What changed in this filing

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Item 9A. Controls and Procedures

2023-10-16 compared with 2022-10-14 · 55 added, 66 removed, 224 unchanged (35% of the section changed)

6 unchanged sentences

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2022.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2023 due to the material weakness below.

To address these material weakness, management performed additional procedures to ensure the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

6 unchanged sentences

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management performed an assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2022 based upon criteria in an Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, management believes the Company’s internal control over financial reporting was effective as of June 30, 2022 based on the criteria issued by COSO.

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm.

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCOAB”) Audit Standard No.

5, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management has identified the following material weakness - Management failed to perform a complete assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2023 based upon criteria in an Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) or alternative framework.

There were no changes to our internal control over financial reporting during the fourth quarter ended June 30, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth above, there were no changes to our internal control over financial reporting during the fourth quarter ended June 30, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Directors, Executive Officers and Corporate Governance.

The following table sets forth the officers and directors of Luvu Brands, Inc.

as of June 30, 2022.

The following table sets forth the current officers and directors of Luvu Brands, Inc.

Chief Executive Officer, President, Director

17 unchanged sentences

Friedman’s experience as Chief Executive Officer and insight into our operations, our industry, and related risks as well as experience bringing consumer products to market were factors considered by our board of directors in concluding he should serve as a director of our Company.

Sannikov, Chief Financial Officer.

Sannikov joined the Company in April 2022.

Martin Scott, Chief Financial Officer.

Scott was appointed chief financial officer effective September 1, 2023.

He has served as founder and executive officer of Martin Scott CFO Consulting Services Inc.

From March 2022 to January 2023, Mr.

Scott served as chief financial officer of MGO Global, Inc.

From 2018 to 2020, Mr.

Sannikov was Finance Director of The Weather Group.

Prior to The Weather Group, Mr.

Sannikov held multiple finance leadership positions at AMES Taping Tools, FiberLight, and Cox Communications.

Sannikov holds a B.B.A.

degree in Finance and an M.B.A.

degree with concentration in Finance from Georgia State University.

Scott served as principal accounting and financial officer of Puradyn Filter Technologies, Inc.

Scott is a Certified Public Accountant.

Scott graduated from Florida State University with a Bachelor of Science degree in Accounting and Finance.

Leslie Vogelman, Treasurer.

28 unchanged sentences

Executive officers, directors, and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Based on a review of the copies of such forms received by us, and to the best of our knowledge, there were no reports untimely filed during the fiscal year ended June 30, 2022, except as provided below.

On February 23, 2022, the three executive officers of the Company each filed a Form 4 to disclose the exercise of options.

Such Form 4s were each filed late due to administrative error.

Based on a review of the copies of such forms received by us, and to the best of our knowledge, there were no reports untimely filed during the fiscal year ended June 30, 2023.

Code of Ethics

We have not yet adopted a Code of Business Conduct and Ethics.

We are currently working towards developing a formal Code of Business Conduct and Ethics, which will apply to all of our employees, including our board of directors.

When available, a copy of our Code of Business Conduct and Ethics may, upon request made to us in writing at the following address, be made available without charge:

During August 2023 we adopted a code of ethics.

The code of ethics is filed as an exhibit to this Form 10-K annual report.

The code applies to our officers, director, employees, and certain consultants.

The code provides written standards that are designed to deter wrongdoing and promote:

(i) honest and ethical conduct;

(ii) full, fair, accurate, timely and understandable disclosure;

(iii) compliance with applicable laws and regulations;

(iv) promote reporting of internal violations of the code;

and (v) accountability for the adherence to the code.

A copy of our code of ethics may, upon request made to us in writing at the following address, be made available without charge:

2745 Bankers Industrial Drive, Atlanta, Georgia, 30360.

7 unchanged sentences

Chief Financial Officer(2)

Chief Financial Officer

Manuel Munoz (4)

Chief Information Officer

(1) The amounts reported in this column represent the full grant date fair value of stock awards in accordance with ASC 718, net of estimated forfeitures.

Refer to Note 17 of the financial statements included in Item 8 of this Annual Report for the assumptions made in the valuation of stock awards.

See Grants of Plan-Based Awards table below.

(2) On April 26, 2022, the Company appointed Alexander A.

Sannikov Chief Financial Officer of the Company effective April 29, 2022.

(3) Ronald P.

Scott resigned as Company’s Chief Financial Officer and member of the board of directors on April 29, 2022.

(4) Effective September 13, 2021, Manuel Munoz transitioned to a nonexecutive position and is no longer an executive officer.

Grants of Plan-Based Awards

The following table summarizes information concerning each grant of an award made in our fiscal year ending June 30, 2022 to each of our NEOs:

All Other Option Awards:

Number of Securities

Underlying Options

base price of

Grant Date Fair

Value of Stock

Outstanding Equity Awards at Fiscal Year End

The following table shows, for the fiscal year ended June 30, 2022, certain information regarding outstanding equity awards at fiscal year-end for our NEOs.

Outstanding Equity Awards at June 30, 2022

Option Awards

Unexercisable

That Have Not

12/11/2022(1)

The common stock option vested pro rata over a four-year period on each of December 11, 2018, December 11, 2019, December 11, 2020 and December 11, 2021.

The common stock option vests pro rata over a four-year period on each of April 11, 2023, April 11, 2024, April 11, 2025, and April 11, 2026.

(2) Resigned on September 1, 2023 effective with the appointment of Mr.

Martin Scott as chief financial officer.

(3) Forfeited effective September 1, 2023 upon Mr.

Sannikov’s resignation.

Incentive and Non-qualified Stock Option and Stock Award Plans

1 unchanged sentence

Please see Note 15 to the notes to our financial statements appearing elsewhere in this report for a description of the material terms of this plan.

Employment Agreement

Employment Agreements

The Company has entered into an employment agreement with Louis Friedman, President and Chief Executive Officer.

2 unchanged sentences

In certain termination situations, the Company is liable to pay severance compensation to this executive for up to 9 months.

The Company has not entered into a formal written employment agreement with Alexander Sannikov, Chief Financial Officer, however, on April 11, 2022, Mr.

Sannikov entered into a Stock Option Agreement pursuant to the Company’s 2015 Equity Incentive Plan granting him an incentive stock option for an aggregate of 250,000 shares of our common stock, 62,500 shares exercisable on April 11 of each year, beginning 2023 through 2026, at an exercise price of $0.20 per share.

The Company’s wholly owned subsidiary, One Up, has entered into a one year employment agreement with Mr.

Scott effective September 1, 2023, providing for a base salary of $126,000 per year.

The agreement may be terminated by either party with or without cause on 30 day notice.

In addition, Mr.

Scott is eligible for Company benefits and will be entitled to indemnification to the maximum extent permitted by applicable law.

Scott entered into a Stock Option Agreement pursuant to the Company’s 2015 Equity Incentive Plan granting him an incentive stock option for an aggregate of 200,000 shares of our common stock, 100,000 shares exercisable commencing on September 1, 2024 and the remaining 100,000 shares exercisable commencing on September 1, 2025, at an exercise price of $$0.0812 per share.

The options shall immediately vest upon the Company uplisting to a national exchange or in the event of a “change of control” of the Company, as defined under the Stock Option Agreement.

The option is exercisable for a period of 5 years from the initial grant date.

15 unchanged sentences

Beneficial Ownership

Executive Officers and Directors

Leslie Vogelman

All directors and executive officers as a group (3 persons)

5% Shareholders

Hope Capital, Inc.

Executive Officers and Directors

Series A Convertible Preferred Stock

13 unchanged sentences

Friedman may differ from the interests of the other shareholders.

Also includes options for purchase 200,000 shares of common stock.

Excludes 250,000 shares of common stock underlying options that are subject to vesting.

Includes options to purchase 125,000 shares of common stock.

Friedman disclaims any beneficial ownership of shares held by Leslie Vogelman.

Excludes options to purchase 200,000 of common stock that are subject to vesting.

Vogelman disclaims any beneficial ownership of shares held by Louis S.

This person’s address is 111 Great Neck Road, Suite 216, Great Neck, NY 11021.

Curt Kramer is the sole shareholder of Hope Capital, Inc.

and the natural control person over these securities.

Friedman owns 100% of the Series A Convertible Preferred Stock, each share of which has the number of votes equal to the result of:

43 unchanged sentences

In its review of non-audit service fees and its appointment of Liggett & Webb P.A.

as our independent accountants, the Board considered whether the provision of such services is compatible with maintaining independence.

(2022) and Assurance Dimensions (2023) as our independent accountants, the Board considered whether the provision of such services is compatible with maintaining independence.

All of the services provided and fees charged by Liggett & Webb P.A.

were approved by the Board.

and Assurance Dimensions were approved by the Board.

Exhibits, Financial Statement Schedules.

4 unchanged sentences

Incorporated by Reference

Filed or Furnished

Exhibit Description

7 unchanged sentences

Articles of Amendment to the Amended and Restated Articles of Incorporation, effective February 28, 2011

Articles of Amendment to the Amended and Restated Articles of Incorporation, effective November 5, 2015

Designation of Rights and Preferences of Series A Convertible Preferred Stock.

16 unchanged sentences

dated November 20, 2020

Executive Employment Term Sheet dated September 1, 2023 between One Up Innovations, Inc.

and Martin Scott*

Stock Option Agreement between Luvu Brands, Inc.

and Martin Scott dated September 1, 2023*

Code of Ethics

Letter from Liggett & Webb P.A., dated November 3, 2022

Insider Trading Policy

Consent of Liggett & Webb P.A.

independent registered public accounting firm

Consent of Assurance Dimensions independent registered public accounting firm

Section 302 Certificate of Chief Executive Officer

8 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase Document

Management contract or compensatory plan or arrangement.

Form 10-K Summary.

5 unchanged sentences

October 13, 2023

/s/ Alexander A.

Sannikov, Chief Financial Officer

/s/ Martin Scott

Martin Scott, Chief Financial Officer

(Principal Financial and Accounting Officer)

4 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