What changed in this filing

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Item 1A. Risk Factors

2026-04-15 compared with 2025-05-28 · 75 added, 123 removed, 402 unchanged (33% of the section changed)

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● our debt obligations and our limited amount of cash;

● material weaknesses in our internal controls over financial reporting;

● our concentration of revenue with a limited number of licensees;

● restrictions related to certain key licensing agreements;

● conducting operations through joint ventures and our dependence on the joint ventures;

● the operational performance and/or strategic initiatives of our licensees and retail partners;

● the operational performance and/or strategic initiatives of our licensees;

● continued market acceptance of our brands and products;

● the use of social media and influencers to market brands and products;

● changing consumer preferences and shifting industry trends;

● execution of our growth strategy, including the acquisition of new brands;

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Such additional financing may not be available on satisfactory terms or it may not be available when needed, or at all.

As of December 31, 2024, we had cash and cash equivalents of approximately $1.3 million, and during the year ended December 31, 2024, we used $4.7 million of cash in operating activities.

On March 19, 2024, we closed on a public offering and private placement of our common stock, which resulted in aggregate net proceeds to us of approximately $2.0 million.

In December 2024, we refinanced our debt by entering into a new loan agreement for an aggregate amount of $10.0 million of term loans, resulting in the net receipt of $2.8 million of cash after repayment of expenses and repayment

of our prior loan agreement.

In April 2025, we refinanced our debt with a new lender, resulting in the net receipt of approximately $3.0 million of cash after repayment of principal and payment of fees and expenses.

As of December 31, 2025, we had cash and cash equivalents of approximately $1.3 million, and during the year ended December 31, 2025, we used approximately $7.0 million of cash in operating activities.

During the year ended December 31, 2025, we raised approximately $3.8 million of net proceeds through various public and private equity transactions, and received net proceeds of approximately $5.1 million through debt refinancing and delayed draw transactions.

In January 2026, we entered into a common stock purchase arrangement with an investor, pursuant to which such investor has committed to purchase up to $15.0 million of our common stock.

We may require significant additional cash to satisfy our working capital requirements, expand our operations, or acquire and develop additional brands.

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Our financial statements have been prepared assuming that we will continue as a going concern.

We incurred net losses of approximately $22.6 million and $22.2 million during the years ended December 31, 2024 and 2023, respectively (which included non-cash expenses of approximately $20.3 million and $9.0 million, respectively), and had an accumulated deficit of approximately $76.2 million and $53.8 million as of December 31, 2024 and 2023, respectively.

Net cash used in operating activities was $4.7 million in 2024 and $6.5 million in 2023.

Our audited financial statements for the fiscal year ended December 31, 2024 were prepared under the assumption that we will continue as a going concern;

Our audited financial statements for the fiscal year ended December 31, 2025 have been prepared under the assumption that we will continue as a going concern;

however, we have incurred significant losses over the past several years and have used a significant amount of cash in operating activities.

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Our ability to continue as a going concern is dependent on executing our business plans and meeting our obligations as they come due within the next twelve months from the filing date of this Annual Report on Form 10-K.

Accordingly, the accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and calculations of liabilities that might be necessary should be Company be unable to continue as a going concern.

Accordingly, the accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and calculations of liabilities that might be necessary should the Company be unable to continue as a going concern.

Our auditor also included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2025 with respect to this uncertainty.

Our auditor determined our ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding our available capital and the risk of bias in management’s judgments and assumptions in their determination.

Although we intend to continue exploring strategic financing alternatives and operational efficiencies to improve liquidity, there can be no assurance that funding will be available on acceptable terms on a timely basis, or at all, or otherwise improve our liquidity.

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Our debt obligations could impair our liquidity and financial condition, and in the event we are unable to meet our debt obligations, we could lose ownership of our trademarks and/or other assets.

On April 21, 2025, we entered into an amendment our lenders and FEAC Agent, LLC, pursuant to which the December 12, 2024 loan and security agreement was amended to provide for $1.5 million repayment of the $3.95 million Term Loan A made on December 12, 2024 and an additional Term Loan B in the amount of $5.12 million on April 21, 2025.

The loans outstanding after giving effect to this amendment and the application of the proceeds of the additional Term Loan B are as follows:

(1) Term Loan A in the amount of $2.45 million, (2) Term Loan B in the amount of $9.12 million, and (3) Delayed Draw Term Loan in the amount of $2.05 million.

On December 12, 2024, we and certain of our direct and indirect subsidiaries entered into a loan and security agreement with FEAC Agent, LLC, as administrative agent and collateral agent, and our lenders pursuant to which the lenders made term loans to the Company.

On April 21, 2025, we and certain of our direct and indirect subsidiaries entered into an amendment with our lenders and FEAC Agent, LLC, pursuant to which we made a $1.5 million repayment of the Term Loan A made on December 12, 2024 and we borrowed an additional Term Loan B in the amount of $5.12 million.

As of December 31, 2025, the outstanding loan balances totaled $13.6 million, consisting of $3.75 million under Term Loan A and $9.83 million under Term Loan B.

These term loans are guaranteed by certain direct and indirect subsidiaries of the Company, and are secured by all of the assets of the Company and such subsidiaries.

The April 21, 2025 amendment also contains various customary financial covenants and reporting requirements, as specified and defined therein.

As of the date of this Annual Report on Form 10-K, the Company is in compliance with all applicable covenants.

Within 30 days after April 21, 2025, the outstanding principal amount of the Term Loan A shall be repaid, on a pro rata basis in an aggregate amount equal to $500,000.

Principal on the Term Loan A is payable on a pro rata basis in quarterly installments of $250,000 on each of March 31, June 30, September 30, and December 31 of each year, commencing on March 31, 2026, with the unpaid balance due on the maturity date of December 12, 2028.

Principal on the Term Loan B is payable on the maturity date of December 12, 2028.

Principal and accrued and unpaid interest on Term Loan A is payable on the maturity date of September 20, 2027 and principal and accrued and unpaid interest on the Term Loan B is payable on the maturity date of December 12, 2028.

On April 13, 2026, we issued senior secured notes in a principal amount of $3.01 million (the “Senior Notes”), with a maturity date of April 13, 2027.

The Senior Notes are guaranteed by certain direct and indirect subsidiaries of the Company, and are secured by all of the assets of the Company and such subsidiaries.

Our debt obligations:

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● make us more vulnerable in the event of a downturn in our business prospects and could limit our flexibility to plan for, or react to, changes in our sales and licensing channels.

In the event that we fail in the future to make any required payment under the agreements governing our indebtedness or if we fail to comply with the financial and operating covenants contained in those agreements, we would be in default with respect to that indebtedness and the lenders could declare such indebtedness to be immediately due and payable.

There can be no assurance that the lenders will amend or grant waivers to the loan agreement to adjust or eliminate covenants or waive our non-compliance or breach of a financial or other covenant in the future.

Failure to maintain our listing on Nasdaq would result in a default under our term loan debt agreements, as amended.

In the event that we fail in the future to satisfy other obligations under the agreements governing our indebtedness, including satisfying financial covenants, we would be in default with respect to that indebtedness and the lenders could declare such indebtedness to be immediately due and payable.

We cannot assure you that the lenders will amend or grant waivers to the loan agreements to adjust or eliminate covenants or waive our future non-compliance or breach of a financial or other covenant in the future.

Failure to maintain our listing on Nasdaq would also result in a default under our term loan debt agreements.

A debt default could significantly diminish the market value and marketability of our common stock and could result in the acceleration of the payment obligations under all or a portion of our indebtedness, or a renegotiation of our loan agreement with more onerous terms and/or additional equity dilution.

Since our debt obligations are secured by substantially all our assets, upon a default, our lenders may be able to foreclose on our assets.

We have identified material weaknesses in our internal controls over financial reporting.

We are ultimately responsible for establishing and maintaining adequate internal controls over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.

A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We have identified material weaknesses in our internal controls over financial reporting as of December 31, 2024 (see “Controls and Procedures” in Item 9A for further information).

We are actively developing and plan to implement a remediation plan designed to address these material weaknesses.

However, we cannot guarantee these steps will be sufficient to address the material weaknesses.

If this remediation proves ineffective, if we fail to develop and maintain proper and effective internal controls over financial reporting, or if additional material weaknesses in our disclosure controls and internal control over financial reporting are discovered or occur in the future, our ability to produce timely and accurate financial statements, comply with applicable laws and regulations, or access the capital markets could be impaired and we could be required to restate our financial results.

If we identify any new material weaknesses in the future, or if our remediation measures are not effective, any such newly identified or existing material weakness could limit our ability to prevent or detect a misstatement of our accounts or

disclosures that could result in a material misstatement of our annual or interim financial statements.

In such case, we may be unable to maintain compliance with securities law requirements regarding the timely filing of periodic reports, in addition to applicable stock exchange listing requirements.

Investors may lose confidence in our financial reporting, and our stock price may decline as a result.

We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses

Further, upon an event of default under the Senior Notes, the holders of the Senior Notes (other than IPX) have the right to convert the notes into shares of our common stock (i) initially at a fixed conversion price equal to $1.165 per share and (ii) after May 17, 2026, at a price equal to the lesser of (a) 85% multiplied by the lowest volume weighted average price of the common stock during the 10-trading day period prior to conversion and (b) $1.165.

The issuance of shares upon any such conversion will significantly dilute our then-existing stockholders’ percentage ownership of the Company and would likely adversely impact the market price of our common stock.

A substantial portion of our revenue is concentrated with a limited number of licensees such that the loss of any of such licensees could decrease our revenue and impair our cash flows.

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During the years ended December 31, 2025 and 2024, Qurate accounted for approximately 20% and 44%, respectively, of our total net revenue, while the Halston Master License represented approximately 52% and 31% of our total net revenue, respectively.

Because we are dependent on these agreements for a significant portion of our revenues, if Qurate or G-III were to have financial difficulties, or if Qurate and/or G-III decide not to renew or extend their existing agreements with us, our revenue and cash flows could be reduced substantially.

Our cash flow would also be significantly impacted if there were significant delays in our collection of receivables from these licensees.

Additionally, we have limited control over the programming that Qurate devotes to our brands or its promotional sales with our brands (such as “Today’s Special Value” sales).

Because we are dependent on these agreements for a significant portion of our revenues, if Qurate or G-III were to have financial difficulties, and/or if Qurate or G-III decide not to renew or extend their existing agreements with us, our revenue and cash flows could be reduced substantially.

Our cash flow would also be significantly impacted if there were significant

delays in our collection of receivables from these licensees.

Additionally, we have limited control over the programming that Qurate devotes to our brands or its promotional sales with our brands.

If Qurate reduces or modifies its programming or promotional sales related to our brands, our revenues and cash flows could be reduced substantially.

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A breach of any of these agreements could also result in Qurate seeking monetary damages, seeking an injunction against us and our other licensees, reducing the programming time allocated to our brands, and/or terminating the respective agreement, which could have a material adverse effect on our net income and cash flows.

We conduct certain of our operations through joint ventures.

Joint ventures could fail to meet our expectations or cease to deliver anticipated benefits.

There could also be disagreements with our joint venture partners that could adversely affect our interest a joint venture.

We currently hold a 17.5% interest in IM Topco, LLC and a 19% interest in ORME.

We may enter into additional joint ventures in the future.

Our operating results are, in part, dependent upon the performance of IM Topco, LLC and ORME, and, in the future, could also be dependent in part upon the performance of future joint ventures.

Joint ventures involve numerous risks, and could fail to meet our initial or ongoing expectations.

While we provide certain services to IM Topco, LLC and may provide services to future joint ventures, we do not control the day-to-day operations of IM Topco, LLC or ORME, and may not control the day-to-day operations of future joint ventures.

The anticipated synergies or other benefits

of a joint venture may fail to materialize due to changing business conditions or changes in our business priorities or those of our joint venture partners.

Our joint venture partners, as well as any future partners, may have interests that are different from our interests that may result in conflicting views as to the conduct of the business or future direction of the joint venture.

In the event that we have a disagreement with a joint venture partner with respect to a particular issue to come before the joint venture, or as to the management or conduct of the business of the joint venture, we may not be able to resolve such disagreement in our favor.

Any such disagreement could have a material adverse effect on our interest in the joint venture, the business of the joint venture, or the portion of our growth strategy related to the joint venture.

We are dependent on our joint ventures to provide timely and accurate information about their sales and operations, which we rely upon to effectively manage their brands.

IM Topco, LLC and ORME are, and we expect any future joint ventures will be, contractually obligated to provide timely and accurate information regarding their sales and operations.

We rely on this information to prepare our consolidated financial statements.

Any delay in reporting reduces our visibility into the results of operations for our current and any future joint ventures, and our inability to collect timely and accurate information may affect our ability to timely complete our financial statements and timely file reports and other information with the SEC and may adversely affect our business and results of operations.

In connection with our fiscal year ended December 31, 2023, we were not able to complete the audit of IM Topco in a timely manner, which resulted in our late filing of our Annual Report on Form 10-K for the year ended December 31, 2023 and our late filing of such year’s audit of IM Topco.

IM Topco information was not timely received for the fiscal year ended December 31, 2024, which contributed to our late filing of our Annual Report on Form 10-K for the year ended December 31, 2024.

Effective the second quarter of 2025, our equity interest in IM Topco has decreased to the extent that our investment in IM Topco will no longer be accounted for under the equity method of accounting.

The failure of our licensees to adequately produce, market, source, and sell quality products bearing our brand names in their license categories or to pay their obligations under their license agreements could result in a decline in our results of operations.

Our revenues are dependent on payments made to us under our licensing agreements.

Although the licensing agreements for our brands typically require the advance payment to us of a portion of the licensing fees and in many cases provide for guaranteed minimum royalty payments to us, the failure of our licensees to satisfy their obligations under these agreements or their inability to operate successfully or at all, could result in their breach and/or the early termination of such agreements, the non-renewal of such agreements, or our decision to amend such agreements to reduce the guaranteed minimums or sales royalties due thereunder, thereby eliminating some or all of that stream of revenue.

Although the licensing agreements for our brands often require the advance payment to us of a portion of the licensing fees and in many cases provide for guaranteed minimum royalty payments to us, the failure of our licensees to satisfy their obligations under these agreements or their inability to operate successfully or at all, could result in their breach and/or the early termination of such agreements, the non-renewal of such agreements, or our decision to amend such agreements to reduce the guaranteed minimums or sales royalties due thereunder, thereby eliminating some or all of that stream of revenue.

Moreover, during the terms of the license agreements, we are substantially dependent upon the efforts and abilities of our licensees to maintain the quality and marketability of the products bearing our trademarks, as their failure to do so could materially tarnish our brands, thereby harming our future growth and prospects.

