0001558370-23-006076 | 10-K | XBRL Viewer

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of income tax benefit for federal and state and local income taxes


	Years Ended December 31,
($ in thousands)	2022		2021
Current:
Federal	$	300	$	—
State and local		234		86
Total current		534		86

Deferred:
Federal		(509)		(2,376)
State and local		(456)		(816)
Total deferred		(965)		(3,192)
Total benefit	$	(431)	$	(3,106)

Schedule of reconciliation of income tax benefit computed at the federal and state and local statutory rates


	Years Ended December 31,
	2022		2021
U.S. statutory federal rate	21.00	%	21.00	%
State and local rate, net of federal tax benefit	6.10		4.64
Stock compensation	(6.14)		(5.56)
Excess compensation deduction	(5.32)		(0.68)
Federal true-ups	(5.09)		(0.10)
Life insurance	(0.52)		(0.10)
Change in tax rate	—		0.06
Other permanent differences	—		(0.01)
Income tax benefit	10.03	%	19.25	%

Schedule of components of net deferred tax assets (liabilities)


	December 31,
($ in thousands)	2022		2021
Deferred tax assets
Stock-based compensation	$	712	$	1,274
Federal, state and local net operating loss carryforwards		3,175		6,684
Accrued compensation and other accrued expenses		748		728
Allowance for doubtful accounts		—		309
Basis difference arising from discounted note payable		11		11
Foreign tax credit		—		219
Charitable contribution carryover		—		77
Property and equipment		497		488
Interest expense		—		602
Total deferred tax assets		5,143		10,392

Deferred tax liabilities
Basis difference arising from intangible assets of acquisition		(4,036)		(10,251)
Total deferred tax liabilities		(4,036)		(10,251)

Net deferred tax assets	$	1,107	$	141

Income Taxes - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2017
Operating Loss Carryforwards
Operating loss carryforward available to offset future taxable income	$ 10.9	$ 20.8	$ 0.3
Indefinite Life
Operating Loss Carryforwards
Operating loss carryforward available to offset future taxable income	$ 10.9

Significant Contracts and Concentrations (Tables)

12 Months Ended

Dec. 31, 2022

Risks and Uncertainties [Abstract]

Schedule Of License Agreements


	Current Term	Automatic	Xcel Commenced	QVC Product
Agreement	Expiry	Renewal	Brand with QVC	Launch
LOGO Qurate Agreement	November 1, 2023	one-year period	April 2021	2009
Longaberger Qurate Agreement	October 31, 2023	two-year period	November 2019	2019
Ripka Qurate Agreement	*	not applicable	April 2014	1999
IM Qurate Agreement	**	not applicable	September 2011	2010
H Qurate Agreement	***	not applicable	January 2015	2015

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of total lease costs


($ in thousands)	2022		2021
Operating lease cost	$	1,474	$	2,047
Short-term lease cost		55		68
Variable lease cost		217		178
Sublease income		(104)		(622)
Total lease cost	$	1,642	$	1,671

Schedule of maturities of lease liabilities

As of December 31, 2022, the maturities of lease liabilities were as follows:


($ in thousands)
2023	$	1,678
2024		1,711
2025		1,711
2026		1,711
2027		1,452
Thereafter (through 2028)		158
Total lease payments		8,421
Less: Discount		1,206
Present value of lease liabilities		7,215
Current portion of lease liabilities		1,376
Non-current portion of lease liabilities	$	5,839

Schedule of contracts with certain executives and key employees


	Employment
($ in thousands)	Contract
Year Ended December 31,	Payments
2023	$	4,313
2024		2,150
2025		2,150
2026		2,150
2027		2,150
Thereafter		6,988
Total future minimum employment contract payments	$	19,901

Acquisitions, Divestitures and Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2022

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

Summarized financial information for IM Topco


($ in thousands)
Revenues	$	7,791
Gross profit		7,791
Income from continuing operations		317
Net income		317

Related Party Transactions - Isaac Mizrahi (Details)				12 Months Ended
Related Party Transactions - Isaac Mizrahi (Details)	May 31, 2022 USD ($) shares	Feb. 24, 2022 USD ($)	Feb. 24, 2020 USD ($) item	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Asset Purchase Agreement
Additional shares issued \| shares	65,275
Restricted Stock
Asset Purchase Agreement
Number of shares vested \| shares				830,123
Isaac Mizrahi
Asset Purchase Agreement
Base Salary				$ 2,100,000	$ 2,000,000.0	$ 1,800,000
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
Shares surrendered for cancellation \| shares	240,000
Additional shares issued \| shares	33,557
Payments to related party	$ 100,000
Value of shares issued	$ 50,000
Isaac Mizrahi \| Restricted Stock
Asset Purchase Agreement
Number of shares vested \| shares	522,500
Isaac Mizrahi \| Laugh Club Annual Fee [Member]
Asset Purchase Agreement
Related Party Costs		$ 720,000
IM Topco [Member] \| Services Agreement
Asset Purchase Agreement
Due from related party	$ 300,000
IM Topco [Member] \| License Agreement
Asset Purchase Agreement
Royalty guarantees	$ 400,000

Debt - Narrative (Details)									12 Months Ended
Debt - Narrative (Details)	May 31, 2022 USD ($)	Dec. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 24, 2021 USD ($)	Apr. 21, 2021	Apr. 14, 2021 USD ($) installment loan	Feb. 11, 2019 USD ($) loan	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Debt
Unamortized deferred finance costs									$ 800,000
Repayment of principal									29,000,000	$ 41,750,000
Prepayment fee	$ 1,400,000
Proceeds from revolving loan debt										2,498,000
Interest and related expenses	300,000
Loss on early extinguishment of debt									2,324,000	$ 1,516,000
Prepayment premium									1,400,000
Other costs									100,000
IM Intellectual Property
Debt
Cash proceeds from sale	30,100,000
New Loan Agreement
Debt
Face amount of loan		$ 29,000,000.0
Unamortized deferred finance costs		920,000
Breakage fees		$ (180,000)
Percentage of closing fee		1.75%
Legal and other fees		$ 500,000
Deferred issuance cost		970,000
Quarterly installment payment		625,000
Final payment amount		20,875,000
Notice period to terminate or prepay										30 days
Repayment of principal	$ 28,400,000
Loss on early extinguishment of debt		(740,000)
New Loan Agreement \| On Or Before First Anniversary
Debt
Maximum Prepayment Of Debt Amount		$ 1,400,000
Percentage of prepayment premium		5.00%
New Loan Agreement \| LIBOR
Debt
Stated interest rate (as percentage)		7.50%
Incremental Term Loan
Debt
Face amount of loan		$ 25,000,000.0
Loan And Security Agreement With BHI And First Eagle Alternative Credit LLC
Debt
Number of term loans \| loan							2
Unamortized deferred finance costs							$ 100,000
Breakage fees							$ 700,000
Percentage of closing fee							2.50%
Closing fee paid							$ 600,000
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
Repayment of principal			$ 1,250,000	$ 1,250,000
Loss on early extinguishment of debt							(800,000)
Xcel Term Loan
Debt
Floor rate of LIBOR (as percentage)						1.00%
Interest Expense									$ 1,200,000	$ 1,900,000
Effective interest rate (as percentage)									9.80%	8.70%
Xcel Term Loan A
Debt
Face amount of loan							$ 10,000,000.0
Xcel Term Loan A \| LIBOR
Debt
Stated interest rate (as percentage)							4.00%
Xcel Term Loan B
Debt
Face amount of loan							$ 15,000,000.0
Xcel Term Loan B \| LIBOR
Debt
Stated interest rate (as percentage)							8.00%
Term LoanA \| Xcel Term Loan
Debt
Face amount of loan								$ 7,300,000
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
Stated interest rate (as percentage)								5.10%
Second Amended And Restated Loan And Security Agreement \| Xcel Term Loan B
Debt
Stated interest rate (as percentage)								6.25%
Second Amended And Restated Loan And Security Agreement \| Term LoanB \| Xcel Term Loan B
Debt
Face amount of loan								$ 14,700,000
Revolving Credit Facility
Debt
Amount of future financing							$ 4,000,000.0
Percentage of the amount of eligible accounts receivable							85.00%
Interest Expense										$ 100,000
Line of Credit Facility, Interest Rate (as percent)					4.75%
Proceeds from revolving loan debt			$ 998,000		$ 1,500,000

Income Taxes - Income Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Current:
Federal	$ 300
State and local	234	86
Total current	534	86
Deferred:
Federal	(509)	(2,376)
State and local	(456)	(816)
Total deferred	(965)	(3,192)
Total benefit	$ (431)	$ (3,106)

- Definition

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

+ References + Details

Acquisitions, Divestitures and Variable Interest Entities

12 Months Ended

Dec. 31, 2022

Acquisitions, Divestitures and Variable Interest Entities[Abstract]

Acquisitions Divestitures and Variable Interest Entities

3. Acquisitions, Divestitures and Variable Interest Entities

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 ASC Subtopic 805-50. Based on the performance of the Lori Goldstein brand through December 31, 2022, approximately $0.2 million of additional consideration has been earned and is payable to the Seller in 2023.

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 was 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 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, such success-related bonuses having been approved by the Board of Directors on March 18, 2021. These bonuses were expensed on the Closing Date and 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. The Company therefore recognized $1.2 million and $0.9 million of salary expense within salaries, benefits and employment taxes in the accompanying consolidated statements of operations, and $0.8 million and $0.6 million of consulting expense within other selling, general and administrative expenses in the accompanying consolidated statements of operations, in the Current Year and Prior Year, respectively, related to such agreements.

Sale of Majority Interest in Isaac Mizrahi Brand

On May 27, 2022, Xcel (along with IM Topco, LLC (“IM Topco”) and IM Brands, LLC (“IMB”), both wholly owned subsidiaries of the Company) and IM WHP, LLC (“WHP”), a subsidiary of WHP Global, a private equity-backed brand management and licensing company, entered into a membership purchase agreement. Pursuant to this agreement, on May 31, 2022, (i) the Company contributed assets owned by IMB, including the Isaac Mizrahi Brand trademarks and other intellectual property rights relating thereto into IM Topco, and (ii) the Company sold 70% of the membership interests of IM Topco to WHP.

The purchase price paid by WHP to the Company at the closing of the transaction in exchange for the 70% membership interest in IM Topco consisted of $46.2 million in cash. Pursuant to the purchase agreement, the Company will also be entitled to receive an “earn-out” payment in the amount of $2.0 million if, during the period from January 1, 2023 through December 31, 2023, (i) IM Topco receives Net Royalty Revenue (as defined in the purchase agreement) in an amount equal to or greater than $17.5 million and (ii) IM Topco generates EBITDA (as defined in the purchase agreement) in an amount equal to or greater than $11.8 million. Additionally, in the event that IM Topco receives less than $13.347 million in aggregate royalties for any four consecutive calendar quarters over a three-year period ending on the third anniversary of the closing, WHP will be entitled to receive from the Company up to $16 million, less all amounts of net cash flow distributed to WHP for such period, as an adjustment to the purchase price, payable in either cash or equity interests in IM Topco held by the Company. Based on IM Topco’s earnings from May 31, 2022 through December 31, 2022 and the applicable distribution provisions, WHP earned $4.32 million in cash flow, which reduces the potential purchase price adjustment to $11.68 million.

In connection with the aforementioned membership purchase agreement, on May 31, 2022, the Company and WHP entered into an Amended and Restated Limited Liability Company Agreement of IM Topco (the “Business Venture Agreement”) governing the operation of IM Topco as a partnership between the Company and WHP following the closing. Pursuant to the Business Venture Agreement, IM Topco is managed by a single Manager appointed by the vote of a majority-in-interest of IM Topco’s members, and WHP serves as the sole Manager of IM Topco. The Business Venture Agreement contains customary provisions for the governance of a partnership, including with respect to decision making, access to information, restrictions on transfer of interests, and covenants.

Pursuant to the Business Venture Agreement, IM Topco’s Net Cash Flow (as defined in the agreement) shall be distributed to the members during each fiscal year no less than once per fiscal quarter, as follows:

(i)

first, 100% to WHP, until WHP has received an aggregate amount during such fiscal year equal to $8,852,000;

(ii)

second, 100% to Xcel, until Xcel has received an aggregate amount during such fiscal year equal to $1,316,200; and

(iii)

thereafter, in proportion to the members’ respective ownership interests.

The amounts described in (i) and (ii) above are subject to adjustment in certain circumstances as set forth in the Business Venture Agreement.

The Company also entered into a number of other related agreements on May 31, 2022 in connection with the transaction, as described below:

●

The Company entered into a services agreement with IM Topco, pursuant to which the Company will provide certain design and support services (including assistance with the operations of the interactive television business and related talent support) to IM Topco in exchange for payments of $0.3 million per fiscal year.

●

The Company entered into a license agreement with IM Topco, pursuant to which IM Topco granted the Company a license to use certain Isaac Mizrahi trademarks on and in connection with the design, manufacture, distribution, sale, and promotion of women’s sportswear products in the United States and Canada during the term of the agreement, in exchange for the payment of royalties in connection therewith. The initial term of this agreement ends December 31, 2026, and provides guaranteed royalties of $0.4 million per year to IM Topco.

●

The Company’s licensing agreement with Qurate Retail Group related to the Isaac Mizrahi Brand (see Note 5) was assigned to IM Topco as of May 31, 2022.

●

The Company’s employment agreement with Mr. Mizrahi and the Company’s services agreement with Laugh Club (see Note 11) were transferred to IM Topco. In addition, all 522,500 unvested shares of restricted stock of the Company held by Mr. Mizrahi (for which all stock-based compensation expense had been previously recognized in prior periods) were immediately vested, with 240,000 of such shares being surrendered for cancellation in satisfaction of withholding tax obligations. In addition, the Company issued 33,557 additional shares of common stock of the Company (valued at $50,000) to Mr. Mizrahi, which vested immediately, and made a $100,000 cash payment to Mr. Mizrahi.

Management assessed and evaluated the ownership structure and other terms of the May 27, 2022 membership purchase agreement and Business Venture Agreement, as well as considered the Company’s continuing involvement with the Isaac Mizrahi Brand through the aforementioned services agreement and licensing agreement, and concluded that (i) IM Topco is not a Variable Interest Entity under ASC Topic 810, and (ii) the Company has significant influence over, but does not control, IM Topco. As such, on May 31, 2022, the Company de-recognized the carrying amount of the Isaac Mizrahi Brand trademarks of $44.5 million and recognized the fair value of its retained interest in IM Topco of approximately $19.8 million as an equity method investment on the accompanying consolidated balance sheet. The fair value of the Company’s retained interest was determined by applying the Company’s ownership percentage to the implied enterprise value of IM Topco, which was calculated based on the price paid by WHP for the 70% controlling interest, as the May 31, 2022 sale transaction was considered an arms-length transaction between knowledgeable market participants and the most relevant and reasonable indication of value to utilize. The inputs and assumptions for this nonrecurring fair value measurement are classified as Level 3 within the fair value hierarchy defined in ASC Topic 820.

The Company incurred approximately $0.9 million of expenses directly related to this transaction, including legal fees and agent fees, of which $0.1 million of the agent fees were paid through the issuance of 65,275 shares of the Company’s common stock, which were recognized as a reduction to the gain from the transaction. The Company recognized a net pre- tax gain from the transaction of $20.6 million, which is classified as other income in the consolidated statement of operations for the Current Year.

In addition to the amounts described above, the Company’s Board of Directors awarded cash bonuses totaling approximately $1.0 million to certain members of the Company’s senior management. These bonuses are included in Salaries, benefits and employment taxes in the accompanying consolidated statement of operations for Current Year.

During the Current Year subsequent to the May 27, 2022 transaction, the Company made a capital contribution to IM Topco of $0.6 million in cash, which did not change the Company’s noncontrolling ownership interest of 30%.

The Company accounts for its interest in the ongoing operations of IM Topco as other income (expense) under the equity method of accounting. The Company recognized an equity method loss of approximately $1.2 million related to its investment for the year ended December 31, 2022, based on the aforementioned distribution provisions and preferences set forth in the Business Venture Agreement.

Summarized financial information for IM Topco for the period commencing May 31, 2022 (the date of the sale of a majority interest in IM Topco) through December 31, 2022 is as follows:


($ in thousands)
Revenues	$	7,791
Gross profit		7,791
Income from continuing operations		317
Net income		317

Longaberger Licensing, LLC Variable Interest Entity

Xcel is party to a limited liability company agreement (the “LLC Agreement”) with a subsidiary of Hilco Global related to Longaberger Licensing, LLC (“LL”). Hilco Global is the sole Class A Member of LL, and Xcel is the sole Class B Member of LL (each individually a “Member,” and collectively, the “Members”). Each Member holds a 50% equity ownership interest in LL; however, based on an analysis of the contractual terms and rights contained in the LLC Agreement and related agreements, the Company has previously determined that under the applicable accounting standards, LL is a variable interest entity and the Company has effective control over LL. Therefore, as the primary beneficiary, the Company has consolidated LL since 2019, and has recognized the assets, liabilities, revenues, and expenses of LL as part of its consolidated financial statements, along with a noncontrolling interest which represents Hilco Global’s 50% ownership share in LL.

During the Prior Year, the Members made capital contributions to LL of $1.0 million each in order to fund LL’s working capital requirements. This resulted in increases to the carrying value of Hilco Global’s noncontrolling interest in LL for the Prior year of $1.0 million. The impacts of Xcel’s capital contributions were eliminated in consolidation.

Acquisitions, Divestitures and Variable Interest Entities - Sale of Majority Interest in Isaac Mizrahi Brand (Details)				7 Months Ended	12 Months Ended
	May 31, 2022 USD ($) shares	May 27, 2022 USD ($) Y	Mar. 18, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) shares
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Additional shares issued \| shares	65,275
Amount of de-recognized asset	$ 44,500,000
Fair value of retained interest	19,800,000
Expenses related to this transaction	900,000
Agent fees paid	100,000
Gain on sale of majority interest in Isaac Mizrahi brand					$ 20,586,000
Loss from equity method investment					(1,202,000)
Members contribution					$ 600,000
IM Topco, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Company's noncontrolling ownership interest		30.00%
Management
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash bonus	$ 1,000,000.0
IM Topco, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership interest	70.00%
Loss from equity method investment	$ 1,200,000
Members contribution		$ 600,000
Lori Goldstein Brand \| Senior Management
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash bonus			$ 175,000
Restricted Stock
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of shares vested \| shares					830,123
Isaac Mizrahi
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Shares surrendered for cancellation \| shares	240,000
Additional shares issued \| shares	33,557
Value of shares issued	$ 50,000
Payments to related party	$ 100,000
Isaac Mizrahi \| Restricted Stock
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of shares vested \| shares	522,500
Business Venture Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash flow distributable to members (in percent)	100.00%
Net cash flow distributable to members	$ 1,316,200
Business Venture Agreement \| WHP
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash flow distributable to members (in percent)	100.00%
Net cash flow distributable to members	$ 8,852,000
Services Agreement \| IM Topco
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Due from related party	300,000
License Agreement \| IM Topco
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Royalty guarantees	$ 400,000
Disposed of by Sale \| Isaac Mizrahi \| WHP
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Adjustments to purchase price payable				$ 11,680,000	$ 11,680,000
WHP earned in cashflow				$ 4,320,000
IM Brand trademarks and other intellectual property rights \| Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of membership interests sold		70.00%
Purchase price paid in cash		$ 46,200,000
Earn-out consideration		2,000,000.0
Amount of adjustments to retained interest		17,500,000
EBITDA		11,800,000
Royalty guarantees		$ 13,347,000
Number of consecutive quarters for royalty payable term \| Y		4
Royalty payable term		3 years
Adjustments to purchase price payable		$ 16,000,000

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock Employees	Common Stock Executive Officer [Member]	Common Stock Consultants	Common Stock Director	Common Stock	Paid-In Capital [Member] Employees	Paid-In Capital [Member] Executive Officer [Member]	Paid-In Capital [Member] Consultants	Paid-In Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Noncontrolling Interest [Member]	Employees	Executive Officer [Member]	Consultants	Total
Balances at Dec. 31, 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									343						343
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
Shares issued to employee in connection with contractual agreement						$ 31						$ 31
Shares issued to employee in connection with contractual agreement (in shares)	21,676		40,336
Shares issued to consultant in connection with stock grant								$ 75						$ 75
Shares issued to consultant in connection with stock grant (in shares)				50,000
Shares issued on exercise of stock options, net (in shares)					26,253
Shares repurchased in exchange for withholding taxes						(16)						(16)
Shares repurchased in exchange for withholding taxes (in shares)	(9,187)
Additional investment in Longaberger Licensing, LLC by non-controlling interest holder											1,000				1,000
Net loss										(12,184)	(845)				(13,029)
Balances at Dec. 31, 2021					$ 20				103,039	(28,779)	662				74,942
Balances (in shares) at Dec. 31, 2021					19,571,119
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Compensation expense related to stock options and restricted stock									534						534
Shares issued to executive related to stock grants for bonus payments							281						281
Shares issued to executive related to stock grants for bonus payments (in shares)		178,727
Shares issued in connection with sale transaction (see Note 2 and Note 8)						97						97
Shares issued in connection with sale transaction (see Note 2 and Note 8) (in shares)	65,275
Shares issued to consultant in connection with stock grant								$ 33	50					$ 33	50
Shares issued to consultant in connection with stock grant (in shares)			20,064	50,000	33,557
Shares repurchased in exchange for withholding taxes						$ (357)	$ (85)					$ (357)	$ (85)
Shares repurchased in exchange for withholding taxes (in shares)	(240,000)	(53,882)
Net loss										(4,018)	(1,338)				(5,356)
Balances at Dec. 31, 2022					$ 20				$ 103,592	$ (32,797)	$ (676)				$ 70,139
Balances (in shares) at Dec. 31, 2022					19,624,860

Trademarks and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Trademarks and Other Intangibles

Trademarks and other intangibles, net consist of the following:


	Weighted
	Average	December 31, 2022
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (finite-lived)	15 years		68,880		21,346		47,534
Copyrights and other intellectual property	8 years		429		298		131
Total		$	69,309	$	21,644	$	47,665


	Weighted
	Average	December 31, 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		68,880		15,268		53,612
Non-compete agreement	7 years		562		562		—
Copyrights and other intellectual property	8 years		429		237		192
Total		$	114,371	$	16,067	$	98,304

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
2023	$	6,140
2024		6,120
2025		4,177
2026		3,533
2027		3,507
Thereafter (through 2036)		24,188
Total	$	47,665

Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Compensation expense	$ 720	$ 720
Operating cost	620	720
Non Management Directors
Stockholders' Equity
Compensation expense	310	170
Employee
Stockholders' Equity
Compensation expense	$ 410	$ 550

Trademarks and Other Intangibles - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets [Line Items]
Impairment charges on indefinite-lived intangible assets		$ 0
Impairment of Intangible Assets, Finite-lived	$ 0	0
Amortization expense for intangible assets	6,100,000	$ 5,600,000
Trademarks
Goodwill and Intangible Assets [Line Items]
Proceeds from sale of assets	$ 44,500,000

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

10. Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. In determining the need for a valuation allowance, management reviews both positive and negative evidence pursuant to the requirements of ASC Topic 740, including current and historical results of operations, future income projections, and the overall prospects of the Company’s business.

The income tax provision (benefit) for federal and state and local income taxes in the consolidated statements of operations consists of the following:


	Years Ended December 31,
($ in thousands)	2022		2021
Current:
Federal	$	300	$	—
State and local		234		86
Total current		534		86

Deferred:
Federal		(509)		(2,376)
State and local		(456)		(816)
Total deferred		(965)		(3,192)
Total benefit	$	(431)	$	(3,106)

The reconciliation of income tax benefit computed at the federal and state and local statutory rates to the Company’s loss before taxes is as follows:


	Years Ended December 31,
	2022		2021
U.S. statutory federal rate	21.00	%	21.00	%
State and local rate, net of federal tax benefit	6.10		4.64
Stock compensation	(6.14)		(5.56)
Excess compensation deduction	(5.32)		(0.68)
Federal true-ups	(5.09)		(0.10)
Life insurance	(0.52)		(0.10)
Change in tax rate	—		0.06
Other permanent differences	—		(0.01)
Income tax benefit	10.03	%	19.25	%

The significant components of net deferred tax assets (liabilities) of the Company consist of the following:


	December 31,
($ in thousands)	2022		2021
Deferred tax assets
Stock-based compensation	$	712	$	1,274
Federal, state and local net operating loss carryforwards		3,175		6,684
Accrued compensation and other accrued expenses		748		728
Allowance for doubtful accounts		—		309
Basis difference arising from discounted note payable		11		11
Foreign tax credit		—		219
Charitable contribution carryover		—		77
Property and equipment		497		488
Interest expense		—		602
Total deferred tax assets		5,143		10,392

Deferred tax liabilities
Basis difference arising from intangible assets of acquisition		(4,036)		(10,251)
Total deferred tax liabilities		(4,036)		(10,251)

Net deferred tax assets	$	1,107	$	141

As of December 31, 2022 and 2021, the Company had approximately $10.9 million and $20.8 million, respectively, of federal net operating loss carryforwards ("NOLs") available to offset future taxable income. The NOL as of December 31, 2017 of $0.3 million has an expiration period through 2037. The NOL generated during tax years beginning after December 31, 2017 of $10.9 million has an indefinite life and does not expire.

As of December 31, 2022 and 2021, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its consolidated financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its consolidated financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Trademarks and Other Intangibles

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Trademarks and Other Intangibles

4. Trademarks and Other Intangibles

Trademarks and other intangibles, net consist of the following:


	Weighted
	Average	December 31, 2022
	Amortization	Gross Carrying		Accumulated		Net Carrying
($ in thousands)	Period	Amount		Amortization		Amount
Trademarks (finite-lived)	15 years		68,880		21,346		47,534
Copyrights and other intellectual property	8 years		429		298		131
Total		$	69,309	$	21,644	$	47,665


	Weighted
	Average	December 31, 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		68,880		15,268		53,612
Non-compete agreement	7 years		562		562		—
Copyrights and other intellectual property	8 years		429		237		192
Total		$	114,371	$	16,067	$	98,304

During the Current Year, the Company sold its $44.5 million of indefinite-lived trademarks related to the Isaac Mizrahi Brand (see Note 3 for details). Also during the Current Year, the Company retired its intangible asset for a non-compete agreement related to the Halston Brand, as such intangible asset had reached the end of its estimated useful life and had become fully amortized.

Amortization expense for intangible assets for the Current Year and Prior Year was approximately $6.1 million and $5.6 million, respectively.

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
2023	$	6,140
2024		6,120
2025		4,177
2026		3,533
2027		3,507
Thereafter (through 2036)		24,188
Total	$	47,665

Nature of Operations, Background, and Basis of Presentation

12 Months Ended

Dec. 31, 2022

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

Xcel Brands, Inc. (“Xcel” and, together with its subsidiaries, the “Company”) is a media and consumer products company engaged in the design, production, marketing, live streaming, wholesale distribution, and direct-to-consumer sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands.

Currently, the Company’s brand portfolio consists of the LOGO by Lori Goldstein brand (the “Lori Goldstein Brand”), the Halston brands (the “Halston Brand”), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the “C Wonder Brand”), the Longaberger brand (the “Longaberger Brand”), the Isaac Mizrahi brands (the “Isaac Mizrahi Brand”), and other proprietary brands.

●

The Lori Goldstein Brand, Halston Brand, Ripka Brand, and C Wonder Brand are wholly owned by the Company.

●

The Company manages the Longaberger Brand through its 50% ownership interest in Longaberger Licensing, LLC; the Company consolidates Longaberger Licensing, LLC and recognizes noncontrolling interest for the remaining ownership interest held by a third party (see Note 3 for additional details).

●

The Company manages the Q Optix business through its 50% ownership interest in Q Optix, LLC.

●

The Company wholly owned and managed the Isaac Mizrahi Brand through May 31, 2022. On May 31, 2022, the Company sold to a third party a majority interest in a newly-created subsidiary that was formed to hold the Isaac Mizrahi Brand trademarks, but retained a noncontrolling interest in the brand through a 30% ownership interest in IM Topco, LLC and continues to participate in the operations of the business; the Company accounts for its interest in IM Topco, LLC using the equity method of accounting (see Note 3 for additional details).

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

The Company’s wholesale and direct-to-consumer operations are presented as "Net sales" and "Cost of goods sold" in the Consolidated Statements of Operations, separately from the Company’s licensing revenues.

Liquidity and Management’s Plans

The Company incurred net losses of approximately $5.4 million ($25.9 million excluding the gain on sale of a majority interest in the Isaac Mizrahi brand) and $13.0 million during the years ended December 31, 2022 and 2021, respectively, and had an accumulated deficit of approximately $32.8 million and $28.8 million as of December 31, 2022 and 2021, respectively. Included in the net losses were non-cash expenses of approximately $8.2 million and $7.5 million for the years ended December 31, 2022 and 2021, respectively. Net cash used in operating activities was $14.2 million in 2022 and $6.6 million in 2021. The Company had working capital (current assets less current liabilities, excluding the current portion of lease obligations) of approximately $8.8 million and $7.9 million as of December 31, 2022 and 2021, respectively. The Company’s cash and cash equivalents were approximately $4.6 million as of December 31, 2022. The aforementioned factors raise uncertainties about the Company’s ability to continue as a going concern.

Management plans to mitigate an expected shortfall of capital and to support future operations by shifting the business from a wholesale/licensing hybrid model into a licensing plus business model and to divest or restructure the Longaberger brand. In the first quarter of 2023, the Company began to restructure its business operations by entering into new licensing agreements and joint venture arrangements with best-in-class business partners. The Company entered into a new

interactive television licensing agreement with America’s Collectibles Network, Inc. d/b/a JTV (“JTV”) for the Ripka Brand, and a separate license with JTV for the Ripka Brand’s e-commerce business. For apparel, similar transactions have recently been executed. In conjunction with the launch of the C Wonder Brand on HSN, the Company licensed the wholesale production operations related to the brand to One Jeanswear Group, LLC (“OJG”); this new license with OJG also includes other new celebrity brands that the Company plans to launch in 2023 and beyond. For the Halston Brand, management plans on entering into a joint venture related to the brand’s wholesale apparel business with another leading apparel manufacturer (the “Halston JV”). The Halston JV will develop an apparel business under the H Halston brand through department stores, e-commerce, and other retailers. The Halston JV will include a wholesale license to Xcel. Management expects the transition of these operating businesses to be completed by second quarter of 2023. Management believes that this evolution of the Company’s operating model will provide the Company with significant cost savings and allow the Company to reduce and better manage its exposure to operating risks. As of March 31, 2023, steps have been taken to reduce payroll costs by $6 million and operating expenses by $7 million over the next twelve months. Further, the Company intends to obtain a line of credit to provide additional capital resources. However, there is no assurance that this line of credit or any other external financing will be obtained.

Based on these recent changes in the Company’s business model, management expects to generate adequate cash flows to meet the Company’s operating and capital expenditure needs, for at least the twelve months subsequent to the filing date of this Annual Report on Form 10-K, and therefore, such conditions and uncertainties with respect to the Company’s ability to continue as a going concern as of December 31, 2022, have subsequently been alleviated.

Stockholders' Equity - Equity Incentive Plans (Details) - shares	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Shares of common stock reserved for issuance (in shares)	9,022,284
2011 Equity Incentive Plan \| Unexercised Stock Options
Stockholders' Equity
Shares of common stock reserved for issuance (in shares)	5,316,025
2021 Equity Incentive Plan
Stockholders' Equity
Number of common stock eligible for issuance	4,000,000
Shares are granted available for issuance (in shares)	3,291,909
Shares of common stock reserved for issuance (in shares)	3,291,909	3,291,909
2021 Equity Incentive Plan \| Unexercised Stock Options
Stockholders' Equity
Shares of common stock reserved for issuance (in shares)	414,350

Trademarks and Other Intangibles - Schedule of Trademarks and Other Intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Trademarks and Other Intangibles
Gross Carrying Amount (definite-lived)	$ 69,309
Gross Carrying Amount, Total		$ 114,371
Accumulated Amortization	21,644	16,067
Net Carrying Amount	47,665
Net Carrying Amount, Total	$ 47,665	$ 98,304
Trademarks
Trademarks and Other Intangibles
Weighted Average Amortization Period	15 years	15 years
Gross Carrying Amount (definite-lived)	$ 68,880	$ 68,880
Accumulated Amortization	21,346	15,268
Net Carrying Amount	$ 47,534	$ 53,612
Non-compete agreement
Trademarks and Other Intangibles
Weighted Average Amortization Period		7 years
Gross Carrying Amount (definite-lived)		$ 562
Accumulated Amortization		$ 562
Copyrights and other intellectual property
Trademarks and Other Intangibles
Weighted Average Amortization Period	8 years	8 years
Gross Carrying Amount (definite-lived)	$ 429	$ 429
Accumulated Amortization	298	237
Net Carrying Amount	$ 131	192
Trademarks
Trademarks and Other Intangibles
Gross Carrying Amount (indefinite-lived)		$ 44,500

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities
Net loss	$ (5,356)	$ (13,029)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	7,263	6,830
Asset impairment charges	274	1,372
Amortization of deferred finance costs included in interest expense	156	308
Stock-based compensation	620	720
Provision for doubtful accounts	413	102
Undistributed proportional share of net income of equity method investee	1,202
Loss on early extinguishment of debt	2,324	1,516
Deferred income tax benefit	(965)	(3,192)
Gain on sale of majority interest in Isaac Mizrahi brand	(20,586)
Gain on reduction of contingent obligation	(900)
Changes in operating assets and liabilities:
Accounts receivable	2,117	1,147
Inventory	530	(2,159)
Prepaid expenses and other current and non-current assets	566	(818)
Accounts payable, accrued expenses, accrued payroll, accrued income taxes payable, and other current liabilities	(1,372)	1,228
Lease-related assets and liabilities	(244)	(581)
Other liabilities	(224)
Net cash used in operating activities	(14,182)	(6,556)
Cash flows from investing activities
Net proceeds from sale of majority interest in Isaac Mizrahi brand	45,386
Capital contribution to equity method investee	(600)
Cash consideration for acquisition of Lori Goldstein assets		(3,661)
Purchase of other intangible assets		(39)
Purchase of property and equipment	(265)	(1,095)
Net cash provided by (used in) investing activities	44,521	(4,795)
Cash flows from financing activities
Proceeds from exercise of stock options		5
Shares repurchased including vested restricted stock in exchange for withholding taxes	(442)	(16)
Cash contribution from noncontrolling interest		1,000
Proceeds from revolving loan debt		2,498
Proceeds from long-term debt		54,000
Payment of deferred finance costs		(2,173)
Payment of revolving loan debt		(2,498)
Payment of long-term debt	(29,000)	(41,750)
Payment of prepayment, breakage and other fees associated with early extinguishment of long-term debt	(1,511)	(559)
Net cash (used in) provided by financing activities	(30,953)	10,507
Net decrease in cash, cash equivalents, and restricted cash	(614)	(844)
Cash, cash equivalents, and restricted cash at beginning of period	5,222	6,066
Cash, cash equivalents, and restricted cash at end of period	4,608	5,222
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents	4,608	4,483
Restricted cash		739
Total cash, cash equivalents, and restricted cash	4,608	5,222
Supplemental disclosure of non-cash activities:
Contingent obligation related to acquisition of Lori Goldstein assets at fair value		6,639
Liability for equity-based bonuses and other equity-based payments	(283)	(13)
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$ 1,032	1,799
Cash paid during the period for income taxes		$ 91

Stockholders' Equity - Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands									12 Months Ended
	May 31, 2022	Apr. 20, 2022	Oct. 29, 2021	Oct. 01, 2021	Jul. 01, 2021	May 07, 2021	Apr. 26, 2021	Apr. 01, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Other disclosures
Compensation expense									$ 720	$ 720
Non Management Directors
Other disclosures
Compensation expense									310	170
Employee
Number of Other than Options
Granted (in shares)	33,557
Other disclosures
Compensation expense									$ 410	$ 550
Senior Management
Other disclosures
Unrecognized compensation expense		$ 280
Restricted Stock
Number of Other than Options
Outstanding, beginning balance (in shares)									815,833
Granted (in shares)									347,623
Canceled (in shares)									0
Vested (in shares)									(830,123)
Expired/Forfeited (in shares)									0
Outstanding, ending balance (in shares)									333,333	815,833
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)									$ 4.00
Granted (in dollars per share)									1.58
Canceled (in dollars per share)									0
Vested (in dollars per share)									3.11
Expired/Forfeited (in dollars per share)									0
Outstanding, ending balance (in dollars per share)									$ 3.71	$ 4.00
Other disclosures
Compensation expense									$ 300	$ 400
Unrecognized compensation expense									$ 100
Weighted average period of recognition									1 year 1 month 6 days
Restricted Stock \| Isaac Mizrahi
Number of Other than Options
Vested (in shares)	(522,500)
Restricted Stock \| Non Management Directors
Number of Other than Options
Granted (in shares)		50,000						50,000
Other disclosures
Award vesting period (in years)		2 years						2 years
Restricted Stock \| Consultant
Number of Other than Options
Granted (in shares)		20,064		16,892	9,399		14,045
Restricted Stock \| Consultant \| Isaac Mizrahi
Number of Other than Options
Granted (in shares)	65,275
Restricted Stock \| Employee
Number of Other than Options
Granted (in shares)			12,489
Restricted Stock \| Senior Management
Number of Other than Options
Granted (in shares)		178,727				181,179
Other disclosures
Compensation expense											$ 300
Restricted Stock \| April 1, 2022 \| Non Management Directors
Other disclosures
Percentage of options vested per tranche		50.00%
Restricted Stock \| April 20, 2023 \| Non Management Directors
Other disclosures
Percentage of options vested per tranche		50.00%

Summary of Significant Accounting Policies - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]
Accounts receivable	$ 5,110,000	$ 7,640,000
Allowance for doubtful accounts	100,000	1,100,000
Bad debt expense	400,000	100,000
Earned revenue accrued but not billed	0	0
Accounts receivable, assigned to third party agent for collection	1,700,000
Accounts receivable, collection agent fees	50,000.00
Depreciation, Excluding Lessor Asset under Operating Lease	1,100,000	1,300,000
Property and equipment impairment		700,000
Operating Lease, Impairment Loss	300,000	700,000
Impairment charges on indefinite-lived intangible assets		0
Impairment charges on finite-lived intangible assets	0	0
Company wrote-off by customers outstanding	1,500,000
Restricted cash	0	700,000
Equity method investment	19,195,000
Investment without readily determinable fair value	100,000	100,000
Advertising cost during the period	2,600,000	2,500,000
Unrecognized Tax Benefits	$ 0	$ 0
Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of property and equipment (in years)	3 years
Estimated useful life of finite-lived intangible asset (in years)	3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of property and equipment (in years)	7 years
Estimated useful life of finite-lived intangible asset (in years)	18 years

Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands							12 Months Ended
	Apr. 26, 2022	Apr. 20, 2022	Aug. 13, 2021	Jul. 01, 2021	Apr. 01, 2021	Mar. 15, 2021	Dec. 31, 2022	Dec. 31, 2021
Other disclosures
Compensation expense							$ 720	$ 720
Operating cost							620
Other income							$ 100
Authorized number of shares							51,000,000
Employee
Other disclosures
Compensation expense							$ 410	550
Non Management Directors
Other disclosures
Compensation expense							$ 310	$ 170
Stock options
Number of Options
Outstanding, beginning balance (in shares)							5,630,970
Granted (in shares)							605,850
Canceled (in shares)							0
Exercised (in shares)							0
Expired/Forfeited (in shares)							(622,510)
Outstanding, ending balance (in shares)							5,614,310	5,630,970
Exercisable (in shares)							1,916,810
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)							$ 2.25
Granted (in dollars per share)							1.61
Canceled (in dollars per share)							0
Exercised (in dollars per share)							0
Expired/Forfeited (in dollars per share)							2.81
Outstanding, ending balance (in dollars per share)							2.12	$ 2.25
Exercisable (in dollars per share)							$ 2.89
Other disclosures
Outstanding Weighted Average Remaining Contractual Life (in Years)							4 years 9 months 3 days	5 years 5 months 15 days
Exercisable Weighted Average Remaining Contractual Life (in Years)							1 year 9 months
Vested (in shares)							771,684
Compensation expense							$ 500	$ 300
Unrecognized compensation expense								$ 100
Weighted average period of recognition								1 year 1 month 13 days
Stock options \| Employee
Number of Options
Granted (in shares)		380,850	10,000			365,390
Weighted Average Exercise Price
Granted (in dollars per share)		$ 1.62	$ 2.00			$ 1.86
Stock options \| Non Management Directors
Number of Options
Granted (in shares)					125,000
Weighted Average Exercise Price
Granted (in dollars per share)					$ 1.93
Stock options \| Management
Number of Options
Granted (in shares)		125,000		20,000
Weighted Average Exercise Price
Granted (in dollars per share)		$ 1.62		$ 2.76
Other disclosures
Vesting percentage per year		50.00%
Stock options \| Consultant
Number of Options
Granted (in shares)	100,000
Weighted Average Exercise Price
Granted (in dollars per share)	$ 1.58
Stock options \| Five year expiration
Stockholders' Equity
Expiration period								5 years
Stock options \| Seven year expiration
Stockholders' Equity
Expiration period								7 years
Stock options \| Ten year expiration
Stockholders' Equity
Expiration period								10 years

Nature of Operations, Background, and Basis of Presentation - Liquidity (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	May 31, 2022	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net (loss) income			$ (4,018)	$ (12,184)
Net loss			5,356	13,029
Net loss excluding gain on sale of majority interest			25,900
Accumulated deficit			(32,797)	(28,779)
Other Noncash Expense			8,200	7,500
Net cash used in operating activities			14,182	6,556
Working capital, Net			8,800	7,900
Cash and cash equivalents			4,608	4,483
Payment of long-term debt			$ 29,000	$ 41,750
Subsequent Events
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction in payroll costs		$ 6,000
Reduction in operating expenses		$ 7,000
New Loan Agreement
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Payment of long-term debt	$ 28,400

Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

6. Debt

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


	December 31,		December 31,
($ in thousands)	2022		2021
Term loan debt	$	—	$	29,000
Unamortized deferred finance costs related to term loan debt		—		(969)
Total		—		28,031
Current portion of debt		—		2,500
Long-term debt	$	—	$	25,531

On May 31, 2022, the Company used $30.1 million of the proceeds received from the transaction related to the Isaac Mizrahi Brand (see Note 3) to repay all amounts outstanding under the December 30, 2021 term loan agreement with First Eagle Alternative Credit Agent, LLC (“FEAC”) described below, consisting of $28.4 million in principal amount, a $1.4 million prepayment fee, and approximately $0.3 million in interest and related expenses. As a result, the Company recognized a loss on early extinguishment of debt of approximately $2.3 million during the Current Year, consisting of approximately $1.4 million of debt prepayment premium, the immediate write-off of approximately $0.8 million of unamortized deferred finance costs, and approximately $0.1 million of other costs.

Term Loan Debt (through May 31, 2022)

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. Under that amended loan agreement, the aggregate amount 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. These two term loans bore interest at a fixed rate of 5.1% and 6.25% per annum, respectively. 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.

April 2021 Term Loan Debt

On April 14, 2021, Xcel, as Borrower, and its wholly-owned subsidiaries entered into a new loan and security agreement with BHI as administrative agent and collateral agent, FEAC as co-collateral agent, and the financial institutions party thereto as lenders. Pursuant to this loan agreement, the lenders made two term loans: (1) a term loan in the amount of $10.0 million and (2) a term loan in the amount of $15.0 million. These two term loans bore interest at “LIBOR” plus 4.0% per annum, and “LIBOR” plus 8.0% per annum, respectively, with “LIBOR” defined 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. This 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.

Management assessed and determined that the April 2021 loan 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 Prior Year.

Upon entering into the April 2021 loan agreement, Xcel paid a 2.5% closing fee in the amount of $0.6 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 were deferred on the Company’s balance sheet as a reduction of the carrying value of the term loan debt, to be subsequently amortized to interest expense over the term of the debt using the effective interest method.

Under the April 2021 loan agreement, the debt was to mature on April 14, 2025, with principal 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. The Company made the required principal payments on June 30, 2021 and September 30, 2021 (totaling $1.25 million) as scheduled.

The Company, BHI, FEAC, and the lenders subsequently amended the April 2021 loan agreement multiple times during 2021 – on August 12, 2021, September 29, 2021, and November 12, 2021. While these amendments modified financial covenants and/or adjusted the maximum amount available under the revolving loan facility, there were no changes made to the total principal balance, interest rate, maturity date, or any other terms of the loan agreement.

December 2021 Term Loan Debt

On December 30, 2021, Xcel, as Borrower, and its wholly-owned subsidiaries entered into a new loan and security agreement with FEAC, as lead arranger and as administrative agent and collateral agent, and the financial institutions party thereto as lenders. Pursuant to this loan agreement, the lenders made a term loan in the aggregate amount of $29.0 million. This term loan bore interest at “LIBOR” plus 7.5% per annum, with “LIBOR” defined as the greater of (a) the rate of interest per annum for deposits in dollars for an interest period equal to three months as published by Bloomberg or a comparable or successor quoting service at approximately 11:00 a.m. (London time) two business days prior to the last business day of each calendar month and (b) 1.0% per annum. The December 2021 loan agreement also provides that Xcel may request the lenders make incremental term loans of up to $25.0 million, with the terms and conditions of any such incremental term loans to be agreed in an amendment to the agreement prior to funding.

Management assessed and determined that the December 2021 loan agreement resulted in an extinguishment of the April 2021 term loan debt, and accordingly recognized a loss of approximately $0.74 million (consisting of $0.92 million of unamortized deferred finance costs and $(0.18) of net fees owed to BHI less refunds of certain costs related to the April 2021 term loan debt) during the Prior Year.

Upon entering into the December 2021 loan agreement, Xcel paid a 1.75% closing fee to FEAC for the benefit of the lenders; the Company also paid approximately $0.5 million of various legal and other fees in connection with the execution of the loan agreement. These fees and costs totaling approximately $0.97 million were deferred on the Company’s balance sheet as of December 31, 2021 as a reduction of the carrying value of the term loan debt, to be subsequently amortized to interest expense over the term of the debt using the effective interest method.

The December 2021 term loan was to mature on April 14, 2025. Principal on this debt was payable in quarterly installments of $625,000 on each of March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 2022 and ending on March 31, 2025, with a final payment of $20,875,000 on the maturity date of April 14, 2025.

Under the December 2021 loan agreement, Xcel had the right upon thirty (30) days prior written notice to prepay all or any portion of the term loan debt and accrued and unpaid interest thereon. Based on the terms of the loan agreement, when the term loan was repaid in full on May 31, 2022, Xcel was required to pay a prepayment premium of five percent (5.00%), which amounted to approximately $1.4 million.

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

The various term loan agreements described above also contained customary covenants, including reporting requirements, trademark preservation, and certain financial covenants (on a consolidated basis with Xcel and its wholly-owned subsidiaries); the Company was in compliance with all applicable covenants under the respective loan agreements as of and for all periods presented in the financial statements.

For the Current Year and Prior Year, the Company incurred interest expense of approximately $1.2 million and $1.9 million, respectively, related to term loan debt. The effective interest rate related to term loan debt was approximately 9.8% and 8.7% for the Current Year and Prior Year, respectively.

Revolving Loan Debt

Under the terms of the April 2021 loan agreement discussed above, the lenders made a revolving loan facility available to Xcel. 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 revolving loan facility. Xcel repaid the outstanding balance in full on December 30, 2021. The revolving loan facility bore interest at a rate of 4.75% per annum, and the Company incurred related interest expense of approximately $0.1 million for the Prior Year. As of December 31, 2021, the Company no longer had access to a revolving loan facility under the terms of the new loan agreement entered into on December 30, 2021.

Earnings (Loss) Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Earnings (Loss) Per Share [Abstract]
Net loss attributable to Xcel Brands, Inc. stockholders	$ (4,018)	$ (12,184)
Basic weighted average number of shares outstanding	19,624,669	19,455,987
Add: Effect of warrants (in shares)	0	0
Add: Effect of stock options (in shares)	0	0
Diluted weighted average number of shares outstanding	19,624,669	19,455,987
Basic net loss per share	$ (0.20)	$ (0.63)
Diluted net loss per share	$ (0.20)	$ (0.63)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2022

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

8. Earnings (Loss) Per Share

The following table is a reconciliation of the numerator and denominator of the basic and diluted net loss per share computations for the years ended December 31, 2022 and 2021:


		Year Ended
	December 31,
	2022		2021
Numerator:
Net loss attributable to Xcel Brands, Inc. stockholders (in thousands)	$	(4,018)	$	(12,184)

Denominator:
Basic weighted average number of shares outstanding		19,624,669		19,455,987
Add: Effect of warrants		—		—
Add: Effect of stock options		—		—
Diluted weighted average number of shares outstanding		19,624,669		19,455,987

Basic net loss per share	$	(0.20)	$	(0.63)
Diluted net loss per share	$	(0.20)	$	(0.63)

As a result of the net loss presented for the Current Year and Prior Year, the Company calculated diluted loss per share using basic weighted-average shares outstanding for both years, as utilizing diluted shares would be anti-dilutive to loss per share.

The computation of basic and diluted loss per share excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:


	Year Ended
	December 31,
	2022	2021
Stock options	5,614,310	5,630,970
Warrants	116,065	116,065
Total	5,730,375	5,747,035

Significant Contracts

12 Months Ended

Dec. 31, 2022

Risks and Uncertainties [Abstract]

Significant Contracts

5. Significant Contracts

Qurate Agreements

Through its wholly owned subsidiaries, the Company has direct-to-retail license agreements with Qurate Retail Group (“Qurate”), pursuant to which the Company designs, and Qurate sources and sells, various products under the LOGO by Lori Goldstein brand, the Longaberger brand, and the Judith Ripka brand. These agreements include, respectively, the LOGO Qurate Agreement, Longaberger Qurate Agreement, and the Ripka Qurate Agreement. The Company was also previously a party to similar agreements with Qurate related to the Isaac Mizrahi brand (the IM Qurate Agreement) and the H by Halston brand (the H Qurate Agreement). Qurate owns the rights to all designs produced under the aforementioned

agreements (collectively, the “Qurate Agreements”), and the Qurate Agreements include the sale of products across various categories through Qurate’s television media (including QVC and HSN) and related internet sites.

Pursuant to the agreements, the Company granted to Qurate and its affiliates the exclusive, worldwide right to promote the Company’s branded products, and the right to use and publish the related trademarks, service marks, copyrights, designs, logos, and other intellectual property rights owned, used, licensed, and/or developed by the Company, for varying terms as set forth below.


	Current Term	Automatic	Xcel Commenced	QVC Product
Agreement	Expiry	Renewal	Brand with QVC	Launch
LOGO Qurate Agreement	November 1, 2023	one-year period	April 2021	2009
Longaberger Qurate Agreement	October 31, 2023	two-year period	November 2019	2019
Ripka Qurate Agreement	*	not applicable	April 2014	1999
IM Qurate Agreement	**	not applicable	September 2011	2010
H Qurate Agreement	***	not applicable	January 2015	2015

* On August 30, 2022, Qurate and the Company amended the Ripka Qurate Agreement such that the license period was terminated effective December 31, 2021. Effective January 1, 2022, the agreement entered a sell-off period, under which Qurate may continue to license the Ripka brand on a non-exclusive basis for as long as necessary to sell off any of its remaining inventory.

** On May 31, 2022, in connection with the sale of a majority interest in the Isaac Mizrahi brand to WHP, this agreement was assigned to IM Topco, LLC. See Note 3 for additional details.

*** In the fourth quarter of 2020, the Company transitioned and discontinued licensing of the H Halston brand to Qurate. The Company began wholesale supply sales of the H Halston products under arrangements with HSN and certain Qurate global affiliates and other unrelated interactive television networks.

In connection with the Qurate Agreements and during the same periods, Qurate and its subsidiaries have the exclusive, worldwide right to use the names, likenesses, images, voices, and performances of the Company’s spokespersons to promote the respective products.

Under the Qurate Agreements, Qurate is obligated to make payments to the Company on a quarterly basis, based primarily upon a percentage of the net retail sales of the specified branded products. Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by Qurate and its subsidiaries under the Qurate Agreements, net of customer returns, and excluding freight, shipping and handling charges, and sales, use, or other taxes.

Also, under the Qurate Agreements, except for the Longaberger Qurate Agreement, the Company will pay for a period of time a royalty participation fee to Qurate on revenue earned from the sale, license, consignment, or any other form of distribution of any products, bearing, marketed in connection with, or otherwise associated with the specified trademarks and brands. Such royalty participation fees are recorded as a reduction to net licensing revenue.

Net licensing revenue from Qurate totaled $11.4 million and $18.8 million for the Current Year and Prior Year, respectively, representing approximately 44% and 50% of the Company’s total net revenue, respectively. As of December 31, 2022 and 2021, the Company had receivables from Qurate of $0.9 million and $3.5 million, representing approximately 17% and 46% of the Company’s accounts receivable, respectively. The December 31, 2022 and 2021 Qurate receivables did not include any earned revenue accrued but not yet billed as of the respective balance sheet dates.

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2022	Apr. 14, 2023	Jun. 30, 2022
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-37527
Entity Registrant Name	XCEL BRANDS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0307819
Entity Address, Address Line One	1333 Broadway, 10th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10018
City Area Code	347
Local Phone Number	727-2474
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	XELB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 11,906,000
Entity Common Stock, Shares Outstanding		19,624,860
Auditor Name	Marcum LLP
Auditor Firm ID	688
Auditor Location	New York, NY
Entity Central Index Key	0001083220
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

Earnings (Loss) Per Share - Anti-dilutive Securities Excluded (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities	5,730,375	5,747,035
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities	5,614,310	5,630,970
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities	116,065	116,065

Commitments and Contingencies - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
2023	$ 1,678
2024	1,711
2025	1,711
2026	1,711
2027	1,452
Thereafter (through 2028)	158
Total lease payments	8,421
Less: Discount	1,206
Present value of lease liabilities	7,215
Current portion of lease liabilities	1,376	$ 1,207
Non-current portion of lease liabilities	$ 5,839	$ 7,252

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, net of allowances	$ 63	$ 1,090
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)	19,624,860	19,571,119
Common stock, shares outstanding (in shares)	19,624,860	19,571,119

Acquisitions, Divestitures and Variable Interest Entities - Acquisition of LOGO by Lori Goldstein Brand (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 01, 2021	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Asset Acquisition [Line Items]
Cash paid subsequent to closing	$ 2,000
Lori Goldstein Brand
Schedule Of Asset Acquisition [Line Items]
Cash paid at closing	1,600
Cash paid subsequent to closing	2,045
Contingent consideration	$ 12,500
Period for payment of additional consideration	45 days
Maximum period for payment of additional consideration	6 years
Percentage of additional consideration on royalty contribution	75.00%
Asset Acquisition, Contingent Obligation	$ 6,639	$ 6,600
Purchase price	$ 10,300
Weighted average useful life of finite-lived intangible assets acquired	4 years
Term of employment agreement	10 years
Base salary rate during initial year	$ 900
Base salary rate after initial year	1,200
Advisory and consultation fees during initial year	600
Advisory and consultation fees after initial year	800
Salary expenses		1,200	$ 900
Consulting expense		800	$ 600
Additional consideration is payable to the seller		$ 200
Direct transaction expenses	16
Total direct initial consideration	3,645
Maximum \| Lori Goldstein Brand
Schedule Of Asset Acquisition [Line Items]
Contingent consideration	$ 12,500

Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings (Loss) Per Share [Abstract]

Schedule of the basic and diluted net loss per share


		Year Ended
	December 31,
	2022		2021
Numerator:
Net loss attributable to Xcel Brands, Inc. stockholders (in thousands)	$	(4,018)	$	(12,184)

Denominator:
Basic weighted average number of shares outstanding		19,624,669		19,455,987
Add: Effect of warrants		—		—
Add: Effect of stock options		—		—
Diluted weighted average number of shares outstanding		19,624,669		19,455,987

Basic net loss per share	$	(0.20)	$	(0.63)
Diluted net loss per share	$	(0.20)	$	(0.63)

Anti-dilutive Securities Excluded from Computation of Earnings (Loss) Per Share


	Year Ended
	December 31,
	2022	2021
Stock options	5,614,310	5,630,970
Warrants	116,065	116,065
Total	5,730,375	5,747,035

Significant Contracts - Schedule of License Agreements (Details)	12 Months Ended
	Dec. 31, 2022
LOGO Qurate Agreement
Current Term Expiry	Nov. 01, 2023
Automatic Renewal	2 years
Xcel Commenced Brand with QVC	April 2021
QVC Product Launch	2009
Longaberger Qurate Agreement
Current Term Expiry	Oct. 31, 2023
Xcel Commenced Brand with QVC	November 2019
QVC Product Launch	2019
Ripka Qurate Agreement
Xcel Commenced Brand with QVC	April 2014
QVC Product Launch	1999
IM Qurate Agreement
Automatic Renewal	1 year
Xcel Commenced Brand with QVC	September 2011
QVC Product Launch	2010
H Qurate Agreement
Xcel Commenced Brand with QVC	January 2015
QVC Product Launch	2015

Commitments and Contingencies - Other Matters (Details)	Nov. 22, 2022 $ / shares
Commitments and Contingencies Disclosure [Abstract]
Minimum bid price per share	$ 1.00
Consecutive days above minimum bid price per share	30 days

Commitments and Contingencies - Company Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 1,474	$ 2,047
Short-term lease cost	55	68
Variable lease cost	217	178
Sublease income	(104)	(622)
Total lease cost	$ 1,642	$ 1,671

Stockholders' Equity - Non-Vested Options (Details) - Stock options	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of Options
Beginning Balance (in shares) \| shares	3,873,334
Granted (in shares) \| shares	605,850
Vested (in shares) \| shares	(771,684)
Forfeited or Canceled (in shares) \| shares	(10,000)
Ending Balance (in shares) \| shares	3,697,500
Weighted Average Grant Date Fair Value
Beginning Balance (in dollars per share) \| $ / shares	$ 0.07
Granted (in dollars per share) \| $ / shares	0.79
Vested (in dollars per share) \| $ / shares	0.72
Forfeited or Canceled (in dollars per share) \| $ / shares	1.09
Ending Balance (in dollars per share) \| $ / shares	$ 0.05

Nature of Operations, Background, and Basis of Presentation (Details)	12 Months Ended
	Dec. 31, 2022	May 31, 2022
Longaberger Licensing, LLC \| Variable Interest Entity, Primary Beneficiary
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage	50.00%
IM Topco, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ownership interest		30.00%
Q Optix, LLC \| Variable Interest Entity, Primary Beneficiary
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage	50.00%

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity

7. Stockholders’ Equity

The Company has authority to issue up to 51,000,000 shares, consisting of 50,000,000 shares of common stock and 1,000,000 shares of preferred stock.

Equity Incentive Plans

The Company’s 2021 Equity Incentive Plan (the “2021 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 4,000,000 shares of common stock are eligible for issuance under the 2021 Plan. The 2021 Plan provides for the grant of any or all of the following types of awards: stock options (incentive or non-qualified), restricted stock, restricted stock units, performance awards, or cash awards. The 2021 Plan is administered by the Company’s Board of Directors, or, at the Board’s discretion, a committee of the Board.

In addition, stock-based awards (including options, warrants, and restricted stock) previously granted under the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) remain outstanding and shares of common stock may be issued to satisfy options or warrants previously granted under the 2011 Plan, although no new awards may be granted under the 2011 Plan.

Stock-Based Compensation

Total expense recognized for all forms of stock-based compensation was approximately $0.72 million in both the Current Year and Prior Year. Of the Current Year expense amount, approximately $0.41 million related to employees and approximately $0.31 million related to directors and consultants; approximately $0.62 million was recorded as an operating cost and approximately $0.10 million was recorded as a reduction to other income. Of the Prior Year expense amount, approximately $0.55 million related to employees and approximately $0.17 million related to directors and consultants; all of the Prior Year expense amount was recorded as an operating cost.

Stock Options

Options granted under the Company’s equity incentive plans 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 option activity for the Current Year is as follows:



				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
	Number of	Exercise		Life	Intrinsic
	Options	Price		(in Years)	Value
Outstanding at January 1, 2022	5,630,970	$	2.25	5.46	$	—
Granted	605,850		1.61
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(622,510)		2.81
Outstanding at December 31, 2022, and expected to vest	5,614,310	$	2.12	4.76	$	—
Exercisable at December 31, 2022	1,916,810	$	2.89	1.75	$	—

Current Year stock option grants were as follows:

On April 20, 2022, the Company granted options to purchase an aggregate of 380,850 shares of common stock to various employees. The exercise price of the options is $1.62 per share, and all options vested immediately on the date of grant.

On April 20, 2022 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 $1.62 per share, and 50% of the options vest on each of April 20, 2023 and April 20, 2024.

On April 26, 2022, the Company granted options to purchase an aggregate of 100,000 shares of common stock to a consultant. The exercise price of the options is $1.58 per share, and all options vested immediately on the date of grant.

Prior Year stock option grants were as follows:

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. One-half of the options vested on April 1, 2022, and the remaining half of the options will vest on 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. One-half of the options vested on June 1, 2022, and the remaining half of the options will vest on June 1, 2023.

On August 13, 2021, the Company granted options to purchase an aggregate of 10,000 shares of common stock to an employee. The exercise price of the options is $2.00 per share. One-half of the options were to vest on August 13, 2022, with the remaining half of the options to vest on August 13, 2023, but all of these options were forfeited when the employee left the Company in the Current Year.

The fair value of the options granted was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions:


	Year Ended December 31,
	2022		2021
Expected Volatility	57.14 – 92.65	%	29.49 – 82.99	%
Expected Dividend Yield	—	%	—	%
Expected Life (Term, in years)	0.67 – 3.25		2.5 – 3.25
Risk-Free Interest Rate	1.60 – 2.80	%	0.24 – 0.52	%

Compensation expense related to stock options for the Current Year and Prior Year was approximately $0.5 million and $0.3 million, respectively. Total unrecognized compensation expense related to unvested stock options (excluding stock options with performance-based vesting) at December 31, 2022 amounts to approximately $0.1 million and is expected to be recognized over a weighted average period of 1.12 years.

Of the total stock options outstanding at December 31, 2022, the vesting of 3,500,000 options is contingent upon the Company’s common stock achieving certain target prices as follows:


Target Prices		Number of Options Vesting
$3.00		1,000,000
$5.00		850,000
$7.00		700,000
$9.00		550,000
$11.00		400,000

As of December 31, 2022, none of these 3,500,000 performance-based stock options have vested, and no compensation expense has been recorded related to such options.

The following table summarizes the Company’s stock option activity for non-vested options for the Current Year:


		Weighted
		Average
	Number of	Grant Date
	Options	Fair Value
Balance at January 1, 2022	3,873,334	$	0.07
Granted	605,850		0.79
Vested	(771,684)		0.72
Forfeited or Canceled	(10,000)		1.09
Balance at December 31, 2022	3,697,500	$	0.05

Warrants

Warrants granted by the Company 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 warrant activity for the Current Year 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, 2022	116,065	$	3.15	2.57	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	—		—
Outstanding and exercisable at December 31, 2022	116,065	$	3.15	1.57	$	—

No compensation expense was recorded in the Current Year or Prior Year related to warrants.

Stock Awards

A summary of the Company’s restricted stock activity for the Current Year is as follows:


		Weighted
	Number of	Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2022	815,833	$	4.00
Granted	347,623		1.58
Canceled	—		—
Vested	(830,123)		3.11
Expired/Forfeited	—		—
Outstanding at December 31, 2022	333,333	$	3.71

Current Year stock award grants were as follows:

On April 20, 2022, the Company issued an aggregate of 50,000 shares of common stock to non-management directors, which vest evenly over two years, of which 50% shall vest on April 20, 2023, and 50% shall vest on April 20, 2024.

On April 20, 2022, the Company issued 20,064 shares of common stock to a consultant, which vested immediately.

On May 31, 2022, the Company issued 65,275 shares of common stock to a consultant in connection with the transaction related to the Isaac Mizrahi Brand (see Note 3); these shares vested immediately.

On May 31, 2022, the Company issued 33,557 shares of common stock to Isaac Mizrahi, which vested immediately (see Note 3 for additional details).

Additionally, on April 20, 2022, the Company issued 178,727 shares of common stock to a member of senior management as payment for a performance bonus earned in 2021. These shares vested immediately. The Company had previously recognized compensation expense of approximately $0.28 million in the Prior Year to accrue for this performance bonus.

Prior Year stock award grants were as follows:

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. One-half of the shares vested on April 1, 2022, and the remaining half 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.

On October 1, 2021, the Company issued 16,892 shares of stock to a consultant, which vested immediately.

On October 29, 2021, the Company issued 12,489 shares of stock to an employee pursuant to the terms of a contractual agreement, which vested immediately.

Additionally, on May 7, 2021, the Company issued 181,179 shares of common stock to a member of senior management as payment for a performance bonus earned 2020. These shares vested immediately. The Company recognized compensation expense of approximately $0.3 million in 2020 to accrue for this performance bonus.

Notwithstanding the foregoing, each grantee may extend the first anniversary of all or a portion of the restricted stock by six months and, thereafter one or more times may further extend such date with respect to all or a portion of the restricted stock until the next following date exactly six months thereafter, by providing written notice of such election to extend such date with respect to all or a portion of the restricted stock prior to such date.

Total compensation expense related to stock awards for the Current Year and Prior Year (inclusive of the amounts detailed above) was approximately $0.3 million and $0.4 million, respectively. Total unrecognized compensation expense related to unvested restricted stock grants at December 31, 2022 amounts to $0.1 million and is expected to be recognized over a weighted average period of 1.10 years.

The following table provides information with respect to restricted stock purchased and retired by the Company during the Current Year and Prior Year:


				Number of
				Shares
				Purchased as
				Part of
	Total Number	Actual		Publicly	Fair value of
	of Shares	Price Paid		Announced	Re-Purchased
Date	Purchased	per Share		Plan	Shares
April 20, 2022 (i)	53,882		1.57	—		84,000
May 31, 2022 (i)	240,000		1.49	—		358,000
Total 2022	293,882	$	1.50	—	$	442,000

October 29, 2021 (i)	9,187		1.73	—		16,000
Total 2021	9,187	$	1.73	—	$	16,000

(i)

The shares were exchanged from employees and directors in connection with the income tax withholding obligations on behalf of such employees and directors from the vesting of restricted stock or the receipt of stock awards. The 2011 Plan and 2021 Plan allow for award holders to surrender vested shares to cover withholding tax liabilities.

Shares Available Under the Company’s Equity Incentive Plans

At December 31, 2022, there were 3,291,909 shares of common stock available for award grants under the 2021 Plan.

Shares Reserved for Issuance

At December 31, 2022, there were 9,022,284 shares of common stock reserved for issuance, including 5,316,025 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 414,350 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 3,291,909 shares available for issuance under the 2021 Plan.

Dividends

The Company has not paid any dividends to date.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Stockholders' Equity - Outstanding and vesting options (Details) - Performance Shares	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Stockholders' Equity
Number of options vesting	3,500,000
Vested (in shares)	0
Target Price 1 [Member]
Stockholders' Equity
Number of options vesting	1,000,000
Share Price \| $ / shares	$ 3.00
Target Price 2 [Member]
Stockholders' Equity
Number of options vesting	850,000
Share Price \| $ / shares	$ 5.00
Target Price 3 [Member]
Stockholders' Equity
Number of options vesting	700,000
Share Price \| $ / shares	$ 7.00
Target Price 4 [Member]
Stockholders' Equity
Number of options vesting	550,000
Share Price \| $ / shares	$ 9.00
Target Price 5 [Member]
Stockholders' Equity
Number of options vesting	400,000
Share Price \| $ / shares	$ 11.00

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Leases

The Company has an operating lease for its corporate offices and operations facility, as well as certain equipment with a term of 12 months or less. The Company is currently not a party to any finance leases.

The Company's real estate leases have remaining lease terms between approximately 5 to 7 years. As of December 31, 2022, the weighted average remaining lease term was 5.0 years and the weighted average discount rate was 6.25%.

The Company leases office space under an operating lease agreement related to the Company’s main headquarters located in New York City. This lease commenced on March 1, 2016 and expires on October 30, 2027. This lease requires the Company to pay additional rents related to increases in certain taxes and other costs on the property.

The Company also has an operating lease for its former retail store location in Westchester, New York, which was closed in the Current Year. This lease shall expire on January 31, 2029; however, the Company is currently in the process of negotiating the termination of this lease. The Company recorded an impairment charge of $0.7 million to fully impair the remaining balance of the right-of-use asset for this lease in the Prior Year.

The Company had an operating lease for its former corporate offices and operations facility, which was subleased to a third-party subtenant through February 27, 2022, and the Company's lease of this office space expired by its terms on February 28, 2022.

For the years ended December 31, 2022 and 2021, total lease expense included in selling, general and administrative expenses on the Company's consolidated statements of operations was approximately $1.6 million and $1.7 million, respectively. The Company’s total lease costs for the years ended December 31, 2022 and 2021 were comprised of the following:


($ in thousands)	2022		2021
Operating lease cost	$	1,474	$	2,047
Short-term lease cost		55		68
Variable lease cost		217		178
Sublease income		(104)		(622)
Total lease cost	$	1,642	$	1,671

Cash paid for amounts included in the measurement of operating lease liabilities was $1.7 million and $2.0 million in the Current Year and Prior Year, respectively. Cash received from subleasing was $0.1 million and $0.7 million in the Current Year and Prior Year, respectively.

As of December 31, 2022, the maturities of lease liabilities were as follows:


($ in thousands)
2023	$	1,678
2024		1,711
2025		1,711
2026		1,711
2027		1,452
Thereafter (through 2028)		158
Total lease payments		8,421
Less: Discount		1,206
Present value of lease liabilities		7,215
Current portion of lease liabilities		1,376
Non-current portion of lease liabilities	$	5,839

Employment Agreements

The Company has employment contracts with certain executives and key employees. The future minimum payments under these contracts are as follows:


	Employment
($ in thousands)	Contract
Year Ended December 31,	Payments
2023	$	4,313
2024		2,150
2025		2,150
2026		2,150
2027		2,150
Thereafter		6,988
Total future minimum employment contract payments	$	19,901

In addition to the employment contract payments stated above, the Company’s employment contracts with certain executives and key employees contain performance-based bonus provisions. These provisions include bonuses based on the Company achieving revenues in excess of established targets and/or on operating results.

Certain of the employment agreements contain severance and/or change in control provisions. Aggregate potential severance compensation amounted to approximately $3.6 million as of December 31, 2022.

Contingent Obligation – Halston Heritage Earn-Out

In connection with the February 11, 2019 purchase of the Halston Heritage trademarks from the 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 from 2019 through December 31, 2022. This additional consideration would have been payable in shares of common stock of the Company. The Halston Heritage Earn-Out of $0.9 million was recorded as a long-term liability on February 11, 2019 and as of December 31, 2021, based on the difference at the date of acquisition between the fair value of the acquired assets of the Halston Heritage Trademarks and the total consideration paid.

The final royalty target year ended on December 31, 2022, and HIP ultimately did not earn any additional consideration based on the formula set forth in the related asset purchase agreement. As such, during the year ended December 31, 2022, the Company recorded a $0.9 million gain on the reduction of contingent obligations in the accompanying consolidated

statement of operations. As of December 31, 2022, there were no amounts remaining under the Halston Heritage Earn-Out.

Contingent Obligation – Lori Goldstein Earn-Out

In connection with the April 1, 2021 purchase of the Lori Goldstein trademarks (see Note 3 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 liability in the accompanying consolidated balance sheets, 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. Based on the performance of the Lori Goldstein brand through December 31, 2022, approximately $0.2 million of additional consideration has been earned and is payable to the Seller in 2023. At December 31, 2022, $0.2 million of the balance is recorded as a current liability and $6.4 million is recorded as a long-term liability; at December 31, 2021, the entire balance was recorded as a long-term liability.

Contingent Obligation – Isaac Mizrahi Transaction

In connection with the May 31, 2022 transaction related to the sale of a majority interest in the Isaac Mizrahi Brand (see Note 3 for additional information), the Company has agreed with WHP that, in the event that IM Topco receives less than $13.3 million in aggregate royalties for any four consecutive calendar quarters over a three-year period ending on May 31, 2025, WHP will be entitled to receive from the Company up to $16 million, less all amounts of net cash flow distributed to WHP on an accumulated basis, as an adjustment to the purchase price previously paid by WHP. Such amount would be payable by the Company in either cash or equity interests in IM Topco held by the Company. No amount has been recorded in the accompanying consolidated balance sheets related to this contingent obligation, and management believes the likelihood of any such payment is remote. Based on IM Topco’s earnings from May 31, 2022 through December 31, 2022 and the applicable distribution provisions, WHP earned $4.32 million in cash flow, which reduces the potential purchase price adjustment to $11.68 million.

Legal Proceedings

From time to time, the Company becomes involved in legal claims and litigation in the ordinary course of business. In the opinion of management, based on consultations with legal counsel, the disposition of litigation currently pending against the Company is unlikely to have, individually or in the aggregate, a materially adverse effect on the Company’s business, financial position, results of operations, or cash flows. The Company routinely assesses all its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable.

Other Matters

On November 22, 2022, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that the minimum bid price per share for its common stock fell below $1.00 for a period of 30 consecutive business days. Therefore, the Company did not meet the minimum bid price requirement set forth in the Nasdaq Listing Rules.

The letters also state that pursuant to Nasdaq Listing Rules 5810(c)(3)(A), the Company will be provided 180 calendar days to regain compliance with the minimum bid price requirement, or until May 22, 2022.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company can regain compliance if, at any time during the Tolling Period or such 180-day period, the closing bid price of the Company’s common stock is at least $1.00 for a minimum period of 10 consecutive business days. If by May 22, 2023, the Company does not regain compliance with the Nasdaq Listing Rules, the Company may be eligible for additional time to regain compliance pursuant to Nasdaq Listing

Rule 5810(c)(3)(A)(ii). To qualify, the Company would need to submit a transfer application and a $5,000 application fee. The Company would also need to provide written notice to Nasdaq of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. As part of its review process, the Nasdaq staff will make a determination of whether it believes the Company will be able to cure this deficiency. Should the Nasdaq staff conclude that the Company will not be able to cure the deficiency, or should the Company determine not to submit a transfer application or make the required representation, Nasdaq will provide notice that the Company’s shares of common stock will be subject to delisting.

If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company’s shares of common stock will be subject to delisting from the Nasdaq Global Market. At such time, the Company may appeal the delisting determination to a hearings panel.

The Company intends to monitor its closing bid price and the market value of its publicly held common stock between now and May 22, 2023, and will consider available options to resolve the Company’s noncompliance with the minimum bid price requirement, as may be necessary. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria.

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. The COVID-19 pandemic (including actions taken by national, state, and local governments in response to COVID-19) has negatively impacted the U.S. and global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets.

COVID-19 has had, and continues to have, a significant negative impact on the Company’s business. The initial onset of the pandemic in 2020 resulted in a sudden decrease in sales for many of the Company’s products, from which the Company has yet to fully recover. Additionally, COVID-19 has also impacted, and continues to impact, the Company’s supply chain partners, including third party manufacturers, logistics providers, and other vendors, as well as the supply chains of its licensees. These supply chains have experienced, and may continue to experience in the future, disruptions as a result of closed factories, factories operating with a reduced workforce, or other logistics constraints, including vessel, container and other transportation shortages, labor shortages, and port congestion.

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

Commitments and Contingencies - Narrative (Details) $ in Thousands				7 Months Ended	12 Months Ended
	May 31, 2022 USD ($) item	Apr. 01, 2021 USD ($)	Feb. 11, 2019 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Commitments and Contingencies
Operating lease expense					$ 1,600	$ 1,700
Weighted average remaining lease term for operating leases				5 years	5 years
Weighted average discount rate				6.25%	6.25%
Cash payments for operating lease expense					$ 1,700	2,000
Cash received from subleasing					100	700
Contingent obligation				$ 6,396	6,396	7,539
Gain on reduction of contingent obligation					900
Earn-out balance before settlement				243	243
Contingent obligation				$ 19,901	19,901
Gain on reduction of contingent obligation					900
Plan
Commitments and Contingencies
Aggregate potential severance costs					$ 3,600
Minimum
Commitments and Contingencies
Remaining lease term				5 years	5 years
Maximum
Commitments and Contingencies
Remaining lease term				7 years	7 years
Main Headquarters Lease
Commitments and Contingencies
Lease expiration date					Oct. 30, 2027
Office Space Lease
Commitments and Contingencies
Term of operating leases sublease					Feb. 28, 2022
Office Space Lease \| Minimum
Commitments and Contingencies
Lease expiration date					Feb. 27, 2022
Office Space Lease \| Maximum
Commitments and Contingencies
Lease expiration date					Feb. 28, 2022
Retail Site
Commitments and Contingencies
Impairment charge					$ 700
Isaac Mizrahi sale transaction with IM Topco \| Disposed of by Sale
Commitments and Contingencies
Number of consecutive quarters for royalty payable term \| item	4
Royalty payable term	3 years
Contingent obligation	$ 0
Isaac Mizrahi sale transaction with IM Topco \| Disposed of by Sale \| WHP
Commitments and Contingencies
WHP earned in cashflow				$ 4,320
Adjustments to purchase price payable				11,680	11,680
Isaac Mizrahi sale transaction with IM Topco \| Disposed of by Sale \| Maximum
Commitments and Contingencies
Royalty guarantees	13,300
Adjustments to purchase price payable	$ 16,000
Halston Heritage
Commitments and Contingencies
Contingent consideration			$ 6,000
Earn-out liability recorded						900
Gain on reduction of contingent obligation					900
Lori Goldstein Brand
Commitments and Contingencies
Contingent consideration		$ 12,500
Contingent obligation						$ 6,400
Earn-out balance before settlement				$ 200	200
Royalties earned						6 years
Contingent obligation (Lori Goldstein Earn-Out)		6,639			6,600
Additional consideration is payable to the seller					$ 200
Lori Goldstein Brand \| Maximum
Commitments and Contingencies
Contingent consideration		$ 12,500

Significant Contracts - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Product Information [Line Items]
Net revenue	$ 25,781	$ 37,932
Accounts receivable	5,110	7,640
Net licensing revenue
Product Information [Line Items]
Net revenue	$ 14,737	$ 21,876
Sales [Member] \| Customer Concentration Risk [Member] \| Qurate
Product Information [Line Items]
Concentration Risk, Percentage	44.00%	50.00%
Sales [Member] \| Customer Concentration Risk [Member] \| Qurate \| Net licensing revenue
Product Information [Line Items]
Net revenue	$ 11,400	$ 18,800
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Qurate
Product Information [Line Items]
Concentration Risk, Percentage	17.00%	46.00%
Accounts receivable	$ 900	$ 3,500

- Definition

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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Stockholders' Equity - Black-Scholes Assumptions for Options Granted (Details) - Stock options	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Expected Volatility Rate, Minimum	57.14%	29.49%
Expected Volatility Rate, Maximum	92.65%	82.99%
Expected Dividend Yield	0.00%	0.00%
Risk-Free Interest Rate, Minimum	1.60%	0.24%
Risk-Free Interest Rate, Maximum	2.80%	0.52%
Minimum
Stockholders' Equity
Expected Life (in years)	8 months 1 day	2 years 6 months
Maximum
Stockholders' Equity
Expected Life (in years)	3 years 3 months	3 years 3 months

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 4,608	$ 4,483
Accounts receivable, net of allowances of $63 and $1,090, respectively	5,110	7,640
Inventory	2,845	3,375
Prepaid expenses and other current assets	1,457	1,681
Total current assets	14,020	17,179
Non-current Assets:
Property and equipment, net	1,418	2,549
Operating lease right-of-use assets	5,420	6,314
Trademarks and other intangibles, net	47,665	98,304
Equity method investment	19,195
Restricted cash		739
Deferred tax assets, net	1,107	141
Other assets	110	555
Total non-current assets	74,915	108,602
Total Assets	88,935	125,781
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	3,958	6,169
Accrued income taxes payable	568	64
Accrued payroll	416	577
Current portion of operating lease obligations	1,376	1,207
Current portion of long-term debt		2,500
Current portion of contingent obligations	243
Total current liabilities	6,561	10,517
Long-Term Liabilities:
Long-term portion of operating lease obligations	5,839	7,252
Long-term debt, net, less current portion		25,531
Long-term portion of contingent obligations	6,396	7,539
Total long-term liabilities	12,235	40,322
Total Liabilities	18,796	50,839
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding
Common stock, $.001 par value, 50,000,000 shares authorized, and 19,624,860 and 19,571,119 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively	20	20
Paid-in capital	103,592	103,039
Accumulated deficit	(32,797)	(28,779)
Total Xcel Brands, Inc. stockholders' equity	70,815	74,280
Noncontrolling interest	(676)	662
Total Stockholders' Equity	70,139	74,942
Total Liabilities and Stockholders' Equity	$ 88,935	$ 125,781

Acquisitions, Divestitures and Variable Interest Entities - Longaberger Licensing, LLC Variable Interest Entity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Asset Acquisition [Line Items]
Members contribution	$ 600
Variable Interest Entity, Primary Beneficiary
Schedule Of Asset Acquisition [Line Items]
Members contribution		$ 1,000
Increase in carrying value of non-controlling interest		$ 1,000
Longaberger Licensing, LLC \| Hilco Global
Schedule Of Asset Acquisition [Line Items]
Ownership interest	50.00%
Longaberger Licensing, LLC \| Variable Interest Entity, Primary Beneficiary
Schedule Of Asset Acquisition [Line Items]
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage	50.00%

Income Taxes - Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets
Stock-based compensation	$ 712	$ 1,274
Federal, state and local net operating loss carryforwards	3,175	6,684
Accrued compensation and other accrued expenses	748	728
Allowance for doubtful accounts	0	309
Basis difference arising from discounted note payable	11	11
Foreign tax credit	0	219
Charitable contribution carryover	0	77
Property and equipment	497	488
Interest expense	0	602
Total deferred tax assets	5,143	10,392
Deferred tax liabilities
Basis difference arising from intangible assets of acquisition	(4,036)	(10,251)
Total deferred tax liabilities	(4,036)	(10,251)
Net deferred tax assets	$ 1,107	$ 141

Debt (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Net Carrying Amount of Debt

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


	December 31,		December 31,
($ in thousands)	2022		2021
Term loan debt	$	—	$	29,000
Unamortized deferred finance costs related to term loan debt		—		(969)
Total		—		28,031
Current portion of debt		—		2,500
Long-term debt	$	—	$	25,531

Income Taxes - Reconciliation of Income Tax Rates (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
U.S. statutory federal rate	21.00%	21.00%
State and local rate, net of federal tax benefit	6.10%	4.64%
Stock compensation	(6.14%)	(5.56%)
Excess compensation deduction	(5.32%)	(0.68%)
Federal true-ups	(5.09%)	(0.10%)
Life insurance	(0.52%)	(0.10%)
Change in tax rate	0.00%	0.06%
Other permanent differences	0.00%	(0.01%)
Income tax benefit	10.03%	19.25%

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Summary of Stock Option Activity

A summary of the Company’s stock option activity for the Current Year is as follows:



				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
	Number of	Exercise		Life	Intrinsic
	Options	Price		(in Years)	Value
Outstanding at January 1, 2022	5,630,970	$	2.25	5.46	$	—
Granted	605,850		1.61
Canceled	—		—
Exercised	—		—
Expired/Forfeited	(622,510)		2.81
Outstanding at December 31, 2022, and expected to vest	5,614,310	$	2.12	4.76	$	—
Exercisable at December 31, 2022	1,916,810	$	2.89	1.75	$	—

Schedule of Black-Scholes Assumptions for Fair Value of Options Granted

The fair value of the options granted was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions:


	Year Ended December 31,
	2022		2021
Expected Volatility	57.14 – 92.65	%	29.49 – 82.99	%
Expected Dividend Yield	—	%	—	%
Expected Life (Term, in years)	0.67 – 3.25		2.5 – 3.25
Risk-Free Interest Rate	1.60 – 2.80	%	0.24 – 0.52	%

Schedule of options vesting upon achievement of target price


Target Prices		Number of Options Vesting
$3.00		1,000,000
$5.00		850,000
$7.00		700,000
$9.00		550,000
$11.00		400,000

Summary of Stock Option Activity for Non-Vested Options

The following table summarizes the Company’s stock option activity for non-vested options for the Current Year:


		Weighted
		Average
	Number of	Grant Date
	Options	Fair Value
Balance at January 1, 2022	3,873,334	$	0.07
Granted	605,850		0.79
Vested	(771,684)		0.72
Forfeited or Canceled	(10,000)		1.09
Balance at December 31, 2022	3,697,500	$	0.05

Summary of Warrant Activity

A summary of the Company’s warrant activity for the Current Year 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, 2022	116,065	$	3.15	2.57	$	—
Granted	—		—
Canceled	—		—
Exercised	—		—
Expired/Forfeited	—		—
Outstanding and exercisable at December 31, 2022	116,065	$	3.15	1.57	$	—

Summary of Restricted Stock Activity

A summary of the Company’s restricted stock activity for the Current Year is as follows:


		Weighted
	Number of	Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding at January 1, 2022	815,833	$	4.00
Granted	347,623		1.58
Canceled	—		—
Vested	(830,123)		3.11
Expired/Forfeited	—		—
Outstanding at December 31, 2022	333,333	$	3.71

Schedule Of Common Stock Repurchased

The following table provides information with respect to restricted stock purchased and retired by the Company during the Current Year and Prior Year:


				Number of
				Shares
				Purchased as
				Part of
	Total Number	Actual		Publicly	Fair value of
	of Shares	Price Paid		Announced	Re-Purchased
Date	Purchased	per Share		Plan	Shares
April 20, 2022 (i)	53,882		1.57	—		84,000
May 31, 2022 (i)	240,000		1.49	—		358,000
Total 2022	293,882	$	1.50	—	$	442,000

October 29, 2021 (i)	9,187		1.73	—		16,000
Total 2021	9,187	$	1.73	—	$	16,000

(i)

Stockholders' Equity - Warrants (Details) - USD ($)	12 Months Ended
Stockholders' Equity - Warrants (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Other disclosures
Compensation expense	$ 720,000	$ 720,000
Warrants
Number of Other than Options
Outstanding and exercisable, beginning balance (in shares)	116,065
Granted (in shares)	0
Canceled (in shares)	0
Exercised (in shares)	0
Expired/Forfeited (in shares)	0
Outstanding and exercisable, ending balance (in shares)	116,065	116,065
Weighted Average Exercise Price
Outstanding and exercisable, beginning balance (in dollars per share)	$ 3.15
Granted (in dollars per share)	0
Canceled (in dollars per share)	0
Exercised (in dollars per share)	0
Expired/Forfeited (in dollars per share)	0
Outstanding and exercisable, ending balance (in dollars per share)	$ 3.15	$ 3.15
Weighted Average Remaining Contractual Life (in Years), Outstanding and exercisable	1 year 6 months 25 days	2 years 6 months 25 days
Other disclosures
Compensation expense	$ 0	$ 0
Warrants \| Five year expiration
Stockholders' Equity
Expiration period	5 years
Warrants \| Seven year expiration
Stockholders' Equity
Expiration period	7 years
Warrants \| Ten year expiration
Stockholders' Equity
Expiration period	10 years

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

11. Related Party Transactions

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. This employment agreement remained in effect through May 31, 2022. On May 31, 2022, this agreement was transferred to IM Topco as part of the transaction in which the Company sold a majority interest in the Isaac Mizrahi Brand trademarks to a third party (see Note 3 for details).

The employment agreement provided Mr. Mizrahi with a base salary of $1.8 million, $2.0 million, and $2.1 million per annum for 2020, 2021, and 2022, respectively. Mr. Mizrahi was also 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 and 2022. The Bonus consisted 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 below:

●

“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 Qurate’s QVC channel on Mondays (subject to certain expectations) up to a maximum of 40 such appearances in a calendar year.

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 provided services to Mr. Mizrahi necessary for Mr. Mizrahi to perform his services pursuant to the employment agreement. The Company paid Laugh Club an annual fee of $0.72 million for such services. This services agreement remained in effect through May 31, 2022. On May 31, 2022, this agreement was transferred to IM Topco as part of the transaction in which the Company sold a majority interest in the Isaac Mizrahi Brand trademarks to a third party (see Note 3 for details).

In addition, on May 31, 2022, all 522,500 unvested shares of restricted stock of the Company held by Mr. Mizrahi (for which all stock-based compensation expense had been previously recognized in prior periods) were immediately vested, with 240,000 of such shares being surrendered for cancellation in satisfaction of withholding tax obligations. Also on May 31, 2022, the Company issued 33,557 additional shares of common stock of the Company (valued at $50,000) to Mr. Mizrahi, which vested immediately, and made a $100,000 cash payment to Mr. Mizrahi.

Trademarks and Other Intangibles - Schedule of Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Finite Lived Intangible Assets Future Amortization Expense:
2023	$ 6,140
2024	6,120
2025	4,177
2026	3,533
2027	3,507
Thereafter (through 2036)	24,188
Net Carrying Amount	$ 47,665

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

The consolidated financial statements include the accounts of Xcel, its wholly owned subsidiaries, and entities in which Xcel has a controlling financial interest as of and for the years ended December 31, 2022 (the "Current Year") and 2021 (the "Prior Year"). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission (“SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation, and net earnings have been adjusted by the portion of operating results of consolidated entities attributable to noncontrolling interests.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation, or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

The Company deems the following items to require significant estimates from management:

●Allowance for doubtful accounts;

●Useful lives of trademarks;

●Assumptions used in the valuation of intangible assets, including cash flow estimates for initial determinations of fair value and/or impairment analysis; and

●Stock-based compensation.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.

Accounts Receivable

Accounts receivable are reported net of the allowance for doubtful accounts. The allowance for doubtful accounts is based on the Company’s ongoing discussions with its licensees, wholesale and digital customers, and its evaluation of each customer’s payment history, account aging, and financial position.

As of December 31, 2022 and 2021, the Company had $5.1 million and $7.6 million, respectively, of accounts receivable, net of allowances for doubtful accounts of $0.1 million and $1.1 million, respectively. The Company recognized bad debt expense of $0.4 million and $0.1 million for the Current Year and Prior Year, respectively, which was related to the bankruptcy of several retail customers due to the novel coronavirus disease pandemic. The Company wrote-off approximately $1.5 million of such customers’ outstanding receivable balances in the Current Year.

There is no earned revenue that has been accrued but not billed as of December 31, 2022 and 2021.

As of December 31, 2022, approximately $1.7 million of the Company's outstanding receivables were assigned to a third-party agent pursuant to a services agreement entered into during the Current Year, under which the Company assigned, for purposes of collection only, the right to collect certain specified receivables on the Company's behalf and solely for the Company's benefit. Under such agreement, the Company retains ownership of such assigned receivables, and receives payment from the agent (less certain fees charged by the agent) upon the agent's collection of the receivables from customers. During the Current Year, the Company paid approximately $0.05 million in fees to the agent under the aforementioned services agreement.

Inventory

Inventory is recorded at the lower of cost or net realizable value, with cost determined on a weighted average basis. The Company holds finished goods inventory for its direct-to-consumer operations. Apparel and jewelry finished goods inventory is purchased to satisfy orders received from its wholesale operations. The Company periodically reviews the composition of its inventories in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventories, the Company will record a write-down to net realizable value in the period that the decline in value is first recognized. Write-downs for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts.

Property and Equipment

Furniture, equipment, and software are stated at cost less accumulated depreciation and amortization, and are depreciated using the straight-line method over their estimated useful lives, generally three (3) to seven (7) years. Depreciation expense for the years ended December 31, 2022 and 2021 was approximately $1.1 million and $1.3 million, respectively.

Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the leases. Betterments and improvements are capitalized, while repairs and maintenance are expensed as incurred.

Costs to develop or acquire software for internal use incurred during the preliminary project stage and the post implementation stage are expensed, while internal and external costs to acquire or develop software for internal use incurred during the application development stage – including design, configuration, coding, testing, and installation – are generally capitalized.

The Company’s long-lived property and equipment assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable and its carrying amount exceeds its fair value. With reference to such impairment testing, the Company groups assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluates the asset group against the sum of undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on undiscounted cash flows analysis or appraisals. The inputs utilized in the impairment analysis are classified as Level 3 inputs within the fair value hierarchy as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurement.”

As a result of management’s decision to close its brick-and-mortar fine jewelry retail store, the Company recognized a $0.7 million impairment charge in the Prior Year related to furniture and fixtures, equipment, and leasehold improvement assets of the store, and a $0.7 million impairment charge in the Prior Year related to the operating lease right-of-use asset for the store. Separately, the Company recognized impairment charges of $0.3 million in the Current Year related to store fixtures purchased for an apparel program with one of the Company’s retail partners.

Trademarks and Other Intangible Assets

The Company follows FASB ASC Topic 350, “Intangibles - Goodwill and Other.” Under this standard, goodwill and indefinite-lived intangible assets are not amortized, but are required to be assessed for impairment at least annually (the Company utilizes December 31 as its testing date) and when events occur or circumstances change that would more likely than not reduce the fair value of the asset below its carrying amount.

Indefinite-Lived Intangible Asset

The Company tests its indefinite-lived intangible asset for recovery in accordance with ASC-820-10-55-3F, which states that the income approach (“Income Approach”) converts future amounts (for example cash flows) to a single current (that is, discounted) amount. When the Income Approach is used, fair value measurement reflects current market expectations about those future amounts. The Income Approach is based on the present value of future earnings expected to be generated by a business or asset. Income projections for a future period are discounted at a rate commensurate with the degree of risk associated with future proceeds. A residual or terminal value is also added to the present value of the income to quantify the value of the business beyond the projection period. As such, recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to its expected future discounted net cash flows. If the carrying amount of such assets is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the recoverable amount of the assets.

The Company performed its annual impairment testing as described above for the year ended December 31, 2021, and concluded that there was no impairment of its indefinite-lived intangible asset. The Company subsequently sold its indefinite-lived intangible asset during the Current Year for a gain (see Note 3 for additional details).

Finite-Lived Intangible Assets

The Company’s finite-lived intangible assets, including Trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An impairment loss is recognized if the carrying amount of a finite-lived intangible asset is not recoverable and its carrying amount exceeds its fair value.

With reference to finite-lived intangible assets impairment testing, the Company groups assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluates the asset group against the sum of undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flows analysis or appraisals. The inputs utilized in the finite-lived intangible assets impairment analysis are classified as Level 3 inputs within the fair value hierarchy as defined in ASC Topic 820, “Fair Value Measurement.”

No impairment charges were recorded related to finite-lived intangible assets for the Current Year or Prior Year.

The Company’s finite-lived intangible assets are amortized over their estimated useful lives of three (3) to eighteen (18) years. The Company re-evaluates the remaining useful life of its finite-lived intangible assets on an annual basis, based on consideration of current events and circumstances, the expected use of the asset, and the effects of demand, competition, and other economic factors. No changes were made to the estimated useful lives of intangible assets in the Current Year or Prior Year.

Restricted Cash

Restricted cash was $0.7 million as of December 31, 2021. This balance consisted of cash deposited as collateral for an irrevocable standby letter of credit associated with the lease of the Company’s current corporate office and operating facility at 1333 Broadway, New York City. There was no restricted cash at December 31, 2022, as the aforementioned letter of credit expired and was not renewed.

Investment in Unconsolidated Affiliate

Investments in Unconsolidated Affiliates

The Company holds a noncontrolling equity interest in IM Topco, LLC, which was entered into during the Current Year (see Note 3 for additional details). This investment is accounted for in accordance with ASC Topic 323, “Investments – Equity Method and Joint Ventures,” as the Company has the ability to exercise significant influence over operating and financial policies but does not control the affiliate. As of December 31, 2022, the carrying value of this investment on the Company’s consolidated balance sheet was $19.2 million. The Company recognizes its share of the ongoing operating results of IM Topco LLC (based on the distribution provisions set forth in the related business venture agreement) as other income (expense) in the accompanying consolidated statement of operations for the Current Year.

The Company also holds a limited partner ownership interest in an unconsolidated affiliate, which was entered into in 2016. This investment is accounted for in accordance with ASC Topic 321, “Investments – Equity Securities,” and is included within other assets on the Company’s consolidated balance sheets at December 31, 2022 and 2021. As of December 31, 2022 and 2021, the carrying value of this investment was $0.1 million. This investment does not have a readily determinable fair value and in accordance with ASC 820-10-35-59, the investment is valued at cost, less impairment, plus or minus observable price changes of an identical or similar investment of the same issuer.

Deferred Finance Costs

The Company previously incurred costs (primarily professional fees and lender underwriting fees) in connection with borrowings under senior secured term loans. Such costs were deferred on the consolidated balance sheet as a reduction to the carrying value of the associated borrowing, and were amortized as interest expense using the effective interest method.

Contingent Obligations

When accounting for asset acquisitions, if any contingent obligations exist and the fair value of the assets acquired is greater than the consideration paid, any contingent obligations are recognized and recorded as the positive difference between the fair value of the assets acquired and the consideration paid for the acquired assets.

When accounting for asset acquisitions, if any contingent obligations exist and the fair value of the assets acquired are equal to the consideration paid, any contingent obligations are recognized based upon the Company’s best estimate of the amount that will be paid to settle the liability.

The Company recorded contingent obligations in connection with the acquisitions of the Halston Heritage trademarks in 2019 and the LOGO by Lori Goldstein trademarks in 2021. See Note 3 and Note 9 for additional information related to contingent obligations.

Under the applicable accounting guidance, the Company is required to carry such contingent liability balances on its consolidated balance sheet until the measurement period of the earn-out expires and all related contingencies have been resolved.

Revenue Recognition

The Company applies the guidance in ASC Topic 606, “Revenue from Contracts with Customers” to recognize revenue.

Licensing

The Company recognizes revenue continuously over time as it satisfies its continuous obligation of granting access to its licensed intellectual properties, which are deemed symbolic intellectual properties under the applicable revenue accounting guidance. Payments are typically due after sales have occurred and have been reported by the licensees or, where applicable, in accordance with minimum guaranteed payment provisions. The timing of performance obligations is typically consistent with the timing of payments, though there may be differences if contracts provide for advances or significant escalations of contractually guaranteed minimum payments. There were no such differences that would have a material impact on the Company’s consolidated balance sheets at December 31, 2022 and 2021. In accordance with ASC 606-10-55-65, the Company recognizes net licensing revenue at the later of when (1) the subsequent sale or usage occurs or (2) the performance obligation to which some or all of the sales- or usage-based royalty has been allocated is satisfied (in whole or in part). More specifically, the Company separately identifies:

(i)

Contracts for which, based on experience, royalties are expected to exceed any applicable minimum guaranteed payments, and to which an output-based measure of progress based on the “right to invoice” practical expedient is applied because the royalties due for each period correlate directly with the value to the customer of the Company’s performance in each period (this approach is identified as “View A” by the FASB Revenue Recognition Transition Resource Group, “TRG”); and

(ii)

Contracts for which revenue is recognized based on minimum guaranteed payments using an appropriate measure of progress, in which minimum guaranteed payments are straight-lined over the term of the contract and recognized ratably based on the passage of time, and to which the royalty recognition constraint to the sales-based royalties in excess of minimum guaranteed is applied and such sales-based royalties are recognized to the distinct period only when the minimum guaranteed is exceeded on a cumulative basis (this approach is identified as “View C” by the TRG).

The Company does not typically perform by transferring goods or services to customers before the customer pays consideration or before payment is due, thus the amounts of contract assets as defined by ASC 606-10-45-3 related to licensing contracts were not material as of December 31, 2022 and 2021. The Company’s unconditional right to receive consideration based on the terms and conditions of licensing contracts is presented as accounts receivable on the accompanying consolidated balance sheets. The Company typically does not receive consideration in advance of performance and, consequently, amounts of contract liabilities as defined by ASC 606-10-45-2 related to licensing contracts were not material as of December 31, 2022 and 2021.

The Company does not disclose the amount attributable to unsatisfied or partially satisfied performance obligations for variable revenue contracts (identified under “View A” above) in accordance with the optional exemption allowed under ASC 606. The Company did not have any revenue recognized in the reporting period from performance obligations satisfied, or partially satisfied, in previous periods. Remaining minimum guaranteed payments for active contracts as of December 31, 2022 are expected to be recognized ratably in accordance with View C over the remaining term of each contract based on the passage of time and through December 2024, subject to renewal or extension upon termination.

Wholesale Sales

The Company generates revenue through the design, sourcing, and sale of branded jewelry and apparel to both domestic and international customers who, in turn, sell the products to the consumer. The Company recognizes revenue within net sales in the accompanying consolidated statements of operations when performance obligations identified under the terms of contracts with its customers are satisfied, which occurs upon the transfer of control of the merchandise in accordance with the contractual terms and conditions of the sale. Shipping to customers is accounted for as a fulfillment activity and is recorded within other selling, general and administrative expenses.

Direct to Consumer Sales

The Company’s revenue associated with its e-commerce businesses is recognized within net sales in the accompanying consolidated statements of operations at the point in time when product is shipped to the customer. Shipping to customers is accounted for as a fulfillment activity and is recorded within other selling, general and administrative expenses. The Company’s revenue related to its brick-and-mortar retail store is recognized within net sales in the accompanying consolidated statements of operations at the point of sale to the customer.

Advertising Costs

All costs associated with production for the Company’s advertising, marketing, and promotion are expensed during the periods when the activities take place. All other advertising costs, such as print and online media, are expensed when the advertisement occurs. The Company incurred approximately $2.6 million and $2.5 million in advertising and marketing costs for the Current Year and Prior Year, respectively, which are included within other selling, general and administrative expenses in the accompanying consolidated statements of operations.

Leases

The Company determines if an arrangement is a lease (as defined in ASC Topic 842, “Leases”) at the inception of the arrangement. The Company generally recognizes a right-of-use (“ROU”) asset, representing its right to use the underlying leased asset for the lease term, and a liability for its obligation to make future lease payments (the lease liability) at commencement date (the date on which the lessor makes the underlying asset available for use) based on the present value of lease payments over the lease term. The Company does not recognize ROU assets and lease liabilities for lease terms of 12 months or less, but recognizes such lease payments in operations on a straight-line basis over the lease terms.

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.

For real estate leases of office space, the Company accounts for the lease and non-lease components as a single lease component. Variable lease payments that do not depend on an index or rate (such as real estate taxes and building insurance and lessee’s shares thereof), if any, are excluded from lease payments at lease commencement date for initial measurement. Subsequent to initial measurement, these variable payments are recognized when the event determining the amount of variable consideration to be paid occurs.

Lease expense for operating lease payments is generally recognized on a straight-line basis over the lease term. The Company recognizes income from subleases (in which the Company is the sublessor) on a straight-line basis over the term of the sublease, as a reduction to lease expense.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation - Stock Compensation,” by recognizing the fair value of stock-based compensation as an operating expense over the service period of the award or term of the corresponding contract, as applicable.

The fair value of stock 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, the expected life of the awards and the expected stock price volatility over the terms of the awards. The expected life is based on the estimated average 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 risk-free rate is based on the U.S. Treasury rate for the expected term at the time of grant, volatility is based on the historical volatility of the Company’s common stock, and 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, based on the quoted market price of the Company’s common shares on the NASDAQ Global Market.

Non-employee awards are measured at the grant date fair value of the equity instruments to be issued, and the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant.

The Company accounts for forfeitures as a reduction of compensation cost in the period when such forfeitures occur.

For stock option awards for which vesting is contingent upon the achievement of certain performance targets, the timing and amount of compensation expense recognized is based upon the Company’s projections and estimates of the relevant performance metric(s) until the time the performance obligation is satisfied. Expense for such awards is recognized only to the extent that the achievement of the specified performance target(s) has been met or is considered probable.

Income Taxes

Current income taxes are based on the respective period’s taxable income for federal and state income tax reporting purposes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is required if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company applies the FASB guidance on accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also addresses derecognition, classification, interest, and penalties related to uncertain tax positions. The Company has no unrecognized tax benefits as of December 31, 2022 and 2021. Interest and penalties related to uncertain tax positions, if any, are recorded in income tax expense. Tax years that remain open for assessment for federal and state tax purposes include the years ended December 31, 2019 through December 31, 2022.

The income tax effects of changes in tax laws are recognized in the period when enacted.

Fair Value

ASC Topic 820, “Fair Value Measurement,” defines fair value and establishes a framework for measuring fair value under U.S. GAAP. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of the Company’s assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to the short-term maturities of these instruments. The carrying value of term loan debt approximates fair value because the fixed interest rate approximates current market rates and in the instances it does not, the impact is not material. When debt interest rates are below market rates, the Company considers the discounted value of the difference of actual interest rates and its internal borrowing against the scheduled debt payments.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, and accounts receivable. The Company limits its credit risk with respect to cash by maintaining cash, cash equivalents, and restricted cash balances with high quality financial institutions. At times, the Company’s cash, cash equivalents, and restricted cash may exceed federally insured limits. Concentrations of credit risk with respect to accounts receivable are minimal due to the collection history and due to the nature of the Company’s royalty revenues. Generally, the Company does not require collateral or other security to support accounts receivable.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings (loss) per share reflect, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of stock options and warrants using the treasury stock method. The difference between basic and diluted weighted-average common shares results from the assumption that all dilutive stock options and warrants outstanding were exercised into common stock if the effect is not anti-dilutive.

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which was subsequently amended in November 2018 through ASU No. 2018-19. This ASU will require entities to estimate lifetime expected credit losses for financial instruments, including trade and other receivables, which will result in earlier recognition of credit losses. Subsequently, the FASB issued additional guidance in ASU No. 2019-05 in May 2019, ASU No. 2019-10 and 2019-11 in November 2019, ASU No. 2020-02 in February 2020, and ASU No. 2022-02 in March 2022. Among other things, the additional guidance deferred the application of the new guidance on credit losses for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition when it is adopted during the first quarter of 2023.

Recently Adopted Accounting Pronouncements

The Company adopted ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” effective January 1, 2021. 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.

The Company adopted ASU No. 2021-10, “Government Assistance (Topic 823): Disclosures by Business Entities about Government Assistance.” This ASU requires certain financial statement disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. As this ASU only affects financial statement disclosures, the adoption of this guidance did not have any impact on the Company’s results of operations, cash flows, or financial condition.

Acquisitions and Divestitures - Summarized financial information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gross Profit	$ 17,801	$ 27,265
Net income	(5,356)	$ (13,029)
IM Topco, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	7,791
Gross Profit	7,791
Income from continuing operations	317
Net income	$ 317

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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+ Details

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenues
Net revenue	$ 25,781	$ 37,932
Cost of goods sold	7,980	10,667
Gross profit	17,801	27,265
Operating costs and expenses
Salaries, benefits and employment taxes	16,802	16,535
Other selling, general and administrative expenses	15,386	14,364
Stock-based compensation	620	720
Depreciation and amortization	7,263	6,830
Asset impairment charges	274	1,372
Total operating costs and expenses	40,345	39,821
Other income (expense)
Gain on sale of majority interest in Isaac Mizrahi brand	20,586
Loss from equity method investment	(1,202)
Gain on reduction of contingent obligation	900
Total other income (expense)	20,284
Operating loss	(2,260)	(12,556)
Interest and finance expense
Interest expense - term loan debt	1,187	1,916
Other interest and finance charges, net	16	147
Loss on early extinguishment of debt	2,324	1,516
Total interest and finance expense	3,527	3,579
Loss before income taxes	(5,787)	(16,135)
Income tax benefit	(431)	(3,106)
Net loss	(5,356)	(13,029)
Net loss attributable to noncontrolling interest	(1,338)	(845)
Net loss attributable to Xcel Brands, Inc. stockholders	$ (4,018)	$ (12,184)
Loss per common share attributable to Xcel Brands, Inc. stockholders:
Basic net loss per share	$ (0.20)	$ (0.63)
Diluted net loss per share	$ (0.20)	$ (0.63)
Weighted average number of common shares outstanding:
Basic weighted average number of shares outstanding	19,624,669	19,455,987
Diluted weighted average common shares outstanding	19,624,669	19,455,987
Net licensing revenue
Revenues
Net revenue	$ 14,737	$ 21,876
Net sales
Revenues
Net revenue	$ 11,044	$ 16,056

Commitments and Contingencies - Future Minimum Payments under Employment Contracts (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 4,313
2024	2,150
2025	2,150
2026	2,150
2027	2,150
Thereafter	6,988
Total future minimum employment contract payments	$ 19,901

Stockholders' Equity - Restricted Stock Purchased and Retired (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	May 31, 2022	Apr. 20, 2022	Oct. 29, 2021	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Total Number of Shares Purchased	240,000	53,882	9,187	293,882	9,187
Actual Price Paid Per Share (in dollars per share)	$ 1.49	$ 1.57	$ 1.73	$ 1.50	$ 1.73
Number of Shares Purchased as Part of Publicly Announced Plan	0	0	0	0	0
Fair value of Re-Purchased Shares	$ 358,000	$ 84,000	$ 16,000	$ 442,000	$ 16,000

Debt - Net Carrying Amount of Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Term loan debt	$ 0	$ 29,000
Unamortized deferred finance costs related to term loan debt		(969)
Total		28,031
Current portion of debt		2,500
Long-term debt		$ 25,531

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

Use of Estimates

The Company deems the following items to require significant estimates from management:

●Allowance for doubtful accounts;

●Useful lives of trademarks;

●Assumptions used in the valuation of intangible assets, including cash flow estimates for initial determinations of fair value and/or impairment analysis; and

●Stock-based compensation.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.

Accounts Receivable

There is no earned revenue that has been accrued but not billed as of December 31, 2022 and 2021.

Inventory

Property and Equipment

Trademarks and Other Intangible Assets

Indefinite-Lived Intangible Asset

Finite-Lived Intangible Assets

No impairment charges were recorded related to finite-lived intangible assets for the Current Year or Prior Year.

Restricted Cash

Investments in Unconsolidated Affiliates

Deferred Finance Costs

Contingent Obligations

Revenue Recognition

The Company applies the guidance in ASC Topic 606, “Revenue from Contracts with Customers” to recognize revenue.

Licensing

(i)

(ii)

Wholesale Sales

Direct to Consumer Sales

Advertising Costs

Leases

Stock-Based Compensation

Restricted stock awards are valued using the fair value of the Company’s stock at the date of grant, based on the quoted market price of the Company’s common shares on the NASDAQ Global Market.

The Company accounts for forfeitures as a reduction of compensation cost in the period when such forfeitures occur.

Income Taxes

The income tax effects of changes in tax laws are recognized in the period when enacted.

Fair Value

Fair Value of Financial Instruments

Concentrations of Credit Risk

Earnings (Loss) Per Share

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements