Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 09, 2023 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 001-37527 | |
Entity Registrant Name | XCEL BRANDS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 76-0307819 | |
Entity Address, Address Line One | 1333 Broadway, 10th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10018 | |
City Area Code | 347 | |
Local Phone Number | 727-2474 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | XELB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,707,956 | |
Entity Central Index Key | 0001083220 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 3,507 | $ 4,608 |
Accounts receivable, net | 6,878 | 5,110 |
Inventory | 798 | 2,845 |
Prepaid expenses and other current assets | 554 | 1,457 |
Total current assets | 11,737 | 14,020 |
Non-current Assets: | ||
Property and equipment, net | 916 | 1,418 |
Operating lease right-of-use assets | 4,946 | 5,420 |
Trademarks and other intangibles, net | 44,590 | 47,665 |
Equity method investment | 18,165 | 19,195 |
Deferred tax assets, net | 1,107 | 1,107 |
Other assets | 25 | 110 |
Total non-current assets | 69,749 | 74,915 |
Total Assets | 81,486 | 88,935 |
Current Liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 2,750 | 3,870 |
Deferred revenue | 922 | 88 |
Accrued income taxes payable | 555 | 568 |
Accrued payroll | 154 | 416 |
Current portion of operating lease obligations | 1,219 | 1,376 |
Current portion of contingent obligations | 1,400 | 243 |
Total current liabilities | 7,000 | 6,561 |
Long-Term Liabilities: | ||
Long-term portion of operating lease obligations | 4,660 | 5,839 |
Deferred revenue | 4,207 | |
Long-term portion of contingent obligations | 4,996 | 6,396 |
Total long-term liabilities | 13,863 | 12,235 |
Total Liabilities | 20,863 | 18,796 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, $.001 par value, 50,000,000 shares authorized, and 19,633,194 and 19,624,860 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 20 | 20 |
Paid-in capital | 103,715 | 103,592 |
Accumulated deficit | (41,908) | (32,797) |
Total Xcel Brands, Inc. stockholders' equity | 61,827 | 70,815 |
Noncontrolling interest | (1,204) | (676) |
Total Stockholders' Equity | 60,623 | 70,139 |
Total Liabilities and Stockholders' Equity | $ 81,486 | $ 88,935 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 19,700,656 | 19,624,860 |
Common stock, shares outstanding (in shares) | 19,700,656 | 19,624,860 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | ||||
Net revenue | $ 6,781 | $ 8,467 | $ 12,831 | $ 17,214 |
Cost of goods sold | 3,800 | 2,570 | 6,493 | 4,250 |
Gross profit | 2,981 | 5,897 | 6,338 | 12,964 |
Direct operating costs and expenses | ||||
Salaries, benefits and employment taxes | 2,241 | 5,236 | 5,706 | 10,089 |
Other selling, general and administrative expenses | 2,943 | 4,288 | 6,436 | 7,712 |
Total direct operating costs and expenses | 5,184 | 9,524 | 12,142 | 17,801 |
Operating loss before other operating costs and expenses (income) | (2,203) | (3,627) | (5,804) | (4,837) |
Other operating costs and expenses (income) | ||||
Depreciation and amortization expense | 1,786 | 1,812 | 3,583 | 3,632 |
Gain on sale of majority interest in Isaac Mizrahi brand | (20,608) | (20,608) | ||
Loss from equity method investment | 515 | 1,030 | ||
Gain on sale of limited partner ownership interest | (351) | (351) | ||
Gain on settlement of lease liability | (445) | (445) | ||
Operating loss | (3,708) | 15,169 | (9,621) | 12,139 |
Interest and finance (income) expense | ||||
Interest expense - term loan debt | 479 | 1,187 | ||
Other interest and finance charges, net | (7) | (1) | 18 | |
Loss on early extinguishment of debt | 2,324 | 2,324 | ||
Total interest and finance (income) expense | (7) | 2,802 | 18 | 3,511 |
Loss before income taxes | (3,701) | 12,367 | (9,639) | 8,628 |
Income tax (benefit) provision | 0 | 3,178 | 0 | 3,178 |
Net (loss) income | (3,701) | 9,189 | (9,639) | 5,450 |
Net loss attributable to noncontrolling interest | (233) | (301) | (528) | (553) |
Net (loss) income attributable to Xcel Brands, Inc. stockholders | $ (3,468) | $ 9,490 | $ (9,111) | $ 6,003 |
(Loss) earnings per common share attributable to Xcel Brands, Inc. stockholders: | ||||
Basic net (loss) income per share | $ (0.18) | $ 0.48 | $ (0.46) | $ 0.31 |
Diluted net (loss) income per share | $ (0.18) | $ 0.48 | $ (0.46) | $ 0.30 |
Weighted average number of common shares outstanding: | ||||
Basic weighted average number of shares outstanding | 19,735,500 | 19,677,243 | 19,684,630 | 19,624,474 |
Diluted weighted average common shares outstanding | 19,735,500 | 19,814,448 | 19,684,630 | 19,756,775 |
Net licensing revenue | ||||
Revenues | ||||
Net revenue | $ 2,428 | $ 5,175 | $ 4,650 | $ 11,136 |
Net sales | ||||
Revenues | ||||
Net revenue | $ 4,353 | $ 3,292 | $ 8,181 | $ 6,078 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock Employees | Common Stock Executive Officer [Member] | Common Stock Consultants | Common Stock Director | Common Stock | Paid-In Capital [Member] Employees | Paid-In Capital [Member] Executive Officer [Member] | Paid-In Capital [Member] Consultants | Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Noncontrolling Interest [Member] | Employees | Executive Officer [Member] | Consultants | Total |
Balances at Dec. 31, 2021 | $ 20 | $ 103,039 | $ (28,779) | $ 662 | $ 74,942 | ||||||||||
Balances (in shares) at Dec. 31, 2021 | 19,571,119 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Compensation expense related to stock options and restricted stock | 30 | 30 | |||||||||||||
Net income (loss) | (3,487) | (252) | (3,739) | ||||||||||||
Balances at Mar. 31, 2022 | $ 20 | 103,069 | (32,266) | 410 | 71,233 | ||||||||||
Balances (in shares) at Mar. 31, 2022 | 19,571,119 | ||||||||||||||
Balances at Dec. 31, 2021 | $ 20 | 103,039 | (28,779) | 662 | 74,942 | ||||||||||
Balances (in shares) at Dec. 31, 2021 | 19,571,119 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income (loss) | 5,450 | ||||||||||||||
Balances at Jun. 30, 2022 | $ 20 | 103,490 | (22,776) | 109 | 80,843 | ||||||||||
Balances (in shares) at Jun. 30, 2022 | 19,624,860 | ||||||||||||||
Balances at Mar. 31, 2022 | $ 20 | 103,069 | (32,266) | 410 | 71,233 | ||||||||||
Balances (in shares) at Mar. 31, 2022 | 19,571,119 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Compensation expense related to stock options and restricted stock | 402 | 402 | |||||||||||||
Shares issued related to/in connection with stock grant | $ 50 | $ 281 | $ 33 | $ 50 | $ 281 | $ 33 | |||||||||
Shares issued related to/in connection with stock grant | 33,557 | 178,727 | 20,064 | 50,000 | |||||||||||
Shares issued to consultant in connection with Isaac Mizrahi sale transaction | 97 | 97 | |||||||||||||
Shares issued to consultant in connection with Isaac Mizrahi sale transaction | 65,275 | ||||||||||||||
Shares repurchased in exchange for withholding taxes | $ (357) | $ (85) | $ (357) | $ (85) | |||||||||||
Shares repurchased in exchange for withholding taxes (in shares) | (240,000) | (53,882) | |||||||||||||
Net income (loss) | 9,490 | (301) | 9,189 | ||||||||||||
Balances at Jun. 30, 2022 | $ 20 | 103,490 | (22,776) | 109 | 80,843 | ||||||||||
Balances (in shares) at Jun. 30, 2022 | 19,624,860 | ||||||||||||||
Balances at Dec. 31, 2022 | $ 20 | 103,592 | (32,797) | (676) | 70,139 | ||||||||||
Balances (in shares) at Dec. 31, 2022 | 19,624,860 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Compensation expense related to stock options and restricted stock | 51 | 51 | |||||||||||||
Shares issued to consultant in connection with stock grant | 6 | 6 | |||||||||||||
Shares issued to consultant in connection with stock grant (in shares) | 8,334 | ||||||||||||||
Net income (loss) | (5,643) | (295) | (5,938) | ||||||||||||
Balances at Mar. 31, 2023 | $ 20 | 103,649 | (38,440) | (971) | 64,258 | ||||||||||
Balances (in shares) at Mar. 31, 2023 | 19,633,194 | ||||||||||||||
Balances at Dec. 31, 2022 | $ 20 | 103,592 | (32,797) | (676) | 70,139 | ||||||||||
Balances (in shares) at Dec. 31, 2022 | 19,624,860 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income (loss) | (9,639) | ||||||||||||||
Balances at Jun. 30, 2023 | $ 20 | 103,715 | (41,908) | (1,204) | 60,623 | ||||||||||
Balances (in shares) at Jun. 30, 2023 | 19,700,656 | ||||||||||||||
Balances at Mar. 31, 2023 | $ 20 | 103,649 | (38,440) | (971) | 64,258 | ||||||||||
Balances (in shares) at Mar. 31, 2023 | 19,633,194 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Compensation expense related to stock options and restricted stock | 27 | 27 | |||||||||||||
Shares issued to consultant in connection with stock grant | 39 | 39 | |||||||||||||
Shares issued to consultant in connection with stock grant (in shares) | 58,334 | ||||||||||||||
Shares issued on exercise of stock options, net (in shares) | 9,128 | ||||||||||||||
Net income (loss) | (3,468) | (233) | (3,701) | ||||||||||||
Balances at Jun. 30, 2023 | $ 20 | $ 103,715 | $ (41,908) | $ (1,204) | $ 60,623 | ||||||||||
Balances (in shares) at Jun. 30, 2023 | 19,700,656 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||||
Net income (loss) | $ (3,701) | $ 9,189 | $ (9,639) | $ 5,450 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expense | 1,786 | 1,812 | 3,583 | 3,632 |
Asset impairment charges | 100 | |||
Amortization of deferred finance costs included in interest expense | 156 | |||
Stock-based compensation | 122 | 517 | ||
Provision for doubtful accounts | 90 | |||
Undistributed proportional share of net loss of equity method investee | 1,030 | |||
Loss on early extinguishment of debt | 2,324 | 2,324 | ||
Deferred income tax (benefit) provision | 1,384 | |||
Gain on sale of majority interest in Isaac Mizrahi brand | (20,608) | (20,608) | ||
Gain on sale of limited partner ownership interest | (351) | (351) | ||
Gain on settlement of lease liability | (445) | (445) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (1,768) | (1,741) | ||
Inventory | 2,047 | (100) | ||
Prepaid expenses and other current and non-current assets | 863 | 8 | ||
Deferred revenue | 5,041 | 347 | ||
Accounts payable, accrued expenses, accrued payroll, accrued income taxes payable, and other current liabilities | (1,637) | 205 | ||
Lease-related assets and liabilities | (417) | (159) | ||
Other liabilities | (224) | |||
Net cash used in operating activities | (1,471) | (8,719) | ||
Cash flows from investing activities | ||||
Net proceeds from sale of majority interest in Isaac Mizrahi brand | 45,408 | |||
Net proceeds from sale of assets | 451 | |||
Purchase of property and equipment | (81) | (85) | ||
Net cash provided by (used in) investing activities | 370 | 45,323 | ||
Cash flows from financing activities | ||||
Shares repurchased including vested restricted stock in exchange for withholding taxes | (442) | |||
Payment of long-term debt | (29,000) | |||
Payment of prepayment, breakage and other fees associated with early extinguishment of long-term debt | (1,511) | |||
Net cash (used in) provided by financing activities | (30,953) | |||
Net (decrease) increase in cash and cash equivalents | (1,101) | 5,651 | ||
Cash and cash equivalents at beginning of period | 4,608 | 5,222 | ||
Cash and cash equivalents at end of period | 3,507 | 10,873 | 3,507 | 10,873 |
Reconciliation to amounts on consolidated balance sheets: | ||||
Cash and cash equivalents | 3,507 | 3,507 | ||
Total cash, cash equivalents, and restricted cash | $ 3,507 | $ 10,873 | 3,507 | 10,873 |
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest | $ 1,032 | |||
Cash paid during the period for income taxes | $ 16 |
Nature of Operations, Backgroun
Nature of Operations, Background, and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Nature of Operations, Background, and Basis of Presentation [Abstract] | |
Nature of Operations, Background, and Basis of Presentation | 1. Nature of Operations, Background, and Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2022 (which has been derived from audited financial statements) and the unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements were prepared following the same policies and procedures used in the preparation of the audited consolidated financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the results of operations, financial position, and cash flows of Xcel Brands, Inc. and its subsidiaries (the “Company” or "Xcel"). The results of operations for the interim periods presented herein are not necessarily indicative of the results for the entire fiscal year or for any future interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on April 17, 2023. The Company is a media and consumer products company engaged in the design, production, marketing, live streaming, wholesale distribution, and direct-to-consumer sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Currently, the Company’s brand portfolio consists of the LOGO by Lori Goldstein brand (the “Lori Goldstein Brand”), the Halston brands (the "Halston Brand"), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the "C Wonder Brand"), the Longaberger brand (the “Longaberger Brand”), the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), and other proprietary brands. ● The Lori Goldstein Brand, Halston Brand, Ripka Brand, and C Wonder Brand are wholly owned by the Company. ● The Company manages the Longaberger Brand through its 50% ownership interest in Longaberger Licensing, LLC; the Company consolidates Longaberger Licensing, LLC and recognizes noncontrolling interest for the remaining ownership interest held by a third party. ● The Company manages the Q Optix business through its 50% ownership interest in Q Optix, LLC; the Company consolidates Q Optix, LLC and recognizes noncontrolling interest for the remaining ownership interest held by a third party. ● The Company wholly owned and managed the Isaac Mizrahi Brand through May 31, 2022. On May 31, 2022, the Company sold to a third party a majority interest in a newly-created subsidiary that was formed to hold the Isaac Mizrahi Brand trademarks, but retained a noncontrolling interest in the brand through a 30% ownership interest in IM Topco, LLC, and continues to contribute to the operations of the brand through a service agreement (see Note 11 for additional details). The Company accounts for its interest in IM Topco, LLC using the equity method of accounting. The Company designs, produces, markets, and distributes products, licenses its brands to third parties, and generates licensing revenues through contractual arrangements with manufacturers and retailers. The Company and its licensees distribute through an omni-channel retail sales strategy, which includes distribution through interactive television, digital live-stream shopping, wholesale, and e-commerce channels to be everywhere its customers shop. The Company’s wholesale and direct-to-consumer operations are presented as "Net sales" and "Cost of goods sold" in the Condensed Consolidated Statements of Operations, separately from the Company’s net licensing revenue. Liquidity and Management’s Plans The Company incurred a net loss attributable to Company stockholders of approximately $3.5 million and $9.1 million during the three and six months ended June 30, 2023, respectively (which included net non-cash expenses of approximately $1.7 million and $4.0 million, respectively), and had an accumulated deficit of approximately $41.9 million as of June 30, 2023. Net cash used in operating activities was approximately $1.5 million for the six months ended June 30, 2023. The Company had working capital (current assets less current liabilities, excluding the current portion of lease obligations and any contingent obligations payable in common stock) of approximately $6.0 million as of June 30, 2023. The Company’s cash and cash equivalents were approximately $3.5 million as of June 30, 2023. The aforementioned factors raise uncertainties about the Company’s ability to continue as a going concern. Management implemented a plan to mitigate an expected shortfall of capital and to support future operations by shifting the business from a wholesale/licensing hybrid model into a “licensing-plus” business model. In the first quarter of 2023, the Company began to restructure its business operations by entering into new licensing agreements and joint venture arrangements with best-in-class business partners. The Company entered into a new interactive television licensing agreement with America’s Collectibles Network, Inc. d/b/a Jewelry Television (“JTV”) for the Ripka Brand, and a separate license with JTV for the Ripka Brand’s e-commerce business. For apparel, similar transactions have recently been executed. In conjunction with the launch of the C Wonder Brand on HSN, the Company licensed the wholesale operations related to the brand to One Jeanswear Group, LLC (“OJG”); this new license with OJG also includes certain other new celebrity brands that the Company plans to develop and launch in 2023 and beyond. For the Halston Brand, on May 15, 2023, the Company entered into a new master license agreement for men’s, women’s, and children’s apparel, fashion accessories, and other product categories with an industry-leading wholesale apparel company for distribution through department stores, e-commerce, and other retailers (see Note 4). This new master license for the Halston Brand provides for an upfront cash payment and royalties, including certain guaranteed minimum royalties to the Company, includes significant annual minimum net sales requirements, and has a twenty-five five twenty five The transition of these operating businesses was substantially completed as of June 30, 2023. Management believes that this evolution of the Company’s operating model will provide the Company with significant cost savings and allow the Company to reduce and better manage its exposure to operating risks. As of June 30, 2023, the Company has reduced payroll costs by approximately $6 million and operating expenses by approximately $7 million, on an annualized basis when compared to the corresponding periods in the prior year. Based on these recent events and changes in the Company’s business model, management expects to generate adequate cash flows to meet the Company’s operating and capital expenditure needs, for at least the twelve months subsequent to the filing date of this Quarterly Report on Form 10-Q, and therefore, such conditions and uncertainties with respect to the Company’s ability to continue as a going concern as of June 30, 2023, have been alleviated. Recently Adopted Accounting Pronouncements The Company adopted the provisions of Accounting Standards Update (“ASU”) No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (as amended by ASU No. 2018-19 in November 2018, ASU No. 2019-05 in May 2019, ASU No. 2019-10 and 2019-11 in November 2019, ASU No. 2020-02 in February 2020, and ASU No. 2022-02 in March 2022) effective January 1, 2023. This ASU requires entities to estimate lifetime expected credit losses for financial instruments, including trade and other receivables, which will result in earlier recognition of credit losses. The adoption of this new guidance did not have a significant impact on the Company’s results of operations, cash flows, or financial condition. |
Equity Method Investment
Equity Method Investment | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Method Investment | 2. Equity Method Investment IM Topco, LLC On May 27, 2022, Xcel (along with IM Topco, LLC (“IM Topco”) and IM Brands, LLC (“IMB”), both wholly owned subsidiaries of the Company) and IM WHP, LLC (“WHP”), a subsidiary of WHP Global, a private equity-backed brand management and licensing company, entered into a membership purchase agreement. Pursuant to this agreement, on May 31, 2022, (i) the Company contributed assets owned by IMB, including the Isaac Mizrahi Brand trademarks and other intellectual property rights relating thereto into IM Topco, and (ii) the Company sold 70% of the membership interests of IM Topco to WHP. The purchase price paid by WHP to the Company at the closing of the transaction consisted of $46.2 million in cash. The Company incurred approximately $0.9 million of expenses directly related to this transaction, including legal fees and agent fees, of which $0.1 million of the agent fees were paid through the issuance of 65,275 shares of the Company’s common stock, which were recognized as a reduction to the gain from the transaction. The Company recognized a net pre-tax gain from the transaction of $20.6 million, which is classified within “other expense (income), including non-cash expenses” in the condensed consolidated statements of operations for the three and six months ended June 30, 2022. The Company accounts for its 30% interest in the ongoing operations of IM Topco as other expense (income) under the equity method of accounting. Pursuant to the business venture agreement between the Company and WHP governing the operation of IM Topco, IM Topco’s net cash flow (as defined in the agreement) shall be distributed to the members during each fiscal year no less than once per fiscal quarter, as follows: (i) first, 100% to WHP, until WHP has received an aggregate amount during such fiscal year equal to $8,852,000 (subject to adjustment in certain circumstances as set forth in the agreement); (ii) second, 100% to Xcel, until Xcel has received an aggregate amount during such fiscal year equal to $1,316,200 (subject to adjustment in certain circumstances as set forth in the agreement); and (iii) thereafter, in proportion to the members’ respective percentage interests. Based on these distribution provisions, the Company recognized an equity method loss of $0.52 million and $1.03 million related to its investment for the three and six months ended June 30, 2023, respectively. The Company did not recognize any equity income or loss related to its investment for the three and six months ended June 30, 2022. Summarized financial information for IM Topco for the three and six months ended June 30, 2023 is as follows: For the three For the six months ended months ended June 30, June 30, ($ in thousands) 2023 2023 Revenues $ 3,573 $ 6,919 Gross profit 3,573 6,919 Income from continuing operations 206 113 Net income 206 113 |
Trademarks and Other Intangible
Trademarks and Other Intangibles | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Trademarks and Other Intangibles | 3. Trademarks and Other Intangibles Trademarks and other intangibles, net consist of the following: Weighted Average June 30, 2023 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 24,391 44,489 Copyrights and other intellectual property 8 years 429 328 101 Total $ 69,309 $ 24,719 $ 44,590 Weighted Average December 31, 2022 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 21,346 47,534 Copyrights and other intellectual property 8 years 429 298 131 Total $ 69,309 $ 21,644 $ 47,665 Amortization expense for intangible assets was approximately $1.54 million for both the three-month period ended June 30, 2023 (the "current quarter") and the three-month period ended June 30, 2022 (the "prior year quarter"). Amortization expense for intangible assets was approximately $3.07 million for both the six-month period ended June 30, 2023 (the "current six months") and the six-month period ended June 30, 2022 (the "prior year six months"). |
Significant Contracts
Significant Contracts | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Significant Contracts and Concentrations | 4. Significant Contracts and Concentrations Halston Master License On May 15, 2023, the Company, through its subsidiaries, H Halston, LLC and H Heritage Licensing, LLC (collectively, the “Licensor”), entered into a master license agreement relating to the Halston Brand (the “Halston Master License”) with an industry-leading wholesale apparel company, for men’s and women’s apparel, men’s and women’s fashion accessories, children’s apparel and accessories, home, airline amenity and amenity kits, and such other product categories as mutually agreed upon. The Halston Master License provides for an upfront cash payment and royalties payable to the Company, including certain guaranteed minimum royalties, includes significant annual minimum net sales requirements, and has a twenty-five -year term (consisting of an initial five -year period, followed by a twenty -year period), subject to the licensee’s right to terminate with at least 120 days’ notice prior to the end of each five -year period during the term. The licensee has an option to purchase the Halston Brand for $5.0 million at the end of the twenty-five -year term, which right may be accelerated under certain conditions associated with an uncured material breach of the Halston Master License in accordance with the terms of the Halston Master License. The Licensor granted to the licensee a security interest in the Halston trademarks to secure the Licensor’s obligations under the Halston Master License, including to honor the obligations under the purchase option. In connection with the Halston Master License, the Company issued to the licensee a ten -year warrant to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $1.50 per share, which vest based upon certain annual royalty targets being satisfied. As a result of the upfront cash payment and guaranteed minimum royalties discussed above, the Company has recognized $4.89 million of deferred revenue contract liabilities on its condensed consolidated balance sheet as of June 30, 2023 related to this contract, of which $0.89 million was classified as a current liability and $4.00 million was classified as a long-term liability. The balance of the deferred revenue contract liabilities will be recognized ratably as revenue over the next 5.5 years Qurate Agreements Under the Company’s agreements with Qurate Retail Group (“Qurate”), collectively referred to as the Qurate Agreements, Qurate is obligated to make payments to the Company on a quarterly basis, based primarily upon a percentage of net retail sales of certain specified branded merchandise. Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by Qurate and its subsidiaries under the Qurate Agreements, net of customer returns, and excluding freight, shipping and handling charges, and sales, use, or other taxes. Net licensing revenue from the Qurate Agreements represents a significant portion of the Company’s total net revenue. ● Net licensing revenue from the Qurate Agreements totaled $1.76 million and $4.05 million for the current quarter and prior year quarter, respectively, representing approximately 26% and 48% of the Company’s total net revenue for the current quarter and prior year quarter, respectively. The prior year quarter included revenues from Qurate Agreement related to the Isaac Mizrahi Brand; such agreement was assigned to IM Topco on May 31, 2022. ● Net licensing revenue from the Qurate Agreements totaled $3.28 million and $9.06 million for the current six months and prior year six months, respectively, representing approximately 26% and 53% of the Company’s total net revenue for the current quarter and prior year quarter, respectively. The prior year six months included revenues from Qurate Agreement related to the Isaac Mizrahi Brand; such agreement was assigned to IM Topco on May 31, 2022. ● As of June 30, 2023 and December 31, 2022, the Company had receivables from Qurate of $1.6 million and $0.9 million, respectively, representing approximately 23% and 17% of the Company’s total net accounts receivable, respectively. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable are presented on the Company’s condensed consolidated balance sheets net of allowances for credit losses. Such allowances were approximately $0.0 million as of both June 30, 2023 and December 31, 2022. The Company did not recognize any credit loss expense in the current quarter or current six months. There were no significant write-offs or recoveries in the current quarter or current six months. Credit loss expense recognized in the prior year quarter and prior year six months was $0.09 million. The allowance for credit losses is determined based upon a variety of judgments and factors. Factors considered in determining the allowance include historical collection, write-off experience, and management's assessment of collectibility from customers, including current conditions, reasonable forecasts, and expectations of future collectibility and collection efforts. Management continuously assesses the collectibility of receivables and adjusts estimates based on actual experience and future expectations based on economic indicators. Management also monitors the aging analysis of receivables to determine if there are changes in the collections of accounts receivable. Receivable balances are written-off against the allowance for credit losses when such balances are deemed to be uncollectible. Also, as of June 30, 2023 and December 31, 2022, approximately $1.18 million and $1.65 million, respectively, of the Company's outstanding receivables were assigned to a third-party agent pursuant to a services agreement entered into during the third quarter of 2022, under which the Company assigned, for purposes of collection only, the right to collect certain specified receivables on the Company's behalf and solely for the Company's benefit. Under such agreement, the Company retains ownership of such assigned receivables, and receives payment from the agent (less certain fees charged by the agent) upon the agent's collection of the receivables from customers. During the current quarter and current six months, the Company paid approximately $0.02 million and $0.07 million in fees to the agent under the aforementioned services agreement. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 6. Leases The Company has an operating lease for its corporate offices and operations facility, as well as certain equipment with a term of 12 months or less. As of June 30, 2023, the Company’s real estate lease has a remaining lease term of approximately 4.3 years, and the lease liability is measured using a discount rate of 6.25%. Lease expense included in selling, general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations was approximately $0.4 million for both the current quarter and prior year quarter, approximately $0.8 million for the current six months, and approximately $0.7 million for the prior year six months. Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.4 million in both the current quarter and prior year quarter, approximately $0.8 million in the current six months, and approximately $1.0 million in the prior year six months. Also, the Company was previously a party to an operating lease for its former retail store location, which was closed in 2022. During the three months ended June 30, 2023, the Company successfully negotiated a settlement with the lessor resulting in the termination of this lease. Under the settlement agreement, the Company paid $0.07 million to the lessor in May 2023, and agreed to make two subsequent payments of approximately $0.11 million each to the lessor on or before July 31, 2023 and October 31, 2023. The Company recognized a liability of $0.23 million for these remaining payments as part of “accounts payable, accrued expenses and other current liabilities” on the condensed consolidated balance sheet as of June 30, 2023. The Company recognized a gain of $0.44 million from this settlement transaction, which is classified within “other expense (income), including non-cash expenses” in the condensed consolidated statements of operations for the three and six months ended June 30, 2023. As of June 30, 2023, the maturities of lease obligations were as follows: ($ in thousands) 2023 (July 1 through December 31) $ 776 2024 1,552 2025 1,552 2026 1,552 2027 1,294 Thereafter - Total lease payments 6,726 Less: Discount 847 Present value of lease liabilities 5,879 Current portion of lease liabilities 1,219 Non-current portion of lease liabilities $ 4,660 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt The Company did not have any debt obligations as of June 30, 2023 or December 31, 2022. From December 30, 2021 through May 31, 2022, the Company had term loan debt outstanding pursuant to an agreement with First Eagle Alternative Credit Agent, LLC (“FEAC”); this debt was repaid in full and extinguished on May 31, 2022. As a result of this extinguishment, the Company recognized a loss on early extinguishment of debt of approximately $2.3 million during the prior year quarter and prior year six months, consisting of approximately $1.4 million of debt prepayment premium, the immediate write-off of approximately $0.8 million of unamortized deferred finance costs, and approximately $0.1 million of other costs. For the prior year quarter and prior year six months, the Company incurred interest expense (including both interest paid in cash and the amortization of deferred finance costs) related to term loan debt of approximately $0.48 million and $1.19 million, respectively, and the effective interest rate related to term loan debt was approximately 9.8%. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Equity Incentive Plans A total of 4,000,000 shares of common stock are eligible for issuance under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of any or all of the following types of awards: stock options (incentive or non-qualified), restricted stock, restricted stock units, performance awards, or cash awards. The 2021 Plan is administered by the Company’s Board of Directors, or, at the Board’s discretion, a committee of the Board. In addition, stock-based awards (including options, warrants, and restricted stock) previously granted under the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) remain outstanding and shares of common stock may be issued to satisfy options or warrants previously granted under the 2011 Plan, although no new awards may be granted under the 2011 Plan. Stock-based Compensation The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation - Stock Compensation,” by recognizing the fair value of stock-based compensation as an operating expense over the service period of the award or term of the corresponding contract, as applicable. Forfeitures are accounted for as a reduction of compensation cost in the period when such forfeitures occur. For stock option awards for which vesting is contingent upon the achievement of certain performance targets, the timing and amount of compensation expense recognized is based upon the Company’s projections and estimates of the relevant performance metric(s) until the time the performance obligation is satisfied. Expense for such awards is recognized only to the extent that the achievement of the specified performance target(s) has been met or is considered probable. Total expense recognized in the current quarter and prior year quarter for all forms of stock-based compensation was approximately $0.06 million and $0.58 million, respectively. Of the current quarter expense amount, substantially all of the expense related to directors and consultants, and was recorded within “other selling, general and administrative expenses” in the accompanying condensed consolidated statements of operations. Of the prior year quarter expense amount, approximately $0.39 million related to employees and approximately $0.19 million related to directors and consultants. Approximately $0.48 million of the prior year quarter expense was recorded as operating costs, and approximately $0.10 million was recorded as a reduction to other income. Total expense recognized in the current six months and prior year six months for all forms of stock-based compensation was approximately $0.12 million and $0.61 million, respectively. Of the current six months expense amount, substantially all of the expense related to directors and consultants, and was recorded within “other selling, general and administrative expenses” in the accompanying condensed consolidated statements of operations. Of the prior year six months expense amount, approximately $0.40 million related to employees and approximately $0.21 million related to directors and consultants. Approximately $0.51 million of the prior year six months expense was recorded as operating costs, and approximately $0.10 million was recorded as a reduction to other income. Stock Options A summary of the Company’s stock options activity for the current six months is as follows: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Options Price (in Years) Value Outstanding at January 1, 2023 5,614,310 $ 2.12 4.76 $ — Granted — — Exercised (22,750) 1.00 Expired/Forfeited (472,140) 3.84 Outstanding at June 30, 2023, and expected to vest 5,119,420 $ 2.04 4.59 $ — Exercisable at June 30, 2023 1,556,920 $ 2.76 2.19 $ — Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $0.02 million and $0.38 million, respectively. Compensation expense related to stock options for the current six months and the prior year six months was approximately $0.05 million and $0.40 million, respectively. Total unrecognized compensation expense related to unvested stock options at June 30, 2023 was approximately $0.05 million and is expected to be recognized over a weighted average period of approximately 0.79 years. A summary of the Company’s non-vested stock options activity for the current six months is as follows: Weighted Average Number of Grant Date Options Fair Value Balance at January 1, 2023 3,697,500 $ 0.05 Granted — — Vested (135,000) 0.68 Forfeited or Canceled — — Balance at June 30, 2023 3,562,500 $ 0.02 Warrants A summary of the Company’s warrants activity for the current six months is as follows: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Warrants Price (in Years) Value Outstanding and exercisable at January 1, 2023 116,065 $ 3.15 1.57 $ — Granted 1,000,000 1.50 Exercised — — Expired/Forfeited — — Outstanding at June 30, 2023 1,116,065 $ 1.67 8.97 $ 88,009 Exercisable at June 30, 2023 116,065 $ 3.15 1.09 $ — On May 15, 2023, in connection with the Halston Master License (see Note 4), the Company issued to a licensee a ten-year warrant to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $1.50 per share, which vest based upon certain annual royalty targets being satisfied under the license agreement. The fair value of the warrants will be recognized as a reduction of revenue over the term of the related license agreement, with an offsetting increase to stockholders’ equity as additional paid-in capital. No compensation expense related to warrants was recognized in the current quarter, prior year quarter, current six months, or prior year six months. Stock Awards A summary of the Company’s restricted stock activity for the current six months is as follows: Weighted Number of Average Restricted Grant Date Shares Fair Value Outstanding at January 1, 2023 333,333 $ 3.71 Granted 66,668 0.67 Vested (66,668) 0.67 Expired/Forfeited — — Outstanding at June 30, 2023 333,333 $ 3.71 On January 1, 2023, the Company issued 8,334 shares of common stock to a consultant, which vested immediately. On April 17, 2023, the Company issued 8,334 shares of common stock to a consultant, which vested immediately. On May 15, 2023, the Company issued 50,000 shares of common stock to a consultant, which vested immediately. Compensation expense related to stock awards was approximately $0.05 million for the current quarter and approximately $0.20 million for the prior year quarter. Compensation expense related to stock awards was approximately $0.08 million for the current six months and approximately $0.21 million for the prior year six months. Total unrecognized compensation expense related to unvested restricted stock grants at June 30, 2023 was approximately $0.03 million and is expected to be recognized over a weighted average period of approximately 0.79 years. Restricted Stock Units There were no restricted stock units outstanding as of June 30, 2023 and December 31, 2022, and no restricted stock units have been issued since the inception of the 2021 Plan. Shares Available Under the Company’s Equity Incentive Plans As of June 30, 2023, there were 3,302,241 shares of common stock available for award grants under the 2021 Plan. Shares Reserved for Issuance As of June 30, 2023, there were 8,537,726 shares of common stock reserved for issuance, including 4,898,135 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 337,350 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 3,302,241 shares available for issuance under the 2021 Plan. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings (Loss) Per Share [Abstract] | |
Earnings (Loss) Per Share | 9. Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period, including stock options and warrants, using the treasury stock method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. The following table is a reconciliation of the numerator and denominator of the basic and diluted net (loss) income per share computations for the three and six months ended June 30, 2023 and 2022: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Numerator: Net (loss) income attributable to Xcel Brands, Inc. stockholders (in thousands) $ (3,468) $ 9,490 $ (9,111) $ 6,003 Denominator: Basic weighted average number of shares outstanding 19,735,500 19,677,243 19,684,630 19,624,474 Add: Effect of warrants — 657 — 639 Add: Effect of stock options — 136,548 — 131,662 Diluted weighted average number of shares outstanding 19,735,500 19,814,448 19,684,630 19,756,775 Basic net loss per share $ (0.18) $ 0.48 $ (0.46) $ 0.31 Diluted net loss per share $ (0.18) $ 0.48 $ (0.46) $ 0.30 As a result of the net loss for the current quarter and current six months, the Company calculated diluted EPS using basic weighted average shares outstanding for such periods, as utilizing diluted shares would be anti-dilutive to loss per share. The computation of diluted EPS excludes the following potentially dilutive securities because their inclusion would be anti-dilutive: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Stock options 5,119,420 5,781,890 5,119,420 5,781,890 Warrants 1,116,065 116,065 1,116,065 116,065 Total 6,235,485 5,897,955 6,235,485 5,897,955 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The estimated annual effective income tax rate for the current quarter and the prior year quarter was approximately 0% and 25%, respectively, resulting in an income tax (benefit) provision of $0 and $3.18 million, respectively. For the current quarter, the federal statutory rate differed from the effective tax rate due to the recording of a valuation allowance against the benefit that would have otherwise been recognized, as it was considered not more likely than not that the net operating losses generated during each period will be utilized in future periods. For the prior year quarter, the federal statutory rate differed from the effective tax rate primarily due to recurring permanent differences, state taxes, and the discrete treatment of stock compensation shortfall, which increased the effective tax rate by approximately 10%, partially offset by the reversal of a valuation allowance that was previously recorded in the first quarter of 2022, which decreased the effective tax rate by approximately 6%. The estimated annual effective income tax rate for the current six months and the prior year six months was approximately 0% and 35%, respectively, resulting in an income tax (benefit) provision of $0 and $3.18 million, respectively. For the current six months, the federal statutory rate differed from the effective tax rate due to the recording of a valuation allowance against the benefit that would have otherwise been recognized, as it was considered not more likely than not that the net operating losses generated during each period will be utilized in future periods. For the prior year six months, the federal statutory rate differed from the effective tax rate primarily due to recurring permanent differences, state taxes, and the discrete treatment of stock compensation shortfall, which increased the effective tax rate by approximately 14%. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions IM Topco, LLC The Company holds a noncontrolling interest in IM Topco, which is accounted for under the equity method of accounting. On May 31, 2022, the Company entered into a services agreement with IM Topco, pursuant to which the Company provides certain design and support services (including assistance with the operations of the interactive television business and related talent support) to IM Topco in exchange for payments of $300,000 per year. For the three and six months ended June 30, 2023, the Company recognized service fee income related to this agreement of $75,000 and $150,000, respectively. On May 31, 2022, the Company entered into a license agreement with IM Topco, pursuant to which IM Topco granted the Company a license to use certain Isaac Mizrahi trademarks on and in connection with the design, manufacture, distribution, sale, and promotion of women’s sportswear products in the United States and Canada during the term of the agreement, in exchange for the payment of royalties in connection therewith. The initial term of this agreement was set to end on December 31, 2026, and provided guaranteed royalties to IM Topco of $400,000 per year. Effective December 16, 2022, the license agreement between IM Topco and Xcel was terminated in favor of a new similar license agreement between IM Topco and an unrelated third party. However, as part of the termination of the May 31, 2022 license agreement, Xcel provided a guarantee to IM Topco for the payment of any difference between (i) the royalties received by IM Topco from the unrelated third party under the new agreement and (ii) the amount of guaranteed royalties that IM Topco would have received from Xcel under the May 31, 2022 agreement. For the three and six months ended June 30, 2023, the estimated amount of such shortfall was approximately $60,000 and $120,000, respectively, which the Company recognized as royalty expense in the condensed consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Contingent Obligation – Lori Goldstein Earn-Out In connection with the April 1, 2021 purchase of the Lori Goldstein trademarks, the Company agreed to pay the seller additional cash consideration (the “Lori Goldstein Earn-Out”) of up to $12.5 million, based on royalties earned during the six long-term liability. At June 30, 2023, $1.4 million of the remaining balance was recorded as a current liability and $5.0 million was recorded as a long-term liability. Contingent Obligation – Isaac Mizrahi Transaction In connection with the May 31, 2022 transaction related to the sale of a majority interest in the Isaac Mizrahi Brand (see Note 2), the Company agreed with WHP that, in the event that IM Topco receives less than $13.3 million in aggregate royalties for any four consecutive calendar quarters over a three-year period ending on May 31, 2025, WHP will be entitled to receive from the Company up to $16 million, less all amounts of net cash flow distributed to WHP on an accumulated basis, as an adjustment to the purchase price previously paid by WHP. Such amount would be payable by the Company in either cash or equity interests in IM Topco held by the Company. No amount has been recorded in the accompanying condensed consolidated balance sheets related to this contingent obligation, and management believes the likelihood of any such payment is remote. Based on IM Topco’s earnings from May 31, 2022 through June 30, 2023 and the applicable distribution provisions, WHP earned $7.9 million in cash flow, which reduces the maximum potential purchase price adjustment to $8.1 million. Legal Proceedings From time to time, the Company becomes involved in legal claims and litigation in the ordinary course of business. In the opinion of management, based on consultations with legal counsel, the disposition of litigation currently pending against the Company is unlikely to have, individually or in the aggregate, a materially adverse effect on the Company’s business, financial position, results of operations, or cash flows. The Company routinely assesses all its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. |
Equity Method Investment (Table
Equity Method Investment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Acquisitions, Divestitures and Variable Interest Entities[Abstract] | |
Summarized financial information for IM Topco | For the three For the six months ended months ended June 30, June 30, ($ in thousands) 2023 2023 Revenues $ 3,573 $ 6,919 Gross profit 3,573 6,919 Income from continuing operations 206 113 Net income 206 113 |
Trademarks and Other Intangib_2
Trademarks and Other Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Trademarks and Other Intangibles | Weighted Average June 30, 2023 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 24,391 44,489 Copyrights and other intellectual property 8 years 429 328 101 Total $ 69,309 $ 24,719 $ 44,590 Weighted Average December 31, 2022 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 21,346 47,534 Copyrights and other intellectual property 8 years 429 298 131 Total $ 69,309 $ 21,644 $ 47,665 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Maturities of Lease Liabilities | ($ in thousands) 2023 (July 1 through December 31) $ 776 2024 1,552 2025 1,552 2026 1,552 2027 1,294 Thereafter - Total lease payments 6,726 Less: Discount 847 Present value of lease liabilities 5,879 Current portion of lease liabilities 1,219 Non-current portion of lease liabilities $ 4,660 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Option Activity | Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Options Price (in Years) Value Outstanding at January 1, 2023 5,614,310 $ 2.12 4.76 $ — Granted — — Exercised (22,750) 1.00 Expired/Forfeited (472,140) 3.84 Outstanding at June 30, 2023, and expected to vest 5,119,420 $ 2.04 4.59 $ — Exercisable at June 30, 2023 1,556,920 $ 2.76 2.19 $ — |
Summary of Stock Option Activity for Non-Vested Options | Weighted Average Number of Grant Date Options Fair Value Balance at January 1, 2023 3,697,500 $ 0.05 Granted — — Vested (135,000) 0.68 Forfeited or Canceled — — Balance at June 30, 2023 3,562,500 $ 0.02 |
Summary of Warrant Activity | Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Warrants Price (in Years) Value Outstanding and exercisable at January 1, 2023 116,065 $ 3.15 1.57 $ — Granted 1,000,000 1.50 Exercised — — Expired/Forfeited — — Outstanding at June 30, 2023 1,116,065 $ 1.67 8.97 $ 88,009 Exercisable at June 30, 2023 116,065 $ 3.15 1.09 $ — |
Summary of Restricted Stock Activity | Weighted Number of Average Restricted Grant Date Shares Fair Value Outstanding at January 1, 2023 333,333 $ 3.71 Granted 66,668 0.67 Vested (66,668) 0.67 Expired/Forfeited — — Outstanding at June 30, 2023 333,333 $ 3.71 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings (Loss) Per Share [Abstract] | |
Schedule of the basic and diluted net loss per share | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Numerator: Net (loss) income attributable to Xcel Brands, Inc. stockholders (in thousands) $ (3,468) $ 9,490 $ (9,111) $ 6,003 Denominator: Basic weighted average number of shares outstanding 19,735,500 19,677,243 19,684,630 19,624,474 Add: Effect of warrants — 657 — 639 Add: Effect of stock options — 136,548 — 131,662 Diluted weighted average number of shares outstanding 19,735,500 19,814,448 19,684,630 19,756,775 Basic net loss per share $ (0.18) $ 0.48 $ (0.46) $ 0.31 Diluted net loss per share $ (0.18) $ 0.48 $ (0.46) $ 0.30 |
Anti-dilutive Securities Excluded from Computation of Earnings (Loss) Per Share | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Stock options 5,119,420 5,781,890 5,119,420 5,781,890 Warrants 1,116,065 116,065 1,116,065 116,065 Total 6,235,485 5,897,955 6,235,485 5,897,955 |
Nature of Operations, Backgro_2
Nature of Operations, Background, and Basis of Presentation (Details) | 6 Months Ended | |
Jun. 30, 2023 | May 31, 2022 | |
Longaberger Licensing, LLC | Variable Interest Entity, Primary Beneficiary | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 50% | |
Q Optix, LLC | Variable Interest Entity, Primary Beneficiary | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 50% | |
IM Topco, LLC | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Ownership interest | 30% |
Nature of Operations, Backgro_3
Nature of Operations, Background, and Basis of Presentation - Liquidity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
May 15, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Net (loss) income | $ (3,468) | $ 9,490 | $ (9,111) | $ 6,003 | ||||
Net loss | 3,701 | $ 5,938 | $ (9,189) | $ 3,739 | 9,639 | (5,450) | ||
Accumulated deficit | (41,908) | (41,908) | $ (32,797) | |||||
Other Noncash Expense | 1,700 | 4,000 | ||||||
Net cash used in operating activities | 1,471 | 8,719 | ||||||
Working capital, Net | 6,000 | 6,000 | ||||||
Cash and cash equivalents | $ 3,507 | 3,507 | ||||||
Reduction in payroll costs | 6,000 | |||||||
Reduction in operating expenses | $ 7,000 | |||||||
Payment of long-term debt | $ 29,000 | |||||||
Halston License | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Additional royalty payable term | 20 years | |||||||
Halston License | Minimum | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Royalty payable term | 5 years | |||||||
Halston License | Maximum | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Royalty payable term | 25 years |
Equity Method Investment - IM T
Equity Method Investment - IM Topco, LLC (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
May 27, 2023 | May 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | May 27, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale of majority interest in Isaac Mizrahi brand | $ 20,608,000 | $ 20,608,000 | |||||
Loss from equity method investment | $ (1,030,000) | ||||||
IM Topco, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership interest | 30% | ||||||
IM Topco, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss from equity method investment | $ (520,000) | $ (1,030,000) | |||||
Business Venture Agreement | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net cash flow distributable to members (in percent) | 100% | ||||||
Net cash flow distributable to members | $ 1,316,200 | ||||||
Business Venture Agreement | WHP | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net cash flow distributable to members (in percent) | 100% | ||||||
Net cash flow distributable to members | $ 8,852,000 | ||||||
IM Brand trademarks and other intellectual property rights | Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Amount received in cash | $ 46,200,000 | ||||||
Transaction expenses | 900,000 | ||||||
Legal and agent fees | $ 100,000 | ||||||
Shares issued to consultant in connection with Isaac Mizrahi sale transaction | 65,275 | ||||||
Gain on sale of majority interest in Isaac Mizrahi brand | $ 20,600,000 | ||||||
IM Brand trademarks and other intellectual property rights | Disposed of by Sale | IM Topco, LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership interest | 70% |
Equity Method Investment - Summ
Equity Method Investment - Summarized financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gross Profit | $ 2,981 | $ 5,897 | $ 6,338 | $ 12,964 | ||
Net loss | (3,701) | $ (5,938) | $ 9,189 | $ (3,739) | (9,639) | $ 5,450 |
IM Topco, LLC | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenues | 3,573 | 6,919 | ||||
Gross Profit | 3,573 | 6,919 | ||||
Loss from continuing operations | 206 | 113 | ||||
Net loss | $ 206 | $ 113 |
Trademarks and Other Intangib_3
Trademarks and Other Intangibles - Narrative (Details) - USD ($) $ in Thousands | 15 Months Ended | 18 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $ 1,540 | $ 3,070 |
Trademarks and Other Intangib_4
Trademarks and Other Intangibles - Schedule of Trademarks and Other Intangibles (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Trademarks and Other Intangibles | ||
Gross Carrying Amount (definite-lived) | $ 69,309 | |
Gross Carrying Amount, Total | $ 69,309 | |
Accumulated Amortization | 24,719 | 21,644 |
Net Carrying Amount | 44,590 | |
Net Carrying Amount, Total | $ 44,590 | $ 47,665 |
Trademarks (finite-lived) | ||
Trademarks and Other Intangibles | ||
Weighted Average Amortization Period | 15 years | 15 years |
Gross Carrying Amount (definite-lived) | $ 68,880 | $ 68,880 |
Accumulated Amortization | 24,391 | 21,346 |
Net Carrying Amount | $ 44,489 | $ 47,534 |
Copyrights and other intellectual property | ||
Trademarks and Other Intangibles | ||
Weighted Average Amortization Period | 8 years | 8 years |
Gross Carrying Amount (definite-lived) | $ 429 | $ 429 |
Accumulated Amortization | 328 | 298 |
Net Carrying Amount | $ 101 | $ 131 |
Signifcant Contracts and Concen
Signifcant Contracts and Concentrations - Halson Master License (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
May 15, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||||
Purchaseable stock | 19,700,656 | 19,700,656 | 19,624,860 | |||
Deferred revenue, current | $ 922 | $ 922 | $ 88 | |||
Deferred revenue, long-term liability | 4,207 | 4,207 | ||||
Licensing revenue | 6,781 | $ 8,467 | 12,831 | $ 17,214 | ||
Net licensing revenue | ||||||
Subsequent Event [Line Items] | ||||||
Licensing revenue | 2,428 | $ 5,175 | 4,650 | $ 11,136 | ||
Halston License | ||||||
Subsequent Event [Line Items] | ||||||
Additional royalty payable term | 20 years | |||||
Total purchase price | $ 5,000 | |||||
Warrant term | 10 years | |||||
Purchaseable stock | 1,000,000 | |||||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 | |||||
Deferred revenue | 4,890 | 4,890 | ||||
Deferred revenue, current | 890 | 890 | ||||
Deferred revenue, long-term liability | $ 4,000 | $ 4,000 | ||||
Recognition period of deferred revenue | 5 years 6 months | |||||
Halston License | Minimum | ||||||
Subsequent Event [Line Items] | ||||||
Royalty payable term | 5 years | |||||
Halston License | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Royalty payable term | 25 years | |||||
Halston License | Warrants | ||||||
Subsequent Event [Line Items] | ||||||
Purchaseable stock | 1,000,000 | |||||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 | |||||
Halston License | Net licensing revenue | ||||||
Subsequent Event [Line Items] | ||||||
Licensing revenue | $ 330 |
Significant Contracts and Conce
Significant Contracts and Concentrations - Qurate Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||||
Net revenue | $ 6,781 | $ 8,467 | $ 12,831 | $ 17,214 | |
Accounts receivable | 6,878 | 6,878 | $ 5,110 | ||
Net licensing revenue | |||||
Product Information [Line Items] | |||||
Net revenue | $ 2,428 | $ 5,175 | $ 4,650 | $ 11,136 | |
Sales [Member] | Customer Concentration Risk [Member] | Qurate | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 26% | 48% | 26% | 53% | |
Sales [Member] | Customer Concentration Risk [Member] | Qurate | Net licensing revenue | |||||
Product Information [Line Items] | |||||
Net revenue | $ 1,760 | $ 4,050 | $ 3,280 | $ 9,060 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Qurate | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 23% | 17% | |||
Accounts receivable | $ 1,600 | $ 1,600 | $ 900 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Accounts Receivable [Abstract] | ||||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | ||
Write offs or recoveries | 0 | |||
Bad debt expense | 0 | $ 90 | ||
Accounts receivable, assigned to third party agent for collection | 1,180 | 1,180 | $ 1,650 | |
Accounts receivable, collection agent fees | $ 20 | $ 70 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||
May 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Oct. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||||
Cash payments for operating lease expense | $ 400 | $ 400 | $ 800 | $ 1,000 | ||
Lease settlement expense | $ 70 | |||||
Lease settlement payable | $ 110 | |||||
Gain on settlement of lease liability | $ 445 | $ 445 | ||||
Weighted average discount rate | 6.25% | 6.25% | ||||
Weighted average remaining lease term for operating leases | 4 years 3 months 18 days | 4 years 3 months 18 days | ||||
Selling, general and administrative expenses | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease expense | $ 400 | $ 400 | $ 800 | $ 700 | ||
Other expense (income), including non-cash expenses | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Gain on settlement of lease liability | 440 | |||||
Accounts Payable and Accrued Liabilities | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease settlement liability | $ 230 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 (April 1 through December 31) | $ 776 | |
2024 | 1,552 | |
2025 | 1,552 | |
2026 | 1,552 | |
2027 | 1,294 | |
Total lease payments | 6,726 | |
Less: Discount | 847 | |
Present value of lease liabilities | 5,879 | |
Current portion of lease liabilities | 1,219 | $ 1,376 |
Non-current portion of lease liabilities | $ 4,660 | $ 5,839 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Debt Disclosure [Abstract] | ||
Unamortized deferred finance costs | $ 800 | |
Effective interest rate (as percentage) | 9.80% | |
Repayment of principal | $ 29,000 | |
Prepayment fee | 1,400 | |
Loss on early extinguishment of debt | $ 2,324 | 2,324 |
Other costs | 100 | |
Interest expense - term loan debt | $ 479 | $ 1,187 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) | Jun. 30, 2023 shares |
Stockholders' Equity | |
Shares of common stock reserved for issuance (in shares) | 8,537,726 |
2011 Equity Incentive Plan | Unexercised Stock Options | |
Stockholders' Equity | |
Shares are granted available for issuance (in shares) | 4,898,135 |
2021 Equity Incentive Plan | |
Stockholders' Equity | |
Number of common stock eligible for issuance | 4,000,000 |
Shares are granted available for issuance (in shares) | 3,302,241 |
Shares of common stock reserved for issuance (in shares) | 3,302,241 |
2021 Equity Incentive Plan | Employee Stock Option [Member] | |
Stockholders' Equity | |
Shares of common stock reserved for issuance (in shares) | 337,350 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stockholders' Equity | ||||
Compensation expense | $ 60 | $ 580 | $ 120 | $ 610 |
Operating cost | $ 122 | 517 | ||
Costs and Expenses | ||||
Stockholders' Equity | ||||
Compensation expense | 480 | 510 | ||
Other income | ||||
Stockholders' Equity | ||||
Compensation expense | 100 | 100 | ||
Non Management Directors | ||||
Stockholders' Equity | ||||
Compensation expense | 190 | 210 | ||
Employee | ||||
Stockholders' Equity | ||||
Compensation expense | $ 390 | $ 400 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Other disclosures | ||||||
Compensation expense | $ 60,000 | $ 580,000 | $ 120,000 | $ 610,000 | ||
Employee | ||||||
Other disclosures | ||||||
Compensation expense | 390,000 | 400,000 | ||||
Non Management Directors | ||||||
Other disclosures | ||||||
Compensation expense | 190,000 | 210,000 | ||||
Employee Stock Option [Member] | ||||||
Number of Options | ||||||
Outstanding, beginning balance (in shares) | 5,614,310 | 5,614,310 | ||||
Granted (in shares) | 0 | |||||
Exercised (in shares) | 22,750 | |||||
Expired/Forfeited (in shares) | (472,140) | |||||
Outstanding, ending balance (in shares) | 5,119,420 | 5,119,420 | 5,614,310 | |||
Exercisable (in shares) | 1,556,920 | |||||
Weighted Average Exercise Price | ||||||
Outstanding, beginning balance (in dollars per share) | $ 2.12 | $ 2.12 | ||||
Granted (in dollars per share) | 0 | |||||
Exercised (in dollars per share) | 1 | |||||
Expired/Forfeited (in dollars per share) | 3.84 | |||||
Outstanding, ending balance (in dollars per share) | $ 2.04 | $ 2.04 | $ 2.12 | |||
Exercisable (in dollars per share) | $ 2.76 | |||||
Other disclosures | ||||||
Outstanding Weighted Average Remaining Contractual Life (in Years) | 4 years 7 months 2 days | 4 years 9 months 3 days | ||||
Exercisable Weighted Average Remaining Contractual Life (in Years) | 2 years 2 months 8 days | |||||
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 | $ 0 | |||
Aggregate Intrinsic Value, Exercisable | $ 0 | |||||
Compensation expense | 20,000 | $ 380,000 | 50,000 | $ 400,000 | ||
Unrecognized compensation expense | $ 50,000 | $ 50,000 | ||||
Weighted average period of recognition | 9 months 14 days |
Stockholders' Equity - Non-Vest
Stockholders' Equity - Non-Vested Options (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Employee Stock Option [Member] | |
Number of Options | |
Beginning Balance (in shares) | 3,697,500 |
Vested (in shares) | (135,000) |
Ending Balance (in shares) | 3,562,500 |
Weighted Average Grant Date Fair Value | |
Beginning Balance (in dollars per share) | $ / shares | $ 0.05 |
Vested (in dollars per share) | $ / shares | 0.68 |
Ending Balance (in dollars per share) | $ / shares | $ 0.02 |
Employee Stock Option [Member] | |
Number of Options | |
Granted (in shares) | 0 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | May 15, 2023 | |
Other disclosures | ||||||
Purchaseable stock | 19,700,656 | 19,700,656 | 19,624,860 | |||
Compensation expense | $ 60,000 | $ 580,000 | $ 120,000 | $ 610,000 | ||
Halston License | ||||||
Other disclosures | ||||||
Warrant term | 10 years | |||||
Purchaseable stock | 1,000,000 | |||||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 | |||||
Warrants | ||||||
Number of Other than Options | ||||||
Outstanding and exercisable, beginning balance (in shares) | 116,065 | |||||
Granted (in shares) | 1,000,000 | |||||
Exercised (in shares) | 0 | |||||
Expired/Forfeited (in shares) | 0 | |||||
Outstanding, ending balance (in shares) | 1,116,065 | 1,116,065 | 116,065 | |||
Exercisable (in shares) | 116,065 | 116,065 | ||||
Weighted Average Exercise Price | ||||||
Outstanding and exercisable, beginning balance (in dollars per share) | $ 3.15 | |||||
Granted (in dollars per share) | 1.50 | |||||
Exercised (in dollars per share) | 0 | |||||
Expired/Forfeited (in dollars per share) | 0 | |||||
Outstanding, ending balance (in dollars per share) | $ 1.67 | 1.67 | $ 3.15 | |||
Exercisable, ending balance (in dollars per share) | $ 3.15 | $ 3.15 | ||||
Weighted Average Remaining Contractual Life (in Years), Outstanding | 8 years 11 months 19 days | 1 year 6 months 25 days | ||||
Weighted Average Contractual Life (in Years), Exercisable | 1 year 1 month 2 days | |||||
Aggregate Intrinsic Value, Outstanding | $ 88,009 | $ 88,009 | $ 0 | |||
Aggregate Intrinsic Value, Exercisable | 0 | 0 | ||||
Other disclosures | ||||||
Compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Stockholders' Equity - Stock Aw
Stockholders' Equity - Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
May 15, 2023 | Apr. 17, 2023 | Jan. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other disclosures | |||||||
Compensation expense | $ 60 | $ 580 | $ 120 | $ 610 | |||
Non Management Directors | |||||||
Other disclosures | |||||||
Compensation expense | 190 | 210 | |||||
Employee | |||||||
Other disclosures | |||||||
Compensation expense | 390 | 400 | |||||
Restricted Stock | |||||||
Number of Other than Options | |||||||
Outstanding, beginning balance (in shares) | 333,333 | 333,333 | |||||
Granted (in shares) | 66,668 | ||||||
Vested (in shares) | (66,668) | ||||||
Expired/Forfeited (in shares) | 0 | ||||||
Outstanding, ending balance (in shares) | 333,333 | 333,333 | |||||
Weighted Average Exercise Price | |||||||
Outstanding, beginning balance (in dollars per share) | $ 3.71 | $ 3.71 | |||||
Granted (in dollars per share) | 0.67 | ||||||
Vested (in dollars per share) | 0.67 | ||||||
Expired/Forfeited (in dollars per share) | 0 | ||||||
Outstanding, ending balance (in dollars per share) | $ 3.71 | $ 3.71 | |||||
Other disclosures | |||||||
Unrecognized compensation expense | $ 30 | $ 30 | |||||
Weighted average period of recognition | 9 months 14 days | ||||||
Common Stock | |||||||
Other disclosures | |||||||
Compensation expense | $ 50 | $ 200 | $ 80 | $ 210 | |||
Common Stock | Consultant | |||||||
Number of Other than Options | |||||||
Granted (in shares) | 50,000 | 8,334 | 8,334 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock (Details) - shares | Jun. 30, 2023 | Dec. 31, 2022 |
Stockholders' Equity | ||
Common stock, shares outstanding (in shares) | 19,700,656 | 19,624,860 |
Common stock, shares issued (in shares) | 19,700,656 | 19,624,860 |
Restricted Stock | ||
Stockholders' Equity | ||
Common stock, shares outstanding (in shares) | 0 | |
Common stock, shares issued (in shares) | 0 |
Earnings (Loss) Per Share - Bas
Earnings (Loss) Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings (Loss) Per Share [Abstract] | ||||||
Net (loss) income attributable to Xcel Brands, Inc. stockholders | $ (3,468) | $ 9,490 | $ (9,111) | $ 6,003 | ||
Basic weighted average number of shares outstanding | 19,735,500 | 19,677,243 | 19,684,630 | 19,624,474 | ||
Add: Effect of warrants (in shares) | 657 | 639 | ||||
Add: Effect of stock options (in shares) | 136,548 | 131,662 | ||||
Diluted weighted average number of shares outstanding | 19,735,500 | 19,633,194 | 19,814,448 | 19,571,119 | 19,684,630 | 19,756,775 |
Basic net (loss) income per share | $ (0.18) | $ 0.48 | $ (0.46) | $ 0.31 | ||
Diluted net (loss) income per share | $ (0.18) | $ (0.29) | $ 0.48 | $ (0.18) | $ (0.46) | $ 0.30 |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Anti-dilutive Securities Excluded (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities | 6,235,485 | 5,897,955 | 6,235,485 | 5,897,955 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities | 5,119,420 | 5,781,890 | 5,119,420 | 5,781,890 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities | 1,116,065 | 116,065 | 1,116,065 | 116,065 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes | |||||
Effective income tax rate | 0% | 25% | 0% | 35% | |
Income tax (benefit) provision | $ 0 | $ 3,178 | $ 0 | $ 3,178 | |
Effect of state taxes on effective tax rate | 10% | 14% | |||
Effect of reversal of valuation allowance | 6% |
Related Party Transactions - Is
Related Party Transactions - Isaac Mizrahi (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | May 31, 2022 | |
Restricted Stock | |||
Asset Purchase Agreement | |||
Number of shares vested | 66,668 | ||
IM Topco [Member] | License Agreement | |||
Asset Purchase Agreement | |||
Royalty guarantees | $ 400,000 | $ 400,000 | |
Recognized royalty expense | 60,000 | 120,000 | |
Related Party [Member] | IM Topco [Member] | Services Agreement | |||
Asset Purchase Agreement | |||
Due from related party | $ 300,000 | ||
Revenue from services provided | $ 75,000 | $ 150,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | 13 Months Ended | ||||
May 31, 2022 USD ($) item | Apr. 01, 2021 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | |
Commitments and Contingencies | ||||||||
Weighted average remaining lease term for operating leases | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 3 months 18 days | |||||
Weighted average discount rate | 6.25% | 6.25% | 6.25% | |||||
Cash payments for operating lease expense | $ 400 | $ 400 | $ 800 | $ 1,000 | ||||
Contingent obligation | 4,996 | 4,996 | $ 6,396 | $ 4,996 | ||||
Earn-out balance before settlement | 1,400 | 1,400 | 243 | 1,400 | ||||
Additional consideration is payable to the seller | 200 | |||||||
Isaac Mizrahi sale transaction with IM Topco | Disposed of by Sale | ||||||||
Commitments and Contingencies | ||||||||
Number of consecutive quarters for royalty payable term | item | 4 | |||||||
Royalty payable term | 3 years | |||||||
Contingent obligation | $ 0 | |||||||
Isaac Mizrahi sale transaction with IM Topco | Disposed of by Sale | WHP | ||||||||
Commitments and Contingencies | ||||||||
WHP earned in cashflow | 7,900 | |||||||
Adjustments to purchase price payable | 8,100 | 8,100 | 8,100 | |||||
Isaac Mizrahi sale transaction with IM Topco | Disposed of by Sale | Maximum | ||||||||
Commitments and Contingencies | ||||||||
Royalty guarantees | 13,300 | |||||||
Adjustments to purchase price payable | $ 16,000 | |||||||
Lori Goldstein Brand | ||||||||
Commitments and Contingencies | ||||||||
Contingent consideration | $ 12,500 | |||||||
Contingent obligation | 6,400 | |||||||
Earn-out balance before settlement | $ 1,400 | $ 1,400 | 200 | $ 1,400 | ||||
Royalties earned | 6 years | |||||||
Contingent obligation (Lori Goldstein Earn-Out) | $ 5,000 | $ 6,600 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | May 15, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | May 27, 2022 |
Subsequent Event [Line Items] | ||||
Purchaseable stock | 19,700,656 | 19,624,860 | ||
IM Intellectual Property | Disposed of by Sale | IM Topco, LLC | ||||
Subsequent Event [Line Items] | ||||
Ownership interest | 70% | |||
Halston License | ||||
Subsequent Event [Line Items] | ||||
Additional royalty payable term | 20 years | |||
Total purchase price | $ 5 | |||
Warrant term | 10 years | |||
Purchaseable stock | 1,000,000 | |||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 | |||
Halston License | Minimum | ||||
Subsequent Event [Line Items] | ||||
Royalty payable term | 5 years | |||
Halston License | Maximum | ||||
Subsequent Event [Line Items] | ||||
Royalty payable term | 25 years | |||
Halston License | Warrants | ||||
Subsequent Event [Line Items] | ||||
Purchaseable stock | 1,000,000 | |||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 |
Summary of Significant Accounti
Summary of Significant Accounting Policies - Accounts Receivable 10K (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | ||||
Accounts receivable | $ 6,878 | $ 6,878 | $ 5,110 | |
Allowance for doubtful accounts | 0 | 0 | ||
Bad debt expense | 0 | $ 90 | ||
Accounts receivable, assigned to third party agent for collection | 1,180 | 1,180 | $ 1,650 | |
Accounts receivable, collection agent fees | $ 20 | $ 70 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (3,468) | $ 9,490 | $ (9,111) | $ 6,003 |