter, dated November 7, 2023, by and between Excelerate US, Inc.

E mployment Agreement , dated April 12, 2024, by and between a.k.a.

and Kenneth C.

001-40828 April 18, 2024 10.1

Offer Letter, dated November 7, 2023, by and between Excelerate US, Inc.

and Jill Ramsey

001-40828 November 9, 2023 10.1

I nsider Trading Policy

21.1* Subsidiaries of a.k.a.

1 unchanged sentence

23.1* Consent of Independent Registered Public Accounting Firm

31.1* Certification of Interim Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Certification of Interim Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to 18 U.S.C.

C onsent of Independent Registered Public Accounting Firm

31.1* Certification of Chief Executive Officer (Principal Executive Officer ) pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer (Principal Financial Officer) pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Certification of Chief Executive Officer (Principal Executive Officer ) pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer ( Principal Financial Officer) pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Brands Holding Corp.

Executive Incentive Compensation Recoupment Policy

10-K 001-40828 March 7, 2024 97.1

101.INS* Inline XBRL Instance Document

15 unchanged sentences

/s/ Ciaran Long

Interim Chief Executive Officer and Chief Financial Officer

Chief Executive Officer

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

1 unchanged sentence

/s/ Ciaran Long

Interim Chief Executive Officer and Chief Financial Officer

Chief Executive Officer

March 6, 2025

Ciaran Long (Principal Executive Officer, Principal Financial Officer and

Ciaran Long (Principal Executive Officer)

/s/ Kevin Grant

Chief Financial Officer

March 6, 2025

(Principal Financial Officer and

Principal Accounting Officer)

22 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures