Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 01, 2024 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 550 Seventh Avenue, 11th 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, $0.001 par value per share | |
Trading Symbol | XELB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,492,117 | |
Entity Central Index Key | 0001083220 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 1,552 | $ 2,998 |
Accounts receivable, net of allowances for credit losses of $75 at March 31, 2024 and December 31, 2023 | 3,603 | 3,454 |
Inventory | 445 | 453 |
Prepaid expenses and other current assets | 471 | 398 |
Total current assets | 6,071 | 7,303 |
Non-current Assets: | ||
Property and equipment, net | 133 | 634 |
Operating lease right-of-use assets | 2,535 | 4,453 |
Trademarks and other intangibles, net | 39,986 | 41,520 |
Equity method investment in IM Topco, LLC | 17,070 | 17,585 |
Other assets | 969 | 165 |
Total non-current assets | 60,693 | 64,357 |
Total Assets | 66,764 | 71,660 |
Current Liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 1,918 | 2,236 |
Deferred revenue | 889 | 889 |
Accrued income taxes payable | 372 | 372 |
Current portion of operating lease obligations | 1,278 | 1,258 |
Current portion of long-term debt | 1,000 | 750 |
Current portion of contingent obligation | 723 | 964 |
Total current liabilities | 6,180 | 6,469 |
Long-Term Liabilities: | ||
Long-term portion of operating lease obligations | 3,694 | 4,021 |
Deferred revenue | 3,333 | 3,556 |
Long-term debt, net, less current portion | 3,747 | 3,971 |
Long-term portion of contingent obligations | 5,432 | 5,432 |
Other long-term liabilities | 506 | 40 |
Total long-term liabilities | 16,712 | 17,020 |
Total Liabilities | 22,892 | 23,489 |
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 23,452,117 and 19,795,053 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 23 | 20 |
Paid-in capital | 105,904 | 103,861 |
Accumulated deficit | (60,143) | (53,849) |
Total Xcel Brands, Inc. stockholders' equity | 45,784 | 50,032 |
Noncontrolling interest | (1,912) | (1,861) |
Total Stockholders' Equity | 43,872 | 48,171 |
Total Liabilities and Stockholders' Equity | $ 66,764 | $ 71,660 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowances | $ 75 | |
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) | 23,452,117 | 19,795,053 |
Common stock, shares outstanding (in shares) | 23,452,117 | 19,795,053 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Net revenue | $ 2,184,000 | $ 6,050,000 |
Cost of goods sold | 2,693,000 | |
Gross profit | 2,184,000 | 3,357,000 |
Direct operating costs and expenses | ||
Salaries, benefits and employment taxes | 1,933,000 | 3,465,000 |
Other selling, general and administrative expenses | 2,029,000 | 3,493,000 |
Total direct operating costs and expenses | 3,962,000 | 6,958,000 |
Operating loss before other operating costs and expenses | (1,778,000) | (3,601,000) |
Other operating costs and expenses (income) | ||
Depreciation and amortization | 1,589,000 | 1,797,000 |
Asset impairment charges | 2,295,000 | |
Loss from equity method investment | 533,000 | 515,000 |
Operating loss | (6,195,000) | (5,913,000) |
Interest and finance expense | ||
Interest expense | 146,000 | |
Other interest and finance charges, net | 4,000 | 25,000 |
Total interest and finance expense | 150,000 | 25,000 |
Loss before income taxes | (6,345,000) | (5,938,000) |
Income tax provision (benefit) | 0 | 0 |
Net loss | (6,345,000) | (5,938,000) |
Net loss attributable to noncontrolling interest | (51,000) | (295,000) |
Net loss attributable to Xcel Brands, Inc. stockholders | $ (6,294,000) | $ (5,643,000) |
Loss per common share attributable to Xcel Brands, Inc. stockholders: | ||
Basic net loss income per share | $ (0.31) | $ (0.29) |
Diluted net loss income per share | $ (0.31) | $ (0.29) |
Weighted average number of common shares outstanding: | ||
Basic weighted average number of shares outstanding | 20,374,920 | 19,633,194 |
Diluted weighted average common shares outstanding | 20,374,920 | 19,633,194 |
Net licensing revenue | ||
Revenues | ||
Net revenue | $ 2,184,000 | $ 2,222,000 |
Net sales | ||
Revenues | ||
Net revenue | $ 3,828,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Public Offering and Private Placement Common Stock | Public Offering and Private Placement Paid-in Capital | Public Offering and Private Placement | Common Stock Consultants | Common Stock | Paid-in Capital Consultants | Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Consultants | Total |
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 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 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock, shares issued (in shares) | 19,795,053 | ||||||||||
Balances at Dec. 31, 2023 | $ 20 | 103,861 | (53,849) | (1,861) | $ 48,171 | ||||||
Balances (in shares) at Dec. 31, 2023 | 19,795,053 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Compensation expense related to stock options and restricted stock | 36 | 36 | |||||||||
Shares issued in connection with stock grant | $ 98 | $ 98 | |||||||||
Shares issued in connection with stock grant (in shares) | 78,000 | ||||||||||
Shares issued in connection with public offering and private placement transactions, net of transaction costs | $ 3 | $ 1,899 | $ 1,902 | 1,902 | |||||||
Contra-revenue related to warrants granted to licensee | 10 | 10 | |||||||||
Net loss | (6,294) | (51) | (6,345) | ||||||||
Balances at Mar. 31, 2024 | $ 23 | $ 105,904 | $ (60,143) | $ (1,912) | $ 43,872 | ||||||
Balances (in shares) at Mar. 31, 2024 | 23,452,117 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued in connection with public offering and private placement transactions, net of transaction costs | $ 1,900 | ||||||||||
Common stock, shares issued (in shares) | 3,579,064 | ||||||||||
Common stock, shares issued (in shares) | 3,579,064 | 23,452,117 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Cash flows from operating activities | ||
Net loss | $ (6,345) | $ (5,938) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 1,589 | 1,797 |
Asset impairment charges | 2,295 | |
Amortization of deferred finance costs included in interest expense | 26 | |
Stock-based compensation and cost of licensee warrants | 144 | 57 |
Undistributed proportional share of net loss of equity method investee | 533 | 515 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (149) | (859) |
Inventory | 8 | (254) |
Prepaid expenses and other current and non-current assets | (156) | 425 |
Deferred revenue | (223) | 240 |
Accounts payable, accrued expenses, accrued income taxes payable, and other current liabilities | (560) | 1,156 |
Lease-related assets and liabilities | (237) | (54) |
Other long-term liabilities | 466 | |
Net cash used in operating activities | (2,609) | (2,915) |
Cash flows from investing activities | ||
Purchase of property and equipment | (81) | |
Net cash provided by investing activities | (81) | |
Cash flows from financing activities | ||
Proceeds from public offering and private placement transactions, net of transaction costs | 1,902 | |
Net cash provided by (used in) financing activities | 1,902 | |
Net decrease in cash and cash equivalents | (707) | (2,996) |
Cash and cash equivalents at beginning of year | 2,998 | 4,608 |
Cash and cash equivalents at end of year | 2,291 | 1,612 |
Reconciliation to amounts on consolidated balance sheets: | ||
Cash and cash equivalents | 1,552 | 1,612 |
Restricted cash | 739 | |
Total cash, cash equivalents, and restricted cash | 2,291 | 1,612 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | $ 119 | |
Cash paid during the period for income taxes | $ 16 |
Nature of Operations, Backgroun
Nature of Operations, Background, and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023 (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, 2023, as filed with the SEC on April 19, 2024. The Company is a media and consumer products company engaged in the design, licensing, marketing, live streaming, and social commerce 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 Halston brands (the "Halston Brand"), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the "C Wonder Brand"), the LOGO by Lori Goldstein brand (the “Lori Goldstein Brand”), the Longaberger brand (the “Longaberger Brand”), the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), the TowerHill by Christie Brinkley brand (the “CB Brand”), and other proprietary brands. ● The Halston Brand, Ripka Brand, C Wonder Brand, and Lori Goldstein 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 holds a noncontrolling interest in the Isaac Mizrahi Brand through its 30% ownership interest in IM Topco, LLC; the Company accounts for its interest in IM Topco, LLC using the equity method of accounting. ● The CB Brand is a new co-branded collaboration between Xcel and Christie Brinkley, announced in 2023 and planned to launch by the end of May 2024. The Company also owns a 30% interest in ORME Live, Inc. (“ORME”), a short-form video and social commerce marketplace that is planned to launch in 2024. The Company primarily generates revenue through the licensing of its brands through contractual arrangements with manufacturers and retailers. The Company, through its licensees, distributes through an omni-channel and social commerce sales strategy, which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, traditional brick-and-mortar retailers, and e-commerce channels, to be everywhere its customers shop. Prior to and for a portion of 2023, the Company also engaged in wholesale and direct-to-consumer sales of products under its brands. The Company’s former wholesale and direct-to-consumer operations were presented as "Net sales" and "Cost of goods sold" in the condensed consolidated statements of operations, separately from the Company’s licensing revenues. Liquidity and Management’s Plans The Company incurred a net loss attributable to Company stockholders of approximately $6.3 million during the three months ended March 31, 2024 (which included non-cash expenses of approximately $4.6 million), and had an accumulated deficit of approximately $60.1 million as of March 31, 2024. Net cash used in operating activities was approximately $2.6 million for the three months ended March 31, 2024. The Company had working capital (current assets less current liabilities, excluding the current portions of lease obligations, deferred revenue, and any contingent obligations payable in common stock) of approximately $2.1 million as of March 31, 2024. The Company’s unrestricted cash and cash equivalents were approximately $1.6 million as of March 31, 2024. The aforementioned factors raise uncertainties about the Company’s ability to continue as a going concern. During the year ended December 31, 2023, management implemented a plan to mitigate an expected shortfall of capital and to support future operations by shifting its business from a wholesale/licensing hybrid model into a “licensing plus” model. To affect this transition, the Company entered into various new licensing agreements and joint venture arrangements with best-in-class business partners. These restructuring initiatives were 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 December 31, 2023, the Company had reduced payroll costs by approximately $6 million and operating expenses (excluding non-recurring charges related to the restructuring) by approximately $9 million, on an annualized basis when compared to the corresponding periods in the prior year. Also during the year ended December 31, 2023, the Company entered into a new term loan agreement in the amount of $5 million, which provided the Company with additional liquidity. Further, in March 2024, the Company issued new shares of common stock for net proceeds of approximately $1.9 million, which provided the Company with additional liquidity. Based on the aforementioned events and changes, management expects that existing cash and future operating cash flows will be adequate to meet the Company’s operating needs, term debt service obligations, and capital expenditure needs, for at least the twelve months subsequent to the filing date of this Quarterly Report on Form 10-Q; therefore, such conditions and uncertainties with respect to the Company’s ability to continue as a going concern as of March 31, 2024, have been alleviated. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates and Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Investments in Unconsolidated Affiliates and Variable Interest Entities | 2. Investments in Unconsolidated Affiliates and Variable Interest Entities Investment in 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 Company accounts for its 30% interest in the ongoing operations of IM Topco as other operating costs and expenses 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 $0.52 million related to its investment in IM Topco for each of the three-month periods ended March 31, 2024 and 2023. For cash flow earnings (i.e., net income before intangible asset amortization expense), management allocated the amounts based on the preferences outlined above. As such, Xcel recognized no cash-based earnings for both of the periods presented. For non-cash amortization expense, management allocated the amounts based on the relative ownership of each member (i.e., 70% WHP and 30% Xcel). The equity method loss for each period presented is equal Xcel’s share of amortization expense. Summarized financial information for IM Topco for the three months ended March 31, 2024 and 2023 is as follows: For the three months ended March 31, ($ in thousands) 2024 2023 Revenues $ 2,752 $ 3,346 Gross profit 2,752 3,346 Loss from continuing operations (437) (143) Net loss (437) (143) Refer to Notes 10, 11, and 12 for other information regarding the Company’s ongoing relationship with IM Topco. Investment in Orme Live, Inc. In December 2023, the Company contributed $0.15 million of cash to ORME in exchange for a 30% equity ownership interest in ORME. The carrying value of this investment is included within other assets in the Company’s condensed consolidated balance sheets. The Company accounts for its 30% interest in the operations of ORME as a component of other operating costs and expenses under the equity method of accounting. The Company’s proportional share of the operating results of ORME for the three months ended March 31, 2024 was a loss of approximately $0.02 million. Longaberger Licensing, LLC Variable Interest Entity Since 2019, Xcel has been party to a limited liability company agreement with a subsidiary of Hilco Global related to Longaberger Licensing, LLC (“LL”). Hilco Global is the sole Class A Member of LL, and Xcel is the sole Class B Member of LL (each individually a “Member”). Each Member holds a 50% equity ownership interest in LL; however, based on an analysis of the contractual terms and rights contained in the LLC agreement and related agreements, the Company has previously determined that under the applicable accounting standards, LL is a variable interest entity and the Company has effective control over LL. Therefore, as the primary beneficiary, the Company has consolidated LL since 2019, and has recognized the assets, liabilities, revenues, and expenses of LL as part of its consolidated financial statements, along with a noncontrolling interest which represents Hilco Global’s 50% ownership share in LL. |
Trademarks and Other Intangible
Trademarks and Other Intangibles | 3 Months Ended |
Mar. 31, 2024 | |
Trademarks and Other Intangibles [Abstract] | |
Trademarks and Other Intangibles | 3. Trademarks and Other Intangibles Trademarks and other intangibles, net consist of the following: Weighted Average March 31, 2024 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 28,950 39,930 Copyrights and other intellectual property 8 years 429 373 56 Total $ 69,309 $ 29,323 $ 39,986 Weighted Average December 31, 2023 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 27,431 41,449 Copyrights and other intellectual property 8 years 429 358 71 Total $ 69,309 $ 27,789 $ 41,520 Amortization expense for intangible assets was approximately $1.53 million for the three-month period ended March 31, 2024 (the "current quarter") and approximately $1.54 million for the three-month period ended March 31, 2023 (the "prior year quarter"). |
Significant Contracts and Conce
Significant Contracts and Concentrations | 3 Months Ended |
Mar. 31, 2024 | |
Significant Contracts [Abstract] | |
Significant Contracts and Concentrations | 4. Significant Contracts and Concentrations 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 $1.61 million and $1.52 million for the current quarter and prior year quarter, respectively, representing approximately 59% and 25% of the Company’s total net revenue for the current quarter and prior year quarter, respectively. As of March 31, 2024 and December 31, 2023, the Company had receivables from Qurate of $1.3 million and $1.5 million, respectively, representing approximately 37% and 43% of the Company’s total net accounts receivable, respectively. Halston Master License On May 15, 2023, the Company, through its wholly owned 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 G-III Apparel Group (“G-III”), 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 provided for an upfront cash payment and royalties payable to the Company, including certain guaranteed minimum royalties, includes 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 G-III’s right to terminate with at least 120 days’ notice prior to the end of each five-year period during the term. G-III 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 G-III 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. As a result of the upfront cash payment and guaranteed minimum royalties discussed above, the Company has recognized $4.2 million and $4.4 million of deferred revenue contract liabilities on its condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. As of December 31, 2023, $0.9 million of the contract liability balance was classified as a current liability and approximately $3.5 million was classified as a long-term liability. As of March 31, 2024, $0.9 million of the contract liability balance was classified as a current liability and approximately $3.3 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 4.13 years . Net licensing revenue recognized from the Halston Master License was $0.6 million for the current quarter, representing approximately 30% of the Company’s total net revenue for the current quarter. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | 5. Leases The Company is party to operating leases for real estate, and for certain equipment with a term of 12 months or less. The Company is currently not a party to any finance leases. Lease expense (net of sublease income) included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations was approximately $0.2 million and $0.4 million for the current quarter and prior year quarter, respectively. 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. 1333 Broadway The Company has an operating lease for offices located at 1333 Broadway, 10th floor, New York, New York, which commenced on March 1, 2016 and expires on October 30, 2027. The average annual fixed rent over the term of this lease is approximately $1.3 million per year, and the lease requires the Company to pay additional rents related to increases in certain taxes and other costs on the property. On January 26, 2024, the Company (as sublessor) entered into an agreement for the sublease of the offices located at 1333 Broadway to a third-party subtenant through October 30, 2027. The average annual fixed rent over the term of the sublease is approximately $0.8 million per year. As a result of entering into the sublease, the Company recognized a non-cash impairment charge of approximately $1.9 million effective February 29, 2024 (which was determined to be the date of a fundamental change to the use of the 1333 Broadway premises) related to the right-of-use asset. Also in connection with entering into the sublease, the Company recognized a non-cash impairment charge of approximately $0.4 million during the current quarter related to leasehold improvement assets at this location. As of March 31, 2024, the Company’s lease of 1333 Broadway has a remaining lease term of approximately 3.58 years, and the lease liability recorded on the Company’s condensed consolidated balance sheet is measured using a discount rate of 6.25%. 550 Seventh Avenue Effective February 29, 2024, the Company entered into an operating lease for new corporate offices located at 550 Seventh Avenue, 11th floor, New York, New York. This lease commenced in April 2024 and expires in April 2031. The average annual lease cost over the term of this lease is approximately $0.5 million per year. As of March 31, 2024, no right-of-use asset or lease liability was recorded in the Company’s condensed consolidated balance sheet related to this lease, as the lease had not yet commenced. Future Lease Obligations As of March 31, 2024, the maturities of lease obligations were as follows: Amount Year (in thousands) 2024 (April 1 through December 31) $ 1,164 2025 1,552 2026 1,552 2027 1,294 Total lease payments 5,562 Less: Discount 590 Present value of lease liabilities 4,972 Current portion of lease liabilities 1,278 Non-current portion of lease liabilities $ 3,694 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt The Company’s net carrying amount of debt was comprised of the following: March 31, December 31, ($ in thousands) 2024 2023 Term loan debt $ 5,000 $ 5,000 Unamortized deferred finance costs related to term loan debt (253) (279) Total 4,747 4,721 Current portion of debt 1,000 750 Long-term debt $ 3,747 $ 3,971 On October 19, 2023, H Halston IP, LLC (the “Borrower”), a wholly owned indirect subsidiary of Xcel Brands, Inc., entered into a term loan agreement with Israel Discount Bank of New York (“IDB”). Pursuant to this loan agreement, IDB made a term loan to the Company in the aggregate amount of $5.0 million. The proceeds of this term loan were used to pay fees, costs, and expenses incurred in connection with entering into the loan agreement, and may be used for working capital purposes. Such costs incurred in connection with the borrowing included a commitment fee paid to IDB, plus various legal and other fees. These fees and costs totaling $0.3 million have been deferred on the Company’s balance sheet as a reduction of the carrying value of the term loan debt, and are being amortized to interest expense over the term of the debt using the effective interest method. In connection with this term loan agreement, the Borrower and H Licensing, LLC (“H Licensing”), a wholly owned subsidiary of Xcel, entered into a security agreement (the “Security Agreement”) in favor of IDB, and Xcel entered into a Membership Interest Pledge Agreement (the “Pledge Agreement”) in favor of IDB. Pursuant to the Security Agreement, the Borrower and H Licensing granted to IDB a security interest in substantially all of their respective assets, other than the trademarks owned by the Borrower and H Licensing, to secure the Borrower’s obligations under the October 2023 loan agreement. Pursuant to the Pledge Agreement, Xcel granted to IDB a security interest in its membership interests in H Licensing to secure the Borrower’s obligations under the October 2023 loan agreement. The term loan matures on October 19, 2028. Principal on the term loan is payable in quarterly installments of $250,000 on each of January 2, April 1, July 1, and October 1 of each year, commencing on April 1, 2024. The Borrower has the right to prepay all or any portion of the term loan at any time without penalty. As of March 31, 2024, the aggregate remaining principal payments under the term loan were as follows: Amount of ($ in thousands) Principal Year Ending December 31, Payment 2024 (April 1 through December 31) $ 750 2025 1,000 2026 1,000 2027 1,000 2028 1,250 Total $ 5,000 Interest on the term loan accrues at “Term SOFR” (as defined in the loan agreement as the forward-looking term rate based on secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to one month on the day that is two U.S. Government Securities Business Days prior to the first day of each calendar month) plus 4.25% per annum. Interest on the term loan is payable on the first day of each calendar month. In addition, on October 19, 2023, the Borrower also entered into a swap agreement with IDB, pursuant to which IDB will pay the Borrower Term SOFR plus 4.25% per annum on the notional amount of the swap in exchange for the Borrower paying IDB 9.46% per annum on such notional amount. The term and declining notional amount of the swap agreement is aligned with the amortization of the October 2023 term loan principal amount. The fair value of this swap agreement was immaterial as of March 31, 2024 and December 31, 2023. For the current quarter, 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 $0.15 million, reflecting an effective interest rate of approximately 11.6%. The term loan agreement also contains customary covenants, including reporting requirements, trademark preservation, and certain financial covenants including annual guaranteed minimum royalty ratio, annual fixed charge coverage ratio, and minimum cash balance levels, all as specified and defined in the loan agreement. The Company was in compliance with all applicable covenants under the loan agreement as of and for all periods presented in the financial statements. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Public Offering and Private Placement Transactions On March 15, 2024, the Company entered into an underwriting agreement with Craig-Hallum Capital Group LLC (the “Representative”), as the representative of the underwriters, relating to a firm commitment underwritten public offering (the “Offering”) of 3,284,422 shares of the Company’s common stock at a price to the public of $0.65 per share. The closing of the Offering occurred on March 19, 2024. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company, were approximately $1.7 million. Upon closing of the Offering, the Company issued the Representative certain warrants to purchase up to 182,952 shares of common stock (the “Representative’s Warrants”) as compensation, which amount was offset against the proceeds received. The Representative’s Warrants will be exercisable at a per share exercise price of $0.8125 . The Representative’s Warrants are exercisable, in whole or in part, during the four and one-half-year period commencing 180 days from the commencement of sales of the shares of common stock in the Offering. In connection with the Offering, on March 14, 2024, the Company entered into subscription agreements with each of Robert W. D’Loren, Chairman and Chief Executive Officer of the Company; an affiliate of Mark DiSanto, a director of the Company; and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company to purchase 132,589 , 132,589 , and 29,464 shares, respectively (collectively, the “Private Placement Shares”), at a price of $0.98 per Private Placement Share. The total number of Private Placement Shares purchased was 294,642 . Net proceeds after payment of agent fees to the Representative were approximately $0.3 million. The purchase of the Private Placement Shares closed concurrently with the Offering. The aggregate number of shares of common stock issued from the Offering and the Private Placement was 3,579,064 shares and the total net proceeds received was approximately $1.9 million. 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 by recognizing the fair value of such 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 for all forms of stock-based compensation was approximately $0.13 million and $0.06 million for the current quarter and prior year quarter, respectively. For both periods, substantially all of the expense was related to directors and consultants, and was recorded as operating costs within “other selling, general and administrative expenses” in the accompanying condensed consolidated statements of operations. Stock Options A summary of the Company’s stock options activity for the current quarter is as follows: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Options Price (in Years) Value Outstanding at January 1, 2024 5,148,540 $ 2.03 4.26 $ — Granted — — Exercised — — Expired/Forfeited (259,500) 4.21 Outstanding at March 31, 2024, and expected to vest 4,889,040 $ 1.91 4.24 $ — Exercisable at March 31, 2024 1,139,040 $ 2.58 1.78 $ — Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $0.02 million and $0.03 million, respectively. Total unrecognized compensation expense related to unvested stock options at March 31, 2024 was approximately $0.05 million and is expected to be recognized over a weighted average period of approximately 0.97 years. A summary of the Company’s non-vested stock options activity for the current quarter is as follows: Weighted Average Number of Grant Date Options Fair Value Balance at January 1, 2024 3,750,000 $ 0.05 Granted — — Vested — — Forfeited or Canceled — — Balance at March 31, 2024 3,750,000 $ 0.05 Stock Awards A summary of the Company’s restricted stock activity for the current quarter is as follows: Weighted Number of Average Restricted Grant Date Shares Fair Value Outstanding at January 1, 2024 333,333 $ 3.69 Granted 78,000 1.25 Vested (78,000) 1.25 Expired/Forfeited — — Outstanding at March 31, 2024 333,333 $ 3.69 On January 12, 2024, the Company issued 78,000 shares of common stock to a consultant, which shares vested immediately. Compensation expense related to stock awards was approximately $0.11 million for the current quarter and approximately $0.03 million for the prior year quarter. Total unrecognized compensation expense related to unvested restricted stock grants at March 31, 2024 was approximately $0.04 million and is expected to be recognized over a weighted average period of approximately 0.96 years. Restricted Stock Units There were no restricted stock units outstanding as of March 31, 2024 and December 31, 2023, and no restricted stock units have been issued since the inception of the 2021 Plan. Shares Available Under the Company’s Equity Incentive Plans At March 31, 2024, there were 3,025,941 shares of common stock available for future award grants under the 2021 Plan. Shares Reserved for Issuance As of March 31, 2024, there were 8,031,046 shares of common stock reserved for issuance, including 4,511,755 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 493,350 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 3,025,941 shares available for issuance under the 2021 Plan. Warrants A summary of the Company’s warrants activity for the current quarter 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, 2024 1,116,065 $ 1.67 8.46 $ — Issued 182,952 0.81 Exercised — — Expired/Forfeited — — Outstanding at March 31, 2024 1,299,017 $ 1.55 7.75 $ — Exercisable at March 31, 2024 116,065 $ 3.15 0.30 $ — Warrants issued during the current quarter were related to the March 19, 2024 Offering (see “Public Offering and Private Placement Transactions” above for details). There was no compensation expense recognized during the current quarter related to these warrants. In connection with the entrance into the Halston Master License (see Note 4), the Company issued to G-III 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 vests based upon certain annual royalty targets being satisfied under the license agreement. The fair value of this warrant is being 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. The amount of contra-revenue recorded related to this warrant during the current quarter was approximately $0.01 million. As of March 31, 2024, no portion of this warrant had vested. Excluding the contra-revenue recognized with respect to the Halston Master License warrant, there was no compensation expense related to warrants recognized in the current quarter or prior year quarter. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings (Loss) Per Share [Abstract] | |
Earnings (Loss) Per Share | 8. 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, excluding the effects of any potentially dilutive securities. Diluted EPS reflects, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of 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 per share computations for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 Numerator: Net loss attributable to Xcel Brands, Inc. stockholders (in thousands) $ (6,294) $ (5,643) Denominator: Basic weighted average number of shares outstanding 20,374,920 19,633,194 Add: Effect of warrants — — Add: Effect of stock options — — Diluted weighted average number of shares outstanding 20,374,920 19,633,194 Basic net loss per share $ (0.31) $ (0.29) Diluted net loss per share $ (0.31) $ (0.29) As a result of the net loss for the current quarter and prior year quarter, 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 for such periods. The computation of diluted EPS excludes the following potentially dilutive securities because their inclusion would be anti-dilutive: Three Months Ended March 31, 2024 2023 Stock options 4,889,040 5,368,780 Warrants 1,299,017 116,065 Total 6,188,057 5,484,845 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The estimated annual effective income tax rate for the current quarter and the prior year quarter was approximately 0% for both periods, resulting in an income tax benefit of $0 for both periods. For both the current quarter and the prior year 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions IM Topco, LLC As described in Note 2, the Company holds a noncontrolling interest in IM Topco, which is accounted for under the equity method of accounting. Service Agreement 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. In November 2023, the services agreement was amended such that the Company agreed to provide IM Topco with a $600,000 reduction of future service fees over the next eighteen months, beginning on July 1, 2023. The Company recognized service fee income related to this agreement of $37,500 and $75,000 for the current quarter and prior year quarter, respectively. License Agreement 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 minimum 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 prior year quarter, the estimated amount of such shortfall was approximately $60,000, which the Company recognized as royalty expense in the condensed consolidated statements of operations. In November 2023, the Company, WHP, and IM Topco entered into an amendment of the May 27, 2022 membership purchase agreement, under which Xcel agreed to make additional royalty payments to IM Topco totaling $450,000 over the next 11 months. As a result of this amendment, the Company recognized a $450,000 increase to the carrying value basis of its equity method investment in IM Topco and a corresponding increase in current liabilities. No amounts were paid to IM Topco during the current quarter, and as of March 31, 2024, the remaining payments due totaled $375,000. Financing Transactions Public Offering and Private Placement Transactions In connection with the Offering of 3,284,422 shares of the Company’s common stock at a price to the public of $0.65 per share which was consummated on March 19, 2024 (see Note 7 for additional details), Robert W. D’Loren, Chairman and Chief Executive Officer of the Company; an affiliate of Mark DiSanto, a director of the Company; and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company, purchased 146,250, 146,250, and 32,500 shares, respectively, at $0.65 per share, the same price at which the shares were sold to other purchasers in the Offering. In connection with the Offering, on March 14, 2024, the Company entered into subscription agreements with each of Mr. D’Loren, Mr. DiSanto, and Mr. Burroughs to purchase 132,589, 132,589, and 29,464 shares, respectively (collectively, the “Private Placement Shares”), at a price of $0.98 per Private Placement Share. The total number of Private Placement Shares purchased was 294,642. Net proceeds after payment of agent fees to the Representative were approximately $0.3 million. The purchase of the Private Placement Shares closed concurrently with the Offering. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies 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, 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 would be entitled to receive from Xcel 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. In November 2023, this agreement was amended such that the purchase price adjustment provision was waived until the measurement period ending March 31, 2024. The purchase price adjustment provision was subsequently further amended in April 2024 (see Note 12 for details). No amount has been recorded in the accompanying condensed consolidated balance sheets related to this contingent obligation. 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 As of December 31, 2022, based on the performance of the Lori Goldstein brand to date, approximately $0.2 million of additional consideration was earned by the seller, and this $0.2 million of additional consideration was paid to the seller during 2023. Based on the performance of the Lori Goldstein through December 31, 2023, approximately $1.0 million of incremental additional consideration was earned by the seller, which will be paid out in 2024. During the current quarter, the Company paid approximately $0.3 million of the $1.0 million earned, and as of March 31, 2024, $0.7 million of the remaining balance was recorded as a current liability and $5.4 million was recorded as a long-term liability. Legal Matters From time to time, the Company becomes involved in legal claims and litigation in the ordinary course of business. 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. With the exception of the matter described in detail below, 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. On February 16, 2024, counsel to Lori Goldstein, a brand spokesperson for the Company, advised the Company that the Company was in material breach of the Asset Purchase Agreement dated March 31, 2021 (the “Asset Purchase Agreement”) by and among Gold Licensing LLC (“Gold” and, together with Xcel, the ”Xcel Parties”), a subsidiary of the Company, and Lori Goldstein and Lori Goldstein, Ltd. (“LG Ltd” and, together with Lori Goldstein, the “LG Parties”) for failure to pay $963,642 earned in 2023 in accordance with the earn-out provisions of the agreement. The Company does not dispute the amount of the Lori Goldstein Earn-Out that was achieved in 2023, and advised Ms. Goldstein that due to the alleged breaches described below, the Company was not willing to pay this amount at such time. The Company subsequently paid approximately $241,000 of the earn-out payment. On May 2, 2024, the Xcel Parties made a written demand for arbitration and commenced an arbitration proceeding against the LG Parties for, among other things, alleged breaches of the Asset Purchase Agreement and alleged breaches of Ms. Goldstein’s employment agreement with the Company. The Company is seeking compensatory damages and consequential damages. Additionally, on May 2, 2024, the Company terminated the employment agreement and the consulting agreement between the Company and LG Ltd. The parties are negotiating to resolve all outstanding disputes and, if an agreement is reached, it may include, among other things, a disposition of the Lori Goldstein brands and related assets to LG Ltd. By agreement between the Company and Ms. Goldstein, while negotiations continue, Ms. Goldstein is continuing to comply with her material obligations to QVC. There can be no assurance that these disputes will be resolved in a manner favorable to the Company or at all. As of the filing date of this Quarterly Report on Form 10-Q, there have been no definitive agreements or terms agreed to by the parties, and it is not certain when or if an agreement will be executed. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Event | |
Subsequent Events | 12. Subsequent Events IM Topco On April 12, 2024, the Company, WHP, and IM Topco entered into amendments of the May 27, 2022 (and as subsequently amended) membership purchase agreement and the related business venture agreement. Under these amendments, the parties agreed to the following: ● The purchase price adjustment provision within the membership purchase agreement was waived until the measurement period ending September 30, 2025. ● If IM Topco royalties are less than $13.5 million for the twelve-month period ending March 31, 2025 or less than $18.0 million for the year ending December 31, 2025, Xcel shall transfer equity interests in IM Topco to WHP equal to 12.5% of the total outstanding equity interests of IM Topco, such that Xcel’s ownership interest in IM Topco would decrease from 30% to 17.5% , and WHP’s ownership interest in IM Topco would increase from 70% to 82.5% . In addition, Xcel shall be obligated to make such transfer to WHP if Xcel fails to make certain payments owed to IM Topco by October 10, 2024 under the second amendment (which totaled $375,000 as of December 31, 2023 and March 31, 2024). In April 2024, Xcel paid $100,000 of this amount to WHP. ● On and after January 1, 2026, WHP shall receive 50% of the Net Cash Flow which would otherwise be payable to Xcel, until WHP has received an aggregate amount of additional Net Cash Flow equal to $1.0 million. |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates and Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Acquisitions, Divestitures and Variable Interest Entities[Abstract] | |
Summarized financial information for IM Topco | Summarized financial information for IM Topco for the three months ended March 31, 2024 and 2023 is as follows: For the three months ended March 31, ($ in thousands) 2024 2023 Revenues $ 2,752 $ 3,346 Gross profit 2,752 3,346 Loss from continuing operations (437) (143) Net loss (437) (143) |
Trademarks and Other Intangib_2
Trademarks and Other Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Trademarks and Other Intangibles [Abstract] | |
Schedule of Trademarks and Other Intangibles | Weighted Average March 31, 2024 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 28,950 39,930 Copyrights and other intellectual property 8 years 429 373 56 Total $ 69,309 $ 29,323 $ 39,986 Weighted Average December 31, 2023 Amortization Gross Carrying Accumulated Net Carrying ($ in thousands) Period Amount Amortization Amount Trademarks (finite-lived) 15 years 68,880 27,431 41,449 Copyrights and other intellectual property 8 years 429 358 71 Total $ 69,309 $ 27,789 $ 41,520 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Maturities of Lease Liabilities | Amount Year (in thousands) 2024 (April 1 through December 31) $ 1,164 2025 1,552 2026 1,552 2027 1,294 Total lease payments 5,562 Less: Discount 590 Present value of lease liabilities 4,972 Current portion of lease liabilities 1,278 Non-current portion of lease liabilities $ 3,694 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | March 31, December 31, ($ in thousands) 2024 2023 Term loan debt $ 5,000 $ 5,000 Unamortized deferred finance costs related to term loan debt (253) (279) Total 4,747 4,721 Current portion of debt 1,000 750 Long-term debt $ 3,747 $ 3,971 |
Schedule of Maturities of Long-Term Debt | Amount of ($ in thousands) Principal Year Ending December 31, Payment 2024 (April 1 through December 31) $ 750 2025 1,000 2026 1,000 2027 1,000 2028 1,250 Total $ 5,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 5,148,540 $ 2.03 4.26 $ — Granted — — Exercised — — Expired/Forfeited (259,500) 4.21 Outstanding at March 31, 2024, and expected to vest 4,889,040 $ 1.91 4.24 $ — Exercisable at March 31, 2024 1,139,040 $ 2.58 1.78 $ — |
Summary of Stock Option Activity for Non-Vested Options | Weighted Average Number of Grant Date Options Fair Value Balance at January 1, 2024 3,750,000 $ 0.05 Granted — — Vested — — Forfeited or Canceled — — Balance at March 31, 2024 3,750,000 $ 0.05 |
Summary of Restricted Stock Activity | Weighted Number of Average Restricted Grant Date Shares Fair Value Outstanding at January 1, 2024 333,333 $ 3.69 Granted 78,000 1.25 Vested (78,000) 1.25 Expired/Forfeited — — Outstanding at March 31, 2024 333,333 $ 3.69 |
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, 2024 1,116,065 $ 1.67 8.46 $ — Issued 182,952 0.81 Exercised — — Expired/Forfeited — — Outstanding at March 31, 2024 1,299,017 $ 1.55 7.75 $ — Exercisable at March 31, 2024 116,065 $ 3.15 0.30 $ — |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings (Loss) Per Share [Abstract] | |
Schedule of the basic and diluted net loss per share | Three Months Ended March 31, 2024 2023 Numerator: Net loss attributable to Xcel Brands, Inc. stockholders (in thousands) $ (6,294) $ (5,643) Denominator: Basic weighted average number of shares outstanding 20,374,920 19,633,194 Add: Effect of warrants — — Add: Effect of stock options — — Diluted weighted average number of shares outstanding 20,374,920 19,633,194 Basic net loss per share $ (0.31) $ (0.29) Diluted net loss per share $ (0.31) $ (0.29) |
Anti-dilutive Securities Excluded from Computation of Earnings (Loss) Per Share | Three Months Ended March 31, 2024 2023 Stock options 4,889,040 5,368,780 Warrants 1,299,017 116,065 Total 6,188,057 5,484,845 |
Nature of Operations, Backgro_2
Nature of Operations, Background, and Basis of Presentation (Details) | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 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% | ||
IM Topco, LLC | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Ownership interest | 30% | 30% | |
ORME | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Ownership interest | 30% | 30% |
Nature of Operations, Backgro_3
Nature of Operations, Background, and Basis of Presentation - Liquidity and Management's Plans (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Nature of Operations, Background, and Basis of Presentation [Abstract] | |||||
Net Income (Loss) | $ (6,294) | $ (5,643) | |||
Non-cash expenses | 4,600 | ||||
Accumulated deficit | $ (60,143) | (60,143) | $ (53,849) | ||
Net cash used in operating activities | (2,609) | (2,915) | |||
Working capital, Net | 2,100 | 2,100 | |||
Cash and cash equivalents | 2,291 | 2,291 | $ 1,612 | 2,998 | $ 4,608 |
Restricted cash | 739 | 739 | |||
Reduction in payroll costs | 6,000 | ||||
Reduction in operating expenses | 9,000 | ||||
Term loan debt | 5,000 | 5,000 | $ 5,000 | ||
Proceeds from public offering and private placement transactions, net of transaction costs | $ 1,900 | $ 1,902 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates and Variable Interest Entities - Sale of Majority Interest in Isaac Mizrahi Brand, Investment in IM Topco, LLC (Details) - USD ($) | 3 Months Ended | ||||
May 31, 2022 | Mar. 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | May 27, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss from equity method investment | $ (533,000) | $ (515,000) | |||
IM Topco, LLC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Ownership interest | 30% | 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) | ||||
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 | IM Topco, LLC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Ownership interest | 70% | 70% |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliates and Variable Interest Entities - Summarized financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross Profit | $ 2,184 | $ 3,357 |
Net (loss) income | (6,345) | (5,938) |
IM Topco, LLC | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | 2,752 | 3,346 |
Gross Profit | 2,752 | 3,346 |
(Loss) income from continuing operations | (437) | (143) |
Net (loss) income | $ (437) | $ (143) |
Investments in Unconsolidated_5
Investments in Unconsolidated Affiliates and Variable Interest Entities - Investment in Orme Live, Inc. (Details) - ORME - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Dec. 31, 2023 | Mar. 31, 2024 | |
Schedule Of Asset Acquisition [Line Items] | ||
Members contribution | $ 150 | |
Ownership interest | 30% | 30% |
Proportional share of the operating results | $ 20 |
Investments in Unconsolidated_6
Investments in Unconsolidated Affiliates and Variable Interest Entities - Longaberger Licensing, LLC VIE (Details) - Longaberger Licensing, LLC - Variable Interest Entity, Primary Beneficiary | 3 Months Ended |
Mar. 31, 2024 | |
Schedule Of Asset Acquisition [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 50% |
Hilco Global | |
Schedule Of Asset Acquisition [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 50% |
Trademarks and Other Intangib_3
Trademarks and Other Intangibles - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Trademarks and Other Intangibles [Abstract] | ||
Amortization expense for intangible assets | $ 1,530 | $ 1,540 |
Trademarks and Other Intangib_4
Trademarks and Other Intangibles - Schedule of Trademarks and Other Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Trademarks and Other Intangibles | ||
Gross Carrying Amount | $ 69,309 | $ 69,309 |
Accumulated Amortization | 29,323 | $ 27,789 |
Total | $ 39,986 | |
Trademarks (finite-lived) | ||
Trademarks and Other Intangibles | ||
Weighted Average Amortization Period | 15 years | 15 years |
Gross Carrying Amount | $ 68,880 | $ 68,880 |
Accumulated Amortization | 28,950 | 27,431 |
Total | $ 39,930 | $ 41,449 |
Copyrights and other intellectual property | ||
Trademarks and Other Intangibles | ||
Weighted Average Amortization Period | 8 years | 8 years |
Gross Carrying Amount | $ 429 | $ 429 |
Accumulated Amortization | 373 | 358 |
Total | $ 56 | $ 71 |
Significant Contracts - Qurate
Significant Contracts - Qurate Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Product Information [Line Items] | |||
Net revenue | $ 2,184 | $ 6,050 | |
Accounts receivable | 3,603 | $ 3,454 | |
Net licensing revenue | |||
Product Information [Line Items] | |||
Net revenue | $ 2,184 | $ 2,222 | |
Sales [Member] | Customer Concentration Risk [Member] | Qurate | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 59% | 25% | |
Sales [Member] | Customer Concentration Risk [Member] | Qurate | Net licensing revenue | |||
Product Information [Line Items] | |||
Net revenue | $ 1,610 | $ 1,520 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Qurate | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 37% | 43% | |
Accounts receivable | $ 1,300 | $ 1,500 |
Significant Contracts - Halson
Significant Contracts - Halson Master License (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
May 15, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Mar. 19, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | |||||
Purchaseable stock | 23,452,117 | 19,795,053 | |||
Deferred revenue, current | $ 889 | $ 889 | |||
Deferred revenue, long-term liability | 3,333 | 3,556 | |||
Licensing revenue | 2,184 | $ 6,050 | |||
Contra-revenue related to warrants granted to licensee | $ 10 | ||||
Sales [Member] | Customer Concentration Risk [Member] | Halston License | |||||
Subsequent Event [Line Items] | |||||
Concentration risk, percentage | 30% | ||||
Warrants | |||||
Subsequent Event [Line Items] | |||||
Warrant term | 4 years 6 months | ||||
Purchaseable stock | 182,952 | ||||
Warrants outstanding, exercise price (in dollars per share) | $ 0.8125 | ||||
Net licensing revenue | |||||
Subsequent Event [Line Items] | |||||
Licensing revenue | $ 2,184 | $ 2,222 | |||
Halston License | |||||
Subsequent Event [Line Items] | |||||
Additional royalty payable term | 20 years | ||||
Total purchase price | $ 5,000 | ||||
Deferred revenue | 4,200 | 4,400 | |||
Deferred revenue, current | 900 | 900 | |||
Deferred revenue, long-term liability | $ 3,300 | $ 3,500 | |||
Recognition period of deferred revenue | 4 years 1 month 17 days | ||||
Licensing revenue | $ 600 | ||||
Halston License | Minimum | |||||
Subsequent Event [Line Items] | |||||
Royalty payable term | 5 years | ||||
Halston License | Maximum | |||||
Subsequent Event [Line Items] | |||||
Royalty payable term | 25 years |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Feb. 29, 2024 | Jan. 26, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | ||||
Lease expiration date | Oct. 30, 2027 | |||
Cash payments for operating lease expense | $ 0.4 | $ 0.4 | ||
Weighted average discount rate | 6.25% | |||
Weighted average remaining lease term for operating leases | 3 years 6 months 29 days | |||
1333 Broadway | ||||
Lessee, Lease, Description [Line Items] | ||||
Annual fixed rent amount | $ 1.3 | |||
Annual fixed sublease rent amount | $ 0.8 | |||
1333 Broadway | Right-of-use assets | ||||
Lessee, Lease, Description [Line Items] | ||||
Non-cash impairment charge | $ 1.9 | |||
1333 Broadway | Leasehold improvements | ||||
Lessee, Lease, Description [Line Items] | ||||
Non-cash impairment charge | 0.4 | |||
530 Seventh Avenue | ||||
Lessee, Lease, Description [Line Items] | ||||
Annual fixed rent amount | $ 0.5 | |||
Selling, general and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 0.2 | $ 0.4 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
2024 (April 1 through December 31) | $ 1,164 | |
2025 | 1,552 | |
2026 | 1,552 | |
2027 | 1,294 | |
Total lease payments | 5,562 | |
Less: Discount | 590 | |
Present value of lease liabilities | 4,972 | |
Current portion of lease liabilities | 1,278 | $ 1,258 |
Non-current portion of lease liabilities | $ 3,694 | $ 4,021 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | ||
Oct. 19, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Debt | |||
Term loan debt | $ 5,000,000 | $ 5,000,000 | |
Unamortized deferred finance costs related to term loan debt | 253,000 | $ 279,000 | |
Interest expense | $ 146,000 | ||
Effective interest rate (as percentage) | 11.60% | ||
Swap contract with IDB | |||
Debt | |||
Derivative, fixed interest rate | 9.46% | ||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Swap contract with IDB | IDB | |||
Debt | |||
Derivative, basis spread on variable rate | 4.25% | ||
New Loan Agreement | |||
Debt | |||
Term loan debt | $ 5,000,000 | $ 5,000,000 | |
Unamortized deferred finance costs related to term loan debt | 300,000 | ||
Quarterly installment amount | $ 250,000 | ||
New Loan Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt | |||
Stated interest rate (as percentage) | 4.25% |
Debt - Net Carrying Amount of D
Debt - Net Carrying Amount of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Term loan debt | $ 5,000 | $ 5,000 |
Unamortized deferred finance costs related to term loan debt | (253) | (279) |
Total | 4,747 | 4,721 |
Current portion of debt | 1,000 | 750 |
Long-term debt | $ 3,747 | $ 3,971 |
Debt - Xcel Term Loan Remaining
Debt - Xcel Term Loan Remaining Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Oct. 19, 2023 |
Debt | |||
Total | $ 5,000 | $ 5,000 | |
New Loan Agreement | |||
Debt | |||
2024 (April 1 through December 31) | 750 | ||
2025 | 1,000 | ||
2026 | 1,000 | ||
2027 | 1,000 | ||
2028 | 1,250 | ||
Total | $ 5,000 | $ 5,000 |
Stockholders' Equity - Public O
Stockholders' Equity - Public Offering and Private Placement Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Mar. 19, 2024 | Mar. 15, 2024 | Mar. 14, 2024 | Mar. 31, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
Class of Stock [Line Items] | ||||||
Purchaseable stock | 23,452,117 | 23,452,117 | 19,795,053 | |||
Common stock issued | 23,452,117 | 23,452,117 | 19,795,053 | |||
Proceeds from public offering and private placement transactions, net of transaction costs | $ 1,900 | $ 1,902 | ||||
Warrants | ||||||
Class of Stock [Line Items] | ||||||
Purchaseable stock | 182,952 | |||||
Warrants outstanding, exercise price (in dollars per share) | $ 0.8125 | |||||
Warrant term | 4 years 6 months | |||||
Public Offering and Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 3,579,064 | |||||
Proceeds from public offering and private placement transactions, net of transaction costs | $ 1,900 | $ 1,902 | ||||
Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Purchaseable stock | 3,284,422 | 3,284,422 | ||||
Common stock price | $ 0.65 | $ 0.65 | ||||
Net proceeds from the sale of shares | $ 1,700 | |||||
Public Offering | Chief Executive Officer | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 146,250 | |||||
Public Offering | Director | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 146,250 | |||||
Public Offering | Executive Vice President | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 32,500 | |||||
Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Common stock price | $ 0.98 | |||||
Net proceeds from the sale of private placement shares | $ 300 | |||||
Private Placement | Agreements | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 294,642 | |||||
Private Placement | Chief Executive Officer | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 132,589 | |||||
Private Placement | Director | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 132,589 | |||||
Private Placement | Executive Vice President | ||||||
Class of Stock [Line Items] | ||||||
Common stock issued | 29,464 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) | Mar. 31, 2024 shares |
Stockholders' Equity | |
Shares of common stock reserved for issuance (in shares) | 8,031,046 |
2011 Equity Incentive Plan | Unexercised Stock Options | |
Stockholders' Equity | |
Shares of common stock reserved for issuance (in shares) | 4,511,755 |
2021 Equity Incentive Plan | |
Stockholders' Equity | |
Number of common stock eligible for issuance | 4,000,000 |
Shares are granted available for issuance (in shares) | 3,025,941 |
Shares of common stock reserved for issuance (in shares) | 3,025,941 |
2021 Equity Incentive Plan | Unexercised Stock Options | |
Stockholders' Equity | |
Shares of common stock reserved for issuance (in shares) | 493,350 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | ||
Compensation expense | $ 130 | $ 60 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Other disclosures | |||
Compensation expense | $ 130,000 | $ 60,000 | |
Employee Stock Option [Member] | |||
Number of Options | |||
Outstanding, beginning balance (in shares) | 5,148,540 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | 0 | ||
Expired/Forfeited (in shares) | (259,500) | ||
Outstanding, ending balance (in shares) | 4,889,040 | 5,148,540 | |
Exercisable (in shares) | 1,139,040 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 2.03 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Expired/Forfeited (in dollars per share) | 4.21 | ||
Outstanding, ending balance (in dollars per share) | 1.91 | $ 2.03 | |
Exercisable (in dollars per share) | $ 2.58 | ||
Other disclosures | |||
Outstanding Weighted Average Remaining Contractual Life (in Years) | 4 years 2 months 26 days | 4 years 3 months 3 days | |
Exercisable Weighted Average Remaining Contractual Life (in Years) | 1 year 9 months 10 days | ||
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 | |
Aggregate Intrinsic Value, Exercisable | 0 | ||
Compensation expense | 20,000 | $ 30,000 | |
Unrecognized compensation expense | $ 50,000 | ||
Weighted average period of recognition | 11 months 19 days |
Stockholders' Equity - Non-Vest
Stockholders' Equity - Non-Vested Options (Details) - Employee Stock Option [Member] | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Options | |
Beginning Balance (in shares) | shares | 3,750,000 |
Ending Balance (in shares) | shares | 3,750,000 |
Weighted Average Grant Date Fair Value | |
Beginning Balance (in dollars per share) | $ / shares | $ 0.05 |
Ending Balance (in dollars per share) | $ / shares | $ 0.05 |
Stockholders' Equity - Stock Aw
Stockholders' Equity - Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Jan. 12, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Other disclosures | |||
Compensation expense | $ 130 | $ 60 | |
Consultant | |||
Number of Other than Options | |||
Granted (in shares) | 78,000 | ||
Restricted Stock | |||
Number of Other than Options | |||
Outstanding, beginning balance (in shares) | 333,333 | ||
Granted (in shares) | 78,000 | ||
Vested (in shares) | (78,000) | ||
Expired/Forfeited (in shares) | 0 | ||
Outstanding, ending balance (in shares) | 333,333 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 3.69 | ||
Granted (in dollars per share) | 1.25 | ||
Vested (in dollars per share) | 1.25 | ||
Expired/Forfeited (in dollars per share) | 0 | ||
Outstanding, ending balance (in dollars per share) | $ 3.69 | ||
Other disclosures | |||
Unrecognized compensation expense | $ 40 | ||
Weighted average period of recognition | 11 months 15 days | ||
Common Stock | |||
Other disclosures | |||
Compensation expense | $ 110 | $ 30 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Stockholders' Equity | ||
Common stock, shares outstanding (in shares) | 23,452,117 | 19,795,053 |
Common stock, shares issued (in shares) | 23,452,117 | 19,795,053 |
Restricted Stock | ||
Stockholders' Equity | ||
Common stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares issued (in shares) | 0 | 0 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
May 15, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Other disclosures | ||||
Compensation expense | $ 130,000 | $ 60,000 | ||
Purchaseable stock | 23,452,117 | 19,795,053 | ||
Contra-revenue related to warrants granted to licensee | $ 10,000 | |||
Warrants | ||||
Number of Other than Options | ||||
Outstanding and exercisable, beginning balance (in shares) | 1,116,065 | |||
Issued (in shares) | 182,952 | |||
Exercised (in shares) | 0 | |||
Expired/Forfeited (in shares) | 0 | |||
Outstanding, ending balance (in shares) | 1,299,017 | 1,116,065 | ||
Exercisable (in shares) | 116,065 | |||
Weighted Average Exercise Price | ||||
Outstanding and exercisable, beginning balance (in dollars per share) | $ 1.67 | |||
Issued (in dollars per share) | 0.81 | |||
Exercised (in dollars per share) | 0 | |||
Expired/Forfeited (in dollars per share) | 0 | |||
Outstanding, ending balance (in dollars per share) | 1.55 | $ 1.67 | ||
Exercisable, ending balance (in dollars per share) | $ 3.15 | |||
Weighted Average Remaining Contractual Life (in Years), Outstanding | 7 years 9 months | 8 years 5 months 15 days | ||
Weighted Average Contractual Life (in Years), Exercisable | 3 months 18 days | |||
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 | ||
Aggregate Intrinsic Value, Exercisable | 0 | |||
Other disclosures | ||||
Compensation expense | $ 0 | $ 0 | ||
Warrants | Halston License | ||||
Other disclosures | ||||
Warrant term | 10 years | |||
Purchaseable stock | 1,000,000 | |||
Warrants outstanding, exercise price (in dollars per share) | $ 1.50 | |||
Contra-revenue related to warrants granted to licensee | $ 10,000 | |||
Number of shares vested | 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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings (Loss) Per Share [Abstract] | ||
Net loss attributable to Xcel Brands, Inc. stockholders | $ (6,294) | $ (5,643) |
Basic weighted average number of shares outstanding | 20,374,920 | 19,633,194 |
Diluted weighted average number of shares outstanding | 20,374,920 | 19,633,194 |
Basic net loss per share | $ (0.31) | $ (0.29) |
Diluted net loss per share | $ (0.31) | $ (0.29) |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Anti-dilutive Securities Excluded (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities | 6,188,057 | 5,484,845 |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities | 4,889,040 | 5,368,780 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities | 1,299,017 | 116,065 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0% | 0% |
Income tax (benefit) provision | $ 0 | $ 0 |
Related Party Transactions - IM
Related Party Transactions - IM Topco, LLC & License Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | May 31, 2022 | |
Asset Purchase Agreement | ||||
Payments for Royalties | $ 0 | |||
Accrued Royalties | 375,000 | |||
IM Topco [Member] | Services Agreement | ||||
Asset Purchase Agreement | ||||
Due from related party | $ 300,000 | |||
Reduction in service fees | $ 600,000 | |||
Revenue from services provided | $ 37,500 | $ 75,000 | ||
IM Topco [Member] | License Agreement | ||||
Asset Purchase Agreement | ||||
Royalty guarantees | $ 60,000 | $ 400,000 | ||
Additional royalty payments | $ 450,000 |
Related Party Transactions - Fi
Related Party Transactions - Financing Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 14, 2024 | Mar. 31, 2024 | Mar. 19, 2024 | Mar. 15, 2024 | Dec. 31, 2023 |
Asset Purchase Agreement | |||||
Purchaseable stock | 23,452,117 | 19,795,053 | |||
Common stock issued | 23,452,117 | 19,795,053 | |||
Public Offering and Private Placement | |||||
Asset Purchase Agreement | |||||
Common stock issued | 3,579,064 | ||||
Public Offering | |||||
Asset Purchase Agreement | |||||
Purchaseable stock | 3,284,422 | 3,284,422 | |||
Common stock price | $ 0.65 | $ 0.65 | |||
Share price | $ 0.65 | ||||
Public Offering | Chief Executive Officer | |||||
Asset Purchase Agreement | |||||
Common stock issued | 146,250 | ||||
Public Offering | Director | |||||
Asset Purchase Agreement | |||||
Common stock issued | 146,250 | ||||
Public Offering | Executive Vice President [Member] | |||||
Asset Purchase Agreement | |||||
Common stock issued | 32,500 | ||||
Private Placement | |||||
Asset Purchase Agreement | |||||
Common stock price | $ 0.98 | ||||
Net proceeds from the sale of private placement shares | $ 0.3 | ||||
Private Placement | Agreements [Member] | |||||
Asset Purchase Agreement | |||||
Common stock issued | 294,642 | ||||
Private Placement | Chief Executive Officer | |||||
Asset Purchase Agreement | |||||
Common stock issued | 132,589 | ||||
Private Placement | Director | |||||
Asset Purchase Agreement | |||||
Common stock issued | 132,589 | ||||
Private Placement | Executive Vice President [Member] | |||||
Asset Purchase Agreement | |||||
Common stock issued | 29,464 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||||
Feb. 16, 2024 USD ($) | May 31, 2022 USD ($) item | Apr. 01, 2021 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies | ||||||
Lease expiration date | Oct. 30, 2027 | |||||
Contingent obligation | $ 5,432,000 | $ 5,432,000 | ||||
Additional consideration is payable to the seller | $ 963,642 | |||||
Earn out payment | $ 241,000 | |||||
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 | |||||
Isaac Mizrahi sale transaction with IM Topco | Disposed of by Sale | Maximum | ||||||
Commitments and Contingencies | ||||||
Royalty guarantees | $ 13,300,000 | |||||
Adjustments to purchase price payable | $ 16,000,000 | |||||
Lori Goldstein Brand | ||||||
Commitments and Contingencies | ||||||
Contingent consideration | $ 12,500,000 | |||||
Contingent obligation | 5,400,000 | |||||
Royalties earned | 6 years | |||||
Contingent obligation (Lori Goldstein Earn-Out) | $ 6,600,000 | $ 300,000 | 200,000 | |||
Additional consideration is payable to the seller | $ 700,000 | $ 1,000,000 | $ 200,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 12, 2024 | May 31, 2022 | Apr. 30, 2024 |
Business Venture Agreement | |||
Subsequent Event [Line Items] | |||
Net cash flow distributable to members (in percent) | 100% | ||
Net cash flow distributable to members | $ 1,316,200 | ||
WHP | Business Venture Agreement | |||
Subsequent Event [Line Items] | |||
Net cash flow distributable to members (in percent) | 100% | ||
Net cash flow distributable to members | $ 8,852,000 | ||
Subsequent Events | IM Topco, LLC | |||
Subsequent Event [Line Items] | |||
Ownership interest | 30% | ||
Subsequent Events | IM Topco, LLC | If Royalties Receivable Less Than Specified Amount | |||
Subsequent Event [Line Items] | |||
Ownership interest | 17.50% | ||
Subsequent Events | IM Topco, LLC | Twelve-month period ending March 31, 2025 | |||
Subsequent Event [Line Items] | |||
Threshold royalties below which the equity interest would be transferable | $ 13,500,000 | ||
Subsequent Events | IM Topco, LLC | Year ending December 31, 2025 | |||
Subsequent Event [Line Items] | |||
Threshold royalties below which the equity interest would be transferable | $ 18,000,000 | ||
Subsequent Events | IM Topco, LLC | WHP | |||
Subsequent Event [Line Items] | |||
Ownership interest | 70% | ||
Equity interests transferred | $ 100,000 | ||
Subsequent Events | IM Topco, LLC | WHP | Business Venture Agreement | |||
Subsequent Event [Line Items] | |||
Net cash flow distributable to members (in percent) | 50% | ||
Net cash flow distributable to members | $ 1,000,000 | ||
Subsequent Events | IM Topco, LLC | WHP | If Royalties Receivable Less Than Specified Amount | |||
Subsequent Event [Line Items] | |||
Ownership equity transferable | 12.50% | ||
Ownership interest | 82.50% | ||
Certain payments owed | $ 375,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (6,294) | $ (5,643) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |