0001558370-20-013840 | 10-Q | XBRL Viewer

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Debt - Xcel Term Loan Remaining Principal Payments (Details) - Xcel Term Loan - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt
2020	$ 750
2021	2,800
2022	8,950
2023	5,000
Total	$ 17,500	$ 19,000

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash and cash equivalents	$ 4,783	$ 4,641
Accounts receivable, net of allowances of $1,163 and $155, respectively	8,188	10,622
Inventory	723	899
Prepaid expenses and other current assets	1,426	1,404
Total current assets	15,120	17,566
Property and equipment, net	3,604	3,666
Operating lease right-of-use assets	9,019	9,250
Trademarks and other intangibles, net	107,675	111,095
Restricted cash	1,109	1,109
Other assets	297	505
Total non-current assets	121,704	125,625
Total Assets	136,824	143,191
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	2,908	4,391
Accrued payroll	618	1,444
Current portion of operating lease obligation	1,917	1,752
Current portion of long-term debt	2,850	2,250
Total current liabilities	8,293	9,837
Long-Term Liabilities:
Long-term portion of operating lease obligation	9,101	9,773
Long-term debt, less current portion	14,523	16,571
Contingent obligation	900	900
Deferred tax liabilities, net	7,165	7,434
Other long-term liabilities	224	224
Total long-term liabilities	31,913	34,902
Total Liabilities	40,206	44,739
Commitments and Contingencies
Equity:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $.001 par value, 50,000,000 shares authorized, and 19,231,040 and 18,866,417 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	19	19
Paid-in capital	102,236	101,736
Accumulated deficit	(6,198)	(3,659)
Total Xcel Brands, Inc. stockholders' equity	96,057	98,096
Noncontrolling interest	561	356
Total Equity	96,618	98,452
Total Liabilities and Equity	$ 136,824	$ 143,191

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Paid-In Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Noncontrolling Interest [Member]	Total
Balances at Dec. 31, 2018	$ 18	$ 100,097	$ (233)		$ 99,882
Balances (in shares) at Dec. 31, 2018	18,138,616
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with the acquisition of Halston Heritage (in shares)	777,778
Issuance of common stock in connection with the acquisition of Halston Heritage	$ 1	1,057			1,058
Compensation expense in connection with stock options and restricted stock		347			347
Net (loss) income			127		127
Balances at Mar. 31, 2019	$ 19	101,501	(106)		101,414
Balances (in shares) at Mar. 31, 2019	18,916,394
Balances at Dec. 31, 2018	$ 18	100,097	(233)		99,882
Balances (in shares) at Dec. 31, 2018	18,138,616
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income					1,884
Balances at Sep. 30, 2019	$ 19	101,739	1,651		103,409
Balances (in shares) at Sep. 30, 2019	18,958,247
Balances at Mar. 31, 2019	$ 19	101,501	(106)		101,414
Balances (in shares) at Mar. 31, 2019	18,916,394
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense in connection with stock options and restricted stock		135			135
Shares issued to employees in connection with restricted stock grants (in shares)	60,000
Net (loss) income			1,852		1,852
Balances at Jun. 30, 2019	$ 19	101,636	1,746		103,401
Balances (in shares) at Jun. 30, 2019	18,976,394
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense in connection with stock options and restricted stock		127			127
Shares repurchased from executives and employees in exchange for withholding taxes (in shares)	(18,147)
Shares repurchased from executives and employees in exchange for withholding taxes		(24)			(24)
Net (loss) income			(95)		(95)
Balances at Sep. 30, 2019	$ 19	101,739	1,651		103,409
Balances (in shares) at Sep. 30, 2019	18,958,247
Balances at Dec. 31, 2019	$ 19	101,736	(3,659)	$ 356	98,452
Balances (in shares) at Dec. 31, 2019	18,866,417
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense in connection with stock options and restricted stock		91			91
Shares issued to executive in connection with stock grants for bonus payments		220			220
Shares issued to executive in connection with stock grants for bonus payments (in shares)	336,700
Shares repurchased from executives and employees in exchange for withholding taxes (in shares)	(155,556)
Shares repurchased from executives and employees in exchange for withholding taxes		(102)			(102)
Net (loss) income			(805)	(33)	(838)
Balances at Mar. 31, 2020	$ 19	101,945	(4,464)	323	97,823
Balances (in shares) at Mar. 31, 2020	19,047,561
Balances at Dec. 31, 2019	$ 19	101,736	(3,659)	356	98,452
Balances (in shares) at Dec. 31, 2019	18,866,417
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income					(2,634)
Balances at Sep. 30, 2020	$ 19	102,236	(6,198)	561	96,618
Balances (in shares) at Sep. 30, 2020	19,231,040
Balances at Mar. 31, 2020	$ 19	101,945	(4,464)	323	97,823
Balances (in shares) at Mar. 31, 2020	19,047,561
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense in connection with stock options and restricted stock		55			55
Shares issued to employees in connection with stock grants (in shares)	270,728
Shares issued to employees in connection with stock grants		265			265
Shares repurchased from executives and employees in exchange for withholding taxes (in shares)	(87,249)
Shares repurchased from executives and employees in exchange for withholding taxes		(85)			(85)
Additional investment in Longaberger Licensing, LLC by non-controlling interest				300	300
Net (loss) income			(1,300)	(36)	(1,336)
Balances at Jun. 30, 2020	$ 19	102,180	(5,764)	587	97,022
Balances (in shares) at Jun. 30, 2020	19,231,040
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense in connection with stock options and restricted stock		56			56
Net (loss) income			(434)	(26)	(460)
Balances at Sep. 30, 2020	$ 19	$ 102,236	$ (6,198)	$ 561	$ 96,618
Balances (in shares) at Sep. 30, 2020	19,231,040

Trademarks and Other Intangibles

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Trademarks and Other Intangibles

2. Trademarks and Other Intangibles

Trademarks and other intangibles, net consist of the following:


	Weighted
	Average	September 30, 2020
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (indefinite-lived)	n/a	$	44,500	$	—	$	44,500
Trademarks (finite-lived)	15 years		34,613		6,291		28,322
Trademarks (finite-lived)	18 years		38,194		3,660		34,534
Other intellectual property	7 years		762		510		252
Copyrights and other intellectual property	10 years		190		123		67
Total		$	118,259	$	10,584	$	107,675


	Weighted
	Average	December 31, 2019
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (indefinite-lived)	n/a	$	62,900	$	—	$	62,900
Trademarks (finite-lived)	15 years		16,213		4,560		11,653
Trademarks (finite-lived)	18 years		38,194		2,067		36,127
Other intellectual property	7 years		762		428		334
Copyrights and other intellectual property	10 years		190		109		81
Total		$	118,259	$	7,164	$	111,095

Amortization expense for intangible assets was approximately $1.14 million for the three-month period ended September 30, 2020 (the "current quarter") and was approximately $0.83 million for the three-month period ended September 30, 2019 (the "prior year quarter"). Amortization expense for intangible assets was approximately $3.42 million for the nine-month period ended September 30, 2020 (the “current nine months”) and was approximately $2.43 million for the nine-month period ended September 30, 2019 (the “prior year nine months”).

Effective January 1, 2020, the Company determined that the Ripka Brand, inclusive of all its trademarks, has a finite life of 15 years, and is amortized on a straight-line basis accordingly. Prior to January 1, 2020, the Ripka Brand trademarks were considered indefinite-lived assets.

The trademarks related to the Isaac Mizrahi Brand have been determined to have indefinite useful lives and, accordingly, no amortization has been recorded for these assets.

Commitments and Contingencies (Details) - USD ($) $ in Millions		9 Months Ended
	Feb. 11, 2019	Sep. 30, 2020	Dec. 31, 2019
Halston Heritage Trademarks
Commitments and Contingencies
Contingent consideration	$ 6.0
Earn-out liability recorded		$ 0.9	$ 0.9
COVID19
Commitments and Contingencies
Additional allowance for doubtful accounts		$ 1.0

Earnings Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

9. Earnings Per Share

Basic earnings 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.


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Basic	19,231,040	18,975,265	19,078,453	18,839,424
Effect of exercise of warrants	—	—	—	725
Diluted	19,231,040	18,975,265	19,078,453	18,840,149

As a result of the net loss presented for the current quarter, prior year quarter, and current nine months, the Company calculated diluted earnings per share using basic weighted average shares outstanding for such period, 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		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Stock options and warrants	8,083,690	8,469,440	8,083,690	8,419,375

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Computation of Diluted Earnings Per Share


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Basic	19,231,040	18,975,265	19,078,453	18,839,424
Effect of exercise of warrants	—	—	—	725
Diluted	19,231,040	18,975,265	19,078,453	18,840,149

Anti-dilutive Securities Excluded from Computation of Earnings Per Share


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Stock options and warrants	8,083,690	8,469,440	8,083,690	8,419,375

Earnings Per Share - Dilutive Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share Basic And Diluted [Line Items]
Basic (in shares)	19,231,040	18,975,265	19,078,453	18,839,424
Diluted (in shares)	19,231,040	18,975,265	19,078,453	18,840,149
Warrant
Earnings Per Share Basic And Diluted [Line Items]
Effect of exercise of Warrants (in shares)	0	0	0	725

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020	7,222,625	$	3.33	5.82	$	—
Granted	481,250		1.43
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(200,000)		1.55
Outstanding at September 30, 2020, and expected to vest	7,503,875	$	3.26	5.06	$	—
Exercisable at September 30, 2020	3,067,125	$	4.92	1.45	$	—

Summary of Stock Option Activity for Non-Vested Options


		Weighted
		Average
	Number of	Grant Date
	Options	Fair Value
Balance at January 1, 2020	4,551,500	$	0.18
Granted	481,250		0.13
Vested	(413,500)		0.61
Forfeited or Canceled	(182,500)		0.29
Balance at September 30, 2020	4,436,750	$	0.13

Summary of Warrants Activity


				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
	Number of	Exercise		Life	Intrinsic
	Warrants	Price		(in Years)	Value
Outstanding and exercisable at January 1, 2020	579,815	$	4.63	2.32	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	—		—
Outstanding and exercisable at September 30, 2020	579,815	$	4.63	1.56	$	—

Summary of Restricted Stock Activity


		Weighted
	Number of	Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2020	1,230,623	$	4.33
Granted	607,428		0.80
Canceled	—		—
Vested	(1,057,218)		2.47
Expired/Forfeited	—		—
Outstanding at September 30, 2020	780,833	$	4.09

Income Tax (Details) - USD ($)		3 Months Ended		9 Months Ended
Income Tax (Details) - USD ($)	Mar. 27, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Effective income tax rate		25.00%	333.00%	10.00%	40.00%
Income tax (benefit) provision		$ (145,000)	$ 137,000	$ (269,000)	$ 1,280,000
Effect of vesting of restricted shares of common stock on effective tax rate		(26.00%)	291.00%	(5.00%)	4.00%
Effect of state taxes on effective tax rate		12.00%	8.00%	6.00%	9.00%
Effect of permanent differences on effective tax rate		18.00%	12.00%	(3.00%)	9.00%
Effect of potential federal net operating loss carryback due to the CARES Act on effective tax rate		3.00%
Operating loss carryback period	5 years
COVID19
Income tax (benefit) provision				$ (98,000)
Tax refund receivable		$ 203,000		$ 203,000

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies Contingent Obligation In connection with the February 11, 2019 purchase of the Halston Heritage Trademarks from HIP, the Company agreed to pay HIP additional consideration (the “Halston Heritage Earn-Out”) of up to an aggregate of $6.0 million, based on royalties earned through December 31, 2022. The Halston Heritage Earn-Out of $0.9 million is recorded as a long-term liability at September 30, 2020 and December 31, 2019 in the accompanying condensed consolidated balance sheets, based on the difference between the fair value of the acquired assets of the Halston Heritage Trademarks and the total consideration paid. In accordance with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity,” the Halston Heritage Earn-Out obligation is treated as a liability in the accompanying condensed consolidated balance sheets because of the variable number of shares payable under the agreement. Coronavirus Pandemic In March 2020, the World Health Organization declared the outbreak of a novel coronavirus disease (“COVID-19”) as a pandemic, which continues to spread throughout the U.S. COVID-19 is having an unprecedented impact on the U.S. economy as federal, state, and local governments react to this public health crisis. The impacts of the current COVID-19 pandemic are broad reaching and are having an impact on the Company’s licensing and wholesale businesses. The COVID-19 pandemic is impacting the Company’s supply chain as most of the Company’s products are manufactured in China, Thailand, and other places around the world affected by this event. Temporary factory closures and the pace of workers returning to work have impacted contract manufacturers’ ability to source certain raw materials and to produce finished goods in a timely manner. The outbreak is also impacting distribution and logistics providers' ability to operate in the normal course of business. Further, the pandemic has resulted in a sudden and continuing decrease in sales for many of the Company’s products, resulting in order cancellations, and a decrease in accounts receivable collections, as the Company recorded approximately $1 million of additional allowance for doubtful accounts for the nine months ended September 30, 2020 for retailers that have filed for bankruptcy. Due to the COVID-19 outbreak, there is significant uncertainty surrounding the potential impact on the Company’s future results of operations and cash flows. Continued impacts of the pandemic could materially adversely affect the Company’s near-term and long-term revenues, earnings, liquidity, and cash flows as the Company’s customers and/or licensees may request temporary relief, delay, or not make scheduled payments. Compliance with Listing Rules On August 6, 2020, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) notifying Xcel that the minimum bid price per share for its common stock fell below $1.00 for a period of 30 consecutive business days. Therefore, the Company did not meet the minimum bid price requirement set forth in the Nasdaq Listing Rules. The letter also states that pursuant to Nasdaq Listing Rules 5810(c)(3)(A), the Company will be provided 180 calendar days to regain compliance with the minimum bid price requirement, or until February 2, 2021. Xcel can regain compliance if, at any time during the Tolling Period or such 180-day period, the closing bid price of its common stock is at least $1.00 for a minimum period of 10 consecutive business days. If by February 2, 2021, the Company does not regain compliance with the Nasdaq Listing Rules, it may be eligible for additional time to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(ii). To qualify, Xcel would need to submit a transfer application and a $5,000 application fee. The Company would also need to provide written notice to Nasdaq of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. As part of its review process, the Nasdaq staff will make a determination of whether it believes the Company will be able to cure this deficiency. Should the Nasdaq staff conclude that Xcel will not be able to cure the deficiency, or should management determine not to submit a transfer application or make the required representation, Nasdaq will provide notice that the Company’s shares of common stock will be subject to delisting. If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that Xcel’s shares of common stock will be subject to delisting from the Nasdaq Global Select Market. At such time, the Company may appeal the delisting determination to a hearings panel. Management intends to monitor the Company’s common stock closing bid price between now and February 2, 2021, and will consider available options to resolve the Company’s noncompliance with the minimum bid price requirement, as may be necessary. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria.

Related Party Transactions (Details) - USD ($)		3 Months Ended		9 Months Ended
Related Party Transactions (Details) - USD ($)	Feb. 11, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Asset Purchase Agreement
Net revenue		$ 7,391,000	$ 10,932,000	$ 21,968,000	$ 30,371,000
Net sales revenue
Asset Purchase Agreement
Net revenue		$ 2,155,000	4,504,000	$ 6,590,000	9,277,000
Hilco Trading, LLC [Member] \| XCel Brands, Inc. [Member]
Asset Purchase Agreement
Ownership percentage		5.00%		5.00%
Halston Heritage
Asset Purchase Agreement
Cash included in aggregate purchase price	$ 8,400,000
Common stock included in aggregate purchase price (in shares)	777,778
Issuance of common stock in connection with Halston Heritage assets acquisition	$ 1,100,000
Aggregate contingent consideration	6,000,000
Minimum deduction from net royalties	$ 1,500,000
Maximum percentage of issued/issuable of earn-out shares	4.99%
Halston Heritage \| 50% of the first $10,000,000 of Excess Net Royalties
Asset Purchase Agreement
Applicable percentage	50.00%
Halston Heritage \| 20% of aggregate Excess Net Royalties greater than $10,000,000 and up to $15,000,000
Asset Purchase Agreement
Applicable percentage	20.00%
Halston Heritage \| 0% of aggregate Excess Net Royalties in excess of $15,000,000
Asset Purchase Agreement
Applicable percentage	0.00%
Maximum \| Halston Heritage \| 50% of the first $10,000,000 of Excess Net Royalties
Asset Purchase Agreement
Excess net royalties	$ 10,000,000
Maximum \| Halston Heritage \| 20% of aggregate Excess Net Royalties greater than $10,000,000 and up to $15,000,000
Asset Purchase Agreement
Excess net royalties	15,000,000
Minimum \| Halston Heritage \| 20% of aggregate Excess Net Royalties greater than $10,000,000 and up to $15,000,000
Asset Purchase Agreement
Excess net royalties	10,000,000
Minimum \| Halston Heritage \| 0% of aggregate Excess Net Royalties in excess of $15,000,000
Asset Purchase Agreement
Excess net royalties	$ 15,000,000
Wife Of Robert W. D'Loren
Asset Purchase Agreement
Period for which the related party has worked in company's ERP system				2 years
Compensation		$ 29,000	$ 42,000	$ 99,000	$ 125,000
Hilco Trading, LLC [Member]
Asset Purchase Agreement
Professional Fees		46,000
Hilco Trading, LLC [Member] \| Net sales revenue
Asset Purchase Agreement
Net revenue		$ 151,000
Hilco Trading, LLC [Member] \| Hilco Global [Member] \| Longaberger Licensing, LLC
Asset Purchase Agreement
Ownership percentage		50.00%		50.00%
House Of Halston LLC \| Former Director
Asset Purchase Agreement
Ownership Percentage in HOH		25.00%		25.00%

Government assistance	9 Months Ended
Government assistance	Sep. 30, 2020
Unusual or Infrequent Items, or Both [Abstract]
Government assistance	7.Government assistance Paycheck Protection Program (PPP) On April 20, 2020, the Company executed a promissory note (the “Promissory Note”) with Bank of America, N.A., which provides for an unsecured loan in the amount of $1.806 million, pursuant to the PPP under the CARES Act. The loan has a two-year term and bears interest at a fixed rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains events of default and other provisions customary for a loan of this type. The loan was funded on April 23, 2020. The PPP also provides that this loan may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act, and later amended by the Paycheck Protection Program Flexibility Act (the "Flexibility Act") signed into law on June 5, 2020. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. While management believes that it is probable that the loan will be forgiven in full, no definite assurance can be provided that forgiveness for any portion of the loan will be obtained. Management's determination that full forgiveness is probable is based on qualification under the Flexibility Act. Management evaluated the legal and contractual terms associated with the loan, and concluded that, although the legal form of the loan is debt, it represents in substance a government grant that is expected to be forgiven. Given the lack of definitive authoritative guidance under GAAP for accounting for government grants, the Company analogized to accounting guidance under International Accounting Standard 20, “Accounting for Government Grants and Disclosure of Government Assistance.” Under such guidance, once it is probable that the conditions attached to the assistance will be met, the earnings impact of government grants is recorded on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Accordingly, the Company recognized approximately $166,000 and $1,806,000 as a reduction to operating expenses in the current quarter and current nine months, respectively. No interest expense related to the loan has been recorded in the Company’s unaudited condensed consolidated financial statements. Economic Incentive Disaster Loan (EIDL) Concurrently with the PPP loan, in May 2020 the Company also received a $10,000 Economic Incentive Disaster Loan (EIDL) Advance through the U.S. Small Business Administration. The EIDL Advance represents a grant that does not have to be repaid, and as such, the Company has recognized $10,000 as a reduction to operating expenses in the current quarter and current nine months. In total, the Company recognized approximately $176,000 and $1,816,000 as a reduction to operating expenses in the current quarter and current nine months, respectively.

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Maturities of Lease Liabilities


($ in thousands)
Remainder of 2020	$	711
2021		2,544
2022		1,891
2023		1,711
2024		1,711
After 2024		4,886
Total lease payments		13,454
Less: Discount		2,436
Present value of lease liabilities		11,018
Current portion of lease liabilities		1,917
Non-current portion of lease liabilities	$	9,101

Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Note [Abstract]

Stockholders' Equity

8.Stockholders’ Equity

2011 Equity Incentive Plan

The Company’s 2011 Equity Incentive Plan, as amended and restated (the “Plan”), is designed and utilized to enable the Company to provide its employees, officers, directors, consultants, and others whose past, present, and/or potential contributions to the Company have been, are, or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company. A total of 13,000,000 shares of common stock are eligible for issuance under the Plan. The Plan provides for the grant of any or all of the following types of awards: stock options, restricted stock, deferred stock, stock appreciation rights, and other stock-based awards. The Plan is administered by the Company’s Board of Directors, or, at the Board’s discretion, a committee of the Board.

The Company accounts for stock-based compensation in accordance with 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.

The fair value of options and warrants is estimated on the date of grant using the Black-Scholes option pricing model. The valuation determined by the Black-Scholes option pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The risk-free rate is based on the U.S. Treasury rate for the expected life at the time of grant, volatility is based on the average long-term implied volatilities of peer companies, and expected life is based on the estimated average of the life of options and warrants using the simplified method. The Company utilizes the simplified method to determine the expected life of the options and warrants due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts.

Restricted stock awards are valued using the fair value of the Company’s stock at the date of grant.

The Company accounts for non-employee awards in accordance with ASU 2018‑07, “Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting.” Such awards are measured at the grant-date fair value of the equity instruments to be issued, and the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant.

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.

Forfeitures are accounted for as a reduction of compensation cost in the period when such forfeitures occur.

Stock Options

Options granted under the Plan expire at various times - either five, seven, or ten years from the date of grant, depending on the particular grant.

A summary of the Company’s stock options activity for the current nine 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, 2020	7,222,625	$	3.33	5.82	$	—
Granted	481,250		1.43
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(200,000)		1.55
Outstanding at September 30, 2020, and expected to vest	7,503,875	$	3.26	5.06	$	—
Exercisable at September 30, 2020	3,067,125	$	4.92	1.45	$	—

On January 1, 2020, the Company granted options to purchase 5,000 shares of stock to a board observer. The exercise price of the options is $4.00 per share, and 50% of the options vest on each of January 1, 2021 and January 1, 2022.

On January 31, 2020, the Company granted options to purchase 75,000 shares of stock to a consultant. The exercise price of the options is $1.57 per share, and all options vested immediately on the date of grant.

On February 28, 2020, the Company granted options to purchase 50,000 shares of common stock to an employee. The exercise price is $1.40 per share, and the vesting of such options is dependent upon the Company achieving certain 12-month sales targets through December 31, 2021.

On March 13, 2020, the Company granted options to purchase 50,000 shares of common stock to a certain key employee. The exercise price of the options is $5.50 per share, and all options vested immediately on the date of grant.

On March 31, 2020, the Company granted options to purchase 50,000 shares of common stock to an employee. The exercise price of the options is $0.61 per share, and one-third of the options shall vest on each of March 31, 2021, March 31, 2021, and March 31, 2022.

On April 1, 2020, the Company granted options to purchase an aggregate of 200,000 shares of commons stock to non-management directors. The exercise price of the options is $0.50 per share, and 50% of the options shall vest on each of April 1, 2021 and April 1, 2022.

On April 15, 2020, the Company granted options to purchase 13,500 shares of common stock to a consultant. The exercise price of the options is $3.00 per share. One-third of the options vested on June 30, 2020, and one-third of the options shall vest on each of September 30, 2020 and December 31, 2020.

On August 21, 2020, the Company granted options to purchase 22,750 shares of common stock to a consultant. The exercise price of the options is $1.00 per share, and all options shall vest on December 31, 2020.

On September 28, 2020, the Company granted options to purchase 15,000 shares of common stock to an employee. The exercise price of the options is $0.71 per share, and one-third of the options shall vest on each of September 28, 2021, September 28, 2022, and September 28, 2023.

Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $45,000 and $66,000, respectively. Compensation expense related to stock options for the current nine months and prior year nine months was approximately $158,000 and $382,000, respectively.

Total unrecognized compensation expense related to unvested stock options at September 30, 2020 amounts to approximately $204,000 and is expected to be recognized over a weighted average period of approximately 1.24 years.

A summary of the Company’s non-vested stock options activity for the current nine months is as follows:


		Weighted
		Average
	Number of	Grant Date
	Options	Fair Value
Balance at January 1, 2020	4,551,500	$	0.18
Granted	481,250		0.13
Vested	(413,500)		0.61
Forfeited or Canceled	(182,500)		0.29
Balance at September 30, 2020	4,436,750	$	0.13

Warrants

Warrants expire at various times - either five or ten years from the date of grant, depending on the particular grant.

A summary of the Company’s warrants activity for the current nine 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, 2020	579,815	$	4.63	2.32	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	—		—
Outstanding and exercisable at September 30, 2020	579,815	$	4.63	1.56	$	—

No compensation expense related to warrants was recognized in the current quarter, current nine months, prior year quarter, or prior year nine months.

Stock Awards

A summary of the Company’s restricted stock activity for the current nine months is as follows:


		Weighted
	Number of	Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2020	1,230,623	$	4.33
Granted	607,428		0.80
Canceled	—		—
Vested	(1,057,218)		2.47
Expired/Forfeited	—		—
Outstanding at September 30, 2020	780,833	$	4.09

On March 30, 2020, the Company issued 336,700 shares of stock to a member of senior management as payment for a performance bonus earned in 2019. These shares vested immediately. The Company recognized compensation expense of $220,000 in 2019 ($168,000 in the prior year quarter and prior year nine months) to accrue for this performance bonus.

On May 20, 2020, the Company issued an aggregate of 270,728 shares of stock to its employees. These shares vested immediately. The Company recognized approximately $265,000 of compensation expense in the current nine months related to this grant.

Compensation expense related to restricted stock grants for the current and prior year quarter was approximately $11,000 and $47,000, respectively. Compensation expense related to restricted stock grants for the current nine months and prior year nine months was approximately $44,000 and $213,000, respectively.

Total unrecognized compensation expense related to unvested restricted stock grants at June 30, 2020 amounts to approximately $21,000 and is expected to be recognized over a weighted average period of approximately 0.50 years.

The Company also recognized approximately $ (7,000) and $313,000 of compensation expense in the current quarter and current nine months related to certain senior management bonuses payable in stock in 2021.

Shares Available Under the Company’s 2011 Equity Incentive Plan

As of September 30, 2020, there were 1,254,920 shares of common stock available for issuance under the Plan.

Shares Reserved for Issuance

As of September 30, 2020, there were 9,338,610 shares of common stock reserved for issuance pursuant to unexercised warrants and stock options, or available for issuance under the Plan.

Dividends

The Company has not paid any dividends to date.

