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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported)
April 12,
2019
LEVEL BRANDS, INC.
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(Exact name of registrant as specified in its charter)
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North Carolina
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001-38299
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47-3414576
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(State or other jurisdiction of incorporation or
organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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4521 Sharon Road, Suite 450, Charlotte, NC 28211
(Address of principal executive offices)(Zip Code)
Registrant's
telephone number, including area code: (704) 362-6286
Level Brands, Inc.
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(Former name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging
growth company ☑
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If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ☐
Item
4.02. Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report
or Completed Interim Review.
On April 12, 2019, the Chief Financial Officer of
Level Brands, Inc. (the “Company”) determined that an
error existed in the Company's previously issued unaudited
condensed consolidated financial statements for the three months
ended December 31, 2018, included in its Quarterly Report on Form
10-Q (the "Form 10-Q") filed with the Securities and Exchange
Commission on February 14, 2019. The Company failed to give effect
to the phase in of FASB ASU 2016-01, Recognition and Measurement of
Financial Assets and Financial Liabilities (“ASU 2016-01”) in the financial
statements included in the 10-Q. The Update, which was effective
for public business entities for fiscal years beginning after
December 31, 2017, is intended to enhance the reporting model for
financial instruments to provide users of financial instruments
with more decision-useful information and addresses certain aspects
of the recognition, measurement, presentation, and disclosure of
financial instruments. This new standard affects all entities that
hold financial assets or owe financial
liabilities.
The Chief Financial Officer promptly notified the
Audit Committee of our Board of Directors of the existence of the
error. The Chief Financial Officer has also discussed the matter
with the Company's auditors, Cherry Bekaert LLP. As a result
of this error, the previously filed
unaudited condensed consolidated financial statements in the Form
10-Q should no longer be relied upon.
The Company is restating its financial statements
as of and for the three months ended December 31, 2018 to reflect
the phase in of ASU 2016-01 which will impact how it records other
comprehensive income. Under the new guidance in ASU 2016-01
the Company should record unrealized gains and losses in the value
of the equity securities it owns in the income statement, whereas,
under previous guidance (and in the December 31, 2018 Form 10-Q)
those gains and losses were recorded as other comprehensive income.
The Company expects to file an amended
Form 10-Q for the period ended December 31, 2018 as soon as
possible which will contain restated unaudited condensed
consolidated financial statements. The restatement is expected to
have an impact on the financial statements included in the Form
10-Q as previously filed, with changes reflected in the income
statement on other comprehensive income (loss), unrealized gain
(loss), and earnings per share, an impact on the balance sheets
equity section, and adjustments to the statement of cash
flow.
No changes for the restatement are expected to
have any impact on our cash position, cash flow, liquidity, or
operations.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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LEVEL
BRANDS, INC.
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Date:
April 18, 2019
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By:
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/s/
Mark S. Elliott
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Mark S.
Elliott, Chief Financial Officer and Chief Operating
Officer
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