Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
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.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management evaluated the 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 receipts and expenditures are being made only in accordance with management and directors of the Company's authorization; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our 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.
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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 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.
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.
Remediation Status of Material Weaknesses
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 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.
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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.
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the three months ended December 31, 2024, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item will be set forth in our Proxy Statement for the 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”) to be filed with the SEC within 120 days of our fiscal year ended December 31, 2024 and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item will be set forth in our 2025 Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item will be set forth in our 2025 Proxy Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be set forth in our 2025 Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item will be set forth in our 2025 Proxy Statement and is incorporated herein by reference.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
See Index to Consolidated Financial Statements at “Item 8. Financial Statements and Supplementary Data.”
2. Financial Statement Schedules
Schedules have been omitted because they are either not required, not applicable, not present in amounts sufficient to require submission of the schedule or the required information is included elsewhere in this Annual Report on Form 10-K.
3. Exhibits
The following exhibits are filed herewith or incorporated by reference herein:
Incorporated by Reference
Exhibit No. Description Form File No. Filing Date Exhibit No.
3.1 Amended and Restated Certificate of Incorporation of a.k.a. Brands Holding Corp., filed with the Delaware Secretary of State on September 21, 2021
8-K 001-40828 September 27, 2021 3.1
3.2 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
8-K 001-40828 September 29, 2023 3.1
3.3 Amended and Restated Bylaws of a.k.a. Brands Holding Corp., effective September 21, 2021
8-K 001-40828 September 27, 2021 3.2
4.1 Registration Rights Agreement, dated September 24, 2021, by and among a.k.a. Brands Holding Corp. and the other signatories party thereto
8-K 001-40828 September 27, 2021 4.1
4.2 Description of a.k.a. Brands Holding Corp.’s securities
10-K
001-40828
March 9, 2023 4.2
10.1 Stockholders Agreement, dated June 23, 2021, by and among a.k.a. Brands Holding Corp., New Excelerate, L.P., and certain other equityholders of the Registrant party thereto
S-1 333-259028 August 24, 2021 10.2
10.2 Form of Indemnification Agreement between a.k.a. Brands Holding Corp. and its directors and officers
S-1 333-259028 August 24, 2021 10.3
10.3 Director Nomination Agreement, dated as of September 24, 2021, by and among a.k.a. Brands Holding Corp. and the other signatories party thereto
8-K 001-40828 September 27, 2021 10.1
10.4 Syndicated Facility Agreement, dated as of September 24, 2021, by and among a.k.a. Brands Holding Corp., KeyBank National Association and the other signatories party thereto
8-K 001-40828 September 27, 2021 10.2
10.5 †
a.k.a. Brands Holding Corp. 2021 Omnibus Incentive Plan
S-8 333-259753 September 24, 2021 10.1
10.6 †
Amendment No. 1 to the a.k.a. Brands Holding Corp. Omnibus Incentive Plan
8-K 001-40828 May 30, 2023 10.1
10.7 †
A mendment No. 2 to the a.k.a. Brands Holding Corp. Omnibus Incentive Plan
8-K 001-40828 May 28, 2024 10.1
10.8 †
Form of Incentive Stock Option Agreement
8-K
001-40828 January 13, 2025 10.2
10.9 †
Form of Restricted Stock Unit Agreement
8-K
001-40828 January 13, 2025 10.4
10.10 †
Form of Restricted Stock Agreement
S-8 333-259753 September 24, 2021 10.4
10.11 †
a.k.a. Brands Holding Corp. 2021 Employee Stock Purchase Plan
S-8 333-259753 September 24, 2021 10.5
10.12 †
Employment Agreement, dated April 8, 2021, by and between Excelerate US, Inc. and Ciaran Long
10-K
001-40828
March 9, 2023 10.11
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10.13 †
E mployment Agreement, dated January 13, 2025, by and betw een a.k.a. Brands, Inc. and Ciaran Long
8-K
001-40828
January 13, 2025 10.1
10.14 †
E mployment Agreement, dated January 13, 2025, by and between a.k.a. Brands, Inc. and Kevin Grant
8-K
001-40828
January 13, 2025 10.3
10.15 †
Employment Agreement, dated October 15, 2020, by and between Excelerate US, Inc. and Michael Trembley
S-1 333-259028 August 24, 2021 10.12
10.16 †
E mployment Agreement , dated April 12, 2024, by and between a.k.a. Brands, Inc. and Kenneth C. White
8-K
001-40828 April 18, 2024 10.1
10.17 †
Offer Letter, dated November 7, 2023, by and between Excelerate US, Inc. and Jill Ramsey
8-K
001-40828 November 9, 2023 10.1
19.1*
I nsider Trading Policy
21.1* Subsidiaries of a.k.a. Brands Holding Corp.
23.1* Consent of Independent Registered Public Accounting Firm
23.2*
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
31.2*
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
32.2**
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
97.1 a.k.a. Brands Holding Corp. Executive Incentive Compensation Recoupment Policy
10-K 001-40828 March 7, 2024 97.1
101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE* Inline XBRL Taxonomy Extension Calculation Linkbase Document
104* Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
__________
† Management contract or compensatory plan or arrangement.
* Filed herewith.
** Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
ITEM 16. FORM 10-K SUMMARY
Not Applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
a.k.a. Brands Holding Corp.
Dated: March 6, 2025
By: /s/ Ciaran Long
Name: Ciaran Long
Title: 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.
Signature Title Date
/s/ Ciaran Long
Chief Executive Officer
March 6, 2025
Ciaran Long (Principal Executive Officer)
/s/ Kevin Grant
Chief Financial Officer
March 6, 2025
Kevin Grant
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Wesley Bryett
Director March 6, 2025
Wesley Bryett
/s/ Christopher Dean
Chairman of the Board of Directors March 6, 2025
Christopher Dean
/s/ Ilene Eskenazi
Director March 6, 2025
Ilene Eskenazi
/s/ Sourav Ghosh
Director March 6, 2025
Sourav Ghosh
/s/ Matthew Hamilton
Director March 6, 2025
Matthew Hamilton
/s/ Myles McCormick
Director March 6, 2025
Myles McCormick
/s/ Jill Ramsey
Director March 6, 2025
Jill Ramsey
/s/ Kelly Thompson
Director March 6, 2025
Kelly Thompson
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