Luvu Brands, Inc 10-Q for FY2026 Q3

Luvu Brands, Inc. (LUVU)

10-Q 2026-05-15 For: 2026-03-31

Added on May 17, 2026

About this 10-Q

Luvu Brands, Inc filed this 10-Q on May 15, 2026, covering the quarter ended March 31, 2026 (FY2026 Q3).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.55M; up 12.0% from $5.85M a year earlier
Net income: $174K; compared with a net loss of $88K a year earlier
Diluted EPS: $0.01; compared with $0.00 a year earlier

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Florida		59-3581576
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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 March 31, 2026 (unaudited) and June 30, 2025	4
	Consolidated Statements of Operations – For the Three and Nine Months Ended March 31, 2026 (unaudited) and March 31, 2025 (unaudited)	8
	Consolidated Statements of Stockholders’ Equity – For the Three and Nine Months Ended March 31, 2026 (unaudited) and March 31, 2025 (unaudited)	6
	Consolidated Statements of Cash Flows – For the Nine Months Ended March 31, 2026 (unaudited) and March 31, 2025 (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

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

	March 31,			June 30,
	2026			2025
	(unaudited)
Assets:	(in thousands, except share data)
Current assets:
Cash and cash equivalents	$	1,230		$	735
Accounts receivable, net of allowance for doubtful accounts and allowance for discounts and returns of $18 on March 31, 2026 and $35 on June 30, 2025		1,612			1,600
Inventories, net of allowance for inventory reserve of $232 on March 31, 2026 and $232 on June 30, 2025		3,339			3,585
Other current assets		93			108
Total current assets		6,274			6,028

Equipment, property and leasehold improvements, net		1,323			1,476
Finance lease assets, net		101			104
Operating lease assets		3,398			1,057
Other assets		80			96
Total assets	$	11,176		$	8,761

Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	1,736		$	1,858
Current debt		1,817			1,949
Other accrued liabilities		784			553
Operating lease liability		544			646
Total current liabilities		4,881			5,006

Noncurrent liabilities:
Deferred Tax Liability		887			119
Long-term debt		750			704
Long-term operating lease liability		2,937			513
Total noncurrent liabilities		4,574			1,336
Total liabilities		9,455			6,342
Commitments and contingencies (See Note 12)		—			—
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 March 31, 2026 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 March 31, 2026 and June 30, 2025, respectively		766			766
Additional paid-in capital		6,315			6,289
Accumulated deficit		(5,360	)		(4,636	)
Total stockholders’ equity		1,721			2,419
Total liabilities and stockholders’ equity	$	11,176		$	8,761

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2026			2025			2026			2025
	(in thousands, except share data)						(in thousands, except share data)

Net Sales	$	6,549		$	5,846		$	19,272		$	18,787
Cost of goods sold (excluding depreciation expense presented below)		4,713			4,243			13,982			13,687
Gross profit		1,836			1,603			5,290			5,100
Operating expenses:
Advertising and promotion		193			240			698			718
Other selling and marketing		447			430			1,326			1,281
General and administrative		888			827			2,606			2,610
Depreciation		81			107			265			324
Total operating expenses		1,609			1,604			4,895			4,933
Operating income/(loss)		227			(1	)		395			167

Other income (expense):
Interest expense and financing costs		(102	)		(87	)		(355	)		(272	)
Total other income (expense)		(102	)		(87	)		(355	)		(272	)
Income (loss) from operations before income taxes		125			(88	)		40			(105	)
Provision for income taxes		49			0			(764	)		0
Net income (loss)	$	174		$	(88	)	$	(724	)	$	(105	)

Net income (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 income (loss) 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-in		Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
	(in thousands, except share data)
Ending balance, December 31, 2024		4,300,000	$	0		76,834,057	$	766	$	6,270	($4,205)			$	2,831
Stock-based compensation expense		-		-		-		-		9		-			9
Stock option exercises		-		-		-		-		-		-			-
Net loss		-		-		-		-		-		(88	)		(88	)
Ending balance, March 31, 2025		4,300,000	$	0		76,834,057	$	766	$	6,279	($4,293)			$	2,752

Ending balance, December 31, 2025		4,300,000	$	0		76,824,057	$	766	$	6,307	($5,534)			$	1,539
Stock-based compensation expense		-		-		-		-	$	8		-			8
Stock option exercises		-		-		-				-		-			-
Net income		-		-		-		-		-		174			174
Ending balance, March 31, 2026		4,300,000	$	0		76,834,057	$	766	$	6,315	($5,360)			$	1,721

	■	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.

	March 31, 2026			June 30, 2025
	(unaudited)
	(in thousands)
Accounts receivable	$	1,630		$	1,635
Allowance for doubtful accounts		(18	)		(35	)
Allowance for discounts and returns		-			-
Total accounts receivable, net	$	1,612		$	1,600

	(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.

	March 31
	2026		2025
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

	March 31, 2026			June 30, 2025
	(unaudited)
(in thousands)
Raw materials	$	1,219		$	1,407
Work in process		444			366
Finished goods		1,908			2,044
Total inventories		3,571			3,817
Allowance for inventory reserves		(232	)		(232	)
Total inventories, net of allowance	$	3,339		$	3,585

	March 31, 2026			June 30, 2025			Estimated Useful Life
	(unaudited)
	(in thousands)
Factory equipment	$	4,510		$	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		5,994			5,885
Accumulated depreciation		(4,570	)		(4,305	)
Equipment and leasehold improvements, net	$	1,424		$	1,580

	Nine Months Ended
	March 31,
	2026			2025
	(in thousands)
OPERATING ACTIVITIES:
Net loss	$	(724	)	$	(105	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		265			324
Deferred tax expense		768			0
Stock-based compensation expense		25			27
Loss on sale of fixed asset		0			7
Change in operating assets and liabilities:
Accounts receivable		(12	)		(359	)
Inventory		246			(170	)
Operating lease liability		(1,457	)		(388	)
Amortization of operating lease asset		1,439			365
Prepaid expenses and other current assets		15			4
Other Assets		16			0
Accounts payable		(122	)		312
Other current liabilities		231			186
Net cash provided by operating activities	$	690		$	203

INVESTING ACTIVITIES:
Investment in equipment, software and leasehold improvements	$	(109	)	$	(34	)
Net cash used in investing activities	$	(109	)	$	(34	)

FINANCING ACTIVITIES:
Borrowing under revolving line of credit	$	183		$	(82	)
Repayment of unsecured line of credit		(5	)		54
Proceeds from secured notes payable		250			-
Repayment of secured notes payable		(364	)		-
Repayment of unsecured notes payable		-			(9	)
Proceeds from equipment notes		71			250
Payments on equipment notes		(233	)		(282	)
Proceeds for finance leases		29			0
Principal payments on finance leases		(17	)		(17	)
Net cash used in financing activities	$	(86	)	$	(87	)
Net increase in cash and cash equivalents		495			82
Cash and cash equivalents at beginning of period	$	735		$	1,028
Cash and cash equivalents at end of period	$	1,230		$	1,110

	Three Months Ended							Three Months Ended
	March 31, 2026							March 31, 2025
(in thousands)	Direct to Consumer		Wholesale		Total			Direct to Consumer		Wholesale		Total
Revenues	$	2,245	$	4,304	$	6,549		$	1,878	$	3,902	$	5,846
Cost of Goods Sold		1,236		3,477		4,713			1,065		3,177		4,243
Other direct operating expenses (a)		297		341		638			298		372		670
Overhead expenses(b)						890							827
Operating income before depreciation		712		485		308			515		419		106
Interest income						(1	)						(1	)
Interest expense						103							88
Depreciation expense						81							108
Other expense, net						-							-
Income/(loss) from operations before income taxes		712		485		125			515		419		(88	)
Reconciliation of operating income to adjusted operating income:
Operating income (loss)		712		485		308			515		419		106
Adjustments:
Share-based compensation expense						9							9
Adjusted operating income	$	712	$	485	$	317		$	515	$	419	$	115

	Nine Months Ended							Nine Months Ended
	March 31, 2026							March 31, 2025
(in thousands)	Direct to Consumer		Wholesale		Total			Direct to Consumer		Wholesale		Total
Revenues	$	6,607	$	12,666	$	19,272		$	6,201	$	12,586	$	18,787
Cost of Goods Sold		3,661		10,321		13,982			3,672		10,015		13,687
Other direct operating expenses (a)		912		1,109		2,022			936		1,063		1,999
Overhead expenses(b)						2,608							2,610
Operating income before depreciation		2,033		1,235		660			1,422		1,680		491
Interest income						(3	)						(4	)
Interest expense						358							269
Depreciation expense						265							324
Other expense, net						-							7
Income/(loss) from operations before income taxes		2,033		1,235		40			1,422		1,680		(105	)
Reconciliation of operating income (loss) to adjusted operating income:
Operating income before depreciation		2,033		1,235		660			1,422		1,680		491
Adjustments:
Share-based compensation expense						25							27
Adjusted operating income	$	2,033	$	1,235	$	685		$	1,422	$	1,680	$	518

	March 31, 2026		June 30, 2025
	(unaudited)
Current debt:
13.5% Unsecured note, interest only, due July 31, 2025(3)	$	-	$	100
13.5% Unsecured note, interest only, due October 31, 2025(1)		-		100
Total current debt	$	-	$	200

