Alliance Entertainment Holding Corp 10-K for FY2024

Alliance Entertainment Holding Corp (AENT)

10-K 2024-09-20 For: 2024-06-30

Added on April 07, 2026

About this 10-K

Alliance Entertainment Holding Corp filed this 10-K on September 20, 2024, covering the fiscal year ended June 30, 2024 (FY2024).

Headline figures

Fiscal year ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.4M; down 50.0% from $16.8M a year earlier
Net income: $4.58M; compared with a net loss of $35.4M a year earlier
Diluted EPS: $0.09; compared with -$0.74 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Title:	Trading Symbol	Name of Exchange on which registered
Class A common stock, par value $0.0001 per share	AENT	The Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $11.50 per share	AENTW	The Nasdaq Stock Market LLC

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☒

		Page
Part I.
Item 1.	Business	1
Item 1A.	Risk Factors.	11
Item 1B.	Unresolved Staff Comments.	37
Item 1C.	Cybersecurity	37
Item 2.	Properties	38
Item 3.	Legal Proceedings	38
Item 4.	Mine Safety Disclosure	38
Part II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	39
Item 6.	Selected Financial Data.	39
Item 7.	Management’s Discussion and Analysis Of Financial Condition and Results Of Operations	39
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 8.	Financial Statements and Supplementary Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
Item 9A.	Controls and Procedures	48
Item 9B	Other Information.	49
Part III.
Item 10	Directors, Executive Officers and Corporate Governance.	50
Item 11	Executive Compensation.	55
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	59
Item 13	Certain Relationships and Related Transactions.	60
Item 14	Principal Accountant Fees and Services.	62
Part IV.
Item 15	Exhibits, Financial Statement Schedules.	63
Item 16	Form 10-K Summary.	65
SIGNATURES		66

	●	Risks related to market acceptance and growth opportunities.
	●	Potential changes in laws or regulations.
	●	Supply chain disruptions and increased costs.
	●	Dependence on key suppliers and customers.
	●	Risks related to our significant indebtedness and compliance with debt covenants.
	●	Litigation and regulatory risks.
	●	Economic factors such as inflation and interest rates.
	●	Challenges in retaining key personnel.
	●	Cybersecurity threats and IT infrastructure issues.
	●	Environmental, safety, and product liability concerns.
	●	Risks related to potential acquisitions.
	●	Changes in U.S. tax laws.

	●	Actual or anticipated variations in our results of operations.

	●	Our ability or inability to generate revenues or profit.

	●	The relatively small number of shares in our public float, which could exacerbate stock price volatility.

	●	Increased competition.

	●	the limitation of the liability of, and the indemnification of, its directors and officers.

	●	a prohibition on actions by its stockholders except at an annual or special meeting of stockholders.

	●	a prohibition on actions by its stockholders by written consent; and

	●	the ability of the board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the board of directors.

	●	may significantly dilute the equity interest of holders of Class A common stock.

	●	may subordinate the rights of holders of shares of common stock if one or more classes of preferred stock are created, and such shares of preferred stock are issued, with rights senior to those afforded to Class A common stock.

	●	could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

	●	may adversely affect prevailing market prices for the Class A common stock and/or Warrants.

	●	Shepherdsville, Kentucky — A 672,087 square foot facility (including 30,000 square feet of cold storage) leased for $4.48 per square foot through November 30, 2024. We have revised the lease and extended the term through January 31, 2031, at a rate of $5.86 per square foot with 3.25% annual increases to base rent. In addition, we retain the right to extend for an additional term of five years at fair market rent.

	●	Shakopee, Minnesota — A 162,753 square foot facility leased for $4.43 per square foot with 2% annual escalations through May 31, 2024, at which time the lease was allowed to expire, and operations were consolidated in our Shepherdsville, KY location.

	●	Shakopee, Minnesota — A 29,688 square foot facility leased for $5.53 per square foot through September 30, 2025.

	Year Ended			Year Ended
($ in thousands)	June 30, 2024			June 30, 2023
Net Revenues	$	1,100,483		$	1,158,722
Cost of Revenues (excluding depreciation and amortization)		971,594			1,054,788
Operating Expenses
Distribution and Fulfillment Expense		48,818			62,841
Selling, General and Administrative Expense		57,651			59,060
Depreciation and Amortization		5,880			6,629
Transaction Costs		2,086			5,014
IC DISC Commissions		-			2,833
Restructuring Costs		280			306
Loss (Gain) on Disposal of Fixed Assets		33			(3	)
Total Operating Expenses		114,748			136,680
Operating Income (Loss)		14,141			(32,746	)
Other Expenses
Change in Fair Value of Warrants		41			1
Interest Expense, Net		12,247			11,715
Total Other Expenses		12,288			11,716
Income (Loss) Before Income Tax Expense (Benefit)		1,853			(44,462	)
Income Tax (Benefit)		(2,728	)		(9,058	)
Net Income (Loss)		4,581			(35,404	)
Other Comprehensive loss		(2	)		-
Total Comprehensive Income (Loss)		4,579			(35,404	)

($in millions)	June 30, 2024		June 30, 2023
Revolver Balance	$	73	$	133
Availability		44		2

	June 30, 2024			February 10, 2023
Stock Price	$	3.00		$	2.55
Exercise price per share	$	11.50		$	11.50
Risk-free interest rate		4.41	%		4.16	%
Expected term (years)		3.6			4.6
Expected volatility		36.0	%		34.6	%
Expected dividend yield		—			—

	●	Risk-free interest rate: the risk-free interest rate is based on the U.S. Treasury rate with a term matching the time to expiration.

	●	Expected term: the expected term is estimated to be equivalent to the remaining contractual term.

	●	Expected volatility: expected stock volatility is based on daily observations of the Company’s historical stock value and implied by market price of the Public Warrants, adjusted by guideline public company volatility.

	●	Expected dividend yield: expected dividend yield is based on the Company’s anticipated dividend payments. As the Company has never issued dividends, the expected dividend yield is 0% and this assumption will be continued in future calculations unless the Company changes its dividend policy.

	●	Information Technology (IT) General Controls – Certain information technology general controls for security and administration of key IT systems were not designed properly or did not operate effectively. Specifically, (i) periodic user access reviews of roles and permissions were not performed sufficiently throughout the period for certain key IT systems, and (ii) certain key IT systems were not logically restricted, resulting in improper segregation of duties for certain business processes.

	●	Financial Close Processes – Management did not design and maintain formal accounting policies, and effective control activities over certain routine aspects of financial reporting. Specifically, management did not design and maintain effective controls over (i) the financial reporting process, including management review controls over areas of accounting such as revenue, inventory, accounts payable, income taxes and payroll, at an appropriate level of precision to detect a material misstatement and sufficient appropriate evidence was not maintained to support the execution and evaluation of the controls performed, (ii) the monthly financial close process, including the review of journal entries, account reconciliations, and analysis of recorded balances, and (iii) the completeness and accuracy of information used by control owners in the operation of certain controls.

	●	Entity-Level Controls: We enhanced support, oversight, and accountability for key financial reporting positions. Management continues to assess and address resource needs, including the potential addition of accounting and compliance personnel and engagement of third-party advisors, as necessary.

	●	Information Technology General Controls: We implemented user access assessments and periodic reviews for key IT systems to ensure appropriate logical security. IT processes are now centrally managed, and we are evaluating the transition of certain hosting and administrative responsibilities to third-party providers.

	●	Financial Close Process and ICFR: We enhanced controls over revenue, inventory, accounts payable, payroll, income taxes, journal entries, and other business processes. This included developing monitoring controls to timely assess and adjust our ICFR as needed. Additionally, we engaged a third-party service provider to assist in designing and implementing significant process transaction flows and key controls across various business processes.

Name	Age	Position
Bruce Ogilvie	66	Executive Chairman of the Board and AEC Director
Jeffrey Walker	56	Chief Executive Officer/Chief Financial Officer and AEC Director
Warwick Goldby	48	Chief Operating Officer
Amanda Gnecco	45	Chief Accounting Officer
Robert Black	64	Chief Compliance Officer
Thomas Finke	59	Independent Director
W. Tom Donaldson III	47	Independent Director
Terilea J. Wielenga	65	Independent Director
Chris Nagelson	56	Independent Director

	●	the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;

	●	pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

	●	setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

	●	setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

	●	obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

	●	reviewing the adequacy and effectiveness of internal control policies and procedures, including establishing special audit procedures in response to any material control deficiencies;

	●	reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction address any conflicts of interest;

	●	reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities;

	●	periodically review risk management policies;

	●	review, approve and monitor code of ethics for senior officers.

