Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
We operate in a highly competitive industry that involves numerous known and unknown risks and uncertainties that could impact our operations. The risks described below and in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our financial condition and/or operating results.
We have experienced continued declines in revenue over the past few years as a result of the sale and divesture of our largest revenue-producing brands, and our current level of revenue does not support our operations.
The 2022 sale of a majority interest in the Isaac Mizrahi brand and the 2024 divestiture of the LOGO by Lori Goldstein brand (and, to a lesser extent, the April 2026 sale of the Judith Ripka brand) resulted in significant decreases in our licensing revenue. As a result of our declining revenue and despite various cost-cutting measures to more efficiently operate our business and reduce and better manage our exposure to operating risks, and additional measures to further optimize our cost structure, our current revenue level does not support our operations, as our current revenue level is below our current level of direct operating expenses. If we are unable to significantly increase our revenue, we will continue to incur significant losses and may not be able to continue operations.
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