What changed in this filing

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Item 9A. Controls and Procedures

2025-05-28 compared with 2024-04-19 · 135 added, 117 removed, 453 unchanged (36% of the section changed)

10 unchanged sentences

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

The basis for the conclusion that such internal control was ineffective included the following considerations:

● The Company was unable to file its Annual Report on Form 10-K within the time specified in SEC rules and forms, due to a failure to obtain audited financial statements of the Company’s investment in an equity method investee.

Additional procedures were required for the Company’s audit, which impacted on the resources required to timely file the Company’s Form 10-K.

● During the middle of February 2024, our equity method investee engaged an independent audit accounting firm (separate from Marcum, LLP) to conduct its audit.

We agreed to pay for all fees of the audit, and on February 23, 2024, paid a retainer to the audit firm, in accordance with the engagement.

The audit firm was the same firm which conducted the audit for the year ended December 31, 2022 for the same equity method investee and delivered timely such audited financial statements for such prior audit.

However, the audit firm for the equity method investee has not completed the 2023 audit on a timely basis.

It was determined their progress was significantly deficient, and there would not be sufficient time to engage a new audit firm to receive timely, audited financial statements of the equity method investee.

The determination was made to terminate this firm’s 2023 engagement and have a new firm engaged to provide the 2023 audited financial statements.

Going forward, the Company will arrange for the appointment of a different auditor by the equity method investee and take a more active role in communicating with the auditor of the equity method investee, including assessing progress and timing.

The basis for the conclusion that such internal control was ineffective principally included consideration of the fact that the Company was unable to file its Annual Report on Form 10-K within the time specified in SEC rules and forms, as management did not maintain appropriately designed entity-level controls impacting Information and Communication and Monitoring, related to a material asset.

The Company is dependent on a third party to report financial information related to an investment in an unconsolidated affiliate.

The timing of the receipt of information from the third party did not permit adequate time to meet SEC deadlines for the Company’s required filing.

In response to the material weaknesses noted above, the Company’s management began to take actions to remediate the identified material weaknesses in internal control over financial reporting during the fiscal year ended December 31, 2025, including increased communication with the aforementioned third party.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

24 unchanged sentences

Prior to founding the Company, from June 2006 to July 2008, Mr.

D’Loren was a director, President and CEO of NexCen Brands, Inc., a global brand acquisition and management company with holdings that included The Athlete’s Foot,

Waverly Home, Bill Blass, MaggieMoo’s, Marble Slab Creamery, Pretzel Time, Pretzelmaker, Great American Cookies, and The Shoe Box.

D’Loren was a director, President and CEO of NexCen Brands, Inc., a global brand acquisition and management company with holdings that included The Athlete’s Foot, Waverly Home, Bill Blass, MaggieMoo’s, Marble Slab Creamery, Pretzel Time, Pretzelmaker, Great American Cookies, and The Shoe Box.

From 2002 to 2006, Mr.

3 unchanged sentences

D’Loren’s total career debt and equity investments in over 30 entertainment and consumer branded products companies have exceeded $1.0 billion.

In 1985, he founded and served as President and CEO of the D’Loren Organization, an investment and restructuring firm responsible for over $2 billion of transactions.

In 1985, he founded and served as President and CEO of the D’Loren Organization, an investment and restructuring firm

responsible for over $2 billion of transactions.

D’Loren has also served as an asset manager for Fosterlane Management, as well as a manager with Deloitte.

39 unchanged sentences

Liebman joined Shorewood in 1994 as Executive Vice President and Chief Financial Officer, and served as its President from 1999 until Shorewood was acquired by International Paper in 2000.

Liebman continued

as Executive Vice President of Shorewood until his retirement in 2005.

Liebman continued as Executive Vice President of Shorewood until his retirement in 2005.

Liebman is a Certified Public Accountant and was an audit partner with Deloitte and Touche, LLP (and its predecessors) from 1974 to 1994.

3 unchanged sentences

From March 2002 to October 2013, Ms.

Weinswig was employed by Citigroup, Inc., most recently where she was Managing Director and Head of the Global Staples & Consumer Discretionary team at Citi Research.

Weinswig was employed by Citigroup, Inc., most recently where she was Managing Director and Head of the Global Staples &

Consumer Discretionary team at Citi Research.

Weinswig also serves as an e-commerce expert for the International Council of Shopping Centers’ Research Task Force and was a founding member of the Oracle Retail Industry Strategy Council.

12 unchanged sentences

Deborah Weinswig brings thought leadership in the retail and licensing industries, particularly in the areas of sourcing and logistics.

Key Employees

Lori Goldstein is Chief Creative Officer and Spokeswoman for the Lori Goldstein Brands.

As Chief Creative Officer, she is responsible for providing design input and guidance to Xcel Brands for all brands under her name.

Goldstein’s work has covered a vast range, from her collaborations with photographers Annie Leibovitz at Vanity Fair to Steven Meisel at Vogue Italia, to her styling for designers Donatella Versace and Vera Wang.

Goldstein stepped in front of the camera in 2009 when she launched LOGO by Lori Goldstein, her exclusive collection for QVC.

She is the author of “Style Is Instinct,” which was published in 2013.

Goldstein’s brand was awarded “Apparel Product Concept of the Year” and she was named QVC Ambassador.

Board Nominee Agreement

On April 21, 2025, Xcel and UTG Capital, Inc., or UTG, entered into a Board Nomination Agreement pursuant to which Xcel granted UTG the right to nominate one individual to serve as a member of the Company’s board of directors, provided the individual is reasonably satisfactory to the Company’s board of directors (and/or board committee with authority over nominations of individuals to serve as directors of the Company) during the Nomination Period.

The term “Nomination Period” means the period commencing on the date of the Board Nomination Agreement and ending on the earlier of (i) the date all of the loans under the December 12, 2024 loan agreement (as amended) have been repaid and (ii) the date UTG no longer holds a participation of at least $1,000,000 principal amount in the Term Loan B;

provided, however, that if prior to the earlier of such dates, UTG and/or its affiliates exercise certain warrants issued to UTG for at least 300,000 shares of common stock, the Nomination Period shall continue for so long as UTG and/or its affiliate continue to hold 300,000 shares of common stock issued upon exercise of such warrants.

Employment Agreements with Executives

1 unchanged sentence

D’Loren for him to continue to serve as Chief Executive Officer of the Company, referred to as the D’Loren Employment Agreement.

Following the initial three-year term, the agreement automatically renewed for successive one-year terms in 2022, 2023, and 2024, and will be automatically renewed for one-year terms thereafter unless either party gives written notice of intent to terminate at least 90 days prior to the termination of the then current term.

Following the initial three-year term, the agreement has automatically renewed for successive one-year terms, and will be automatically renewed for one-year terms thereafter unless either party gives written notice of intent to terminate at least 90 days prior to the termination of the then current term.

Pursuant to the D’Loren Employment Agreement, Mr.

D’Loren’s annual base salary is $0.89 million.

The Company’s board of directors or the compensation committee may approve increases (but not decreases) from time to time.

The Company’s board of directors or the compensation

committee may approve increases (but not decreases) from time to time.

Following the initial three-year term, Mr.

D’Loren’s base salary will be reviewed at least annually.

D’Loren receives an allowance for an automobile appropriate for his level of position and the Company pays (in addition to monthly lease or other payments) all of the related expenses for gasoline, insurance, maintenance, repairs, or any other costs with Mr.

D’Loren also receives an allowance for an automobile appropriate for his level of position and the Company pays (in addition to monthly lease or other payments) all of the related expenses for gasoline, insurance, maintenance, repairs, or any other costs with Mr.

D’Loren’s automobile.

On July 30, 2024, the Company entered into an amendment of the D’Loren Employment Agreement.

Pursuant to this amendment, the Company agreed with Mr.

D’Loren that commencing July 16, 2024 and ending December 31, 2025, Mr.

D’Loren shall accept and the Company shall pay for each month 40% of Mr.

D’Loren’s pro rata portion of base salary for each such month through the issuance of shares of the Company’s common stock.

The shares of common stock will be issued on the last day of each month, and the number of shares issuable for each month to Mr.

D’Loren shall be determined by dividing 40% of his pro-rated base salary for such month by the closing sale price of the Company’s common stock on the last trading day of such month.

D’Loren is permitted to pay the withholding tax through the exchange of a portion of the shares.

D’Loren will be eligible to receive an annual cash bonus in an amount equal to (i) 2.5% of all income generated from the sales of the Company’s products and by the trademarks and other intellectual property owned, operated or managed by us (“IP Income”), in excess of $8.0 million earned and received by us in such fiscal year:

18 unchanged sentences

“Change of control,” as defined in Mr.

D’Loren’s employment agreement, means a merger or consolidation to which we are a party, a sale, lease or other transfer, exclusive license or other disposition of all or substantially all of our assets, a sale or transfer by our stockholders of voting control, in a single transaction or a series of transactions or, if during any twelve consecutive month period, the individuals who at the beginning of such period, constitute the board of directors of the Company (the “Incumbent Directors”) cease (other than due to death) to constitute a majority of the members of the board at the end of such period;

D’Loren’s employment agreement, means a merger or consolidation to which we

are a party, a sale, lease or other transfer, exclusive license or other disposition of all or substantially all of our assets, a sale or transfer by our stockholders of voting control, in a single transaction or a series of transactions or, if during any twelve consecutive month period, the individuals who at the beginning of such period, constitute the board of directors of the Company (the “Incumbent Directors”) cease (other than due to death) to constitute a majority of the members of the board at the end of such period;

provided that directors elected by or on the recommendation of a majority of the directors who so qualify as Incumbent Directors shall be deemed to be Incumbent Directors.

12 unchanged sentences

On February 28, 2019, and effective as of January 1, 2019, the Company entered into a two-year employment agreement with James Haran for him to continue to serve as the Company’s Chief Financial Officer, referred to as the Haran Employment Agreement.

Following the initial two-year term, the agreement automatically renewed for successive one-year terms in 2021, 2022, 2023, and 2024, and will be automatically renewed for one-year terms thereafter unless either party gives written notice of intent to terminate at least 30 days prior to the expiration of the then current term.

Following the initial two-year term, the agreement has automatically renewed for successive one-year terms, and will be automatically renewed for one-year terms thereafter unless either party gives written notice of intent to terminate at least 30 days prior to the expiration of the then current term.

Pursuant to the Haran Employment Agreement, Mr.

12 unchanged sentences

Haran was granted an option to purchase up to 55,263 shares of the Company’s common stock at an exercise price of $17.20 per share.

The option is exercisable until February 28, 2029 and shall vest, subject to Mr.

The option is exercisable until February 28, 2029 and

shall vest, subject to Mr.

Haran remaining employed with the Company and based upon the Company’s common stock achieving target prices as follows:

25 unchanged sentences

On February 28, 2019, and effective as of January 1, 2019, the Company entered into a two-year employment agreement with Seth Burroughs for him to continue to serve as the Company’s Executive Vice President – Business Development and Treasury, referred to as the Burroughs Employment Agreement.

Following the initial two-year term, the agreement has automatically renewed for successive one-year terms, and will be automatically renewed for one-year terms thereafter

unless either party gives written notice of intent to terminate at least 30 days prior to the expiration of the then current term.

Pursuant to the Burroughs Employment Agreement, Mr.

2 unchanged sentences

Following the initial two-year term, the base salary shall be reviewed at least annually.

On July 30, 2024, the Company entered into an amendment of the Burroughs Employment Agreement.

Pursuant to this amendment, the Company agreed with Mr.

Burroughs that commencing July 16, 2024 and ending December 31, 2025, Mr.

Burroughs shall accept and the Company shall pay for each month 40% of Mr.

Burroughs’ pro rata portion of base salary for each such month through the issuance of shares of the Company’s common stock.

The shares of common stock will be issued on the last day of each month, and the number of shares issuable for each month to Mr.

Burroughs shall be determined by dividing 40% of his pro-rated base salary for such month by the closing sale price of the Company’s common stock on the last trading day of such month.

Burroughs is permitted to pay the withholding tax through the exchange of a portion of the shares.

Burroughs will be eligible to receive a performance cash bonus in an amount equal to (i) 0.23% of all IP Income in excess of $12.0 million earned and received by us in such fiscal year;

36 unchanged sentences

Section 16(a) Beneficial Ownership Reporting Compliance

To our knowledge, based solely on a review of Forms 3 and 4 and any amendments thereto furnished to our Company pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934, or representations that no Forms 5 were required, all Section 16(a) filing requirements applicable to our officers, directors, and beneficial owners of more than 10% of our equity securities were timely filed, except that Deborah Weinswig filed a late Form 4 for one transaction.

D’Loren filed a late Form 4 for a transaction on two occasions, and (ii) Seth Burroughs filed a late Form 4 for a transaction on two occasions.

Code of Ethics

5 unchanged sentences

It prohibits trading in certain circumstances and applies to all of our directors, officers, and employees, as well as independent contractors or consultants who have access to material nonpublic information of Xcel.

Additionally, our Trading Policy imposes special additional trading restrictions applicable to all of our directors and executive officers.

Additionally, our Trading Policy imposes special additional trading restrictions applicable

to all of our directors and executive officers.

The Trading Policy is annexed to this Annual Report as an exhibit and the full text of the Trading Policy is available on our website at www.xcelbrands.com.

24 unchanged sentences

EVP - Business

(1) Robert W.

D’Loren’s salary amount for 2022 includes a voluntary temporary deferral of salary of $178,265, which was paid to Mr.

(1) In accordance with the July 30, 2024 amendment of the employment agreements with Robert W.

D’Loren’s and Seth Burroughs (see “Employment Agreements with Executives” in Item 10), commencing July 16, 2024, 40% of each of Mr.

D’Loren’s and Mr.

Burrough’s salary was paid in shares of the Company’s common stock rather than in cash.

Salary compensation paid to Mr.

D’Loren in stock in 2024 was $162,892, which amounted to 24,037 shares on a gross basis (12,933 shares issued on a net basis, after the exchange of shares for withholding taxes).

Salary compensation paid to Mr.

Burroughs in stock in 2024 was $62,443, which amounted to 9,213 shares on a gross basis (4,569 shares issued on a net basis, after the exchange of shares for withholding taxes).

D’Loren’s salary amount for 2024 includes the amount of a voluntary temporary deferral of salary of $125,000, which was earned by Mr.

D’Loren and accrued at December 31, 2024 and was paid to Mr.

D’Loren in 2025.

(2) Bonuses in 2023 include amounts paid in accordance with the executives’ respective employment agreements (see “Employment Agreements with Executives” in Item 10).

Bonuses in 2022 include (i) amounts paid in accordance with the executives’ respective employment agreements and (ii) amounts awarded by the board of directors as transaction bonuses related to the May 2022 sale of a majority interest in the Isaac Mizrahi brand.

(3) The amount shown represents the grant date fair value of fully-vested common stock awards issued as payment for a performance bonus earned in 2021.

(3) Bonuses include amounts paid in accordance with the executives’ respective employment agreements (see “Employment Agreements with Executives” in Item 10).

Outstanding Equity Awards as of December 31, 2024

13 unchanged sentences

Director Compensation

We pay our non-employee directors $3,000 for each board of directors and committee meeting attended, up to a maximum of $12,000 per year for board of directors’ meetings and up to a maximum of $12,000 per year for committee meetings, except that the chairman of each committee receives $4,000 for each such committee meeting attended, up to a maximum of $16,000 per year.

We generally pay our non-employee directors $3,000 for each board of directors and committee meeting attended, up to a maximum of $12,000 per year for board of directors’ meetings and up to a maximum of $12,000 per year for committee meetings, except that the chairman of each committee receives $4,000 for each such committee meeting attended, up to a maximum of $16,000 per year.

The following table sets forth information with respect to each non-employee director’s compensation for the year ended December 31, 2024.

4 unchanged sentences

James Fielding (1) (2)

(1) On August 23, 2023, each non-employee directory was granted 10,000 shares of restricted stock pursuant to the terms and conditions of the 2021 Equity Incentive Plan.

Such shares of restricted stock will vest evenly over approximately

19 months, whereby 50% shall vest on April 1, 2024 and 50% shall vest on April 1, 2025.

(1) On April 3, 2024, each non-employee directory was granted 1,000 shares of restricted stock pursuant to the terms and conditions of the 2021 Equity Incentive Plan.

Such shares of restricted stock will vest evenly over two years, whereby 50% shall vest on April 3, 2025 and 50% shall vest on April 3, 2026.

Notwithstanding the foregoing, each grantee may extent the vesting date of all or a portion of the restricted shares by six months and, thereafter one or more times may further extend such date with respect to all or a portion of the restricted shares until the next following October 3 or April 3, as the case may be.

The grant date fair value of the shares was $8.50 per share.

(2) On August 23, 2023, each non-employee director was granted options to purchase 25,000 shares of stock pursuant to the terms and conditions of the 2021 Equity Incentive Plan.

Such options will vest evenly over approximately 19 months, whereby 50% shall vest on April 1, 2024 and 50% shall vest on April 1, 2025.

(2) On April 3, 2024, each non-employee director was granted options to purchase 2,500 shares of stock pursuant to the terms and conditions of the 2021 Equity Incentive Plan.

Such options will vest evenly over two years, whereby 50% shall vest on April 3, 2025 and 50% shall vest on April 3, 2026.

The exercise price of the options is $8.50 per share.

27 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table lists, as of April 3, 2024, the number of shares of common stock beneficially owned by (i) each person or entity known to the Company to be the beneficial owner of more than 5% of the outstanding common stock;

The following table lists, as of May 2, 2025, the number of shares of common stock beneficially owned by (i) each person or entity known to the Company to be the beneficial owner of more than 5% of the outstanding common stock;

(ii) each named executive officer and director of the Company, and (iii) all officers and directors as a group.

5 unchanged sentences

Unless otherwise indicated, the address for such person is c/o Xcel Brands, Inc., 550 Seventh Avenue, 11th Floor, New York, New York 10018.

The percentages below are calculated based on 23,492,117 shares of common stock issued and outstanding as of April 3, 2023:

The percentages below are calculated based on 2,395,242 shares of common stock issued and outstanding as of May 2, 2025:

Name and Address

8 unchanged sentences

Isaac Mizrahi (9)

Summit Trail Advisors (10)

* Less than 1%.

3 unchanged sentences

DiSanto are the trustees and as to which Mr.

D’Loren has sole voting and dispositive power, (iii) 1,988,390 shares of common stock held in the name of Isaac Mizrahi, (iv) 1,056,667 shares of common stock held in the name of Hilco Trading, LLC, and (v) 2,123,196 shares of common stock as to which holders thereof granted to Mr.

D’Loren has sole voting and dispositive power, (iii) 15,333 immediately exercisable warrants held by IPX Capital, LLC, a company controlled by Mr.

D’Loren, (iv) 172,233 shares of common stock held in the name of Isaac Mizrahi, and (v) 193,271 shares of common stock as to which holders thereof granted to Mr.

D’Loren irrevocable proxy and attorney-in-fact with respect to the shares.

Certain holders or grantees have entered into certain agreements, pursuant to which appoint a person designated by our board of directors as their irrevocable proxy and attorney-in-fact with respect to the shares set forth in clauses (iii), (iv), and (v).

D’Loren does not have any pecuniary interest in these shares described in clauses (iii), (iv), and (v) and disclaims beneficial ownership thereof.

Certain holders or grantees have entered into agreements, pursuant to which appoint a person designated by our board of directors as their irrevocable proxy and attorney-in-fact with respect to the shares set forth in clauses (iv) and (v).

D’Loren does not have any pecuniary interest in these shares described in clauses (iv) and (v) and disclaims beneficial ownership thereof.

Does not include 32,667 shares held by the D’Loren Family Trust (or the Family Trust) of which Mark DiSanto is a trustee and has sole voting and dispositive power.

5 unchanged sentences

(4) Consists of (i) 3,616 shares of common stock, (ii) 7,000 restricted shares, and (iii) immediately exercisable options to purchase 12,750 shares.

(5) Consists of (i) 26,500 shares of common stock, (ii) 326,671 shares held by the D’Loren Family Trust, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the D’Loren Family Trust, (iii) 1,296,352 shares held by Mark X.

DiSanto Investment Trust, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the Trust, (iv) 20,000 restricted shares, (v) 90,000 shares issuable upon exercise of warrants and options that have vested, and (vi) 82,392 shares held by other trusts, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the trusts.

Does not include 1,250 options that are not yet exercisable.

(5) Consists of (i) 2,650 shares of common stock, (ii) 1,000 restricted shares, (iii) 32,667 shares held by the D’Loren Family Trust, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the D’Loren Family Trust, (iv) 130,685 shares held by Mark X.

DiSanto Investment Trust, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the Trust, (v) immediately exercisable options to purchase 12,750 shares, and (vi) 8,239 shares held by other trusts, of which Mark DiSanto is trustee and has sole voting and dispositive power over the shares held by the trusts.

Does not include 1,250 options that are not yet exercisable.

(6) Consists of (i) 5,800 restricted shares and (ii) immediately exercisable options to purchase 12,750 shares.

Does not include 1,250 options that are not yet exercisable.

(7) Consists of (i) 2,500 shares of common stock, (ii) 1,500 restricted shares, and (iii) immediately exercisable options to purchase 12,750 shares.

(8) Includes (i) 4,392,440 shares of common stock, (ii) 168,000 restricted shares, (iii) 360,000 shares issuable upon exercise of options that are currently exercisable, and (iv) 5,775,570 other shares of common stock as to which holders thereof granted to Mr.

Does not include 1,250 options that are not yet exercisable.

(8) Includes (i) 545,254 shares of common stock, (ii) 15,300 restricted shares, (iii) 66,333 shares issuable upon exercise of options and warrants that are currently exercisable, and (iv) 365,504 other shares of common stock as to which holders thereof granted to Mr.

D’Loren irrevocable proxy and attorney-in-fact with respect to the shares.

(9) Consists of (i) 167,233 shares of common stock and (ii) immediately exercisable options to purchase 5,000 shares.

(10) Consists of 245,259 shares of common stock.

Certain Relationships and Related Transactions, and Director Independence

4 unchanged sentences

In November 2023, the services agreement was amended such that the Company agreed to provide IM Topco with a $600,000 reduction of future service fees over the next eighteen months, beginning on July 1, 2023.

For the year ended December 31, 2023, the Company recognized service fee income related to this agreement of $150,000.

In April 2024, the services agreement was further amended to set the service fees at $150,000 per year beginning with the fiscal year ending December 31, 2024.

In addition, under the April 2024 amendment, IM Topco is required to prepay the service fees for the year ending December 31, 2025;

as of December 31, 2024, IM Topco has prepaid $62,500 of such service fees.

The Company recognized service fee income related to this agreement of $150,000 for each of the years ended December 31, 2024 and 2023.

License Agreement

4 unchanged sentences

For the year ended December 31, 2023, the estimated amount of such shortfall was approximately $325,000, which the Company recognized as royalty expense in the consolidated statements of operations.

In November 2023, the Company, WHP, and IM Topco entered into an amendment of the May 27, 2022 membership purchase agreement, under which the parties agreed to waive the purchase price adjustment provision until the measurement period ending March 31, 2024 (see Note 3 for details).

In exchange, Xcel agreed to make additional royalty payments to IM Topco totaling $450,000 the next 11 months.

As a result of this amendment, the Company recognized a $450,000 increase to the carrying value basis of its equity method investment in IM Topco and a corresponding increase in current liabilities.

Isaac Mizrahi

Isaac Mizrahi is a principal stockholder and former employee of the Company.

Employment Agreement

On February 24, 2020, the Company entered into an employment agreement with Mr.

Mizrahi for him 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 (WHP).

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.

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.

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.

Laugh Club Services Agreement

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 (WHP).

On December 4, 2023, the Company acquired a 30% equity ownership interest in Orme Live, Inc.

(“ORME”), a short-form video and social commerce marketplace that is planned to launch in 2024, for a purchase price of $150,000.

ORME licenses the technology utilized by its marketplace from KonnectBio Inc., in which Robert W.

D’Loren, the Company’s Chairman of the Board, Chief Executive Officer, and President, owns an approximate 20% noncontrolling interest.

Equity Transactions

On March 15, 2024, the Company entered into an underwriting agreement with Craig-Hallum Capital Group LLC (the “Representative”), as the representative of the underwriters, relating to a firm commitment underwritten public offering (the “Offering”) of 3,284,421 shares of the Company’s common stock at a price to the public of $0.65 per share.

In connection with the Offering, Robert W.

D’Loren, Chairman and Chief Executive Officer of the Company;

an affiliate of Mark DiSanto, a director of the Company;

and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company, purchased 146,250, 146,250, and 32,500 shares of common stock, respectively.

The closing of the Offering occurred on March 19, 2024.

The net proceeds to the Company from the sale of the shares, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company, are expected to be approximately $1,735,000.

Upon closing of the Offering, the Company issued the Representative certain warrants to purchase up to 178,953 shares of common stock (the “Representative’s Warrants”) as compensation.

The Representative’s Warrants will be exercisable at a per share exercise price of $0.8125.

The Representative’s Warrants are exercisable, in whole or in part, during the four and one-half-year period commencing 180 days from the commencement of sales of the shares of common stock in the Offering.

On March 14, 2024, the Company entered into subscription agreements with each of Robert W.

In November 2023, the Company, WHP, and IM Topco entered into an amendment of the May 2022 membership purchase agreement, under Xcel agreed to make additional royalty payments to IM Topco totaling $450,000 the following 11 months.

As a result of this amendment, the Company recognized a $450,000 increase to the carrying value basis of its

equity method investment in IM Topco and a corresponding increase in current liabilities.

The Company paid $75,000 of the additional royalty payments to IM Topco during the year ended December 31, 2023, and paid $237,500 during the year ended December 31, 2024.

As of December 31, 2024, the remaining payments due totaled $137,500, and are reflected with accounts payable, accrued expenses and other current liabilities in the consolidated balance sheet.

As of the date of this Annual Report on Form 10-K, this amount has not been paid to IM Topco.

Public Offering and Private Placement Transactions

In connection with the Offering of 328,427 shares of the Company’s common stock at a price to the public of $6.50 per share which was consummated on March 19, 2024 (see Note 7 of the financial statements in Item 8 for additional details), Robert W.

D’Loren, Chairman and Chief Executive Officer of the Company;

an affiliate of Mark DiSanto, a director of the Company;

and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company to purchase 132,589, 132,589, and 29,464 shares, respectively (collectively, the “Private Placement Shares”), at a price of $0.98 per Private Placement Share.

and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company, purchased 14,625, 14,625, and 3,250 shares, respectively, at $6.50 per share, the same price at which the shares were sold to other purchasers in the Offering.

Also in connection with the Offering, on March 14, 2024, the Company entered into subscription agreements with each of Mr.

DiSanto, and Mr.

Burroughs to purchase 13,258, 13,258, and 2,946 shares, respectively (collectively, the “Private Placement Shares”), at a price of $9.80 per Private Placement Share.

The total number of Private Placement Shares purchased was 29,462.

Net proceeds after payment of agent fees to the Representative were approximately $265,000.

Net proceeds after payment of agent fees to the Representative were approximately $0.3 million.

The purchase of the Private Placement Shares closed concurrently with the Offering.

The aggregate number of shares of common stock issued from the Offering and the Private Placement was 3,579,063 shares and the total net proceeds received was approximately $2,000,000.