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The concurrent failure by several of our material licensees to meet their financial obligations to us could adversely affect our business, results of operations, and cash flows.

If our retail customers change their buying patterns, request additional allowances, develop their own private label brands or enter into agreements with national brand manufacturers to sell their products on an exclusive basis, our sales to these customers could be materially adversely affected.

Our retail customers’ buying patterns, as well as the need to provide additional allowances to customers, could have a material adverse effect on our business, results of operations and financial condition.

Customers’ strategic initiatives, including developing their own private labels brands, selling national brands on an exclusive basis, reducing the number of vendors they purchase from, or reducing the floor space dedicated to our brands could also impact our sales to these

There is a trend among major retailers to concentrate purchasing among a narrowing group of vendors.

To the extent that any key customer reduces the number of its vendors or allocates less floor space for our products and, as a result, reduces or eliminates purchases from us, there could be a material adverse effect on us.

Our business is dependent on continued market acceptance of our brands, our joint venture brands, and any future brands we may acquire directly or through a joint venture, and the products of our licensees.

Although certain of our licensees guarantee minimum net sales and minimum royalties to us, some of our licensees are not yet selling licensed products or currently have limited distribution of licensed products, and a failure of our brands or of our joint venture brands or of products bearing our brands or our joint venture brands to achieve or maintain broad market acceptance could cause a reduction of our licensing revenues, diminish the value of and generally affect the operating results of our joint ventures, and could further cause existing licensees not to renew their agreements.

Such failure could also cause the devaluation of our trademarks, which are our primary assets and the primary assets of our joint ventures, making it more difficult for us or our joint ventures to renew our current licenses upon their expiration or enter into new or additional licenses for such trademarks.

In addition, if such devaluation of our trademarks were to occur, a material impairment in the carrying value of one or more of our trademarks, which had an aggregate carrying value of $34.8 million as of December 31, 2024, could also occur and be charged as an expense to our operating results.

Continued market acceptance of our brands, our joint ventures’ brands, and our licensees’ products, as well as market acceptance of any future products bearing any future brands we may acquire, is subject to a high degree of uncertainty and constantly changing consumer tastes, preferences, and purchasing patterns.

Our business is dependent on continued market acceptance of our brands and any future brands we may acquire, and the products of our licensees.

Although certain of our licensees guarantee minimum net sales and minimum royalties to us, some of our licensees are not yet selling licensed products or currently have limited distribution of licensed products, and a failure of our brands or of products bearing our brands to achieve or maintain broad market acceptance could cause a reduction of our licensing revenues, and could further cause existing licensees not to renew their agreements.

Such failure could also cause the devaluation of our trademarks, which are our primary assets, making it more difficult for us to renew our current licenses upon their expiration or enter into new or additional licenses for such trademarks.

In addition, if such devaluation of our trademarks were to occur, a material impairment in the carrying value of one or more of our trademarks, which had an

aggregate carrying value of $31.2 million as of December 31, 2025, could also occur and be charged as an expense to our operating results.

Continued market acceptance of our brands and our licensees’ products, as well as market acceptance of any future products bearing any future brands we may acquire, is subject to a high degree of uncertainty and constantly changing consumer tastes, preferences, and purchasing patterns.

Creating and maintaining market acceptance of our licensees’ products and creating market acceptance of new products and categories of products bearing our marks may require substantial marketing efforts, which may, from time to time, also include our expenditure of significant additional funds to keep pace with changing consumer demands, which funds may or may not be available on a timely basis, on acceptable terms or at all.

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Furthermore, we do not actually design or manufacture all of the products bearing our marks, and therefore, have less control over such products’ quality and design than a traditional product manufacturer might have.

The failure of our licensees and joint ventures to maintain the quality of their products could harm the reputation and marketability of our brands and our joint ventures’ brands, which would adversely impact our business and the business of our joint ventures.

Negative claims or publicity regarding Xcel, IM Topco, LLC, our brand co-developers, any future joint ventures, our or their brands, or products could adversely affect our reputation and sales regardless of whether such claims are accurate.

The failure of our licensees to maintain the quality of their products could harm the reputation and marketability of our brands, which would adversely impact our business.

Negative claims or publicity regarding Xcel, our brand co-developers, our brands, or our products could adversely affect our reputation and sales regardless of whether such claims are accurate.

Social media, which accelerates the dissemination of information, can increase the challenges of responding to negative claims.

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Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties.

We use and our joint ventures may use third-party social media platforms as, among other things, marketing tools.

We also maintain, and our joint ventures may maintain, relationships with many social media influencers and engage in sponsorship initiatives.

As existing e-commerce and social media platforms continue to rapidly evolve and new platforms develop, we and our joint ventures must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms.

If we or our joint ventures are unable to cost-effectively use social media platforms as marketing tools or if the social media platforms we or our joint ventures use change their policies or algorithms, we or our joint ventures may not be able to fully optimize such platforms, and our and their ability to maintain and acquire customers and our financial condition may suffer.

We use third-party social media platforms as, among other things, marketing tools.

We also maintain relationships with many social media influencers and engage in sponsorship initiatives.

As existing e-commerce and social media platforms continue to rapidly evolve and new platforms develop, we must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms.

If we are unable to cost-effectively use social media platforms as marketing tools or if the social media platforms we use change their policies or algorithms, we may not be able to fully optimize such platforms, and our ability to maintain and acquire customers and our financial condition may suffer.

Furthermore, as laws and regulations and public opinion rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees, our network of social media influencers, our sponsors, or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices or otherwise could subject us to regulatory investigations, class action lawsuits, liability, fines, or other penalties and have a material adverse effect on our business, financial condition, and operating results.

In addition, an increase in the use of social media for product promotion and marketing may cause an increase in the burden on us and our joint ventures to monitor compliance of such materials, and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.

In addition, an increase in the use of social media for product promotion and marketing may cause an increase in the burden on us to monitor compliance of such materials, and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.

For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser.

We do not prescribe what our influencers post, and if we were held responsible for the content of their posts or their actions, we could be fined or forced to alter our practices, which could have an adverse impact on our business.

Negative commentary regarding us, our joint ventures or our or their products or influencers and other third parties who are affiliated with us or our joint ventures may also be posted on social media platforms and may be adverse to our or our joint ventures’ reputation or business.

Influencers with whom we or our joint ventures maintain relationships could engage in behavior or use their platforms to communicate directly with our customers in a manner that reflects poorly on our or our joint ventures’ brand and may be attributed to us or our joint ventures or otherwise adversely affect us or our joint ventures.

It is not possible to prevent such behavior, and the precautions we and our joint ventures take to detect this activity may not be effective in all cases.

Our and our joint ventures’ target consumers often value readily available information and often act on such information without further investigation and without regard to its accuracy.

The harm may be immediate, without affording us and our joint ventures an opportunity for redress or correction.

Negative commentary regarding us or our products or influencers and other third parties who are affiliated with us may also be posted on social media platforms and may be adverse to our reputation or business.

Influencers with whom we maintain relationships could engage in behavior or use their platforms to communicate directly with our customers in a manner that reflects poorly on our brands and may be attributed to us or otherwise adversely affect us.

It is not possible to prevent such behavior, and the precautions we take to detect this activity may not be effective in all cases.

Our target consumers often value readily available information and often act on such information without further investigation and without regard to its accuracy.

The harm may be immediate, without affording us an opportunity for redress or correction.

If we are unable to anticipate and respond to changing customer preferences and shifts in fashion and industry trends in a timely manner, our business, financial condition, and operating results could be harmed.

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If we fail to manage our expected future growth, our business and operating results could be materially harmed.

We expect to achieve growth in our existing brands and brands we may develop independently or through collaborations or acquire through expansion of our licensing activities and social media e-commerce platforms, including ORME.

We continue to seek new opportunities and international expansion through interactive television and licensing arrangements,

as well as joint ventures and collaborations.

The success of our company, however, will remain largely dependent on our ability to build and maintain broad market acceptance of our brands, co-developed brands, and joint venture brands to contract with and retain key licensees and on our licensees’ and join venture partners’ ability to accurately predict upcoming fashion and design trends within customer bases and fulfill the product requirements of retail channels within the global marketplace.

Our ability to compete effectively and to manage future growth, if any, will depend on the sufficiency and adequacy of our current resources and infrastructure and our ability to continue to identify, attract and retain personnel to manage our brands and integrate any brands we may acquire into our operations.

We continue to seek new opportunities and international expansion through interactive television and licensing arrangements, as well as joint ventures and collaborations.

The success of our company, however, will remain largely dependent on our ability to build and maintain broad market acceptance of our brands and co-developed brands to contract with and retain key licensees and on our licensees’ ability to accurately predict upcoming fashion and design trends within customer bases and fulfill the product requirements of retail channels within the global marketplace.

Our ability to compete effectively and to manage future growth, if any, will depend on the sufficiency and adequacy of our current resources and our ability to continue to identify, attract, and retain personnel to manage our brands and integrate any brands we may acquire into our operations.

There can be no assurance that our personnel, systems, procedures, and controls will be adequate to support our operations and properly oversee our brands.

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Also, there can be no assurance that we will be able to achieve and sustain meaningful growth.

Our growth may be limited by a number of factors including increased competition among branded products at brick-and-mortar, internet and interactive retailers, decreased airtime on QVC, HSN, and JTV, competition for retail licenses and brand acquisitions, joint ventures and collaborations, and insufficient capitalization for future transactions.

Our growth may be limited by a number of factors including increased competition among branded products at brick-and-mortar, internet, and interactive retailers, decreased airtime on QVC, HSN, and JTV, competition for retail licenses, brand acquisitions, and collaborations, and insufficient capitalization for future transactions.

We are dependent upon our Chief Executive Officer and other key executives.

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Our continued success is largely dependent upon his continued efforts and those of our other key executives.

Although we entered into an employment agreement with Mr.

Although we have entered into an employment agreement with Mr.

D’Loren, as well as employment agreements with other executives and key employees, such persons can terminate their employment with us at their option, and there is no guarantee that we will not lose the services of our executive officers or key employees.

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This could impede our ability to fully implement our business plan and future growth strategy, which would harm our business and prospects.

If we are unable to identify and successfully acquire additional trademarks or enter into joint ventures or collaborations for brands, our growth may be limited and, even if additional trademarks are acquired or joint ventures and collaborations are formed, we may not realize anticipated benefits due to integration or licensing difficulties.

While we are focused on growing our existing brands, we intend to selectively seek to acquire additional intellectual property, either directly or through the formation of joint ventures or collaborations.

However, as our competitors continue to pursue a brand management model, acquisitions, joint ventures, and collaborations may become more expensive and suitable candidates could become more difficult to find.

If we are unable to identify and successfully acquire additional trademarks or enter into collaborations for brands, our growth may be limited and, even if additional trademarks are acquired or collaborations are formed, we may not realize anticipated benefits due to integration or licensing difficulties.

While we are focused on growing our existing brands, we intend to selectively seek to acquire additional intellectual property, either directly or through collaborations.

However, as our competitors continue to pursue a brand management model, acquisitions and collaborations may become more expensive and suitable candidates could become more difficult to find.

In addition, even if we successfully acquire additional intellectual property or the rights to use additional intellectual property, we may not be able to achieve or maintain profitability levels that justify our investment in, or realize planned benefits with respect to, those additional brands.

Although we will seek to temper our acquisition, joint venture, and collaboration risks by following guidelines relating to purchase price and valuation, projected returns, existing strength of the brand, its diversification benefits to us, its potential licensing scale and creditworthiness of licensee base, acquisitions, joint ventures, and collaborations, whether they be of additional intellectual property assets or of the companies that own them, entail numerous risks, any of which could detrimentally affect our reputation, our results of operations, and/or the value of our common stock.

Although we will seek to temper our acquisition and collaboration risks by following guidelines relating to purchase price and valuation, projected returns, existing strength of the brand, its diversification benefits to us, its potential licensing scale and creditworthiness of licensee base, acquisitions and collaborations, whether they be of additional intellectual property assets or of the companies that own them, entail numerous risks, any of which could detrimentally affect our reputation, our results of operations, and/or the value of our common stock.

These risks include, among others:

● unanticipated costs associated with the target acquisition, joint venture, or collaboration, or its integration with our company;

● unanticipated costs associated with the target acquisition or collaboration, or its integration with our company;

● our ability to identify or consummate additional quality business opportunities, including potential licenses and new product lines and markets;

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● increased concentration in our revenues with one or more customers in the event that the brand has distribution channels in which we currently distribute products under one or more of our brands.

When we acquire intellectual property assets or the companies that own them, or enter into joint ventures or collaborations, our due diligence reviews are subject to inherent uncertainties and may not reveal all potential risks.

When we acquire intellectual property assets or the companies that own them, our due diligence reviews are subject to inherent uncertainties and may not reveal all potential risks.

We may therefore fail to discover or inaccurately assess undisclosed or contingent liabilities, including liabilities for which we may have responsibility as a successor to the seller or the target company.

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Acquiring additional intellectual property could also have a significant effect on our financial position and could cause substantial fluctuations in our quarterly and yearly operating results.

Acquisitions and joint ventures could result in the recording of significant goodwill and intangible assets on our financial statements, the amortization or impairment of which would reduce our reported earnings in subsequent years.

Acquisitions could result in the recording of significant goodwill and intangible assets on our financial statements, the amortization or impairment of which would reduce our reported earnings in subsequent years.

No assurance can be given with respect to the timing, likelihood, or financial or business effect of any possible transaction.

Moreover, our ability to grow through the acquisition of additional intellectual property, joint ventures and collaborations will also depend on the availability of capital to complete the necessary acquisition arrangements.

Moreover, our ability to grow through the acquisition of additional intellectual property will also depend on the availability of capital to complete the necessary acquisition arrangements.

In the event that we are unable to obtain debt financing on acceptable terms for a particular transaction, we may elect to pursue the transaction through the issuance by us of shares of our common stock (and, in certain cases, convertible securities) as equity consideration, which could dilute our common stock and reduce our earnings per share, and any such dilution could reduce the market price of our common stock unless and until we were able to achieve revenue growth or cost savings and other business economies sufficient to offset the effect of such an issuance.

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If promotional pressure remains intense, either through actions of our competitors or through customer expectations, this may cause a further reduction in our sales and gross margins and could have a material adverse effect on our business, financial condition, and operating results.

Because of the intense competition within our existing and potential wholesale licensees’ markets and the strength of some of their competitors, we and our licensees may not be able to continue to compete successfully.

Because of the intense competition within our existing and potential licensees’ markets and the strength of some of their competitors, our licensees may not be able to continue to compete successfully.

We expect our existing and future licenses to relate to products in the apparel, footwear, accessories, jewelry, home goods, and other consumer industries, in which our licensees face intense competition, including from our other brands and licensees.

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The proxy holder shall vote in favor of matters recommended or approved by the board of directors.

The combined voting power of the common stock ownership of our directors and executive officers was approximately 40% of our voting securities as of April 5, 2025.

The combined voting power of the common stock ownership of our directors and executive officers was approximately 30% of our voting securities as of March 3, 2026.

As a result, our management through such stock ownership will exercise significant influence over all matters requiring shareholder approval, including the election of our directors and approval of significant corporate transactions.

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In order to assist in bringing us in compliance with the minimum bid price requirement, we effected a one-for-ten (1:10) reverse stock split of our outstanding shares of common stock effective March 24, 2025.

On April 8, 2025, we received a letter from the Listing Qualifications Department of Nasdaq confirming that we had regained compliance with the applicable listing rules, and this matter was closed.

As of May 2, 2025, the closing price of our common stock was $2.79.

On April 8, 2025, we received a letter from the Listing Qualifications Department of Nasdaq confirming that we had regained compliance with the

applicable listing rules, and this matter was closed.

However, there can be no assurance that the minimum bid price for our common stock will continue to stay above $1.00 per share in the future.

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Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market.

These additional sales practice and disclosure requirements could impede the sale of our common stock even if and when our common stock becomes listed on the NASDAQ Capital Market.

These additional sales practices and disclosure requirements could impede the sale of our common stock even if and when our common stock becomes listed on the NASDAQ Capital Market.

In addition, the liquidity for our common stock may decrease, with a corresponding decrease in the price of our common stock.

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Although our common stock is quoted on the NASDAQ Capital Market, this does not assure that a meaningful, consistent trading market will develop or that the volatility will decline.

This market volatility could reduce the market price of the common stock, regardless of our

operating performance.

This market volatility could reduce the market price of the common stock, regardless of our operating performance.

In addition, the trading price of the common stock has been volatile over the past several years and could change significantly over short periods of time in response to actual or anticipated variations in our quarterly operating results, announcements by us, our licensees or our respective competitors, factors affecting our licensees’ markets generally and/or changes in national or regional economic conditions, making it more difficult for shares of the common stock to be sold at a favorable price or at all.

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A pandemic or outbreak of disease or similar public health threat, such as the COVID-19 pandemic, or fear of such an event, could have a material adverse impact on our business, operating results, and financial condition.

The COVID-19 pandemic caused a disruption to our business, beginning in March 2020.

The impacts of the COVID-19 pandemic (including actions taken by national, state, and local governments in response to COVID-19) negatively impacted the U.S.

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The global pandemic affected the financial health of certain of our customers, and the bankruptcy of certain other customers;

as a result, we may be required to make additional adjustments to our allowances for credit losses in future periods, which would increase our operating expenses and negatively impact our operating results.

result, we may be required to make additional adjustments to our allowances for credit losses in future periods, which would increase our operating expenses and negatively impact our operating results.

In addition, the effects of the COVID-19 pandemic on the shipping industry negatively impacted our licensees’ ability to import products in a manner that allowed for timely delivery to customers.

Congestion at ports of loading and ports of entry caused significant delays in deliveries and changes to the itineraries of steamship carriers.

Truck driver shortages, shortages of truck equipment and the inability of ports to provide reliable pick up times, also negatively impacted our and our licensees’ ability to timely receive goods in the past.

Truck driver shortages, shortages of truck equipment, and the inability of ports to provide reliable pick up times, also negatively impacted our licensees’ ability to timely receive goods in the past.

If our licensees are unable to mitigate any potential future supply chain disruptions, their ability to meet customer expectations, manage inventory and complete sales could be materially adversely affected, which could adversely affect our results of operations.

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The success of our operations depends on consumer spending.

Consumer spending is impacted by a number of factors which are beyond our control, including actual and perceived economic conditions affecting disposable consumer income (such as unemployment, wages, energy costs and consumer debt levels), customer traffic within shopping and selling environments, business conditions, interest rates and availability of credit and tax rates in the general economy and in the international, regional and local markets in which our products are sold and the impact of natural disasters and pandemics and disease outbreaks.

Consumer spending is impacted by a number of factors which are beyond our control, including actual and perceived economic conditions affecting disposable consumer income (such as unemployment, wages, energy costs, and consumer debt levels), customer traffic within shopping and selling environments, business conditions, interest rates, tax rates, and the availability of credit in the general economy and in the international, regional, and local markets in which our products are sold.

Global economic conditions historically included significant recessionary pressures and declines in employment levels, disposable income and actual and/or perceived wealth, and further declines in consumer confidence and economic growth.

A depressed economic environment is often characterized by a decline in consumer discretionary spending and has disproportionately affected retailers and sellers of consumer goods, particularly those whose goods are viewed as discretionary or luxury purchases, including fashion apparel and accessories such as ours.

Such factors as well as another shift towards recessionary conditions have in the past, and could in the future, devalue our brands, which could result in an impairment in its carrying value, which could be material, create downward pricing pressure on the products carrying our brands, and adversely impact our sales volumes and overall profitability.

Such factors as well as another shift towards recessionary conditions have, in the past, and could in the future, devalue our brands, which could result in an impairment in its carrying value, which could be material, create downward pricing pressure on the products carrying our brands, and adversely impact our revenues and overall profitability.

Further, economic and political volatility and declines in the value of foreign currencies could negatively impact the global economy as a whole and have a material adverse effect on the profitability and liquidity of our operations, as well as hinder our ability to grow through expansion in the international markets.

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and foreign legislation, regulations and trade agreements (including those resulting from the transition to new political administrations) relating to the products and materials our licensees import, including quotas, duties, tariffs or taxes, and other charges or restrictions on imports on our branded and co-branded products.

For example, the United States has recently enacted and proposed to enact significant new tariffs, including a 25% tariff on imports from Mexico and Canada into the United States.

While these tariffs are currently suspended while negotiations take place for a long-term agreement, there continues to exist significant uncertainty about the future relationship between the U.S.

and other countries (including China) with respect to trade policies, treaties and tariffs.

There continues to exist significant uncertainty about the future relationship between the U.S.

and other countries with respect to trade policies, treaties and tariffs.

These developments, or the perception that they could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted countries.

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Moreover, we could incur significant expenses or disruptions of our operations in connection with system failures or breaches.

sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of our systems.

In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of our systems.

The costs to us to eliminate or alleviate security problems, viruses, and bugs, or any problems associated with our newly transitioned systems or outsourced services could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that may impede our sales, distribution or other critical functions.

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Any failure, inadequacy, or interruption of that infrastructure or security lapse (whether intentional or inadvertent) of that technology, including cybersecurity incidents or attacks, could harm our ability to operate our business effectively.

Our investment in ORME also leverages certain artificial intelligence (AI) technologies, which ORME’s technology partner licenses from several third parties including but not limited to Amazon and ChatGPT, and which technologies are nascent and rapidly evolving.

In addition, our technology systems, including our cloud technologies, continue to increase in multitude and complexity, making them potentially vulnerable to breakdown, cyberattack, and other disruptions.

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As part of our business, we collect, store, and transmit large amounts of confidential information, proprietary data, intellectual property, and personal data.

The information and data processed and stored in our technology systems, and those of our licensees, joint ventures, and other third parties on whom we depend to operate our business, may be vulnerable to loss, damage, denial-of-service, unauthorized access, or misappropriation.

The information and data processed and stored in our technology systems, and those of our licensees and other third parties on whom we depend to operate our business, may be vulnerable to loss, damage, denial-of-service, unauthorized access, or misappropriation.

Data security incidents may be the result of unauthorized or unintended activity (or lack of activity) by our employees, contractors, or others with authorized access to our network or malware, hacking, business email compromise, phishing, ransomware, or other cyberattacks directed by third parties.

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If such a significant event were to occur, it could result in a material disruption of our business and commercial operations, including due to a loss, corruption, or unauthorized disclosure of our trade secrets, personal data, or other proprietary or sensitive information.

Further, these cybersecurity incidents can lead to the public disclosure of personal information (including sensitive personal information) of our employees, customers, and others and result in demands for ransom or

other forms of blackmail.

Such attacks, including phishing attacks and attempts to misappropriate or compromise confidential or proprietary information or sabotage enterprise information technology systems, are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage) and expertise, including by organized criminal groups, “hacktivists,” nation states, and others.

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We have dedicated a significant amount of time and resources to comply with this legislation for the years ended December 31, 2025 and 2024, and will continue to do so for future fiscal periods.

However, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2024 and 2023 due to material weaknesses.

We cannot be certain that our internal

controls will become effective or that future material changes to our internal control over financial reporting will be effective.

If we cannot adequately obtain and maintain the effectiveness of our internal control over financial reporting, we may be subject to sanctions or investigation by regulatory authorities, such as the SEC.

However, our management previously concluded that our internal control over financial reporting was not effective as of December 31, 2024 and 2023 due to a material weakness associated with financial information related to an investment in an unconsolidated affiliate.

We have remediated this material weakness during 2025.

However, we cannot be certain that our internal controls in place and operating as of December 31, 2025 will continue to be effective or that future material changes to our internal control over financial reporting will be effective.

If we cannot adequately maintain the effectiveness of our internal control over financial reporting, we may be subject to sanctions or investigation by regulatory authorities, such as the SEC.

Any such action could adversely affect our financial results and the market price of our common stock.

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In addition, we have entered into indemnification agreements with each of our directors and executive officers.

These agreements, among other things, require us to indemnify each director and executive officer for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts, incurred by any such person in any action or proceeding, including any action by us or in our right, arising out of the person’s services as one of our directors or executive officers.

any such person in any action or proceeding, including any action by us or in our right, arising out of the person’s services as one of our directors or executive officers.

The costs associated with providing indemnification under these agreements could be harmful to our business and have an adverse effect on results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors