0001558370-21-015988 | 10-Q | XBRL Viewer

Print Document View Excel Document

Significant Contracts and Concentrations - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Product Information [Line Items]
Net revenue	$ 11,261	$ 7,391	$ 29,834	$ 21,968
Accounts receivable	10,949		10,949		$ 8,889
Sales [Member] \| Customer Concentration Risk [Member] \| QVC, Inc. [Member]
Product Information [Line Items]
Net revenue	$ 6,050	$ 4,700	$ 15,240	$ 13,440
Concentration Risk, Percentage	54.00%	64.00%	51.00%	61.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| QVC, Inc. [Member]
Product Information [Line Items]
Concentration Risk, Percentage			57.00%		50.00%
Accounts receivable	$ 6,190		$ 6,190		$ 4,460

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Trademarks and Other Intangibles - Schedule of Future Amortization Expense (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Finite Lived Intangible Assets Future Amortization Expense:
2021 (October 1 through December 31)	$ 1,555
2022	6,220
2023	6,220
2024	6,199
2025	4,257
Thereafter	30,908
Net Carrying Amount	$ 55,359

Stockholders' Equity - 2011 Equity Incentive Plan (Details) - 2011 Equity Incentive Plan	Sep. 30, 2021 shares
Stockholders' Equity
Number of common stock eligible for issuance	13,000,000
Shares of common stock available for issuance (in shares)	2,636,969
Shares of common stock reserved for issuance (in shares)	8,563,979

Nature of Operations, Background, and Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2021
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%

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 3,981	$ 4,957
Accounts receivable, net of allowances of $1,284 and $1,151, respectively	10,949	8,889
Inventory	3,430	1,216
Prepaid expenses and other current assets	1,711	1,085
Total current assets	20,071	16,147
Non-current Assets:
Property and equipment, net	3,481	3,367
Operating lease right-of-use assets	6,831	8,668
Trademarks and other intangibles, net	99,859	93,535
Restricted cash	739	1,109
Other assets	222	228
Total non-current assets	111,132	106,907
Total Assets	131,203	123,054
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	5,444	4,442
Accrued payroll	683	973
Current portion of operating lease obligations	1,315	2,101
Current portion of long-term debt	4,998	2,800
Total current liabilities	12,440	10,316
Long-Term Liabilities:
Long-term portion of operating lease obligations	7,295	8,469
Long-term debt, less current portion	20,233	13,838
Contingent obligations	7,539	900
Deferred tax liabilities, net	1,038	3,052
Other long-term liabilities	591	224
Total long-term liabilities	36,696	26,483
Total Liabilities	49,136	36,799
Commitments and Contingencies
Equity:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding
Common stock, $.001 par value, 50,000,000 shares authorized, and 19,541,921 and 19,260,862 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	20	19
Paid-in capital	102,936	102,324
Accumulated deficit	(21,836)	(16,595)
Total Xcel Brands, Inc. stockholders' equity	81,120	85,748
Noncontrolling interest	947	507
Total Equity	82,067	86,255
Total Liabilities and Equity	$ 131,203	$ 123,054

Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

10. 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,
	2021	2020	2021	2020
Basic	19,541,774	19,231,040	19,418,469	19,078,453
Effect of exercise of warrants	—	—	—	—
Effect of exercise of stock options	—	—	—	—
Diluted	19,541,774	19,231,040	19,418,469	19,078,453

As a result of the net loss for all periods presented, 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,
	2021	2020	2021	2020
Stock options and warrants	5,927,010	8,083,690	5,927,010	8,083,690

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 0.4	$ 0.4	$ 1.2	$ 1.2
Weighted average remaining lease term for operating leases	5 years 10 months 24 days		5 years 10 months 24 days
Weighted average discount rate	8.64%		8.64%
Cash payments for operating lease expense	$ 0.4	$ 0.6	$ 1.7	$ 1.2
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	5 months		5 months
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	7 years 3 months		7 years 3 months

Stockholders' Equity - Non-Vested Options (Details)	9 Months Ended
Stockholders' Equity - Non-Vested Options (Details)	Sep. 30, 2021 $ / shares shares
Number of Options
Granted (in shares)	510,390
Employee Stock Option
Number of Options
Beginning Balance (in shares)	4,116,167
Granted (in shares)	510,390
Vested (in shares)	(647,390)
Forfeited or Canceled (in shares)	(100,000)
Ending Balance (in shares)	3,879,167
Weighted Average Grant Date Fair Value
Beginning Balance (in dollars per share) \| $ / shares	$ 0.08
Granted (in dollars per share) \| $ / shares	0.44
Vested (in dollars per share) \| $ / shares	0.43
Forfeited or Canceled (in dollars per share) \| $ / shares	0.08
Ending Balance (in dollars per share) \| $ / shares	$ 0.06

Income Tax (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Tax (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate	(28.00%)	(25.00%)	(26.00%)	(10.00%)
Income tax (benefit) provision	$ (535)	$ (145)	$ (2,019)	$ (269)
Effect of vesting of restricted shares of common stock on effective tax rate		(26.00%)		(5.00%)
Effect of state taxes on effective tax rate	7.00%	12.00%	7.00%	6.00%
Effect of permanent differences on effective tax rate		18.00%	(2.00%)	(3.00%)
Effect of potential federal net operating loss carryback due to the CARES Act on effective tax rate		3.00%

- Definition

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

+ References + Details

Earnings Per Share - Dilutive Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share [Abstract]
Basic (in shares)	19,541,774	19,231,040	19,418,469	19,078,453
Diluted (in shares)	19,541,774	19,231,040	19,418,469	19,078,453

Trademarks and Other Intangibles

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Trademarks and Other Intangibles

3. Trademarks and Other Intangibles

Trademarks and other intangibles, net consist of the following:


	Weighted
	Average	September 30, 2021
	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		20,386		6,674		13,712
Trademarks (finite-lived)	18 years		38,194		5,786		32,408
Trademarks (finite-lived)	4 years		10,300		1,287		9,013
Other intellectual property	7 years		762		619		143
Copyrights and other intellectual property	9 years		229		146		83
Total		$	114,371	$	14,512	$	99,859


	Weighted
	Average	December 31, 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		20,386		5,640		14,746
Trademarks (finite-lived)	18 years		38,194		4,192		34,002
Other intellectual property	7 years		762		537		225
Copyrights and other intellectual property	10 years		190		128		62
Total		$	104,032	$	10,497	$	93,535

Amortization expense for intangible assets was approximately $1.56 million for the three-month period ended September 30, 2021 (the "current quarter") and was approximately $1.14 million for the three-month period ended September 30, 2020 (the "prior year quarter"). Amortization expense for intangible assets was approximately $4.02 million for the nine-month period ended September 30, 2021 (the “current nine months”) and was approximately $3.42 million for the nine-month period ended September 30, 2020 (the “prior year nine months”).

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.

Estimated future amortization expense related to finite-lived intangible assets over the remaining useful lives is as follows:


($ in thousands)	Amortization
Year Ending December 31,	Expense
2021 (October 1 through December 31)	$	1,555
2022		6,220
2023		6,220
2024		6,199
2025		4,257
Thereafter		30,908
Total	$	55,359

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net loss	$ (1,359)	$ (460)	$ (5,801)	$ (2,634)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization expense	1,891	1,437	4,949	4,069
Asset impairment charges		31		113
Amortization of deferred finance costs included in interest expense			211	72
Stock-based compensation	163	49	754	780
Provision for doubtful accounts	0	371	132	1,054
Loss on extinguishment of debt (non-cash portion)			454
Deferred income tax benefit			(2,019)	(269)
Net gain on sale of assets				(46)
Changes in operating assets and liabilities:
Accounts receivable			(2,192)	1,380
Inventory			(2,214)	176
Prepaid expenses and other assets			(620)	187
Accounts payable, accrued expenses and other current liabilities			572	(2,403)
Cash paid in excess of rent expense			(122)	(276)
Other liabilities			367
Net cash (used in) provided by operating activities			(5,529)	2,203
Cash flows from investing activities
Cash consideration for acquisition of Lori Goldstein assets			(3,661)
Net proceeds from sale of assets				46
Purchase of other intangible assets			(39)
Purchase of property and equipment			(1,049)	(700)
Net cash used in investing activities			(4,749)	(654)
Cash flows from financing activities
Proceeds from exercise of stock options			5
Shares repurchased including vested restricted stock in exchange for withholding taxes				(187)
Cash contribution from non-controlling interest			1,000	300
Proceeds from revolving loan debt			2,498
Proceeds from long-term debt			25,000
Payment of deferred finance costs			(1,204)	(20)
Payment of long-term debt			(18,000)	(1,500)
Payment of breakage fees associated with extinguishment of long-term debt			(367)
Net cash provided by (used in) financing activities			8,932	(1,407)
Net (decrease) increase in cash, cash equivalents, and restricted cash			(1,346)	142
Cash, cash equivalents, and restricted cash at beginning of period			6,066	5,750
Cash, cash equivalents, and restricted cash at end of period	4,720	5,892	4,720	5,892
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents	3,981	4,783	3,981	4,783
Restricted cash	739	1,109	739	1,109
Total cash, cash equivalents, and restricted cash	$ 4,720	$ 5,892	4,720	5,892
Supplemental disclosure of non-cash activities:
Operating lease right-of-use assets			(722)	797
Operating lease obligations			(722)	797
Contingent obligation related to acquisition of Lori Goldstein assets at fair value			6,639
Liability for equity-based bonuses and other equity-based payments			140	93
Supplemental disclosure of cash flow information:
Cash paid during the period for interest			1,346	1,092
Cash paid during the period for income taxes			$ 18	$ 58

Acquisitions - Total Consideration for Asset Acquisition (Details) - Lori Goldstein Brand - USD ($) $ in Thousands		9 Months Ended
	Apr. 01, 2021	Sep. 30, 2021
Schedule Of Asset Acquisition [Line Items]
Cash paid at closing	$ 1,600
Cash paid subsequent to closing	2,045
Total direct initial consideration	3,645
Direct transaction expenses	16
Contingent obligation (Lori Goldstein Earn-Out)	6,639	$ 6,600
Total consideration	$ 10,300

Stockholders' Equity - Additional Information (Details) - USD ($)					3 Months Ended		9 Months Ended
	Jul. 01, 2021	May 07, 2021	Apr. 26, 2021	Apr. 01, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Restricted Stock
Stockholders' Equity
Granted (in shares)							254,623
Compensation expense related to stock options					$ 37,000	$ 11,000	$ 84,000	$ 44,000
Unrecognized compensation expense					72,000		$ 72,000
Weighted average period of recognition							1 year 6 months
Restricted Stock \| Non Management Directors
Stockholders' Equity
Granted (in shares)				50,000
Award vesting period (in years)				2 years
Restricted Stock \| Non Management Directors \| April 1, 2022
Stockholders' Equity
Percentage of options vested per tranche				50.00%
Restricted Stock \| Non Management Directors \| April 1, 2023
Stockholders' Equity
Percentage of options vested per tranche				50.00%
Restricted Stock \| Consultant
Stockholders' Equity
Granted (in shares)	9,399		14,045
Restricted Stock \| Senior Management
Stockholders' Equity
Granted (in shares)		181,179
Stock Compensation Plan \| Employees
Stockholders' Equity
Compensation expense related to stock options					32,000		$ 32,000
Management Stock Bonus \| Senior Management
Stockholders' Equity
Compensation expense related to stock options					46,000		400,000	291,000
Reduction to compensation expense							8,000
Warrant
Stockholders' Equity
Compensation expense related to stock options					$ 0	$ 0	$ 0	$ 0

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Leases [Abstract]
2021 (October 1 through December 31)	$ 539
2022	1,891
2023	1,711
2024	1,711
2025	1,710
After 2025	3,579
Total lease payments	11,141
Less: Discount	2,531
Present value of lease liabilities	8,610
Current portion of lease liabilities	1,315	$ 2,101
Non-current portion of lease liabilities	$ 7,295	$ 8,469

Commitments and Contingencies (Details) - USD ($) $ in Thousands			9 Months Ended	12 Months Ended
	Apr. 01, 2021	Feb. 11, 2019	Sep. 30, 2021	Dec. 31, 2020
Lori Goldstein Brand
Commitments and Contingencies
Contingent consideration			$ 12,500
Asset Acquisition, Contingent Obligation	$ 6,639		$ 6,600
Asset Acquisition, Royalties Term			6 years
Halston Heritage Trademarks
Commitments and Contingencies
Contingent consideration		$ 6,000
Earn-out liability recorded			$ 900	$ 900
COVID19
Commitments and Contingencies
Additional allowance for doubtful accounts			$ 100	$ 1,000

Significant Contracts and Concentrations

9 Months Ended

Sep. 30, 2021

Risks and Uncertainties [Abstract]

Significant Contracts and Concentrations

4. Significant Contracts and Concentrations

QVC Agreements

Under the Company’s agreements with Qurate Retail Group (“Qurate”), collectively referred to as the QVC Agreements, Qurate is required to pay the Company fees based primarily on a percentage of its net sales of Isaac Mizrahi, Judith Ripka, Lori Goldstein, and Longaberger branded merchandise. Qurate royalty revenue represents a significant portion of the Company’s total revenues.

●

Revenues from the QVC Agreements totaled $6.05 million and $4.70 million for the current and prior year quarter, respectively, representing approximately 54% and 64% of the Company’s total net revenues for the current and prior year quarter, respectively.

●

Revenues from the QVC Agreements totaled $15.24 million and $13.44 million for the current and prior year nine months, respectively, representing approximately 51% and 61% of the Company’s total net revenues for the current and prior year nine months, respectively.

●

As of September 30, 2021 and December 31, 2020, the Company had receivables from Qurate of $6.19 million and $4.46 million, respectively, representing approximately 57% and 50% of the Company’s total accounts receivable, respectively.

Trademarks and Other Intangibles (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Trademarks and Other Intangibles


	Weighted
	Average	September 30, 2021
	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		20,386		6,674		13,712
Trademarks (finite-lived)	18 years		38,194		5,786		32,408
Trademarks (finite-lived)	4 years		10,300		1,287		9,013
Other intellectual property	7 years		762		619		143
Copyrights and other intellectual property	9 years		229		146		83
Total		$	114,371	$	14,512	$	99,859


	Weighted
	Average	December 31, 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		20,386		5,640		14,746
Trademarks (finite-lived)	18 years		38,194		4,192		34,002
Other intellectual property	7 years		762		537		225
Copyrights and other intellectual property	10 years		190		128		62
Total		$	104,032	$	10,497	$	93,535

Schedule of Future Amortization Expense

Estimated future amortization expense related to finite-lived intangible assets over the remaining useful lives is as follows:


($ in thousands)	Amortization
Year Ending December 31,	Expense
2021 (October 1 through December 31)	$	1,555
2022		6,220
2023		6,220
2024		6,199
2025		4,257
Thereafter		30,908
Total	$	55,359

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2021

Asset Acquisitions [Abstract]

Schedule of Asset Acquisitions


($ in thousands)
Cash paid at closing	$	1,600
Cash paid subsequent to closing		2,045
Total direct initial consideration		3,645
Direct transaction expenses		16
Contingent obligation (Lori Goldstein Earn-Out)		6,639
Total consideration	$	10,300

Nature of Operations, Background, and Basis of Presentation

9 Months Ended

Sep. 30, 2021

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, 2020 (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, 2020, as filed with the SEC on April 23, 2021.

Certain reclassifications have been made to prior year comparable period financial statements to conform to classifications used in the current year – specifically, the classification and aggregation / disaggregation of certain types of operating costs and expenses, and the disaggregation of the components of interest and finance expense. These reclassifications had no impact on total operating costs and expenses, total interest and finance expense, net loss, stockholders’ equity, or cash flows as previously reported.

The Company is a media and consumer products company engaged in the design, production, marketing, live streaming, wholesale distribution, and direct-to-consumer sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Currently, the Company’s brand portfolio consists of the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), the LOGO by Lori Goldstein 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 consolidates Longaberger Licensing, LLC and recognizes noncontrolling interest for the remaining ownership interest held by a third party. The Company acquired the LOGO by Lori Goldstein brand, and the various labels under the brand, on April 1, 2021 (see Note 2).

The Company designs, produces, markets, and distributes products, licenses its brands to third parties, and generates licensing revenues. The Company and its licensees distribute through an omni-channel retail sales strategy, which includes distribution through interactive television, digital live-stream shopping, brick-and-mortar retail, wholesale, and e-commerce channels to be everywhere its customers shop.

Recently Adopted Accounting Pronouncements

On January 1, 2021, the Company adopted Accounting Standards Update ("ASU") No. 2019‑12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU removes certain exceptions to the general principles in Topic 740, including, but not limited to, intraperiod tax allocations and interim period tax calculations. The ASU also provides additional clarification and guidance related to recognition of franchise taxes and changes in tax laws. The adoption of this new guidance did not have any impact on the Company’s results of operations, cash flows, and financial condition.

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

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, 2021	7,179,375	$	3.14	4.93	$	—
Granted	510,390		1.91
Canceled	(8,050)		1.86
Exercised	(99,700)		1.77
Expired/Forfeited	(1,771,070)		5.63
Outstanding at September 30, 2021, and expected to vest	5,810,945	$	2.32	5.56	$	—
Exercisable at September 30, 2021	1,931,778	$	3.40	2.10	$	—

Summary of Stock Option Activity for Non-Vested Options


		Weighted
		Average
	Number of	Grant Date
	Options	Fair Value
Balance at January 1, 2021	4,116,167	$	0.08
Granted	510,390		0.44
Vested	(647,390)		0.43
Forfeited or Canceled	(100,000)		0.08
Balance at September 30, 2021	3,879,167	$	0.06

Summary of Warrant Activity


				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
	Number of	Exercise		Life	Intrinsic
	Warrants	Price		(in Years)	Value
Outstanding and exercisable at January 1, 2021	579,815	$	4.63	1.32	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(463,750)		5.00
Outstanding and exercisable at September 30, 2021	116,065	$	3.15	2.83	$	—

Summary of Restricted Stock Activity


		Weighted
	Number of	Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2021	780,833	$	4.09
Granted	254,623		1.69
Canceled	—		—
Vested	(204,623)		1.63
Expired/Forfeited	—		—
Outstanding at September 30, 2021	830,833	$	3.96

Acquisitions - Additional Information (Details) - Lori Goldstein Brand - USD ($)			9 Months Ended
	Apr. 01, 2021	Mar. 18, 2021	Sep. 30, 2021
Schedule Of Asset Acquisition [Line Items]
Cash paid at closing	$ 1,600,000
Cash paid subsequent to closing	$ 2,045,000
Period for payment of additional consideration	45 days
Asset Acquisition, Contingent Obligation	$ 6,639,000		$ 6,600,000
Contingent consideration			$ 12,500,000
Percentage of additional consideration on royalty contribution	75.00%
Purchase price	$ 10,300,000
Term of employment agreement	10 years
Base salary rate during current fiscal year	$ 900,000
Base salary rate after current fiscal year	1,200,000
Advisory and consultation fees during current fiscal year	600,000
Advisory and consultation fees after current fiscal year	$ 800,000
Weighted average useful life of finite-lived intangible assets acquired	4 years
Maximum
Schedule Of Asset Acquisition [Line Items]
Contingent consideration	$ 12,500,000
Senior Management
Schedule Of Asset Acquisition [Line Items]
Bonus Compensation Expense		$ 175,000
Chief Executive Officer
Schedule Of Asset Acquisition [Line Items]
Bonus Compensation Expense		100,000
Chief Financial Officer, President and Chief Operating Officer, and Executive Vice President of Business Development and Treasury [Member]
Schedule Of Asset Acquisition [Line Items]
Bonus Compensation Expense		$ 25,000

Stockholders' Equity - Stock Awards (Details) - Restricted Stock - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Number of Other than Options
Outstanding, beginning balance (in shares)			780,833
Granted (in shares)			254,623
Canceled (in shares)			0
Vested (in shares)			(204,623)
Expired/Forfeited (in shares)			0
Outstanding, ending balance (in shares)	830,833		830,833
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)			$ 4.09
Granted (in dollars per share)			1.69
Canceled (in dollars per share)			0
Vested (in dollars per share)			1.63
Expired/Forfeited (in dollars per share)			0
Outstanding, ending balance (in dollars per share)	$ 3.96		$ 3.96
Other disclosures
Compensation expense	$ 37,000	$ 11,000	$ 84,000	$ 44,000
Unrecognized compensation expense	$ 72,000		$ 72,000
Weighted average period of recognition			1 year 6 months

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 1,284	$ 1,151
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)	19,541,921	19,260,862
Common stock, shares outstanding (in shares)	19,541,921	19,260,862

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Computation of Diluted Earnings Per Share


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
Basic	19,541,774	19,231,040	19,418,469	19,078,453
Effect of exercise of warrants	—	—	—	—
Effect of exercise of stock options	—	—	—	—
Diluted	19,541,774	19,231,040	19,418,469	19,078,453

Anti-dilutive Securities Excluded from Computation of Earnings Per Share


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
Stock options and warrants	5,927,010	8,083,690	5,927,010	8,083,690

Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Maturities of Lease Liabilities


($ in thousands)
2021 (October 1 through December 31)	$	539
2022		1,891
2023		1,711
2024		1,711
2025		1,710
After 2025		3,579
Total lease payments		11,141
Less: Discount		2,531
Present value of lease liabilities		8,610
Current portion of lease liabilities		1,315
Non-current portion of lease liabilities	$	7,295

Stockholders' Equity - Warrants (Details) - Warrant - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Number of Other than Options
Outstanding and exercisable, beginning balance (in shares)			579,815
Granted (in shares)			0
Canceled (in shares)			0
Exercised (in shares)			0
Expired/Forfeited (in shares)			(463,750)
Outstanding and exercisable, ending balance (in shares)	116,065		116,065		579,815
Weighted Average Exercise Price
Outstanding and exercisable, beginning balance (in dollars per share)			$ 4.63
Granted (in dollars per share)			0
Canceled (in dollars per share)			0
Exercised (in dollars per share)			0
Expired/Forfeited (in dollars per share)			5.00
Outstanding and exercisable, ending balance (in dollars per share)	$ 3.15		$ 3.15		$ 4.63
Weighted Average Remaining Contractual Life (in Years), Outstanding and exercisable			2 years 9 months 29 days		1 year 3 months 25 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

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, 2020
Debt Instrument [Line Items]
Grants recognized as a reduction to operating expenses		$ 176,000	$ 1,816,000
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

Debt - Financial Covenants (Details)	Apr. 14, 2021 USD ($)
April 1, 2021 to September 30, 2021
Debt
Minimum EBITDA	$ 2,200,000
April 1, 2021 to December 31, 2021
Debt
Minimum EBITDA	3,426,000
April 1, 2021 to March 31, 2022
Debt
Minimum EBITDA	4,515,000
July 1, 2021 to June 30, 2022
Debt
Minimum EBITDA	5,146,000
October 1, 2021 to September 30, 2022
Debt
Minimum EBITDA	6,500,000
For the trailing twelve month periods ending December 31, 2022, March 31, 2023, June 30, 2023, and September 30, 2023
Debt
Minimum EBITDA	7,000,000
For the trailing twelve month periods ending December 31, 2023, March 31, 2024, June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025
Debt
Minimum EBITDA	7,500,000
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC
Debt
Minimum liquid assets to meet loan covenants	$ 4,000,000.0
Threshold loan to value ratio	0.50
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| Fiscal Quarter Ending December 31 2021
Debt
Leverage ratio required for loan covenant	6.75
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| Fiscal Quarter Ending March 31, 2022
Debt
Leverage ratio required for loan covenant	5.30
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| Fiscal Quarter Ending On And After June 30, 2022
Debt
Leverage ratio required for loan covenant	4.00
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| Nine months period ended December 31, 2021
Debt
Fixed charge coverage ratio required to meet loan covenant	1.00
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| Twelve fiscal month period ended March 31, 2022
Debt
Fixed charge coverage ratio required to meet loan covenant	1.00
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC \| twelve fiscal month period ending June 30 2022
Debt
Fixed charge coverage ratio required to meet loan covenant	1.25

Allowance for Doubtful Accounts

9 Months Ended

Sep. 30, 2021

Credit Loss [Abstract]

Allowance for Doubtful Accounts

5. Allowance for Doubtful Accounts

Accounts receivable are presented on the Company’s condensed consolidated balance sheets net of allowances of $1,284,000 and $1,151,000 as of September 30, 2021 and December 31, 2020, respectively. The Company recognized bad debt expense of $0 and $371,000 for the current quarter and prior year quarter, respectively, and recognized bad debt expense of $132,000 and $1,054,000 for the current nine months and prior year nine months, respectively.

The bad debt expense amounts for the current nine months, prior year quarter, and prior year nine months include $132,000, $385,000, and $971,000, respectively, of bad debt expense related to the bankruptcy of and economic impact on certain retail customers due to the COVID-19 pandemic. The total allowance of $1.1 million against such customers’ outstanding receivable balances of $1.5 million at September 30, 2021 represents management’s best estimate of collectibility, based on information currently available.

Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions

12. Related Party Transactions

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 $11,000 and $29,000 for the current quarter and prior year quarter, respectively. Mrs. D’Loren received compensation of $32,000 and $99,000 for the current nine months and prior year nine months, respectively.

Isaac Mizrahi

On February 24, 2020, the Company entered into an employment agreement with Isaac Mizrahi, a principal stockholder of the Company, for Mr. Mizrahi to continue to serve as Chief Design Officer of the Isaac Mizrahi Brand. The term of the employment agreement expires on December 31, 2022, subject to earlier termination, and may be extended, at the Company’s option, for two successive one-year terms (each, a “Renewal Period”). Mr. Mizrahi’s base salary shall be $1.8 million, $2.0 million, and $2.1 million per annum during the term of the agreement and $2.25 million and $2.4 million during 2023 and 2024 if the term is extended, in each case, subject to adjustment in the event Mr. Mizrahi does not make a specified number of appearances on the QVC channel. Mr. Mizrahi shall be eligible to receive an annual cash bonus (the “Bonus”) up to an amount equal to $2.5 million less base salary for 2020 and $3.0 million less base salary for 2021, 2022, and any year during the Renewal Period. The Bonus shall consist of the DRT Revenue, Bonus, the Brick-and-Mortar Bonus, the Endorsement Bonus and the Monday Bonus, if any, as determined in accordance with the following:

●

“DRT Bonus” means for any calendar year an amount equal to 10% of the aggregate net revenue related to sales of Isaac Mizrahi Brand products through direct response television. The DRT Revenue Bonus shall be reduced by the amount of the Monday Bonus.

●

“Brick-and-Mortar Bonus” means for any calendar year an amount equal to 10% of the net revenues from sales of products under the Isaac Mizrahi Brand, excluding DRT revenue and endorsement revenues.

●

“Endorsement Bonus” means for any calendar year an amount equal to 40% of revenues derived from projects undertaken by the Company with one or more third parties solely for Mr. Mizrahi to endorse the third party’s products through the use of Mr. Mizrahi’s name, likeness, and/or image, and neither the Company nor Mr. Mizrahi provides licensing or design.

●

“Monday Bonus” means $10,000 for each appearance by Mr. Mizrahi on the QVC channel on Mondays (subject to certain expectations) up to a maximum of 40 such appearances in a calendar year.

Mr. Mizrahi is required to devote his full business time and attention to the business and affairs of the Company and its subsidiaries; however, Mr. Mizrahi is the principal of IM Ready-Made, LLC and Laugh Club, Inc. (“Laugh Club”), and accordingly, he may undertake promotional activities related thereto (including the promotion of his name, image, and likeness) through television, video, and other media (and retain any compensation he receives for such activities) (referred to as “Retained Media Rights”) so long as such activities (i) do not utilize the IM trademarks, (ii) do not have a mutually negative impact upon or materially conflict with Mr. Mizrahi’s duties under the employment agreement, or (iii) are consented to by the Company. The Company believes that it benefits from Mr. Mizrahi’s independent promotional activities by increased brand awareness of IM Brands and the IM trademarks.

Severance. If Mr. Mizrahi’s employment is terminated by the Company without “cause,” or if Mr. Mizrahi resigns with “good reason,” then Mr. Mizrahi will be entitled to receive his unpaid base salary and cash bonuses through the termination date and an amount equal to his base salary in effect on the termination date for the longer of six months and the remainder of the then-current term, but in no event exceeding 18 months. If Mr. Mizrahi’s employment is terminated by the Company without “cause” or if Mr. Mizrahi resigns with “good reason” within six months following a change of control (as defined in the employment agreement), Mr. Mizrahi shall be eligible to receive a lump-sum payment equal to two times the sum of (i) his base salary (at an average rate that would have been in effect for such two-year period following termination) plus (ii) the bonus paid or due to Mr. Mizrahi in the year prior to the change in control.

Non-Competition and Non-Solicitation. During the term of Mr. Mizrahi’s employment by the Company and for a one-year period after the termination of such employment (unless his employment was terminated without “cause” or was terminated by him for “good reason”), Mr. Mizrahi may not permit his name to be used by or to participate in any business

or enterprise (other than the mere passive ownership of not more than 3% of the outstanding stock of any class of a publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market) that engages or proposes to engage in the Company’s business anywhere in the world other than the Company and its subsidiaries. Also during his employment and for a one-year period after the termination of such employment, Mr. Mizrahi may not, directly or indirectly, solicit, induce, or attempt to induce any customer, supplier, licensee, or other business relation of the Company or any of its subsidiaries to cease doing business with the Company or any or its subsidiaries; or solicit, induce, or attempt to induce any person who is, or was during the then-most recent 12-month period, a corporate officer, general manager, or other employee of the Company or any of its subsidiaries, to terminate such employee’s employment with the Company or any of its subsidiaries; or hire any such person unless such person’s employment was terminated by the Company or any of its subsidiaries; or in any way interfere with the relationship between any such customer, supplier, licensee, employee, or business relation and the Company or any of its subsidiaries.

On February 24, 2020, the Company entered into a services agreement with Laugh Club, an entity wholly-owned by Mr. Mizrahi, pursuant to which Laugh Club shall provide services to Mr. Mizrahi necessary for Mr. Mizrahi to perform his services pursuant to the employment agreement. The Company will pay Laugh Club an annual fee of $0.72 million for such services.

Related Party Transactions (Details)		3 Months Ended		9 Months Ended
Related Party Transactions (Details)	Feb. 24, 2020 USD ($) item	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)
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		$ 11,000	$ 29,000	$ 32,000	$ 99,000
Isaac Mizrahis
Asset Purchase Agreement
Number Of Agreement Extension Periods \| item	2
Extension term	1 year
Initial cash bonus basis for Calculation	$ 2,500,000
Subsequent cash bonus basis for Calculation	$ 3,000,000.0
DRT Bonus	10.00%
Bricks-and-Mortar Bonus	10.00%
Endorsement Bonus	40.00%
Monday bonus per appearance	$ 10,000
Maximum appearances eligible for Monday bonus \| item	40
Termination compensation period	2 years
Period of restriction of doing similar activity post termination	1 year
Maximum ownership interest in investment	3.00%
Period of restriction for solicit business relations post termination.	1 year
2020	$ 1,800,000
2021	2,000,000.0
2022	2,100,000
2023	2,250,000
2024	2,400,000
Isaac Mizrahis \| Laugh Club
Asset Purchase Agreement
Annual fee	$ 720,000

Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events.

Subsequent Events

14. Subsequent Events

Amendment to Term Loans

On November 12, 2021, the Company, BHI, FEAC, and the Lenders amended the Loan Agreement that was entered into on April 14, 2021 and had been amended on August 12, 2021 and September 29, 2021. Under the November 2021 amendment, certain financial covenants were modified or eliminated for certain time periods. There were no changes to the total principal balance, interest rate, maturity date, or any other terms of the Loan Agreement. Refer to Note 7 for further details.

Unaudited Condensed Consolidated Statements of Equity - USD ($) $ in Thousands	Common Stock Employee	Common Stock Executive officer	Common Stock Consultants	Common Stock Director	Common Stock	Paid-In Capital Employee	Paid-In Capital Executive officer	Paid-In Capital Consultants	Paid-In Capital	Accumulated Deficit	Noncontrolling Interest	Employee	Executive officer	Consultants	Total
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]
Shares issued to executive related to stock grants for bonus payments						$ 220						$ 220
Shares issued to executive related to stock grants for bonus payments (in shares)	336,700
Shares repurchased from employees in exchange for withholding taxes									(102)						(102)
Shares repurchased from employees in exchange for withholding taxes (in shares)					(155,556)
Compensation expense related to stock options and restricted stock									91						91
Net loss										(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															(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]
Shares issued to employees related to restricted stock grants						$ 265						$ 265
Shares issued to employees related to restricted stock grants (in shares)	270,728
Shares repurchased from employees in exchange for withholding taxes									(85)						(85)
Shares repurchased from employees in exchange for withholding taxes (in shares)					(87,249)
Compensation expense related to stock options and restricted stock									55						55
Additional investment in Longaberger Licensing, LLC by non-controlling interest holder											300				300
Net loss										(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 related to stock options and restricted stock									56						56
Net loss										(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
Balances at Dec. 31, 2020					$ 19				102,324	(16,595)	507				86,255
Balances (in shares) at Dec. 31, 2020					19,260,862
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense related to stock options and restricted stock									169						169
Shares issued on exercise of stock options, net (in shares)					1,667
Net loss										(2,547)	(81)				(2,628)
Balances at Mar. 31, 2021					$ 19				102,493	(19,142)	426				83,796
Balances (in shares) at Mar. 31, 2021					19,262,529
Balances at Dec. 31, 2020					$ 19				102,324	(16,595)	507				$ 86,255
Balances (in shares) at Dec. 31, 2020					19,260,862
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued on exercise of stock options, net (in shares)															99,700
Net loss															$ (5,801)
Balances at Sep. 30, 2021					$ 20				102,936	(21,836)	947				82,067
Balances (in shares) at Sep. 30, 2021					19,541,921
Balances at Mar. 31, 2021					$ 19				102,493	(19,142)	426				83,796
Balances (in shares) at Mar. 31, 2021					19,262,529
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to employees related to restricted stock grants								$ 25						$ 25
Shares issued to employees related to restricted stock grants (in shares)			14,045	50,000
Shares issued to executive related to stock grants for bonus payments		$ 1					$ 282						$ 283
Shares issued to executive related to stock grants for bonus payments (in shares)		181,179
Compensation expense related to stock options and restricted stock									52						52
Shares issued on exercise of stock options, net (in shares)					23,102
Net loss										(1,558)	(256)				(1,814)
Balances at Jun. 30, 2021					$ 20				102,852	(20,700)	170				82,342
Balances (in shares) at Jun. 30, 2021					19,530,855
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to employees related to restricted stock grants								$ 25						$ 25
Shares issued to employees related to restricted stock grants (in shares)			9,399
Compensation expense related to stock options and restricted stock									59						59
Shares issued on exercise of stock options, net (in shares)					1,667
Additional investment in Longaberger Licensing, LLC by non-controlling interest holder											1,000				1,000
Net loss										(1,136)	(223)				(1,359)
Balances at Sep. 30, 2021					$ 20				$ 102,936	$ (21,836)	$ 947				$ 82,067
Balances (in shares) at Sep. 30, 2021					19,541,921

Debt (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Net Carrying Amount of Debt

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


	September 30,		December 31,
($ in thousands)	2021		2020
Term loan debt	$	23,750	$	16,750
Unamortized deferred finance costs related to term loan debt		(1,017)		(112)
Revolving loan debt		2,498		—
Total		25,231		16,638
Current portion of debt (i)		4,998		2,800
Long-term debt	$	20,233	$	13,838

(i)	The current portion of debt as of September 30, 2021 consists of $2.5 million of term loan debt and $2.5 million of revolving loan debt; the current portion of debt as of December 31, 2020 is related solely to term loan debt.