Long-term debt:
13.5% Unsecured note, interest only, due July 31, 2027 (3)	$	100	$	-
13.5% Unsecured note, interest only, due October 31, 2027 (1)		100		-
13.5% Unsecured note, interest only, due April 30, 2027 (2)		200		200
Total long-term debt	$	400	$	200
Total unsecured notes payable	$	400	$	400

Operating leases	Balance Sheet Classification	(in thousands)
Right-of-use assets	Operating lease right-of-use assets, net	$	3,398

Current lease liabilities	Operating lease liabilities	$	544
Non-current lease liabilities	Long-term operating lease liabilities		2,937
Total lease liabilities		$	3,481

Payments	(in thousands)
2027	$	662
2028		752
2029		1,037
2030		1,073
2031		276
Total undiscounted lease payment	$	3,800
Less: Present value discount		(319	)
Total lease liability balance	$	3,481

Years ending March 31,	*(in thousands)*
2027	$	171
2028		87
2029		85
Future Minimum Note Payable Payments	$	283
Current Portion		(171	)
Long-Term Obligations under Equipment Notes Payable	$	112

Year ending March 31,	(in thousands)
2027		35
2028		34
2029		34
2030		9
Future Minimum Finance Lease Payable Payments	$	112
Less Amount Representing Interest		(10	)
Present Value of Minimum Finance Lease Payable Payments		102
Less Current Portion		(27	)
Long-Term Obligations under Finance Lease Payable	$	75

	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 March 31, 2025		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 March 31, 2026		1,200,000			1.3	$	0.14	$	-
Options Exercisable as of March 31, 2026		750,000			1.3	$	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		3.2	$	0.08		150,000	$	0.08
$0.15 to $0.20		700,000		0.9	$	0.16		550,000	$	0.16
$0.30		50,000		0.4	$	0.30		50,000	$	0.30
Total stock options		1,200,000		1.8	$	0.14		750,000	$	0.16

	Three Months				Nine Months
	Ending March 31,				Ending March 31,
	2026		2025		2026		2025
	($ in thousands)				($ in thousands)
Cost of Goods Sold	$	0	$	1	$	0	$	2
Other Selling and Marketing		4		5		12		15
General and Administrative		4		3		13		9
Total Stock-based Compensation Expense	$	8	$	9	$	25	$	26

	March 31,
	2026
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

	Nine months Ended
	March 31,
Cash flow data:	2026			2025
	(Unaudited)
	(Dollars in thousands)
Cash provided by operating activities	$	690		$	203
Cash used in investing activities	$	(109	)	$	(34	)
Cash used in financing activities	$	(86	)	$	(87	)

		Incorporated by Reference				Filed or Furnished
No.	Exhibit Description		Form	Date Filed	Number	Herewith

2.1	Merger and Recapitalization Agreement between WES Consulting, Inc., the majority shareholder of WES Consulting, Inc., Luvu Brands, Inc., and the majority shareholder of Luvu Brands, Inc., dated as of October 19, 2009		8-K	10/22/09	2.1
2.2	Stock Purchase and Recapitalization Agreement between OneUp Acquisition, Inc., Remark Enterprises, Inc., OneUp Innovations, Inc., and Louis S. Friedman, dated March 31, 2009 and fully executed on April 3, 2009		8-K/A	3/24/10	2.2
2.3	Amendment No. 1 to Stock Purchase and Recapitalization Agreement, dated June 22, 2009		8-K/A	3/24/10	2.3
3.1	Amended and Restated Articles of Incorporation		SB-2	3/2/07	3i
3.2	Bylaws		SB-2	3/2/07	3ii
3.3	Articles of Amendment to the Amended and Restated Articles of Incorporation		8-K	2/23/11	3.1
3.4	Articles of Amendment to the Amended and Restated Articles of Incorporation, effective February 28, 2011		8-K	3/3/11	3.1
3.5	Articles of Amendment to the Amended and Restated Articles of Incorporation, effective November 5, 2015		8-K	11/5/15	3.5
4.1	Designation of Rights and Preferences of Series A Convertible Preferred Stock.		8-K	2/23/11	4.1

31.1	Section 302 Certificate of Chief Executive Officer					Filed
31.2	Section 302 Certificate of Chief Financial Officer					Filed
32.1	Section 906 Certificate of Chief Executive Officer					Filed
32.2	Section 906 Certificate of Chief Financial Officer					Filed
101.INS	XBRL Instance Document					Filed
101.SCH	XBRL Taxonomy Extension Schema Document					Filed
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document					Filed
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document					Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					Filed

		LUVU BRANDS, INC.
		(Registrant)

May 15, 2026	By:	/s/ Louis S. Friedman
(Date)		Louis S. Friedman
		President and Chief Executive Officer (Principal Executive Officer)

May 15, 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

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2026		/s/ Louis S. Friedman
		Louis S. Friedman
		Chief Executive Officer (Principal Executive 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.