Luvu Brands, Inc 10-Q for FY2026 Q2

Luvu Brands, Inc. (LUVU)

10-Q 2026-02-17 For: 2025-12-31

Added on April 06, 2026

About this 10-Q

Luvu Brands, Inc filed this 10-Q on February 17, 2026, covering the quarter ended December 31, 2025 (FY2026 Q2).

Headline figures

Quarter ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.88M; down 4.2% from $7.19M a year earlier
Net loss: $765K; compared with net income of $193K a year earlier
Diluted EPS: -$0.01; compared with $0.00 a year earlier

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

2745 Bankers Industrial Drive, Atlanta, GA		30360
(Address of principal executive offices)		(Zip code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None

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

	PART I – FINANCIAL INFORMATION
		Page Number
ITEM 1.	Financial Statements	4

	Consolidated Balance Sheets – At December 31, 2025(unaudited) and June 30, 2025	4
	Consolidated Statements of Operations – For the Three and Six Months Ended December 31, 2025 (unaudited) and December 31, 2024 (unaudited)	5
	Consolidated Statements of Stockholders’ Equity – For the Three and Six Months Ended December 31, 2025 (unaudited) and December 31, 2024 (unaudited)	6
	Consolidated Statements of Cash Flows – For the Six Months Ended December 31, 2025 (unaudited) and December 31, 2024 (unaudited)	7
	Notes Consolidated Financial Statements (unaudited)	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	28

ITEM 4.	Controls and Procedures	28

	PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	29

ITEM 1A.	Risk Factors	29

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

ITEM 3.	Defaults Upon Senior Securities	29

ITEM 4.	Mine Safety Disclosures	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	30

SIGNATURES		31

	December 31,			June 30,
	2025			2025
	(unaudited)
Assets:	(in thousands, except share data)
Current assets:
Cash and cash equivalents	$	1,086		$	735
Accounts receivable, net of allowance for doubtful accounts and allowance for discounts and returns of $18 on December 31 2025 and $35 on June 30, 2025		1,483			1,600
Inventories, net of allowance for inventory reserve of $232 on December 31, 2025 and $232 on June 30, 2025		3,352			3,585
Other current assets		106			108
Total current assets		6,027			6,028

Equipment, property and leasehold improvements, net		1,368			1,476
Finance lease assets, net		77			104
Operating lease assets		3,584			1,057
Other assets		85			96
Total assets	$	11,141		$	8,761

Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	1,696		$	1,858
Current debt		1,923			1,949
Other accrued liabilities		657			553
Operating lease liability		595			646
Total current liabilities		4,871			5,006

Noncurrent liabilities:
Deferred Tax Liability		932			119
Long-term debt		766			704
Long-term operating lease liability		3,033			514
Total noncurrent liabilities		4,731			1,337
Total liabilities		9,602			6,343
Commitments and contingencies (See Note 13)		—			—
Stockholders’ equity:
Preferred stock, 5,700,000 shares authorized, $0.0001 par value none issued and outstanding		—			—
Series A Convertible Preferred stock, 4,300,000 shares authorized $0.0001 par value, 4,300,000 shares issued and outstanding with a liquidation preference of $1,000 as of December 31, 2025 and June 30, 2025		—			—
Common stock, $0.01 par value, 175,000,000 shares authorized, 76,834,057 and 76,834,057 shares issued and outstanding as of December 31, 2025 and June 30, 2025, respectively		766			766
Additional paid-in capital		6,307			6,289
Accumulated deficit		(5,534	)		(4,637	)
Total stockholders’ equity		1,539			2,418
Total liabilities and stockholders’ equity	$	11,141		$	8,761

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2025			2024			2025			2024
	(in thousands, except share data)						(in thousands, except share data)

Net Sales	$	6,882		$	7,186		$	12,723		$	12,941
Cost of goods sold (excluding depreciation expense presented below)		5,084			5,204			9,269			9,444
Gross profit		1,798			1,982			3,454			3,497
Operating expenses:
Advertising and promotion		255			247			505			478
Other selling and marketing		457			437			878			851
General and administrative		805			899			1,719			1,783
Depreciation		97			108			184			217
Total operating expenses		1,614			1,691			3,286			3,329
Operating income		184			291			168			168

Other income (expense):
Interest expense and financing costs		(136	)		(98	)		(252	)		(186	)
Total other expense		(136	)		(98	)		(252	)		(186	)
Income (Loss) from operations before income taxes		48			193			(175	)		(18	)
Provision for income taxes		(813	)		0			(813	)		0
Net loss	$	(765	)	$	193		$	(897	)	$	(18	)

Net loss per share:
Basic	$	(0.01	)	$	0.00		$	(0.01	)	$	(0.00	)
Diluted	$	(0.01	)	$	0.00		$	(0.01	)	$	(0.00	)
Shares used in calculation of net (loss) income per share:
Basic		76,834,057			76,834,057			76,834,057			76,834,057
Diluted		76,834,057			76,834,057			76,834,057			76,834,057

	Series A Preferred Stock				Common Stock				Additional Paid-		Accumulated			Total Stockholders' Equity
	Shares		Amount		Shares		Amount		in Capital		Deficit			(Deficit)
	(in thousands, except share data)
Ending balance, September 30, 2024		4,300,000	$	0		76,834,057	$	766	$	6,261	($4,398		)	$	2,628
Stock-based compensation expense		-		-		-		-		9		-			9
Stock option exercises		-		-		-		-		-		-			-
Net income		-		-		-		-		-		193			193
Ending balance, December 31, 2024		4,300,000	$	0		76,834,057	$	766	$	6,270	($4,205)			$	2,830

Ending balance, September 30, 2025		4,300,000	$	0		76,834,057	$	766	$	6,298	($4,769)			$	2,295
Stock-based compensation expense		-		-		-		-	$	9		-			9
Stock option exercises		-		-		-		-		-		-			-
Net income		-		-		-		-		-		(765	)		(765	)
Ending balance, December 31, 2025		4,300,000	$	0		76,834,057	$	766	$	6,307	($5,534)			$	1,539

	Series A Preferred Stock				Common Stock				Additional Paid-		Accumulated			Total Stockholders' Equity
	Shares		Amount		Shares		Amount		in Capital		Deficit			(Deficit)
	(in thousands, except share data)
Ending balance, June 30, 2024		4,300,000	$	0		76,547,672	$	765	$	6,253	($4,188)			$	2,830
Stock-based compensation expense		-		-		-		-		17		-			17
Stock option exercises		-		-		286,385		1		-		-			-
Net income		-		-		-		-		-		(17	)		(17	)
Ending balance, December 31, 2024		4,300,000	$	0		76,834,057		766	$	6,270	($4,205)			$	2,830

Ending balance, June 30, 2025		4,300,000	$	0		76,834,057	$	766	$	6,289	($4,637)			$	2,418

Stock-based compensation expense		-		-		-		-	$	18		-			18
Stock option exercises		-		-		-		-		-		-			-
Net income		-		-		-		-		-		(897	)		(897	)
Ending balance, December 31, 2025		4,300,000	$	0		76,834,057	$	766	$	6,307	($5,534)			$	1,539

	·	JAXX-a diverse range of convertible daybeds, headboard panels, outdoor soft seating and bean bags made from repurposed polyurethane foam trim.

	·	AVANA-products for yoga exercise, sleep comfort and inclined bed therapy.

	·	LIBERATOR-transformable chaises and specially designed pillows and props for enhancing sexual performance.

	·	FOAMLABS-private label Jaxx products and contract manufacturing for hospitality, school, furniture mass market and beyond.

	December 31, 2025			June 30, 2025
	(unaudited)
	(in thousands)
Accounts receivable	$	1,501		$	1,635
Allowance for doubtful accounts		(18	)		(35	)
Allowance for discounts and returns		-			-
Total accounts receivable, net	$	1,483		$	1,600

	(i)	depreciation, amortization and impairments of property and equipment, goodwill and intangible assets,
	(ii)	amortization for capitalized costs,
	(iii)	share-based compensation expense, and
	(iv)	gains or losses on sales or dispositions of assets.

	Three Months Ended										Three Months Ended
	December 31, 2025										December 31, 2024
(in thousands)	Direct to Consumer		Wholesale		Corporate			Total			Direct to Consumer		Wholesale		Corporate			Total
Revenues	$	2,477	$	4,404	$	0		$	6,882		$	2,456	$	4,730	$	0		$	7,186
Cost of Goods Sold		1,375		3,709		0			5,084			1,479		3,725		0			5,204
Other direct operating expenses (a)		317		330		0			647			301		315		0			616
Overhead expenses(b)		0		0		967			967							1,075			1,075
Operating (loss) income		785		365		(967	)		184			676		689		(1,075	)		290
Interest income		0		0		(1	)		(1	)		0		0		(1	)		(1	)
Interest expense		0		0		134			134			0		0		92			92
Other expense, net		0		0		0			0			0		0		7			7
Loss from operations before income taxes		785		365		(1,100	)		51			676		689		(1,172	)		193
Reconciliation of operating (loss) income to adjusted operating income:
Operating (loss) income		785		365		(967	)		184			676		689		(1,075	)		290
Adjustments:
Share-based compensation expense		0		0		8			8			0		0		9			9
Depreciation and amortization		0		0		97			97			0		0		108			108
Adjusted operating income	$	785	$	365	($862)			$	289		$	676	$	689	($958)			$	407

	(a)	Other direct operating expenses are directly attributable to the business segment, such as marketing, salaries, customer relationship expenses, and travel and entertainment expenses.

	(b)	Overhead expenses are all non-direct expenses related to the operation of the business segment. It includes G&A, unallocated marketing expenses, facilities, and product development.

	December 31, 2025			June 30, 2025			Estimated Useful Life
	(unaudited)
	(in thousands)
Factory equipment	$	4,450		$	4,465		2-10 years
Computer equipment and software		828			764		5-7 years
Office equipment and furniture		181			181		5-7 years
Leasehold improvements		475			475		6 years
Subtotal		5,934			5,885
Accumulated depreciation		(4,489	)		(4,305	)
Equipment and leasehold improvements, net	$	1,445		$	1,580

	Six Months Ended
	December 31,
	2025			2024
	(in thousands)
OPERATING ACTIVITIES:
Net loss	$	(897	)	$	(17	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		184			217
Deferred tax expense		813			0
Stock-based compensation expense		18			18
Loss on sale of fixed asset		0			7
Change in operating assets and liabilities:
Accounts receivable		117			(550	)
Inventory		233			45
Operating lease liability		(1,310	)		(260	)
Amortization of operating lease asset		1,253			248
Prepaid expenses and other current assets		2			2
Other Assets		11			-
Accounts payable		(162	)		541
Other current liabilities		104			112
Net cash provided by operating activities	$	365		$	363

INVESTING ACTIVITIES:
Investment in equipment, software and leasehold improvements	$	(49	)	$	(3	)
Net cash used in investing activities	$	(49	)	$	(3	)

FINANCING ACTIVITIES:
Borrowing under revolving line of credit	$	141		$	160
Repayment of unsecured line of credit		(3	)		(1	)
Proceeds from secured notes payable		250			-
Repayment of secured notes payable		(221	)		-
Proceeds from equipment notes		49			-
Payments on equipment notes		(168	)		(187	)
Principal payments on capital leases		(12	)		(11	)
Net cash used in financing activities	$	35		$	(39	)
Net increase in cash and cash equivalents		352			321
Cash and cash equivalents at beginning of period	$	735		$	1,028
Cash and cash equivalents at end of period	$	1,086		$	1,349

Supplemental Disclosure of Cash Flow Information:

	December 31,
	2025		2024
Common stock options – 2015 Plan		1,200,000		1,150,000
Convertible preferred stock		4,300,000		4,300,000
Total		5,500,000		5,450,000

Operating leases	Balance Sheet Classification	(in thousands)
Right-of-use assets	Operating lease right-of-use assets, net	$	3,584

Current lease liabilities	Operating lease liabilities	$	595
Non-current lease liabilities	Long-term operating lease liabilities		3,033
Total lease liabilities		$	3,628

Payments	(in thousands)
2026	$	718
2027		623
2028		1,028
2029		1,064
2030		547

Total undiscounted lease payment	$	3,979
Less: Present value discount		(351	)
Total lease liability balance	$	3,628

Years ending December 31,	*(in thousands)*
2026	$	210
2027		94
2028		26
Future Minimum Note Payable Payments	$	330
Less Current Portion		(210	)
Long-Term Obligations under Equipment Notes Payable	$	120

Year ending December 30,	(in thousands)
2026		28
2027		28
2028		28
2029		11
Future Minimum Finance Lease Payable Payments	$	93
Less Amount Representing Interest		(16	)
Present Value of Minimum Finance Lease Payable Payments		77
Less Current Portion		(20	)
Long-Term Obligations under Finance Lease Payable	$	58

	Number of shares of underlying outstanding option			Weighted Average Remaining Contract Life		Weighted Average Exercise Price		Intrinsic Value
Option Outstanding as of June 30, 2024		1,350,000			3.0	$	0.12	$	21,000
Granted		200,000			-		0.08		-
Exercised		(300,000	)		-		0.03		(15,000	)
Forfeited or expired		(100,000	)		-		0.02	$	(6,000	)
Options Outstanding as of December 31. 2024		1,150,000			2.7	$	0.14	$	-

Option Outstanding as of June 30, 2025		1,200,000			2.3	$	0.14	$	-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited or expired		-			-		-		-
Options Outstanding as of December 31,2025		1,200,000			1.5	$	0.14	$	-
Options Exercisable as of December 31, 2025		851,042			1.5	$	0.16	$	-

		Outstanding Options						Exercisable
Exercise Prices		Number of Shares		Remaining Life (Years)		Weighted Average Price		Options Number of Shares		Weighted Average Price

$0.02 to $0.03			-		-		-		-		-
$0.04 to $0.10			450,000		3.5	$	0.08		138,542	$	0.08
$0.15 to $0.20			700,000		1.2	$	0.16		662,500	$	0.16
	$0.30		50,000		0.6	$	0.30		50,000	$	0.30
Total stock options			1,200,000		2.0	$	0.14		851,042	$	0.16

	Three Months				Six Months
	Ending December 31,				Ending December 31,
	2025		2024		2025		2024
	($ in thousands)				($ in thousands)
Cost of Goods Sold	$	1	$	1	$	1	$	2
Other Selling and Marketing		4		5		8		10
General and Administrative		4		3		9		6
Total Stock-based Compensation Expense	$	9	$	9	$	18	$	18

	December 31,
	2025
Shares of common stock reserved for issuance under the 2015 Plan		1,200,000
Shares of common stock issuable upon conversion of the Preferred Stock		4,300,000
Total shares of common stock equivalents		5,500,000

	Six months Ended
	December 31,
Cash flow data:	2025			2024
	(Unaudited)
	(Dollars in thousands)
Cash provided by operating activities	$	365		$	363
Cash used in investing activities	$	(49	)	$	(3	)
Cash provided by (used in) financing activities	$	35		$	(39	)

		LUVU BRANDS, INC.
		(Registrant)

February 13, 2026	By:	/s/ Louis S. Friedman
(Date)		Louis S. Friedman
		President and Chief Executive Officer (Principal Executive Officer)

February 13, 2026	By:	/s/ Christopher Knauf
(Date)		Christopher Knauf
		Chief Financial Officer (Principal Financial & Accounting Officer)

1.		I have reviewed this quarterly report on Form 10-Q of Luvu Brands, Inc.;
2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

Date: February 13, 2026		/s/ Christopher A Knauf
		Christopher A Knauf
		Chief Financial Officer (Principal Financial and Accounting Officer)

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.