Maturities of Long-term Debt

The aggregate remaining annual scheduled principal payments under the Term Loans at September 30, 2021 were as follows:


	Amount of
($ in thousands)	Principal
Year Ending December 31,	Payment
2021 (October 1 to December 31)	$	625
2022		2,500
2023		2,500
2024		2,500
2025		15,625
Total	$	23,750

Schedule of minimum EBITDA


Fiscal Period	Minimum EBITDA
April 1, 2021 to September 30, 2021	$	2,200,000
April 1, 2021 to December 31, 2021	$	3,426,000
April 1, 2021 to March 31, 2022	$	4,515,000
July 1, 2021 to June 30, 2022	$	5,146,000
October 1, 2021 to September 30, 2022	$	6,500,000
For the trailing twelve month periods ending December 31, 2022, March 31, 2023, June 30, 2023, and September 30, 2023	$	7,000,000
For the trailing twelve month periods ending December 31, 2023, March 31, 2024, June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025	$	7,500,000

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Oct. 27, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-37527
Entity Registrant Name	XCEL BRANDS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0307819
Entity Address, Address Line One	1333 Broadway, 10th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10018
City Area Code	347
Local Phone Number	727-2474
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	XELB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,558,813
Entity Central Index Key	0001083220
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

Income Tax

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax

11. Income Tax

The effective income tax benefit rate for the current quarter and the prior year quarter was approximately 28% and 25%, respectively, resulting in an income tax benefit of $0.54 million and $0.15 million, respectively.

The effective income tax benefit rate for the current nine months and prior year nine months was approximately 26% and 10%, respectively, resulting in an income tax benefit of $2.02 million and $0.27 million, respectively.

For the current quarter, the federal statutory rate differed from the effective tax rate primarily due to state taxes, which increased the effective tax rate by approximately 7%.

For the prior year 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 current nine months, the federal statutory rate differed from the effective tax rate primarily due to state taxes, which increased the effective tax rate by approximately 7%, partially offset by the impact of recurring permanent differences, which decreased the effective tax rate by approximately 2%.

For the prior year 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 effective 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.

- 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

Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Contingent Obligation – Halston Heritage Earn-Out

In connection with the February 11, 2019 purchase of the Halston Heritage trademarks from H Company IP, LLC (“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, 2021 and December 31, 2020 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 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.

Contingent Obligation – Lori Goldstein Earn-Out

In connection with the April 1, 2021 acquisition of the Lori Goldstein trademarks (see Note 2 for additional information), the Company agreed to pay the Seller additional cash consideration of up to $12.5 million, based on royalties earned during the six calendar year period commencing in 2021. The Lori Goldstein Earn-Out of $6.6 million is recorded as a long-term liability at September 30, 2021 in the accompanying condensed consolidated balance sheet, based on the difference between the fair value of the acquired assets of the Lori Goldstein brand and the total consideration paid, in accordance with the guidance in ASC Subtopic 805-50.

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 circulate throughout the U.S. and the world. COVID-19 has had an unprecedented impact on the U.S. and global economy as national, state, and local governments continue to react to and attempt to manage this ongoing public health crisis.

The impacts of the ongoing 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 pandemic 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 year ended December 31, 2020, and approximately $0.1 million for the current nine months, for retailers that have filed for bankruptcy.

Due to the ongoing COVID-19 pandemic, there is significant uncertainty surrounding the 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.

Acquisitions

9 Months Ended

Sep. 30, 2021

Asset Acquisitions [Abstract]

Acquisitions

2. Acquisitions

Acquisition of LOGO by Lori Goldstein Brand

On March 30, 2021, the Company and its wholly owned subsidiary, Gold Licensing, LLC, entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Lori Goldstein, Ltd. (the “Seller”) and Lori Goldstein (“Shareholder”), pursuant to which the Company agreed to acquire, and the Seller and Shareholder agreed to sell, certain assets of the Seller, including the “LOGO by Lori Goldstein” trademark and other intellectual property rights relating thereto. On April 1, 2021 (the “Closing Date”), the Company completed the acquisition of the assets specified in the Asset Purchase Agreement.

Pursuant to the Asset Purchase Agreement, on the Closing Date, the Company delivered $1.6 million in cash consideration to the Seller. In addition, the Company was required to deliver $2.0 million in cash consideration to the Seller on the earlier of (i) the Company’s receipt of the first royalty payment from QVC, Inc. in respect of the acquired assets, or (ii) July 29, 2021. This payment was made in July 2021.

In addition to the consideration described above, the Seller is eligible to earn additional consideration of up to $12.5 million (the “Lori Goldstein Earn-Out”), which would be payable, in cash, within 45 days after the end of each applicable calendar year during the six calendar year period commencing 2021 in an amount equal to 75% percent of the Royalty Contribution (as defined in the Asset Purchase Agreement) for such calendar year. The Company recorded a contingent obligation of $6.6 million related to the Lori Goldstein Earn-Out, based on the difference between the fair value of the acquired assets of the LOGO by Lori Goldstein brand and the total consideration paid, in accordance with the guidance in Accounting Standards Codification (“ASC”) Subtopic 805-50.

The LOGO by Lori Goldstein brand acquisition was accounted for as an asset purchase. The following represents the aggregate purchase price of $10.3 million:


($ in thousands)
Cash paid at closing	$	1,600
Cash paid subsequent to closing		2,045
Total direct initial consideration		3,645
Direct transaction expenses		16
Contingent obligation (Lori Goldstein Earn-Out)		6,639
Total consideration	$	10,300

The aggregate purchase price has been allocated entirely to the trademarks of the brand. Such trademarks have been determined by management to have a finite useful life, and accordingly, amortization is recorded in the Company’s condensed consolidated statements of operations. The Lori Goldstein trademarks are being amortized on a straight-line basis over their expected useful life of four years.

Upon the consummation of the acquisition of the LOGO by Lori Goldstein brand as described above, the Company incurred cash bonuses totaling $175,000 to certain members of the Company’s senior management (including $100,000 to the Chief Executive Officer, and $25,000 each to the Chief Financial Officer, President and Chief Operating Officer, and

Executive Vice President of Business Development and Treasury), such success-related bonuses having been approved by the Board of Directors on March 18, 2021. These bonuses were subsequently paid in May 2021.

Additionally, concurrent with the acquisition, the Company also entered into a 10-year employment agreement with the Shareholder to serve as the LOGO by Lori Goldstein brand’s Chief Creative Officer and Spokesperson, with a base salary of $0.9 million per annum through December 31, 2021 and $1.2 million per annum thereafter, and the opportunity to earn additional incentives based on the future net royalties related to the brand. Further, the Company concurrently entered into a consulting agreement with the Seller to provide creative advice and consultation, for a fee of $0.6 million per annum through December 31, 2021 and $0.8 million per annum thereafter.

Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for doubtful accounts receivable	$ 1,284		$ 1,284		$ 1,151
Bad debt expense (recovery)	0	$ 371	132	$ 1,054
Accounts receivable	10,949		10,949		$ 8,889
COVID19
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for doubtful accounts receivable	1,100		1,100
Bad debt expense (recovery)		$ 385	132	$ 971
Accounts receivable	$ 1,500		$ 1,500

Government Assistance

9 Months Ended

Sep. 30, 2021

Unusual or Infrequent Items, or Both [Abstract]

Government Assistance

8. 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 provided for an unsecured loan in the amount of $1.806 million, pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The loan had a two-year term and bore interest at a fixed rate of 1.0% per annum, and monthly principal and interest payments were deferred for six months after the date of disbursement. The Promissory Note contained 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 such a 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 is 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.

Management evaluated the legal and contractual terms associated with the loan, and concluded that, although the legal form of the loan was debt, it represented in substance a government grant that was 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 No. 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 prior year quarter and prior year nine months, respectively. No interest expense related to the loan was recorded in the Company’s condensed consolidated financial statements.

On September 29, 2021, the U.S. Small Business Administration, as authorized by the CARES Act, remitted payment of $1,806,000 to Bank of America, N.A. for full forgiveness of the Company’s Promissory Note under the PPP.

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 recognized $10,000 as a reduction to operating expenses in the prior quarter and prior year nine months.

In total for both the PPP and EIDL, the Company recognized approximately $176,000 and $1,816,000 as a reduction to operating expenses in the prior year quarter and prior year nine months, respectively.

Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

6. Leases

The Company has operating leases for its current office, former office, and a 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 5 months and 7.25 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 operations 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 is generally recognized on a straight-line basis over the lease term.

For both 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 approximately $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 approximately $1.2 million.

As of September 30, 2021, the weighted average remaining operating lease term was approximately 5.9 years and the weighted average discount rate for operating leases was 8.64%.

Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million in the current quarter, $1.7 million in the current nine months, $0.6 million in the prior year quarter, and $1.2 million in the prior year nine months.

As of September 30, 2021, the maturities of lease liabilities were as follows:


($ in thousands)
2021 (October 1 through December 31)	$	539
2022		1,891
2023		1,711
2024		1,711
2025		1,710
After 2025		3,579
Total lease payments		11,141
Less: Discount		2,531
Present value of lease liabilities		8,610
Current portion of lease liabilities		1,315
Non-current portion of lease liabilities	$	7,295

Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

7. Debt

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


	September 30,		December 31,
($ in thousands)	2021		2020
Term loan debt	$	23,750	$	16,750
Unamortized deferred finance costs related to term loan debt		(1,017)		(112)
Revolving loan debt		2,498		—
Total		25,231		16,638
Current portion of debt (i)		4,998		2,800
Long-term debt	$	20,233	$	13,838

(i)	The current portion of debt as of September 30, 2021 consists of $2.5 million of term loan debt and $2.5 million of revolving loan debt; the current portion of debt as of December 31, 2020 is related solely to term loan debt.

Previous Term Loan Debt

On February 11, 2019, the Company entered into an amended loan agreement with Bank Hapoalim B.M. (“BHI”), which amended and restated a prior term loan with BHI, 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 into two term loans: (1) a term loan in the amount of $7.3 million and (2) a term loan in the amount of $14.7 million. Such loan agreement was subsequently amended on April 13, 2020 and again on August 18, 2020; such amendments changed the timing and amount of quarterly installment payments, but did not change the total principal balance, interest rate, or maturity date. These amendments during 2020 were accounted for as debt modifications and, accordingly, no gain or loss was recorded.

Current Term Loan Debt

On April 14, 2021 (the “Loan Closing Date”), Xcel, as Borrower, and its wholly-owned subsidiaries (each a “Guarantor” and collectively, the “Guarantors”), entered into a Loan and Security Agreement (the “Loan Agreement”) with BHI as administrative agent and collateral agent, FEAC Agent, LLC (“FEAC”) as co-collateral agent, and the financial institutions party thereto as lenders (the “Lenders”). Pursuant to the Loan Agreement, the Lenders made two term loans: (1) a term loan in the amount of $10.0 million (“Term Loan A”) and (2) a term loan in the amount of $15.0 million (“Term Loan B” and, together with Term Loan A, the “Term Loans”).

The Loan Agreement also provided that the Lenders make available to Xcel a revolving loan facility in an amount up to $4.0 million on a discretionary basis, but not to exceed 85% of the amount of eligible accounts receivable, as defined. Xcel shall have the right to request the Lenders to make incremental term loans (the “Incremental Term Loans”) of up to $25.0 million.

Management assessed and determined that this new agreement resulted in an extinguishment of the previous term loan debt, and accordingly recognized a loss of approximately $0.8 million (consisting of $0.1 million of unamortized deferred finance costs and $0.7 million of breakage fees owed to the old lender under the terms of the previous debt agreement) during the current quarter. Approximately $367,000 of such aforementioned breakage fees were paid at time of extinguishment, with the remaining $367,000 of such fees payable in three equal payments on each of May 1, 2022, 2023, and 2024.

Upon entering into the Loan Agreement, Xcel paid a 2.5% closing fee in the amount of $0.625 million to the administrative agent for the benefit of each Lender having a term loan commitment; the Company also paid approximately $0.6 million

of various legal and other fees in connection with the execution of the Loan Agreement. These fees and costs totaling approximately $1.2 million have been deferred on the condensed consolidated balance sheet as of September 30, 2021 as a reduction of the carrying value of the Term Loans, and are being amortized to interest expense over the term of the Term Loans using the effective interest method.

The Term Loans mature on April 14, 2025, Incremental Term Loans shall mature on the date set forth in the applicable term note, and Revolving Loans mature on April 14, 2022 or such later date as agreed upon by Xcel and the Lenders. Principal on the Term Loans is payable in 16 quarterly installments of $625,000 on each of March 31, June 30, September 30, and December 31 of each year, commencing on June 30, 2021 and ending on March 31, 2025, with a final payment of $15.0 million on the maturity date of April 14, 2025. An amount equal to eighty percent (80%) of each quarterly principal installment payment shall be applied to the Term Loan A and the remaining twenty percent (20%) of each such quarterly principal installment shall be applied to the Term Loan B until the outstanding principal balance of Term Loan A is paid in full. Thereafter, one hundred percent (100%) of each such quarterly principal installment shall be applied to the Term Loan B.

The aggregate remaining annual scheduled principal payments under the Term Loans at September 30, 2021 were as follows:


	Amount of
($ in thousands)	Principal
Year Ending December 31,	Payment
2021 (October 1 to December 31)	$	625
2022		2,500
2023		2,500
2024		2,500
2025		15,625
Total	$	23,750

Xcel shall have the right upon 30 days’ prior written notice to (i) terminate the Revolving Loan facility and repay all Revolving Loans and accrued and unpaid interest thereon and (ii) prepay all or any portion of the Term Loans or Incremental Term Loans and accrued and unpaid interest thereon, provided that any prepayment of the Term Loans shall be applied first to prepay the Term Loan A in full, second to prepay the Term Loan B, and third to the Incremental Term Loans in accordance with the terms agreed to by Xcel, the Lenders, and the administrative agent.

If any Term Loan is prepaid in whole or in part on or prior to the third anniversary of the Loan Closing Date (including as a result of an event of default), Xcel shall pay a prepayment premium as follows: an amount equal to the principal amount of the Term Loan prepaid multiplied by: (i) the greater of three percent (3.00%) and the Lost Yield Revenue (as defined below) if such prepayment occurs on or before the first anniversary of the Loan Closing Date; (ii) two percent (2.00%) if such prepayment occurs at any time after the first anniversary of the Loan Closing Date and on or prior to the second anniversary of the Loan Closing Date; and (iii) one percent (1.00%) if such prepayment occurs at any time after the second anniversary of the Loan Closing Date on or prior to the third anniversary of the Loan Closing Date. Xcel is not obligated to pay a prepayment premium if the Term Loans are prepaid after the third anniversary of the Loan Closing Date. “Lost Yield Revenue” means, with respect to any payment of Term Loans at any time on or prior to the first anniversary of the Loan Closing Date (excluding regularly scheduled amortization payments), the amount of interest (including interest at the Default Rate to the extent the Default Rate is being charged under the Loan Agreement) that would have accrued on the repaid Term Loans during the first 12 months of the term of the Loan Agreement minus the portion of such interest on such Term Loans that actually has been paid.

Xcel’s obligations under the Loan Agreement are guaranteed by the Guarantors and secured by all of the assets of Xcel and the Guarantors (as well as any subsidiary formed or acquired that becomes a credit party to the Loan Agreement) and, subject to certain limitations contained in the Loan Agreement, equity interests of the Guarantors (as well as any subsidiary formed or acquired that becomes a credit party to the Loan Agreement).

Xcel also granted the Lenders a right of first offer to finance any acquisition for which the consideration therefor will be paid other than by cash of Xcel or the Guarantors, the issuance of equity interest of Xcel, or the issuance of notes to the applicable seller.

The Loan Agreement contains customary covenants, including reporting requirements, trademark preservation, and financial covenants (on a consolidated basis with Xcel and the Guarantors under the Loan Agreement).

On August 12, 2021, the Company, BHI, FEAC, and the Lenders amended the Loan Agreement entered into on April 14, 2021. Under this amendment, the EBITDA financial covenant for the three months ended June 30, 2021 was eliminated, and the financial covenants related to EBITDA, fixed charge coverage ratio, and leverage ratio were lowered for the remainder of 2021 and for the 12 months ending March 31, 2022. Additionally, the maximum amount available under the revolving loan facility was reduced from $4.0 million to $1.5 million until the Company meets or exceeds certain financial targets as set forth in the amendment. There were no changes to the total principal balance, interest rate, maturity date, or any other terms of the Loan Agreement.

On September 29, 2021, the Company, BHI, FEAC, and the Lenders amended the Loan Agreement entered into on April 14, 2021. Under this amendment, the maximum amount available under the revolving loan facility was changed to $2.5 million for the period from September 29, 2021 to November 15, 2021, and $1.5 million thereafter until the Company meets or exceeds certain financial targets as set forth in the amendment. There were no changes to the total principal balance, interest rate, maturity date, or any other terms of the Loan Agreement.

On November 12, 2021, the Company, BHI, FEAC, and the Lenders amended the Loan Agreement entered into on April 14, 2021. Under this amendment, certain financial covenants were modified or eliminated for certain time periods. There were no changes to the total principal balance, interest rate, maturity date, or any other terms of the Loan Agreement

The Company’s financial covenants under the Loan Agreement, as amended, are as follows:

●

minimum EBITDA at the end of specified fiscal periods as set forth below;


Fiscal Period	Minimum EBITDA
April 1, 2021 to September 30, 2021	$	2,200,000
April 1, 2021 to December 31, 2021	$	3,426,000
April 1, 2021 to March 31, 2022	$	4,515,000
July 1, 2021 to June 30, 2022	$	5,146,000
October 1, 2021 to September 30, 2022	$	6,500,000
For the trailing twelve month periods ending December 31, 2022, March 31, 2023, June 30, 2023, and September 30, 2023	$	7,000,000
For the trailing twelve month periods ending December 31, 2023, March 31, 2024, June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025	$	7,500,000

●

liquid assets of at least 4.0 million at all times;

●

a fixed charge coverage ratio of not less than (a) 1.00 to 1.00 for the nine month period ending on December 31, 2021, (b) 1.00 to 1.00 for the twelve fiscal month period ending March 31, 2022, and (c) 1.25 to 1.00 for the twelve fiscal month period ending at the end of each fiscal quarter commencing with the fiscal quarter ending June 30, 2022;

●

a leverage ratio for the twelve fiscal month period ending at the end of each fiscal quarter not exceeding (a) 6.75 to 1.00 for the fiscal quarter ending December 31, 2021, (b) 5.30 to 1.00 for the fiscal quarter ending March 31, 2022, and (c) 4.00 to 1.00 for each fiscal quarter ending on and after June 30, 2022; and

●

a loan to value ratio not exceeding 50%.

The Company was in compliance with all applicable covenants as of September 30, 2021, inclusive of the aforementioned amendment executed on November 12, 2021.

Interest on the Term Loan A will accrue at LIBOR plus 4.0% per annum, interest on the Term Loan B will accrue at LIBOR plus 8.0% per annum, and interest on the Revolving Loans will accrue at either the Base Rate plus 1.5% per annum or LIBOR plus 3.75%, as elected by Xcel. Interest on the Loans is payable on the last business day of each calendar month. Base Rate is defined in the 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. LIBOR is defined in the Loan Agreement as the greater of (a) the rate of interest per annum for deposits in dollars for an interest period equal to one month as published by ICE Benchmark Administration Limited or a comparable or successor quoting service at approximately 11:00 a.m. (London time) on such date of determination or (b) 1.0% per annum. Interest on the Incremental Term Loans will accrue at rates and will be paid on dates to be agreed to by Xcel and the Lenders.

For the current and prior year quarter, the Company incurred interest expense related to term loan debt of approximately $565,000 and $303,000, respectively. For the current nine months and prior year nine months, the Company incurred interest expense related to term loan debt of approximately $1,363,000 and $926,000, respectively. The effective interest rate related to term loan debt was approximately 9.6% and 8.4% for the current quarter and current nine months, respectively, and was approximately 6.6% for both the prior year quarter and prior year nine months.

On June 24, 2021, Xcel borrowed $1.5 million under the aforementioned revolving loan facility, and on September 30, 2021, Xcel borrowed $998,000 under the aforementioned revolving loan facility. The Company incurred related interest expense for the current quarter and current nine months of approximately $18,000 and $19,000, respectively.

Earnings Per Share - Anti-dilutive Securities Excluded (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share [Abstract]
Stock options and warrants (in shares)	5,927,010	8,083,690	5,927,010	8,083,690

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues
Net revenue	$ 11,261	$ 7,391	$ 29,834	$ 21,968
Cost of goods sold (sales)	2,865	1,270	7,763	3,923
Gross profit	8,396	6,121	22,071	18,045
Operating costs and expenses
Salaries, benefits and employment taxes	4,185	2,968	12,286	9,798
Other selling, general and administrative expenses	3,463	2,159	9,591	7,153
Stock-based compensation	163	49	754	780
Depreciation and amortization	1,891	1,437	4,949	4,069
Government assistance - Paycheck Protection Program and other		(176)		(1,816)
Asset impairment charges		31		113
Total operating costs and expenses	9,702	6,468	27,580	20,097
Other income		46		46
Operating loss	(1,306)	(301)	(5,509)	(2,006)
Interest and finance expense
Interest expense - term loan debt	565	303	1,363	926
Other interest and finance charges (income), net	23	1	127	(29)
Loss on extinguishment of debt			821
Total interest and finance expense	588	304	2,311	897
Loss before income taxes	(1,894)	(605)	(7,820)	(2,903)
Income tax benefit	(535)	(145)	(2,019)	(269)
Net loss	(1,359)	(460)	(5,801)	(2,634)
Less: Net loss attributable to noncontrolling interest	(223)	(26)	(560)	(95)
Net loss attributable to Xcel Brands, Inc. stockholders	$ (1,136)	$ (434)	$ (5,241)	$ (2,539)
Loss per share attributable to Xcel Brands, Inc. common stockholders:
Basic net loss per share	$ (0.06)	$ (0.02)	$ (0.27)	$ (0.13)
Diluted net loss per share	$ (0.06)	$ (0.02)	$ (0.27)	$ (0.13)
Weighted average number of common shares outstanding:
Basic weighted average common shares outstanding	19,541,774	19,231,040	19,418,469	19,078,453
Diluted weighted average common shares outstanding	19,541,774	19,231,040	19,418,469	19,078,453
Net licensing revenue
Revenues
Net revenue	$ 6,854	$ 5,236	$ 17,385	$ 15,378
Net sales revenue
Revenues
Net revenue	$ 4,407	$ 2,155	$ 12,449	$ 6,590

Trademarks and Other Intangibles - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense for intangible assets	$ 1,560	$ 1,140	$ 4,020	$ 3,420

Nature of Operations, Background, and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2021

Nature of Operations, Background, and Basis of Presentation [Abstract]

Recently Adopted Accounting Pronouncements

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, 2020	Sep. 29, 2021
Debt Instrument [Line Items]
Grants recognized as a reduction to operating expenses		$ 176,000	$ 1,816,000
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
Amount of loan forgiveness under Paycheck Protection Program				$ 1,806,000
Interest expense		$ 0	$ 0

Debt - Net Carrying Amount of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt
Unamortized deferred finance costs related to term loan	$ (1,017)	$ (112)
Total	25,231	16,638
Current portion of long-term debt	4,998	2,800
Long-term debt	20,233	13,838
Revolving Credit Facility
Debt
Term loan debt	2,498
Current portion of long-term debt	2,500
Xcel Term Loan
Debt
Term loan debt	23,750	$ 16,750
Current portion of long-term debt	$ 2,500

Trademarks and Other Intangibles - Schedule of Trademarks and Other Intangibles (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Trademarks and Other Intangibles
Gross Carrying Amount, Total	$ 114,371	$ 104,032
Accumulated Amortization	14,512	10,497
Net Carrying Amount	55,359
Net Carrying Amount, Total	$ 99,859	$ 93,535
Trademarks
Trademarks and Other Intangibles
Weighted Average Amortization Period	15 years	15 years
Gross Carrying Amount (definite-lived)	$ 20,386	$ 20,386
Accumulated Amortization	6,674	5,640
Net Carrying Amount	$ 13,712	$ 14,746
Other intellectual property
Trademarks and Other Intangibles
Weighted Average Amortization Period	7 years	7 years
Gross Carrying Amount (definite-lived)	$ 762	$ 762
Accumulated Amortization	619	537
Net Carrying Amount	$ 143	$ 225
Copyrights and other intellectual property
Trademarks and Other Intangibles
Weighted Average Amortization Period	9 years	10 years
Gross Carrying Amount (definite-lived)	$ 229	$ 190
Accumulated Amortization	146	128
Net Carrying Amount	83	62
Trademarks
Trademarks and Other Intangibles
Gross Carrying Amount (indefinite-lived)	$ 44,500	$ 44,500
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	5,786	4,192
Net Carrying Amount	$ 32,408	$ 34,002
Lori Goldstein Brand \| Trademarks
Trademarks and Other Intangibles
Weighted Average Amortization Period	4 years
Gross Carrying Amount (definite-lived)	$ 10,300
Accumulated Amortization	1,287
Net Carrying Amount	$ 9,013

Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

9. 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 Accounting Standards Codification 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 long-term implied volatilities of the Company’s stock, 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.

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, 2021	7,179,375	$	3.14	4.93	$	—
Granted	510,390		1.91
Canceled	(8,050)		1.86
Exercised	(99,700)		1.77
Expired/Forfeited	(1,771,070)		5.63
Outstanding at September 30, 2021, and expected to vest	5,810,945	$	2.32	5.56	$	—
Exercisable at September 30, 2021	1,931,778	$	3.40	2.10	$	—

On March 15, 2021, the Company granted options to purchase an aggregate of 365,390 shares of common stock to various employees. The exercise price of the options is $1.86 per share, and all options vested immediately on the date of grant.

On April 1, 2021, the Company granted options to purchase an aggregate of 125,000 shares of common stock to non-management directors. The exercise price of the options is $1.93 per share, and 50% of the options vest on each of April 1, 2022 and April 1, 2023.

On July 1, 2021, the Company granted options to purchase an aggregate of 20,000 shares of common stock to a member of management. The exercise price of the options is $2.76 per share, and 50% of the options vest on each of June 1, 2022 and June 1, 2023.

Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $48,000 and $45,000, respectively. Compensation expense related to stock options for the current nine months and prior year nine months was approximately $246,000 and $158,000, respectively.

Total unrecognized compensation expense related to unvested stock options at September 30, 2021 amounts to approximately $125,000 and is expected to be recognized over a weighted average period of approximately 1.16 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, 2021	4,116,167	$	0.08
Granted	510,390		0.44
Vested	(647,390)		0.43
Forfeited or Canceled	(100,000)		0.08
Balance at September 30, 2021	3,879,167	$	0.06

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, 2021	579,815	$	4.63	1.32	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(463,750)		5.00
Outstanding and exercisable at September 30, 2021	116,065	$	3.15	2.83	$	—

No compensation expense related to warrants was recognized in the current quarter, prior year quarter, current nine months, 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, 2021	780,833	$	4.09
Granted	254,623		1.69
Canceled	—		—
Vested	(204,623)		1.63
Expired/Forfeited	—		—
Outstanding at September 30, 2021	830,833	$	3.96

On April 1, 2021, the Company issued an aggregate of 50,000 shares of stock to non-management directors, which vest evenly over two years, whereby 50% shall vest on April 1, 2022, and 50% shall vest on April 1, 2023.

On April 26, 2021, the Company issued 14,045 shares of stock to a consultant, which vested immediately.

On July 1, 2021, the Company issued 9,399 shares of stock to a consultant, which vested immediately.

Compensation expense related to restricted stock grants for the current and prior year quarter was approximately $37,000 and $11,000, respectively. Compensation expense related to restricted stock grants for the current nine months and prior year nine months was approximately $84,000 and $44,000, respectively.

Total unrecognized compensation expense related to unvested restricted stock grants at September 30, 2021 amounts to approximately $72,000 and is expected to be recognized over a weighted average period of approximately 1.50 years.

Additionally, on May 7, 2021, the Company issued 181,179 shares of stock to a member of senior management as payment for a performance bonus earned in 2020. These shares vested immediately. The Company had previously recognized compensation expense of approximately $291,000 in 2020 to accrue for this performance bonus, and recognized a reduction to compensation expense of approximately $(8,000) during the current nine months related to this bonus. The Company also recognized approximately $46,000 and $400,000 of compensation expense in the current quarter and current nine months, respectively, related to similar senior management bonuses payable in common stock in 2022.

The Company also recognized approximately $32,000 of compensation expense in the current quarter and current nine months to accrue for a contractual payment to an employee that will be paid in shares in the fourth quarter of 2021.

Shares Available Under the Company’s 2011 Equity Incentive Plan

As of September 30, 2021, there were 2,636,969 shares of common stock available for issuance under the Plan.

Shares Reserved for Issuance

As of September 30, 2021, there were 8,563,979 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.

Debt - Xcel Term Loan Remaining Principal Payments (Details) - Xcel Term Loan - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt
2021 (October 1 to December 31)	$ 625
2022	2,500
2023	2,500
2024	2,500
2025	15,625
Total	$ 23,750	$ 16,750

Stockholders' Equity - Stock Options (Details) - USD ($)						3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 01, 2023	Jun. 01, 2022	Jul. 01, 2021	Apr. 01, 2021	Mar. 15, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Number of Options
Outstanding, beginning balance (in shares)								7,179,375
Granted (in shares)								510,390
Canceled (in shares)								(8,050)
Exercised (in shares)								99,700
Expired/Forfeited (in shares)								(1,771,070)
Outstanding, ending balance (in shares)						5,810,945		5,810,945		7,179,375
Exercisable (in shares)						1,931,778		1,931,778
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)								$ 3.14
Granted (in dollars per share)								1.91
Canceled (in dollars per share)								1.86
Exercised (in dollars per share)								1.77
Expired/Forfeited (in dollars per share)								5.63
Outstanding, ending balance (in dollars per share)						$ 2.32		2.32		$ 3.14
Exercisable (in dollars per share)						$ 3.40		$ 3.40
Other disclosures
Outstanding Weighted Average Remaining Contractual Life (in Years)								5 years 6 months 21 days		4 years 11 months 4 days
Exercisable Weighted Average Remaining Contractual Life (in Years)								2 years 1 month 6 days
Aggregate Intrinsic Value, Outstanding						$ 0		$ 0		$ 0
Aggregate Intrinsic Value, Exercisable						0		0
Restricted Stock
Other disclosures
Compensation expense						37,000	$ 11,000	84,000	$ 44,000
Unrecognized compensation expense						72,000		$ 72,000
Weighted average period of recognition								1 year 6 months
Employee Stock Option
Other disclosures
Compensation expense						48,000	$ 45,000	$ 246,000	$ 158,000
Unrecognized compensation expense						$ 125,000		$ 125,000
Weighted average period of recognition								1 year 1 month 28 days
Employee Stock Option \| Employee
Number of Options
Granted (in shares)					365,390
Weighted Average Exercise Price
Granted (in dollars per share)					$ 1.86
Employee Stock Option \| Non Management Directors
Number of Options
Granted (in shares)				125,000
Weighted Average Exercise Price
Granted (in dollars per share)				$ 1.93
Other disclosures
Vesting percentage per year				50.00%
Employee Stock Option \| Management
Number of Options
Granted (in shares)			20,000
Weighted Average Exercise Price
Granted (in dollars per share)			$ 2.76
Other disclosures
Vesting percentage per year	50.00%	50.00%
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 - Xcel Loan Narrative (Details)					3 Months Ended		9 Months Ended
Debt - Xcel Loan Narrative (Details)	Sep. 30, 2021 USD ($)	Jun. 24, 2021 USD ($)	Apr. 14, 2021 USD ($) installment loan	Feb. 11, 2019 USD ($) loan	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Nov. 16, 2021 USD ($)	Sep. 29, 2021 USD ($)	Aug. 12, 2021 USD ($)
Debt
Loss on extinguishment of debt							$ (821,000)
Payment of breakage fees							367,000
Proceeds from Lines of Credit							2,498,000
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC
Debt
Number of term loans \| loan			2
Loss on extinguishment of debt			$ (800,000)
Unamortized deferred finance costs			100,000
Breakage fees			700,000
Payment of breakage fees			$ 367,000
Debt extinguishment fee payable	$ 367,000				$ 367,000		367,000
Number of equal installments in breakage fees payable \| installment			3
Percentage of closing fee			2.50%
Closing fee paid			$ 625,000
Legal and other fees			600,000
Deferred issuance cost			$ 1,200,000
Number of quarterly installments \| installment			16
Quarterly installment payment			$ 625,000
Final payment amount			15,000,000.0
Xcel Term Loan
Debt
Incremental term loans			$ 25,000,000.0
Floor rate of LIBOR (as percentage)			1.00%
Interest expense					$ 565,000	$ 303,000	$ 1,363,000	$ 926,000
Effective interest rate (as percentage)					9.60%	6.60%	8.40%	6.60%
Xcel Term Loan \| On Or Before First Anniversary
Debt
Percentage of prepayment premium			3.00%
Xcel Term Loan \| After First Anniversary And On Or Before Second Anniversary
Debt
Percentage of prepayment premium			2.00%
Xcel Term Loan \| After Second Anniversary And On Or Before Third Anniversary
Debt
Percentage of prepayment premium			1.00%
Xcel Term Loan A
Debt
Face amount of loan			$ 10,000,000.0
Percentage of quarterly principal installment payment			80.00%
Xcel Term Loan A \| LIBOR
Debt
Basis spread on variable rate			4.00%
Xcel Term Loan B
Debt
Face amount of loan			$ 15,000,000.0
Percentage of quarterly principal installment payment			20.00%
Percentage of quarterly principal installment payment			100.00%
Xcel Term Loan B \| LIBOR
Debt
Basis spread on variable rate			8.00%
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan
Debt
Face amount of loan				$ 22,000,000.0
Number of term loans \| loan				2
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
Debt
Amount of future financing			$ 4,000,000.0							$ 2,500,000	$ 1,500,000
Percentage of the amount of eligible accounts receivable			85.00%
Interest expense					$ 18,000		$ 19,000
Proceeds from Lines of Credit	$ 998,000	$ 1,500,000
Revolving Credit Facility \| Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC
Debt
Notice period to terminate or prepay			30 days
Revolving Credit Facility \| Xcel Term Loan \| Base Rate
Debt
Basis spread on variable rate			1.50%
Revolving Credit Facility \| Xcel Term Loan \| LIBOR
Debt
Basis spread on variable rate			3.75%
Revolving Credit Facility \| Xcel Term Loan \| Fed Funds Effective Rate Overnight Index Swap Rate [Member]
Debt
Basis spread on variable rate			2.00%
Revolving Credit Facility \| Forecast
Debt
Amount of future financing									$ 1,500,000