Stockholders' Equity - 2011 Equity Incentive Plan (Details) - 2011 Equity Incentive Plan	Sep. 30, 2020 shares
Stockholders' Equity
Number of common stock eligible for issuance	13,000,000
Shares of common stock available for issuance (in shares)	1,254,920
Shares of common stock reserved for issuance (in shares)	9,338,610

Debt - Xcel Term Loan Fixed Installments (Details) - Xcel Term Loan $ in Thousands	3 Months Ended
	Sep. 30, 2020 USD ($)
Debt
Repayment of loan as a percentage of Excess cash flow	50.00%
Minimum principal payment	$ 4,450
December 31, 2020
Debt
Quarterly installment payments on term loans	750
March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021
Debt
Quarterly installment payments on term loans	700
March 31, 2022, June 30, 2022, September 30, 2022, and December 31, 2022
Debt
Quarterly installment payments on term loans	1,125
March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023
Debt
Quarterly installment payments on term loans	$ 1,250

Stockholders' Equity - Non-Vested Options (Details)	9 Months Ended
Stockholders' Equity - Non-Vested Options (Details)	Sep. 30, 2020 $ / shares shares
Number of Options
Granted (in shares)	481,250
Employee Stock Option
Number of Options
Beginning Balance (in shares)	4,551,500
Granted (in shares)	481,250
Vested (in shares)	(413,500)
Forfeited or Canceled (in shares)	(182,500)
Ending Balance (in shares)	4,436,750
Weighted Average Grant Date Fair Value
Beginning Balance (in dollars per share) \| $ / shares	$ 0.18
Granted (in dollars per share) \| $ / shares	0.13
Vested (in dollars per share) \| $ / shares	0.61
Forfeited or Canceled (in dollars per share) \| $ / shares	0.29
Ending Balance (in dollars per share) \| $ / shares	$ 0.13

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 06, 2020
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Entity Registrant Name	XCel Brands, Inc.
Entity Filer Category	Non-accelerated Filer
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 Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,231,040
Amendment Flag	false
Entity Central Index Key	0001083220
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Remainder of 2020	$ 711
2021	2,544
2022	1,891
2023	1,711
2024	1,711
After 2024	4,886
Total lease payments	13,454
Less: Discount	2,436
Present value of lease liabilities	11,018
Current portion of operating lease obligation	1,917	$ 1,752
Non-current portion of lease liabilities	$ 9,101	$ 9,773

Trademarks and Other Intangibles (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Trademarks and Other Intangibles


	Weighted
	Average	September 30, 2020
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (indefinite-lived)	n/a	$	44,500	$	—	$	44,500
Trademarks (finite-lived)	15 years		34,613		6,291		28,322
Trademarks (finite-lived)	18 years		38,194		3,660		34,534
Other intellectual property	7 years		762		510		252
Copyrights and other intellectual property	10 years		190		123		67
Total		$	118,259	$	10,584	$	107,675


	Weighted
	Average	December 31, 2019
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (indefinite-lived)	n/a	$	62,900	$	—	$	62,900
Trademarks (finite-lived)	15 years		16,213		4,560		11,653
Trademarks (finite-lived)	18 years		38,194		2,067		36,127
Other intellectual property	7 years		762		428		334
Copyrights and other intellectual property	10 years		190		109		81
Total		$	118,259	$	7,164	$	111,095

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 1,163	$ 155
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)	19,231,040	18,866,417
Common stock, shares outstanding (in shares)	19,231,040	18,866,417

Nature of Operations, Background, and Basis of Presentation	9 Months Ended
	Sep. 30, 2020
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, 2019 (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, 2019, as filed with the SEC on April 14, 2020. The Company is a media and consumer products company engaged in the design, production, marketing, wholesale distribution, and direct-to-consumer sales of branded apparel, footwear, accessories, jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. The Company has developed a design, production, and supply chain capability driven by its proprietary integrated technology platform. Currently, the Company’s brand portfolio consists of the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), the Judith Ripka brands (the "Ripka Brand"), the Halston brands (the "Halston Brands"), the C Wonder brands (the "C Wonder Brand"), and other proprietary brands. The Company also manages the Longaberger brand (“the Longaberger Brand”) through its 50% ownership interest in Longaberger Licensing, LLC. The Company designs, produces, markets, and distributes products, and in certain cases, licenses its brands to third parties, and generates licensing fees. The Company and its licensees distribute through a ubiquitous-channel retail sales strategy, which includes distribution through interactive television, the internet, and traditional brick-and-mortar retail channels. Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update ("ASU") No. 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” effective January 1, 2020. This ASU adds, modifies, and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, “Fair Value Measurement.” The adoption of this new guidance did not have any impact on the Company’s results of operations, cash flows, and financial condition.

Government assistance - Economic Incentive Disaster Loan (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Grants recognized as a reduction to operating expenses		$ 176,000	$ 0	$ 1,816,000	$ 0
Economic Incentive Disaster Loan
Debt Instrument [Line Items]
Economic Incentive Disaster Loan	$ 10,000
Grants recognized as a reduction to operating expenses		$ 10,000		$ 10,000

Nature of Operations, Background, and Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2020
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	50.00%

Debt - Xcel Loan Narrative (Details)		3 Months Ended		9 Months Ended
Debt - Xcel Loan Narrative (Details)	Feb. 11, 2019 USD ($) loan	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Feb. 10, 2019 USD ($)
Debt
Loss on extinguishment of debt		$ 0	$ 0	$ 0	$ (189,000)
Interest expense		304,000	330,000	897,000	968,000
Xcel Term Loan
Debt
Face amount of loan						$ 14,500,000
Capacity available to convert to incremental term loans	$ 5,000,000
Maximum Prepayment Of Debt Amount	$ 750,000
Interest expense		$ 281,000	$ 317,000	$ 854,000	$ 903,000
Effective interest rate (as percentage)		6.60%	6.70%	6.60%	6.80%
Loan To Be Repaid As Percentage Of Excess Cash Flow Percent		50.00%
Xcel Term Loan A
Debt
Stated interest rate (as percentage)	5.10%
Xcel Term Loan B
Debt
Stated interest rate (as percentage)	6.25%
Second Amended And Restated Loan And Security Agreement
Debt
Minimum net worth required to meet loan covenant	$ 90,000,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan
Debt
Face amount of loan	$ 22,000,000
Number of term loans \| loan	2
Loss on extinguishment of debt			$ 200,000
Upfront fee for debt issuance	$ 90,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Through December 31, 2020
Debt
Minimum liquid assets to meet loan covenants	3,000,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Fiscal quarters ending March 31, 2021 through September 30, 2021
Debt
Minimum liquid assets to meet loan covenants	2,500,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Fiscal quarter ending December 31, 2021
Debt
Minimum liquid assets to meet loan covenants	3,000,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| After December 31 2021
Debt
Minimum liquid assets to meet loan covenants	5,000,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Twelve Month Fiscal Period Ending September 30 2020 [Member]
Debt
Minimum EBITDA to meet loan covenants	5,000,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Fiscal year ending December 31, 2020
Debt
Maximum capital expenditures required to meet loan covenants	1,600,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan \| Fiscal year beginning after December 31, 2020
Debt
Maximum capital expenditures required to meet loan covenants	700,000
Second Amended And Restated Loan And Security Agreement \| Additional Term Loan
Debt
Face amount of loan	7,500,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan A
Debt
Face amount of loan	7,300,000
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan B
Debt
Face amount of loan	$ 14,700,000
Revolving Credit Facility \| Xcel Term Loan \| Base Rate
Debt
Basis spread on variable rate	2.00%
Debt Termination Period, On Or Before Second Anniversary \| Xcel Term Loan A
Debt
Termination fee percentage	1.00%
Debt Termination Period, On Or Before Second Anniversary \| Xcel Term Loan B
Debt
Termination fee percentage	2.00%
Debt Termination Period, After Second Anniversary But Before Third Anniversary \| Xcel Term Loan A
Debt
Termination fee percentage	0.50%
Debt Termination Period, After Second Anniversary But Before Third Anniversary \| Xcel Term Loan B
Debt
Termination fee percentage	1.00%
Debt Termination Period, After Third Anniversary
Debt
Termination fee percentage	0.00%

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	11. Related Party Transactions Benjamin Malka Benjamin Malka was a director of the Company from June 2014 through September 2019. Mr. Malka is also a 25% equity holder of House of Halston LLC (“HOH”), and is the former Chief Executive Officer of HOH. HOH is the parent company of the H Company IP, LLC (“HIP”). On February 11, 2019, the Company and its wholly owned subsidiary, H Heritage Licensing, LLC, entered into an asset purchase agreement (the "Heritage Asset Purchase Agreement") with HIP and HOH, pursuant to which the Company acquired certain assets of HIP, including the "Halston," "Halston Heritage," and "Roy Frowick" trademarks (collectively, the "Halston Heritage Trademarks") and other intellectual property rights relating thereto. Pursuant to the Heritage Asset Purchase Agreement, at closing, the Company delivered in escrow for HIP or its designees (collectively, the “Sellers”) an aggregate of $8.4 million in cash and 777,778 shares of the Company’s common stock valued at $1.1 million (the “Xcel Shares”), subject to a voting agreement and a lock-up agreement relating to the Xcel Shares and a consent and waiver agreement each in form satisfactory to Xcel within three months from the date of the Heritage Asset Purchase Agreement. Such agreements were executed and delivered to Xcel, and the Xcel Shares were issued and delivered to the Sellers. In addition to the closing considerations, HIP is eligible to earn up to an aggregate of $6.0 million (the “Earn-Out Value”) through December 31, 2022 based on Excess Net Royalties. “Excess Net Royalties” during any calendar year for 2019 through 2022 (each, a “Royalty Target Year”) is equal to (a) the positive amount, if any, of the Net Royalties as calculated for such Royalty Target Year, less the greater of (i) One Million Five Hundred Thousand Dollars ($1.5 million), or (ii) the maximum Net Royalties for any previous Royalty Target Year. “Applicable Percentage” means (a) 50% of the first $10.0 million of Excess Net Royalties during the Earn-Out Period, (b) 20% of aggregate Excess Net Royalties during the Earn-Out Period greater than $10.0 million and up to $15.0 million and (c) 0% of aggregate Excess Net Royalties during the Earn-Out Period in excess of $15.0 million. The Earn-Out Consideration shall be payable in common stock of Xcel (the “Earn-Out Shares”); provided, however, that if the number of Earn-Out Shares, when combined with the number of Xcel Shares issued at the Closing Date, will exceed 4.99% of the aggregate number of shares of Xcel common stock outstanding as of the Closing Date (calculated in accordance with Nasdaq Rule 5635(a)) (the “Xcel Share Limit”), then Xcel may, in its sole and unfettered discretion, elect to (x) pay cash for the Earn-Out Value attributable to the Earn-Out Shares that would exceed the Xcel Share Limit; (y) solicit stockholder approval for the issuance of Earn-Out Shares in excess of the Xcel Share Limit in accordance with Nasdaq Rule 5635(a)(2) and, if such stockholder approval is obtained, issue such Earn-Out Shares to HIP; or (z) solicit stockholder approval for the issuance of Shares in excess of the Xcel Share Limit in accordance with Nasdaq Rule 5635(a)(2) and, if such stockholder approval is obtained, pay the applicable Earn-Out Consideration with a combination of cash and Earn-Out Shares. Hilco Trading, LLC Hilco Trading, LLC ("Hilco") directly and indirectly owns greater than 5% of the Company's common stock, and its affiliate Hilco Global owns 50% of the equity of Longaberger Licensing, LLC. During the current quarter, the Company sold certain apparel products to an affiliate of Hilco, and recognized $151,000 of revenue from this transaction. Additionally, during the current quarter, the Company sold certain intangible assets of Longaberger Licensing, LLC to a third party; an affiliate of Hilco earned and was paid a commission of $46,000 related to the sale of these assets. Robert W. D’Loren Jennifer D’Loren is the wife of Robert W. D’Loren, the Company’s Chief Executive Officer and Chairman of the Board, and is employed by the Company. Mrs. D’Loren brings vast experience in project management and implementation of financial IT solutions. During the past two years, Mrs. D’Loren has worked on the implementation of the Company’s ERP system. Mrs. D’Loren received compensation of $29,000 and $42,000 for the current quarter and prior year quarter, respectively. Mrs. D’Loren received compensation of $99,000 and $125,000 for the current nine months and prior year nine months, respectively.

Trademarks and Other Intangibles - Schedule of Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Trademarks and Other Intangibles
Gross Carrying Amount, Total	$ 118,259	$ 118,259
Accumulated Amortization	10,584	7,164
Net Carrying Amount, Total	$ 107,675	$ 111,095
Trademarks
Trademarks and Other Intangibles
Weighted Average Amortization Period	15 years	15 years
Gross Carrying Amount (definite-lived)	$ 34,613	$ 16,213
Accumulated Amortization	6,291	4,560
Net Carrying Amount	$ 28,322	$ 11,653
Other intellectual property
Trademarks and Other Intangibles
Weighted Average Amortization Period	7 years	7 years
Gross Carrying Amount (definite-lived)	$ 762	$ 762
Accumulated Amortization	510	428
Net Carrying Amount	$ 252	$ 334
Copyrights and other intellectual property
Trademarks and Other Intangibles
Weighted Average Amortization Period	10 years	10 years
Gross Carrying Amount (definite-lived)	$ 190	$ 190
Accumulated Amortization	123	109
Net Carrying Amount	67	81
Trademarks
Trademarks and Other Intangibles
Gross Carrying Amount (indefinite-lived)	$ 44,500	$ 62,900
Halston Heritage \| Trademarks
Trademarks and Other Intangibles
Weighted Average Amortization Period	18 years	18 years
Gross Carrying Amount (definite-lived)	$ 38,194	$ 38,194
Accumulated Amortization	3,660	2,067
Net Carrying Amount	$ 34,534	$ 36,127

Income Tax	9 Months Ended
Income Tax	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Tax	10. Income Tax The effective income tax rate for the current quarter and the prior year quarter was approximately 25% and 333%, respectively, resulting in an income tax (benefit) provision of $(0.15) million and $0.14 million, respectively. The effective income tax rate for the current nine months and prior year nine months was approximately 10% and 40%, respectively, resulting in an income tax (benefit) provision of $(0.27) million and $1.28 million, respectively. For the current quarter, the federal statutory rate differed from the effective tax rate primarily due to state taxes and recurring permanent differences, which increased the effective tax rate by approximately 12% and 18%, respectively, partially offset by the tax impact from the vesting of restricted shares of common stock, which was treated as a discrete item for tax purposes and decreased the effective rate by approximately 26%. The effective tax rate was also affected by the tax impact of a potential federal net operating loss carryback due to the CARES Act; this item increased the effective rate by approximately 3%. For the prior year quarter, the effective tax rate was primarily attributable to the tax impact from the vesting of restricted shares of common stock, which was treated as a discrete item for tax purposes; this item increased the effective rate by approximately 291%. The federal statutory rate also differed from the effective tax rate due to state taxes and recurring permanent differences, which increased the effective tax rate by approximately 8% and 12%, respectively. For the current nine months, the federal statutory rate differed from the effective tax rate primarily due to the tax impact from the vesting of restricted shares of common stock, which was treated as a discrete item for tax purposes and decreased the effect rate by approximately 5%. The effective rate was also attributable to state taxes and recurring permanent differences, which increased the effective tax rate by approximately 6% and decreased the effective tax rate by approximately 3%, respectively. For the prior year nine months, the federal statutory rate differed from the effective tax rate primarily due to state taxes and recurring permanent differences, which increased the effective tax rate by approximately 9% and 9%, respectively. The effective tax rate was also partially attributable to the tax impact from the vesting of restricted shares of common stock, which was treated as a discrete item for tax purposes; this item increased the effective rate by approximately 4%. On March 27, 2020, the CARES Act was enacted and signed into law. The CARES Act includes certain provisions impacting businesses’ income taxes related to 2018, 2019, and 2020. Some of the significant tax law changes are to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five-year carryback of net operating losses for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, provide for the acceleration of depreciation expense from 2018 and forward on qualified improvement property, and accelerate the ability to claim refunds of AMT credit carryforwards. The Company is required to recognize the effect of tax law changes on its financial statements in the period in which the law was enacted. At this time, the Company may avail itself of the ability to carry back net operating losses generated in 2018 and 2019 tax years for five years, which would result in an estimated income statement benefit of $98,000 and tax refund receivable of $203,000.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Net Carrying Amount of Debt


	September 30,		December 31,
($ in thousands)	2020		2019
Xcel Term Loan	$	17,500	$	19,000
Unamortized deferred finance costs related to term loan		(127)		(179)
Total		17,373		18,821
Current portion of long-term debt		2,850		2,250
Long-term debt	$	14,523	$	16,571

Maturities of Long-term Debt

The remaining principal balance of the Xcel Term Loan, as amended, outstanding at September 30, 2020 is payable in fixed installments as set forth in the following table, plus the variable payments as described below:


($ in thousands)
Installment Payment Dates	Amount
December 31, 2020	$	750

March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021	$	700

March 31, 2022, June 30, 2022, September 30, 2022, and December 31, 2022	$	1,125

March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023	$	1,250

In addition to the fixed installments outlined above, commencing with the fiscal quarter ended March 31, 2021, the Company is required to repay a portion of the Xcel Term Loan in an amount equal to 50% of the excess cash flow for the fiscal quarter, provided that no early termination fee shall be payable with respect to any such payment. Excess cash flow means, for any period, cash flow from operations (before certain permitted distributions) less (i) capital expenditures not made through the incurrence of indebtedness, (ii) all cash principal paid or payable during such period, and (iii) all dividends declared and paid (or which could have been declared and paid) during such period to equity holders of any credit party treated as a disregarded entity for tax purposes. To the extent that the cumulative amount of such variable repayments made is less than $4.45 million as of March 31, 2022, any such shortfall must be repaid at that date.

Thus, the aggregate remaining annual scheduled principal payments under the Xcel Term Loan are as follows:


	Amount of
($ in thousands)	Principal
Year Ending December 31,	Payment
2020	$	750
2021		2,800
2022		8,950
2023		5,000
Total	$	17,500

Schedule of Fixed Charge Coverage Ratios and Leverage Ratios

The Xcel Term Loan contains customary covenants, including reporting requirements, trademark preservation, and the following financial covenants of Xcel (on a consolidated basis with Xcel and the Guarantors under the Second Amended and Restated Loan and Security Agreement):

net worth as defined in the loan agreements of at least $90.0 million at the end of each fiscal quarter;

liquid assets of at least $3.0 million through December 31, 2020, at least $2.5 million for the fiscal quarters ending March 31, 2021 through September 30, 2021, at least $3.0 million for the fiscal quarter ending December 31, 2021, and at least $5.0 million thereafter;

EBITDA shall not be less than $5.0 million for the twelve month fiscal period ending September 30, 2020;

the fixed charge coverage ratio for the twelve fiscal month period ending at the end of each fiscal quarter shall not be less than the ratio set forth below:


Fiscal Quarter End		Fixed Charge Coverage Ratio
December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021		1.25 to 1.00
March 31, 2022, and thereafter		1.10 to 1.00

capital expenditures (excluding any capitalized compensation costs) shall not exceed $1.6 million for the fiscal year ending December 31, 2020, and $0.7 million for any fiscal year beginning after December 31, 2020; and

the leverage ratio for the twelve fiscal month period ending at the end of each fiscal period set forth below shall not exceed the ratio below:


Fiscal Period		Maximum Leverage Ratio
September 30, 2020		4.00 to 1.00
December 31, 2020		3.50 to 1.00
March 31, 2021		3.15 to 1.00
June 30, 2021		3.00 to 1.00
September 30, 2021		2.75 to 1.00
December 31, 2021		2.50 to 1.00
March 31, 2022 and each Fiscal Quarter end thereafter		1.50 to 1.00

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues
Net revenue	$ 7,391	$ 10,932	$ 21,968	$ 30,371
Cost of goods sold (sales)	1,270	2,950	3,923	6,549
Gross profit	6,121	7,982	18,045	23,822
Operating costs and expenses
Salaries, benefits and employment taxes	2,968	4,045	9,798	12,038
Other design and marketing costs	706	797	2,336	2,352
Other selling, general and administrative expenses	1,642	1,356	5,027	4,014
(Recovery of) costs in connection with potential acquisition	(189)	126	(210)	231
Stock-based compensation	49	295	780	777
Depreciation and amortization	1,437	991	4,069	2,939
Government assistance - Paycheck Protection Program and other	(176)	0	(1,816)	0
Property and equipment impairment	31	0	113	0
Total operating costs and expenses	6,468	7,610	20,097	22,351
Other income	46	0	46	2,850
Operating (loss) income	(301)	372	(2,006)	4,321
Interest and finance expense
Interest expense and other finance charges	304	330	897	968
Loss on extinguishment of debt	0	0	0	189
Total interest and finance expense	304	330	897	1,157
(Loss) income before income taxes	(605)	42	(2,903)	3,164
Income tax (benefit) provision	(145)	137	(269)	1,280
Net (loss) income	(460)	(95)	(2,634)	1,884
Less: Net loss attributable to noncontrolling interest	(26)	0	(95)	0
Net (loss) income attributable to Xcel Brands, Inc. stockholders	$ (434)	$ (95)	$ (2,539)	$ 1,884
(Loss) earnings per share attributable to Xcel Brands, Inc. common stockholders:
Basic net (loss) income per share:	$ (0.02)	$ (0.01)	$ (0.13)	$ 0.10
Diluted net (loss) income per share:	$ (0.02)	$ (0.01)	$ (0.13)	$ 0.10
Weighted average number of common shares outstanding:
Basic weighted average common shares outstanding	19,231,040	18,975,265	19,078,453	18,839,424
Diluted weighted average common shares outstanding	19,231,040	18,975,265	19,078,453	18,840,149
Net licensing revenue
Revenues
Net revenue	$ 5,236	$ 6,428	$ 15,378	$ 21,094
Net sales revenue
Revenues
Net revenue	$ 2,155	$ 4,504	$ 6,590	$ 9,277

Nature of Operations, Background, and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2020
Nature of Operations, Background, and Basis of Presentation [Abstract]
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update ("ASU") No. 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” effective January 1, 2020. This ASU adds, modifies, and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, “Fair Value Measurement.” The adoption of this new guidance did not have any impact on the Company’s results of operations, cash flows, and financial condition.

Significant Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Significant Contracts (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Product Information [Line Items]
Net revenue	$ 7,391	$ 10,932	$ 21,968	$ 30,371
Accounts receivable	8,188		8,188		$ 10,622
Sales [Member] \| Customer Concentration Risk [Member] \| QVC, Inc. [Member]
Product Information [Line Items]
Net revenue	$ 4,700	$ 5,160	$ 13,440	$ 17,960
Concentration Risk, Percentage	64.00%	47.00%	61.00%	59.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| QVC, Inc. [Member]
Product Information [Line Items]
Accounts receivable	$ 4,720		$ 4,720		$ 5,300
Concentration Risk, Percentage			58.00%		50.00%

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

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+ Details

Significant Contracts

9 Months Ended

Sep. 30, 2020

Significant Contracts [Abstract]

Significant Contracts

3. Significant Contracts

QVC Agreements

Under the Company’s agreements with QVC, QVC is required to pay the Company fees based primarily on a percentage of its net sales of Isaac Mizrahi, Ripka, and H Halston branded merchandise. QVC royalty revenue represents a significant portion of the Company’s total revenues.

Total revenues from QVC totaled $4.70 million and $5.16 million for the current and prior year quarter, respectively, representing approximately 64% and 47% of the Company’s total net revenues for the current and prior year quarter, respectively.

Total revenues from QVC totaled $13.44 million and $17.96 million for the current and prior year nine months, respectively, representing approximately 61% and 59% of the Company’s total net revenues for the current and prior year nine months, respectively.

As of September 30, 2020 and December 31, 2019, the Company had receivables from QVC of $4.72 million and $5.30 million, respectively, representing approximately 58% and 50% of the Company’s total receivables, respectively.

Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

5. Leases

The Company has operating leases for its current office, former office, and a planned retail store location, as well as certain equipment with a term of 12 months or less. The Company’s real estate leases have remaining lease terms of between 1 to 8 years.

Under GAAP, a lessee is generally required to recognize a liability for its obligation to make future lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying leased asset for the lease term. The Company determines if an arrangement is a lease at inception. Operating leases are recorded in operating lease ROU assets, current portion of operating lease liabilities, and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. The Company does not recognize lease liabilities and ROU assets for lease terms of 12 months or less, but recognizes such lease payments in net income on a straight-line basis over the lease terms.

Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments related to office leases is recognized on a straight-line basis over the lease term. Lease expense for operating lease payments related to retail leases is recognized on a straight-line basis over the period of operation, as this is representative of the pattern in which benefit is derived from the lease.

For the current and prior year quarter, lease expense included in selling, general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations was $0.4 million. For the current and prior year nine months, lease expense included in selling, general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations was $1.2 million.

As of September 30, 2020, the weighted average remaining operating lease term was 6.4 years and the weighted average discount rate for operating leases was 6.25%.

Cash paid for amounts included in the measurement of operating lease liabilities was $0.6 million in both the current quarter and prior year quarter, $1.2 million in the current nine months, and $1.8 million in the prior year nine months.

As of September 30, 2020, the maturities of lease liabilities were as follows:


($ in thousands)
Remainder of 2020	$	711
2021		2,544
2022		1,891
2023		1,711
2024		1,711
After 2024		4,886
Total lease payments		13,454
Less: Discount		2,436
Present value of lease liabilities		11,018
Current portion of lease liabilities		1,917
Non-current portion of lease liabilities	$	9,101

In Note 12 of the Company’s Form 10-Q for the quarterly period ended June 30, 2020, the Company had previously disclosed (as a subsequent event) that it had entered into an assignment and assumption agreement with the landlord and subtenant at its former office location at 475 Tenth Avenue, New York, NY. However, this agreement was later voided during the current quarter, and ultimately was not consummated.

Earnings Per Share - Anti-dilutive Securities Excluded (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Stock options and warrants (in shares)	8,083,690	8,469,440	8,083,690	8,419,375

Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for Doubtful Accounts Receivable	$ 1,163		$ 1,163		$ 155
Bad debt expense (recovery)	371	$ 0	1,054	$ (144)
Accounts receivable	8,188		8,188		$ 10,622
COVID19
Financing Receivable, Allowance for Credit Loss [Line Items]
Bad debt expense (recovery)	385		971
Accounts receivable	$ 1,210		$ 1,210

Trademarks and Other Intangibles - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Goodwill and Intangible Assets [Line Items]
Amortization expense for intangible assets	$ 1,140	$ 830	$ 3,420	$ 2,430
Ripka Brands
Goodwill and Intangible Assets [Line Items]
Finite useful life			15 years

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net (loss) income	$ (460)	$ (95)	$ (2,634)	$ 1,884
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense	1,437	991	4,069	2,939
Property and equipment impairment	31	0	113	0
Amortization of deferred finance costs			72	114
Stock-based compensation	49	295	780	777
Amortization of note discount				16
Allowance for doubtful accounts	371	0	1,054	(144)
Loss on extinguishment of debt	0	0	0	189
Deferred income tax (benefit) provision			(269)	1,280
Net gain on sale of assets			(46)	0
Gain on reduction of contingent obligation				(2,850)
Changes in operating assets and liabilities:
Accounts receivable			1,380	1,182
Inventory			176	(87)
Prepaid expenses and other assets			187	(14)
Accounts payable, accrued expenses and other current liabilities			(2,403)	(1,744)
Cash paid in excess of rent expense			(276)	(337)
Other liabilities				(196)
Net cash provided by operating activities			2,203	3,009
Cash flows from investing activities
Cash consideration for acquisition of Halston Heritage assets			0	(8,830)
Net proceeds from sale of assets			46	0
Purchase of property and equipment			(700)	(918)
Net cash used in investing activities			(654)	(9,748)
Cash flows from financing activities
Shares repurchased including vested restricted stock in exchange for withholding taxes			(187)	(24)
Cash contribution from non-controlling interest			300	0
Payment of deferred finance costs			(20)	(315)
Proceeds from long-term debt			0	7,500
Payment of long-term debt			(1,500)	(3,742)
Net cash (used in) provided by financing activities			(1,407)	3,419
Net increase (decrease) in cash, cash equivalents, and restricted cash			142	(3,320)
Cash, cash equivalents, and restricted cash at beginning of period			5,750	10,319
Cash, cash equivalents, and restricted cash at end of period	5,892	6,999	5,892	6,999
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents	4,783	5,890	4,783	5,890
Restricted cash	1,109	1,109	1,109	1,109
Total cash, cash equivalents, and restricted cash	$ 5,892	$ 6,999	5,892	6,999
Supplemental disclosure of non-cash activities:
Operating lease right-of-use asset			797	10,409
Operating lease obligation			797	13,210
Accrued rent offset to operating lease right-of-use assets			0	2,801
Settlement of seller note through offset to receivable				600
Settlement of contingent obligation through offset to note receivable				100
Issuance of common stock in connection with Halston Heritage assets acquisition			0	1,058
Contingent obligation related to acquisition of Halston Heritage assets at fair value			0	900
Liability for equity-based bonuses			93	168
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes			58	91
Cash paid during the period for interest			$ 1,092	$ 1,108

Stockholders' Equity - Stock Options (Details) - USD ($)										3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 28, 2020	Aug. 21, 2020	Apr. 15, 2020	Apr. 01, 2020	Mar. 31, 2020	Mar. 13, 2020	Feb. 28, 2020	Jan. 31, 2020	Jan. 01, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Number of Options
Outstanding, beginning balance (in shares)									7,222,625			7,222,625
Granted (in shares)												481,250
Canceled (in shares)												0
Exercised (in shares)												0
Expired/Forfeited (in shares)												(200,000)
Outstanding, ending balance (in shares)										7,503,875		7,503,875		7,222,625
Exercisable (in shares)										3,067,125		3,067,125
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)									$ 3.33			$ 3.33
Granted (in dollars per share)												1.43
Canceled (in dollars per share)												0.00
Exercised (in dollars per share)												0.00
Expired/Forfeited (in dollars per share)												1.55
Outstanding, ending balance (in dollars per share)										$ 3.26		3.26		$ 3.33
Exercisable (in dollars per share)										$ 4.92		$ 4.92
Other disclosures
Outstanding Weighted Average Remaining Contractual Life (in Years)												5 years 22 days		5 years 9 months 26 days
Exercisable Weighted Average Remaining Contractual Life (in Years)												1 year 5 months 12 days
Aggregate Intrinsic Value, Outstanding										$ 0		$ 0		$ 0
Aggregate Intrinsic Value, Exercisable										0		$ 0
Board Observer
Number of Options
Granted (in shares)									5,000
Weighted Average Exercise Price
Granted (in dollars per share)									$ 4.00
Other disclosures
Vesting percentage per year									50.00%
Consultant
Number of Options
Granted (in shares)		22,750	13,500					75,000
Weighted Average Exercise Price
Granted (in dollars per share)		$ 1.00	$ 3.00					$ 1.57
Other disclosures
Awards that vested (as a percent)												33.33%
Vesting percentage per year			33.33%
Employee
Number of Options
Granted (in shares)	15,000				50,000		50,000
Weighted Average Exercise Price
Granted (in dollars per share)	$ 0.71				$ 0.61		$ 1.40
Other disclosures
Vesting percentage per year	33.33%				33.33%
A certain key employee
Number of Options
Granted (in shares)						50,000
Weighted Average Exercise Price
Granted (in dollars per share)						$ 5.50
Non Management Directors
Number of Options
Granted (in shares)				200,000
Weighted Average Exercise Price
Granted (in dollars per share)				$ 0.50
Other disclosures
Vesting percentage per year				50.00%
Employee Stock Option
Number of Options
Granted (in shares)												481,250
Employee Stock Option
Other disclosures
Compensation expense										45,000	$ 66,000	$ 158,000	$ 382,000
Unrecognized compensation expense										$ 204,000		$ 204,000
Weighted average period of recognition												1 year 2 months 27 days
Employee Stock Option \| Five year expiration
Stockholders' Equity
Expiration period												5 years
Employee Stock Option \| Seven year expiration
Stockholders' Equity
Expiration period												7 years
Employee Stock Option \| Ten year expiration
Stockholders' Equity
Expiration period												10 years

Debt - Net Carrying Amount of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt
Unamortized deferred finance costs related to term loan	$ (127)	$ (179)
Total	17,373	18,821
Current portion of long-term debt	2,850	2,250
Long-term debt	14,523	16,571
Xcel Term Loan
Debt
Term Loan	$ 17,500	$ 19,000

Stockholders' Equity - Warrants (Details) - Warrant - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Number of Other than Options
Outstanding and exercisable, beginning balance (in shares)			579,815
Granted (in shares)			0
Canceled (in shares)			0
Exercised (in dollars per share)			0
Expired/Forfeited (in shares)			0
Outstanding and exercisable, ending balance (in shares)	579,815		579,815		579,815
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)			$ 4.63
Granted (in dollars per share)			0.00
Canceled (in dollars per share)			0.00
Exercised (in dollars per share)			0.00
Expired/Forfeited (in dollars per share)			0.00
Outstanding, ending balance (in dollars per share)	$ 4.63		$ 4.63		$ 4.63
Weighted Average Remaining Contractual Life (in Years), Outstanding and exercisable			1 year 6 months 22 days		2 years 3 months 26 days
Aggregate Intrinsic Value, Outstanding and exercisable	$ 0		$ 0		$ 0
Other disclosures
Compensation expense	$ 0	$ 0	$ 0	$ 0
Five year expiration
Stockholders' Equity
Expiration period			5 years
Ten year expiration
Stockholders' Equity
Expiration period			10 years

Debt - Schedule of Fixed Charge Coverage Ratios and Leverage Ratios (Details) - Second Amended And Restated Loan And Security Agreement - Xcel Term Loan	Feb. 11, 2019
December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021
Debt
Fixed charge coverage ratio required to meet loan covenant	1.25
March 31, 2022, and thereafter
Debt
Fixed charge coverage ratio required to meet loan covenant	1.10
September 30, 2020
Debt
Leverage ratio required for loan covenant	4.00
December 31, 2020
Debt
Leverage ratio required for loan covenant	3.50
March 31, 2021
Debt
Leverage ratio required for loan covenant	3.15
June 30, 2021
Debt
Leverage ratio required for loan covenant	3.00
September 30, 2021
Debt
Leverage ratio required for loan covenant	2.75
December 31, 2021
Debt
Leverage ratio required for loan covenant	2.50
March 31, 2022 and each Fiscal Quarter end thereafter
Debt
Leverage ratio required for loan covenant	1.50

Allowance for Doubtful Accounts	9 Months Ended
Allowance for Doubtful Accounts	Sep. 30, 2020
Credit Loss [Abstract]
Allowance for Doubtful Accounts	4. Allowance for Doubtful Accounts Accounts receivable are presented on the Company’s condensed consolidated balance sheets net of allowances of $1,163,000 and $155,000 as of September 30, 2020 and December 31, 2019, respectively. The Company recognized bad debt expense of $371,000 and $0 for the current quarter and prior year quarter, respectively, and recognized bad debt expense of $1,054,000 and a recovery of $(144,000) for the current nine months and prior year nine months, respectively. Included within these amounts, the current quarter and current nine months reflect $385,000 and $971,000, respectively, of bad debt expense related to the bankruptcy of several retail customers due to the novel coronavirus disease pandemic. The total allowance of $971,000 against such customers’ outstanding receivable balances of $1.21 million at September 30, 2020 represents management’s best estimate of collectibility, based on information currently available.

Government assistance - PPP Loan (Details) - USD ($)		3 Months Ended		9 Months Ended
Government assistance - PPP Loan (Details) - USD ($)	Apr. 20, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Grants recognized as a reduction to operating expenses		$ 176,000	$ 0	$ 1,816,000	$ 0
Interest expense		304,000	$ 330,000	897,000	$ 968,000
Paycheck Protection Program, CARES Act [Member]
Debt Instrument [Line Items]
Face amount of loan	$ 1,806,000
Stated interest rate (as percentage)	1.00%
Term of loan	2 years
Grants recognized as a reduction to operating expenses		166,000		1,806,000
Interest expense		$ 0		$ 0

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Lease expense included in selling, general and administrative expenses	$ 0.4	$ 0.4	$ 1.2	$ 1.2
Weighted average remaining lease term for operating leases	6 years 4 months 24 days		6 years 4 months 24 days
Weighted average discount rate for operating lease (as percent)	6.25%		6.25%
Cash payments for operating lease expense	$ 0.6	$ 0.6	$ 1.2	$ 1.8
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	8 years		8 years

Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

6. Debt

The Company’s net carrying amount of debt was comprised of the following:


	September 30,		December 31,
($ in thousands)	2020		2019
Xcel Term Loan	$	17,500	$	19,000
Unamortized deferred finance costs related to term loan		(127)		(179)
Total		17,373		18,821
Current portion of long-term debt		2,850		2,250
Long-term debt	$	14,523	$	16,571

Xcel Term Loan

On February 11, 2019, the Company entered into an amended loan agreement with Bank Hapoalim B.M. (“BHI”), which amended and restated the prior Xcel Term Loan. Immediately prior to February 11, 2019, the aggregate principal amount of the prior Xcel Term Loan was $14.5 million. Pursuant to the Xcel Term Loan agreement, the Lenders extended to Xcel an additional term loan in the amount of $7.5 million, such that, as of February 11, 2019, the aggregate outstanding balance of all the term loans extended by BHI to Xcel was $22.0 million, which amount was divided under the Xcel Term Loan agreement into two term loans: (1) a term loan in the amount of $7.3 million (“Term Loan A”) and (2) a term loan in the amount of $14.7 million (“Term Loan B” and, together with Term Loan A, the “Term Loans”).

The terms and conditions of the Xcel Term Loan resulted in significantly different debt service payment requirements compared with the prior term debt with BHI. Management assessed and determined that this amendment resulted in a loss on extinguishment of debt and recognized a loss of $0.2 million (consisting of unamortized deferred finance costs) during the prior year quarter. Upon entering into the Xcel Term Loan, Xcel paid an upfront fee in the amount of $0.09 million to BHI.

The Xcel Term Loan also allows that BHI and any other lender party to the Xcel Term Loan (collectively, the “Lenders”) can provide to Xcel a revolving loan facility and a letter of credit facility, the terms of each of which shall be agreed to by Xcel and the Lenders. Amounts advanced under the revolving loan facility (the “Revolving Loans”) will be used for the purpose of consummating acquisitions by Xcel or its subsidiaries that are or become parties to the Xcel Term Loan. Xcel will have the right to convert Revolving Loans to incremental term loans (the “Incremental Term Loans”) in minimum amounts of $5.0 million. The Company has not drawn down any funds under either the revolving loan facility or letter of credit facility.

On April 13, 2020, the Company amended its Second Amended and Restated Loan and Security Agreement with BHI. Under this amendment, the quarterly installment payment due March 31, 2020 was deferred, and the amounts of the quarterly installment payments due throughout the remainder of 2020 were reduced, while the amount of principal to be repaid through variable payments based on excess cash flow was increased. In addition, there were multiple changes and waivers to the various financial covenants. Further, this amendment permitted Xcel to incur unsecured debt through the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and excludes any associated PPP debt and debt service from the covenant calculations. There were no changes to the total principal balance, interest rate, or maturity date.

On August 18, 2020, the Company further amended its Second Amended and Restated Loan and Security Agreement with BHI. Under this amendment, the amounts of the quarterly installment payments due throughout 2021 were reduced, and the amount of principal to be repaid through variable payments based on excess cash flow was increased. In addition, there were multiple changes and waivers to the various financial covenants. There were no changes to the total principal balance, interest rate, or maturity date.

The Term Loans mature on December 31, 2023; Incremental Term Loans shall mature on the date set forth in the applicable term note; and Revolving Loans and the letter of credit facility shall mature on such date as agreed upon by Xcel and the Lenders. Any letter of credit issued under the Xcel Term Loan shall terminate no later than one year following the date of issuance thereof.


($ in thousands)
Installment Payment Dates	Amount
December 31, 2020	$	750

March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021	$	700

March 31, 2022, June 30, 2022, September 30, 2022, and December 31, 2022	$	1,125

March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023	$	1,250

Thus, the aggregate remaining annual scheduled principal payments under the Xcel Term Loan are as follows:


	Amount of
($ in thousands)	Principal
Year Ending December 31,	Payment
2020	$	750
2021		2,800
2022		8,950
2023		5,000
Total	$	17,500

Xcel has the right to prepay the Term Loans, Incremental Term Loans, Revolving Loans, and obligations with respect to letters of credit and accrued and unpaid interest thereon and to terminate the Lenders’ obligations to make Revolving Loans and issue letters of credit; provided that any prepayment of less than all of the outstanding balances of the Term Loans and Incremental Term Loans shall be applied to the remaining amounts due in inverse order of maturity.

If any Term Loan or any Incremental Term Loan is prepaid on or prior to the third anniversary of the Closing Date (including as a result of an event of default), Xcel shall pay an early termination fee as follows: an amount equal to the principal amount of the Term Loan or Incremental Term Loan, as applicable, being prepaid, multiplied by: (i) two percent (2.00%) if any of Term Loan B or any Incremental Term Loan is prepaid on or before the second anniversary of the later of the Closing Date or the date such Incremental Term Loan was made, as applicable; (ii) one percent (1.00%) if any of Term Loan A is prepaid on or before the second anniversary of the Closing Date; (iii) one percent (1.00%) if any of Term Loan B or any Incremental Term Loan is prepaid after the second anniversary of the later of the Closing Date or such Incremental Term Loan was made, as applicable, but on or before the third anniversary of such date; (iv) one-half of one percent (0.50%) if any of Term Loan A is prepaid after the second anniversary of the Closing Date, but on or before the third anniversary of such date; or (v) zero percent (0.00%) if any Term Loan or any Incremental Term Loan is prepaid after the third anniversary of the later of the Closing Date or the date such Incremental Term Loan was made, as applicable.

Notwithstanding the above, Xcel may make a voluntary prepayment of up to $0.75 million without any early termination fees. Any such prepayment would be applied against the April 30, 2021 fixed installment payment and would be excluded from the computation of excess cash flows.

Xcel’s obligations under the Xcel Term Loan are guaranteed by and secured by all of the assets of Xcel and its wholly owned subsidiaries, as well as any subsidiary formed or acquired that becomes a credit party to the Xcel Term Loan agreement (the “Guarantors”) and, subject to certain limitations contained in the Xcel Term Loan, equity interests of the Guarantors. Xcel also granted the Lenders a right of first offer to finance any acquisition for which the consideration will be paid other than by cash of Xcel or by the issuance of equity interest of Xcel.

Interest on Term Loan A accrues at a fixed rate of 5.1% per annum and is payable on each day on which the scheduled principal payments on Term Loans are required to be made. Interest on Term Loan B accrues at a fixed rate of 6.25% per annum and is payable on each day on which the scheduled principal payments on Term Loans are required to be made. Interest on the Revolving Loans will accrue at either the Base Rate or LIBOR, as elected by Xcel, plus a margin to be agreed to by Xcel and the Lenders and will be payable on the first day of each month. Base Rate is defined in the Xcel Term Loan agreement as the greater of (a) BHI’s stated prime rate or (b) 2.00% per annum plus the overnight federal funds rate published by the Federal Reserve Bank of New York. Interest on the Incremental Term Loans will accrue at rates to be agreed to by Xcel and the Lenders and will be payable on each day on which the scheduled principal payments under the applicable note are required to be made.

net worth as defined in the loan agreements of at least $90.0 million at the end of each fiscal quarter;

EBITDA shall not be less than $5.0 million for the twelve month fiscal period ending September 30, 2020;

the fixed charge coverage ratio for the twelve fiscal month period ending at the end of each fiscal quarter shall not be less than the ratio set forth below:


Fiscal Quarter End		Fixed Charge Coverage Ratio
December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021		1.25 to 1.00
March 31, 2022, and thereafter		1.10 to 1.00

the leverage ratio for the twelve fiscal month period ending at the end of each fiscal period set forth below shall not exceed the ratio below:


Fiscal Period		Maximum Leverage Ratio
September 30, 2020		4.00 to 1.00
December 31, 2020		3.50 to 1.00
March 31, 2021		3.15 to 1.00
June 30, 2021		3.00 to 1.00
September 30, 2021		2.75 to 1.00
December 31, 2021		2.50 to 1.00
March 31, 2022 and each Fiscal Quarter end thereafter		1.50 to 1.00

The Company was in compliance with all applicable covenants as of September 30, 2020.

For the current and prior year quarter, the Company incurred aggregate interest expense related to term loan debt of approximately $281,000 and $317,000, respectively. For the current nine months and prior year nine months, the Company incurred aggregate interest expense related to term loan debt of approximately $854,000 and $903,000, respectively. The effective interest rate related to term loan debt was approximately 6.6% for the current quarter and current nine months, approximately 6.7% for the prior year quarter, and approximately 6.8% for the prior year nine months.

Stockholders' Equity - Stock Awards (Details) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
Stockholders' Equity - Stock Awards (Details) - USD ($)	May 20, 2020	Mar. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Restricted Stock
Number of Other than Options
Outstanding and exercisable, beginning balance (in shares)					1,230,623
Granted (in shares)					607,428
Canceled (in shares)					0
Vested (in shares)					1,057,218
Expired/Forfeited (in shares)					0
Outstanding and exercisable, ending balance (in shares)			780,833		780,833		1,230,623
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)					$ 4.33
Granted (in dollars per share)					0.80
Canceled (in dollars per share)					0.00
Vested (in dollars per share)					2.47
Expired/Forfeited (in dollars per share)					0.00
Outstanding, ending balance (in dollars per share)			$ 4.09		$ 4.09		$ 4.33
Other disclosures
Compensation expense			$ 11,000	$ 47,000	$ 44,000	$ 213,000
Unrecognized compensation expense			21,000		$ 21,000
Weighted average period of recognition					6 months
Restricted Stock \| Senior Management
Number of Other than Options
Granted (in shares)		336,700
Other disclosures
Compensation expense				$ 168,000		$ 168,000	$ 220,000
Restricted Stock \| Employees
Number of Other than Options
Granted (in shares)	270,728
Other disclosures
Compensation expense			265,000		$ 265,000
Management Stock Bonus
Other disclosures
Compensation expense			$ (7,000)		$ 313,000