	●	reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Office’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

	●	reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

	●	reviewing on an annual basis our executive compensation policies and plans;

	●	implementing and administering our incentive compensation equity-based remuneration plans;

	●	assisting management in complying with our proxy statement and annual report disclosure requirements;

	●	approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

	●	if required, producing a report on executive compensation to be included in our annual proxy statement; and

	●	reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

	●	The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the SEC and any national securities exchange on which the Company is listed.

	●	identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors candidates for nomination for election at the annual general meeting or to fill vacancies on the board of directors;

	●	developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;

	●	coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and

	●	reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.

Name and Position	Fiscal Year	Salary		Bonus		Stock Awards		All Other Compensation		Total Compensation
Bruce Ogilvie⁽¹⁾	2024	$	640,000	$	640,000		—	$	35,859	$	1,315,859
Executive Chairman	2023	$	769,231		—		—	$	35,550	$	804,781
Jeffrey Walker⁽²⁾	2024	$	640,000	$	640,000		—	$	39,194	$	1,319,194
Chief Executive Offer/Chief Financial Officer	2023	$	769,231		—		—	$	37,905	$	807,136

(1)	Included in all other compensation expenses is $22,912 for car and phone allowance in FY24 and FY23. Also included is $16,151 in 401K and health benefits in FY24 and $16,500 in FY23.

(2)	Included in all other compensation expenses is $19,500 for car and phone allowance in FY24 and $24,000 in FY23. Also included is $16,151 in 401K and health benefits in FY23 and $13,900 in FY23.

	Neither of the named executive officers had any outstanding equity awards at June 30, 2024.

			Target
Name	Base Salary ($)		Bonus Percentage(%)
Bruce Ogilvie		800,000		100
Jeffrey Walker		800,000		100

	●	each person known by us to be the beneficial owner of more than 5% of our outstanding shares of Class A common stock;

	●	each of our executive officers and directors; and

	●	all our executive officers and directors as a group.

	Number of Shares of Class A Common Stock		Percentage of Outstanding Class
Name of Beneficial Owner⁽¹⁾	Beneficially Owned		A Common Stock
Bruce Ogilvie ⁽²⁾⁽³⁾		15,281,475		30.0	%
Jeffrey Walker⁽²⁾		22,936,078		45.0	%
Thomas Finke⁽⁴⁾		958,361		1.9	%
W. Tom Donaldson III⁽⁵⁾		2,508,362		4.8	%
Terilea J. Wielenga		13,000		—
Chris Nagelson		5,000		—
Amanda Gnecco		7,500		—
Robert Black		10,000		—
Warwick Goldby		14,000		—
Directors and executive officers as a group (9 individuals)		41,733,776		81.9	%
Ogilvie Legacy Trust dated September 14, 2021⁽⁶⁾		8,554,025		16.8	%

(1)	Unless otherwise indicated, the business address of Alliance’s directors and executive officers is c/o Alliance Entertainment Holding Corporation, 8201 Peters Road, Suite 1000, Plantation, Florida 33324.

(2)	Excludes Class E common stock.

(3)	The shares are beneficially owned by the Bruce Ogilvie, Jr. Trust dated January 20, 1994, having Mr. Bruce Ogilvie, Jr. as trustee, Mr. Ogilvie disclaims individual ownership of such shares except for his individual pecuniary interest in such trusts.

(4)	Includes 637,333 shares issuable upon exercise of private warrants. 321,028 of the listed shares, including 250,000 shares issuable upon exercise of private warrants, are held directly by the Thomas M. Finke Family Trust dtd 12/14/2012, of which Mr. Finke’s spouse is the trustee and Mr. Finke’s spouse and children are the beneficiaries. Mr. Finke disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

(5)	Includes (i) 40,000 shares held directly, (ii) 2,468,362 shares, including 1,837,335 shares issuable upon exercise of private warrants, held directly by B&D Series 2020, LLC, of which Mr. Donaldson is the manager and (iii) 83,300 shares held by Blystone & Donaldson, LLC, of which Mr. Donaldson is the manager. Mr. Donaldson disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein

(6)	Mr. Ogilvie’s two adult children are trustees of the Ogilvie Legacy Trust dated September 14, 2021. Mr. Ogilvie disclaims beneficial ownership of the shares held by such trust.

		Incorporated by Reference
Exhibit Number	Description of Document	Schedule/Form	File Number	Exhibits	Filing Date
2.1**	Business Combination Agreement, dated as of June 22, 2022, by and among Alliance, Merger Sub and Alliance.	Form 8-K	001-40014	2.1	June 23, 2022

3.1	Second Amended and Restated Certificate of Incorporation.	Form 8-K	001-40014	3.4	February 13, 2023

3.2	Amended and Restated Bylaws.	Form 8-K	001-40014	3.5	February 13, 2023

4.1	Specimen Class A Common Stock Certificate.	Form S-4	333-266098	4.5	October 18, 2022

4.2	Specimen Warrant Certificate.	Form S-4	333-266098	4.6	October 18, 2022

4.3	Warrant Agreement, dated February 8, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent.	Form 8-K	001-40014	4.1	February 11, 2021

4.4*	Description of the Registrant’s Securities	Form 10 K	001 40014	4.4	October 19, 2023

10.1	Form of Lock-Up Agreement (included in Exhibit 2.1).	Form 8-K	001-40014	2.1	June 23, 2022

10.2*†	Alliance Entertainment Holding Corporation 2023 Omnibus Equity Incentive Plan.	Form 10 K	001 40014	4.4	October 19, 2023

10.3	Form of Indemnity Agreement.	Form S-4	333-266098	10.11	October 18, 2022

10.4	Lease Agreement, dated as of August 18, 2017, by and between Liberty Property Limited Partnership and COKeM International, Ltd.	Form S-4	333-266098	10.16	October 18, 2022

10.5	First Amendment to Lease, dated as of January 22, 2018, by and among Liberty Property Limited Partnership and COKeM International, Ltd.	Form S-4	333-266098	10.17	October 18, 2022

10.6	Multi-Tenant Industrial Triple Net Lease, dated as of December 14, 2007, by and between Cedar Grove - Crossdock, LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.18	October 18, 2022

10.7	First Amendment to Lease Agreement, dated as of January 18, 2013, by and between KTR LOU I LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.19	October 18, 2022

10.8	Second Amendment to Lease Agreement, dated as of August 1, 2014, by and between KTR LOU I LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.20	October 18, 2022

10.9	Guaranty Agreement, dated as of November 9, 2012, by and between Project Panther Acquisition Corporation and KTR LOU I LLC.	Form S-4	333-266098	10.21	October 18, 2022

10.10	Office Lease, dated as of January 7, 2011, by and between French Overseas Company, LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.22	October 18, 2022

10.11	First Amendment to Lease, dated as of January 31, 2012, by and between French Overseas Company, LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.23	October 18, 2022

10.12	Second Amendment to Lease, dated August 2016, by and between French Overseas Company, LLC and Alliance Entertainment, LLC.	Form S-4	333-266098	10.24	October 18, 2022

10.13	Standard Industrial Lease, dated as of August 12, 2020, by and between SCRS Valley Park Business Center, LLC and COKeM International, Ltd.	Form S-4	333-266098	10.25	October 18, 2022

10.14	Second Amendment to Lease, dated as of June 26, 2020, by and between Liberty Property Limited Partnership and COKeM International, Ltd.	Form S-4	333-266098	10.26	October 18, 2022

10.15 †	Form of Employment Agreement, by and between Alliance Entertainment Holding Corporation and Bruce Ogilvie.	Form S-4	333-266098	10.27	October 18, 2022

10.16 †	Form of Employment Agreement, by and between Alliance Entertainment Holding Corporation and Jeffrey Walker.	Form S-4	333-266098	10.28	October 18, 2022

10.17	Contingent Consideration Escrow Agreement by and among the Combined Company, Bruce Ogilvie and Continental Stock Transfer and Trust Company dated February 10, 2023.	Form 8-K	001-40014	10.29	February 13, 2023

10.18	Loan and Security Agreement, dated as of December 31, 2023 by and among Alliance Entertainment Holding Corporation, as Parent and Guarantor, each of its subsidiaries from time to time party thereto, as Borrowers and Guarantors, the Lenders from time to time parties thereto, and White Oak Commercial Finance LLC, as Administration Agent and Collateral Agent	Form 8-K	001-40014	10.1	December 26, 2023

10.19	Gamefly Distribution Agreement	Form 10-Q	001-40014	10.1	February 8, 2024

14	Code of Ethics.	Form 10-K	001 40014	14	October 19, 2023

16	Letter from WithumSmith+Brown PC to the U.S. Securities and Exchange Commission dated February 10, 2023.	Form 8-K	001-40014	16.1	February 13, 2023

19	Insider Trading Policy

21.1	List of Subsidiaries.	Form 10-K	001-40014	21.1	March 30, 2023

23.1*	Consent of BDO USA, P.C.

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

32.1*	Certification of Principal Executive Officer and 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	Clawback Policy

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 Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

*	Filed herewith.

**	Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

†	Indicates a management contract or compensatory plan, contract or arrangement.

Alliance Entertainment Holding Corporation

By:	/s/ Jeffrey Walker
Name:	Jeffrey Walker
Title:	Chief Executive Officer/Chief Financial Officer

Name	Position	Date

/s/ Jeffrey Walker	Chief Executive Officer/Chief Financial Officer and Director	September 19, 2024
Jeffrey Walker	(Principal Executive Officer, Principal Financial )

/s/ Bruce Ogilvie	Executive Chairman of the Board of Directors	September 19, 2024
Bruce Ogilvie

/s/ Amanda Gnecco	Chief Accounting Officer (Principal Accounting Officer)	September 19, 2024
Amanda Gnecco

/s/ W. Tom Donaldson III	Director	September 19, 2024
W. Tom Donaldson III

/s/ Thomas Finke	Director	September 19, 2024
Thomas Finke

/s/ Chris Nagelson	Director	September 19, 2024
Chris Nagelson

/s/ Terilea J. Wielenga	Director	September 19, 2024
Terilea J. Wielenga

Report of Independent Registered Public Accounting Firm (PCAOB ID # 243)		F-2
Financial Statements:
Consolidated Balance Sheets as of June 30, 2024 and 2023		F-3
Consolidated Statements of Operations for the years end June 30, 2024 and 2023		F-4
Consolidated Statements of Changes in Stockholders’ Deficit for the years end June 30, 2024 and 2023		F-5
Consolidated Statements of Cash Flows for the years end June 30, 2024 and 2023		F-6
Notes to Consolidated Financial Statements		F-7 to F-29

($ in thousands, except per share amounts)	June 30, 2024			June 30, 2023
Assets
Current Assets
Cash	$	1,129		$	865
Trade Receivables, Net		92,357			104,939
Inventory, Net		97,429			146,763
Other Current Assets		5,298			8,299
Total Current Assets		196,213			260,866
Property and Equipment, Net		12,942			13,421
Operating Lease Right-Of-Use Assets		22,124			4,855
Goodwill		89,116			89,116
Intangibles, Net		13,381			17,356
Other Long-Term Assets		503			1,017
Deferred Tax Asset, Net		6,533			2,899
Total Assets	$	340,812		$	389,530
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable	$	133,221		$	151,622
Accrued Expenses		9,371			9,340
Current Portion of Operating Lease Obligations		1,979			3,902
Current Portion of Finance Lease Obligations		2,838			2,449
Promissory Note		—			495
Contingent Liability		511			150
Revolving Credit Facility, Net		—			133,281
Total Current Liabilities		147,920			301,239
Revolving Credit Facility, Net		69,587			—
Finance Lease Obligation, Non- Current		5,016			7,029
Operating Lease Obligations, Non-Current		20,413			1,522
Shareholder Loan (subordinated), Non-Current		10,000			—
Warrant Liability		247			206
Total Liabilities		253,183			309,996
Commitments and Contingencies (Note 11)		-
Stockholders’ Equity
Preferred Stock: Par Value $0.0001 per share, Authorized 1,000,000 shares, Issued and Outstanding 0 shares as of June 30, 2024 and June 30, 2023		—			—
Common Stock: Par Value $0.0001 per share, Authorized 550,000,000 shares at June 30, 2024, and at June 30, 2023; Issued and Outstanding 50,957,370 Shares at June 30, 2024, and 49,167,170 at June 30, 2023		5			5
Paid In Capital		48,058			44,542
Accumulated Other Comprehensive Loss		(79	)		(77	)
Retained Earnings		39,645			35,064
Total Stockholders’ Equity		87,629			79,534
Total Liabilities and Stockholders’ Equity	$	340,812		$	389,530

	Year Ended			Year Ended
($ in thousands except share and per share amounts)	June 30, 2024			June 30, 2023
Net Revenues	$	1,100,483		$	1,158,722
Cost of Revenues (excluding depreciation and amortization)		971,594			1,054,788
Operating Expenses
Distribution and Fulfillment Expense		48,818			62,841
Selling, General and Administrative Expense		57,651			59,060
Depreciation and Amortization		5,880			6,629
Transaction Costs		2,086			5,014
IC DISC Commissions		-			2,833
Restructuring Cost		280			306
Loss (Gain) on Disposal of Fixed Assets		33			(3	)
Total Operating Expenses		114,748			136,680
Operating Income (Loss)		14,141			(32,746	)
Other Expenses
Interest Expense, Net		12,247			11,715
Change in Fair Value of Warrants		41			1
Total Other Expenses		12,288			11,716
Income (Loss) Before Income Tax Benefit		1,853			(44,462	)
Income Tax Benefit		(2,728	)		(9,058	)
Net Income (Loss)		4,581			(35,404	)
Other Comprehensive Income (Loss)
Foreign Currency Translation		(2	)		(11	)
Total Comprehensive Income (Loss)		4,579			(35,415	)
Net Income (Loss) per Share – Basic and Diluted	$	0.09		$	(0.74	)
Weighted Average Common Shares Outstanding – Basic		50,828,548			48,138,393
Weighted Average Common Shares Outstanding – Diluted		50,837,148			48,138,393

	Common Stock Shares				Paid In			Cost of Treasury			Accumulated Other Comprehensive			Retained
($ in thousands)	Issued		Par Value		Capital			Stock			Loss			Earnings			Total
Balances at June 30, 2022		47,500,000	$	5	$	39,995		$	(2,674	)	$	(66	)	$	71,668		$	108,928
Capital Contribution		—		—		6,592			—			—			—			6,592
Conversion of Treasury Stock		—		—		(2,674	)		2,674			—			—			—
Merger: Reverse Recapitalization		1,667,170		—		(787	)		—			—			—			(787	)
Fair Value of Contingent Shares		—		—		1,200			—			—			(1,200	)		—
Currency Translation Adjustment		—		—		—			—			(11	)		—			(11	)
Stock-based Compensation		—		—		216			—			—			—			216
Net Loss		—		—		—			—			—			(35,404	)		(35,404	)
Balances at June 30, 2023		49,167,170	$	5	$	44,542		$	—		$	(77	)	$	35,064		$	79,534
Balance		49,167,170	$	5	$	44,542		$	—		$	(77	)	$	35,064		$	79,534
Issuance of common stock, net of transaction costs of $1.9 million		1,335,000		—		2,130			—			—			—			2,130
Currency Translation Adjustment		—		—		—			—			(2	)		—			(2	)
Stock-based Compensation		455,200		—		1,386			—			—			—			1,386
Net Income												—			4,581			4,581
Net Income (Loss)												—			4,581			4,581
Balances at June 30, 2024		50,957,370	$	5	$	48,058		$	—		$	(79	)	$	39,645		$	87,629
Balance		50,957,370	$	5	$	48,058		$	—		$	(79	)	$	39,645		$	87,629