What changed in this filing

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Item 9A. Controls and Procedures

2024-09-30 compared with 2023-10-16 · 84 added, 70 removed, 209 unchanged (42% of the section changed)

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

We maintain certain disclosure controls and procedures as defined under the Securities Exchange Act of 1934.

They are designed to help ensure that material information is:

(1) gathered and communicated to our management, including our principal executive and financial officers, in a manner that allows for timely decisions regarding required disclosures;

and (2) recorded, processed, summarized, reported and filed with the SEC as required under the Securities Exchange Act of 1934 and within the time periods specified by the SEC.

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 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

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, and for performing an assessment of the effectiveness of internal control over financial reporting as of June 30, 2023.

For this purpose, internal control over financial reporting refers to a process designed by, or under the supervision of, the Company’s principal executive and financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

Controls and Procedures (continued).

recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material adverse effect on the financial statements.

1 unchanged sentence

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.

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.

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.

Management performed an assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2024 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, 2024 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.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting during the fourth quarter ended June 30, 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

1 unchanged sentence

Chief Executive Officer, President, Director

Christopher Knauf

Chief Financial Officer

3 unchanged sentences

Also, there is no arrangement, agreement or understanding between management and non-management shareholders under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.

Directors are not presently compensated for their service on the board, other than the repayment of actual expenses incurred.

There are no present plans to compensate directors for their service on the board.

Directors are not presently compensated for their service on the board other than the repayment of actual expenses incurred, and there are no present plans to compensate them.

Background of Executive Officers and Directors

9 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.

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.

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.

Christopher Knauf, Chief Financial Officer.

Knauf was appointed chief financial officer effective February 14, 2024.

He has an extensive background in omni-channel integrations of design, manufacturing, retail, and wholesale distribution, with extensive financial management experience.

Prior to joining the Company, he most recently served as the Senior Vice President of Accounting from February 2018 to 2024 for LocumTenens.com, LLC, one of the largest medical staffing companies in the United States.

He has a BS in Finance from Fairfield University and an MBA from Fordham University.

Leslie Vogelman, Treasurer.

Vogelman joined the Company in October 2009 in connection with our merger with Old Luvu Brands, Inc.

Prior to that, she served as Old Liberator’s Treasurer since June 2009, when OneUp Innovations, Inc.

merged with Old Liberator in June 2009.

Vogelman joined the Company in October 2009 in connection with our merger with Old Liberator, Inc.

Prior to that, she served as Old Liberator’s Treasurer since June 2009, when OneUp merged with Old Liberator in June 2009.

Vogelman joined OneUp at its inception in 2000 as Secretary and Treasurer.

6 unchanged sentences

There are no other relationships between the officers or directors of the Company.

Directors, Executive Officers and Corporate Governance.

As of the date of this report, we have not established an audit committee or any other committee of the board of directors and, therefore, the responsibilities of such committees have been conducted by our board of directors as a whole.

16 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, 2023.

Based on a review of the copies of such forms received by us, Mr.

Knauf’s Form 3 and Form 4 was not filed on a timely basis.

He has since submitted the forms to be in compliance as of the date of this filing.

Code of Ethics

8 unchanged sentences

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:

A copy of our code 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.

Directors, Executive Officers and Corporate Governance.

Insider Trading Policy

The Company has implemented an Insider Trading Policy applicable to its officers, directors and employees with access to material nonpublic information, as well as such persons’ family members, which prohibits such persons from conducting transactions involving the purchase or sale of the Company’s securities while in possession of material nonpublic information.

A copy of the Company’s Insider Trading Policy is filed as Exhibit 19.1 of this Report.

While the granting of options and other equity awards to officers, directors and other employees is not expressly addressed in the Insider Trading Policy described above, the Company follows the same principles set forth in such Policy when granting equity awards, including options, to its officers, directors and other employees with access to material nonpublic information.

Generally, the Board of Directors or Compensation Committee does not approve grants of such awards close in time to the disclosure of material nonpublic information and does not take material nonpublic information into account when determining the timing and terms of such an award.

Further, the Company does not have a policy or practice of timing the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

Anti-Hedging Policies

Under the Company’s Insider Trading Policy, all officers, directors and employees are prohibited from engaging in hedging, pledging or shoring transactions.

Executive Compensation.

1 unchanged sentence

The following summary compensation table indicates the cash and non-cash compensation earned during the fiscal years ended June 30, 2024 and 2023 by our named executive officers as defined in Item 402(a) of Regulation S-K (each an “NEO”).

Incentive Plan

Option Awards

Non- Equity Incentive Compensation

All Other Compensation

Name and Principal Position

1 unchanged sentence

Officer and Chairman of the Board

Christopher Knauf

Chief Financial Officer(2)

Chief Financial Officer(3)

Chief Financial Officer(4)

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.

(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.

Commenced serving as chief financial officer on February 20, 2024.

Served as chief financial officer from September 1, 2023 to February 20, 2024.

Served as chief financial officer from April 29, 2022 to September 1, 2023.

Outstanding Equity Awards at Year End

The following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of June 30, 2024.

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) unexercisable

incentive plan awards:

underlying unexercised

unit of stock

incentive plan awards:

shares, units

or other rights

that have not

incentive plan awards:

shares, units or

that have not

Louis Friedman

Christopher Knauf

Incentive and Non-qualified Stock Option and Stock Award Plans

6 unchanged sentences

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

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.

On January 15, 2024, the Company, through One Up, engaged Chris Knauf to serve as Chief Financial Officer and Controller of the Company.

The Company shall pay Mr.

Knauf an annual salary of $150,000 and Mr.

Knauf received options to purchase 200,000 shares of the Company’s common stock, exercisable at $0.08 per share on the date of the agreement and an option to purchase an additional 200,000 shares of common stock exercisable at $0.08 per share six months after the date of the agreement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

6 unchanged sentences

Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares of our securities held by them.

Applicable percentage ownership in the following table is based on 76,547,672 shares of common stock and 4,300,000 shares of Series A Convertible Preferred Stock outstanding as of October 12, 2023.

Applicable percentage ownership in the following table is based on 76,547,672 shares of common stock and 4,300,000 shares of Series A Convertible Preferred Stock outstanding as of September 30, 2024.

Beneficial ownership is determined in accordance with the rules of the SEC.

In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of October 12, 2023, are deemed outstanding.

Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

3 unchanged sentences

Beneficial Ownership

Executive Officers and Directors

36,400,237 (1)

Christopher Knauf

Leslie Vogelman

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

Executive Officers and Directors

Series A Convertible Preferred Stock

4,300,000 (3)

Series A Convertible Preferred Stock

Christopher Knauf

Series A Convertible Preferred Stock

2 unchanged sentences

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

4,300,000 (3)

* Less than 1%

8 unchanged sentences

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.

43 unchanged sentences

Our board of directors reviews and approves audit and permissible non-audit services performed by its independent accountants, as well as the fees charged for such services.

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

(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.

and Assurance Dimensions were approved by the Board.

In its review of non-audit service fees and its appointment of Assurance Dimensions (2023) and EC Barrett, LLC (2024) 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 Assurance Dimensions and EC Barrett, LLC were approved by the Board.

Exhibits, Financial Statement Schedules.

4 unchanged sentences

Incorporated by Reference

Filed or Furnished

Exhibit Description

24 unchanged sentences

in favor of Ameris Bank

Lease Agreement between Goodsen Land Partners, LLC and OneUp Innovations, Inc.

Lease Agreement between Goodsen Land Partners and OneUp Innovations, Inc.

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*

Agreement between OneUp Innovations, Inc.

and Christopher Knauf dated January 18, 2024, as supplemented.

Code of Ethics

1 unchanged sentence

Insider Trading Policy

Consent of Liggett & Webb P.A.

independent registered public accounting firm

Consent of EC Barrett, LLC independent registered public accounting firm

Consent of Assurance Dimensions independent registered public accounting firm

14 unchanged sentences

LUVU BRANDS, INC.

October 13, 2023

September 30, 2024

Friedman, Chief Executive Officer and President

October 13, 2023

/s/ Martin Scott

Martin Scott, Chief Financial Officer

September 30, 2024

/s/ Christopher Knauf

Christopher Knauf, Chief Financial Officer

(Principal Financial and Accounting 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.

Chairman of the Board of Directors, Chief Executive Officer,

and President (Principal Executive Officer)

October 13, 2023

Chairman of the Board of Directors, Chief Executive Officer, and President (Principal Executive Officer)

September 30, 2024

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