Debt Refinancing

In connection with the December 2024 refinancing of the Company’s term loan debt (see Note 6 of the financial statements in Item 8 for additional details), IPX Capital, LLC (“IPX”), a company controlled by Mr.

D’Loren, made a $250,000 advance to one of the Company’s subsidiaries, of which $200,000 was repaid to IPX upon the closing of the debt refinancing transaction.

Additionally, IPX purchased a 12.5% undivided, last-out, subordinated participation interest in a portion of the new term loan debt for a purchase price of $500,000, and received a pro rata share of warrants received by the Term B Lenders to purchase shares of the Company’s common stock.

On April 21, 2025 and in connection with the refinancing of the Company’s term loan debt, IPX’s participation in Term Loan B was repaid and IPX purchased a $500,000 undivided, last-out, subordinated participation interest in Term Loan A.

Support Agreement

On April 21, 2025, each of Robert D’Loren, Chairman of the Board and Chief Executive Officer of the Company, Seth Burroughs, Executive Vice President of the Company, and Mark D.

Santo, a director of the Company, entered into a Support Agreement whereby each individual agreed to vote in favor of any proposal to approve the issuance of the shares of common stock issuable upon exercise of the warrants issued to UTG and other lenders and warrants amended in connection with the April 21, 2025 debt refinancing transaction, in accordance with applicable Nasdaq rules.

Board Nominee Agreement

In October 2024, in connection with a required increase to a standby letter of credit associated with the Company’s real estate lease for offices located at 1333 Broadway, Mr.

D’Loren provided a personal guarantee to the financial institution providing such letter of credit, in order to satisfy a portion of the associated collateral requirements for the letter of credit.

On December 4, 2023, the Company acquired a noncontrolling equity ownership interest in ORME, a short-form video and social commerce marketplace, for a purchase price of $150,000.

ORME licenses the technology utilized by its marketplace from KonnectBio Inc., in which Robert W.

D’Loren, the Company’s Chairman of the Board, Chief Executive Officer, and President, owns an approximate 20% noncontrolling interest.

Principal Accountant Fees and Services

1 unchanged sentence

Audit-Related Fees

There were no fees billed by our Independent Registered Public Accounting Firm for audit-related services for the fiscal years ended December 31, 2023 and 2022.

For the fiscal year ended December 31, 2024, fees billed by our Independent Registered Public Accounting Firm for audit-related services consisted of $113,000 for the audit of IM Topco, LLC, and $77,000 for consent and comfort letter procedures related to our Form S-3 and 424(b)(5) filings related to our March 2024 public offering and private placement transactions.

There were no fees billed by our Independent Registered Public Accounting Firm for audit-related services for the fiscal year ended December 31, 2023.

There were no fees billed for professional services rendered by our Independent Registered Public Accounting Firm for tax compliance, tax advice, and tax planning for the fiscal years ended December 31, 2024 and 2023.

12 unchanged sentences

Amended and Restated Certificate of Incorporation of Xcel Brands, Inc.

Certificate of Amendment of Amended and Restated Certificate of Incorporation of Xcel Brands, Inc.

Third Restated and Amended Bylaws of Xcel Brands, Inc.

4 unchanged sentences

Form of Representative’s Warrant issued on March 19, 2024 (14)

Form of Common Stock Warrant issued on December 31, 2024 (3)

Form of UTG Warrant (20)

Form of Restore Warrant (20)

Form of Restore Warrant Amendment (20)

Form of FEAC Warrant Amendment (20)

Amended and Restated Voting Agreement between Xcel Brands, Inc.

8 unchanged sentences

Employment Agreement between the Company and Seth Burroughs dated February 27, 2019 (12)

Amended and Restated Fifth Amendment, entered into as of March 14, 2014 and effective as of December 24, 2013, to the Asset Purchase Agreement filed as Exhibit 10.1 (3)

Sublease Agreement, dated as of July 8, 2015, by and between Xcel Brands, Inc.

3 unchanged sentences

Third Amendment to Membership Interest Purchase Agreement (15)

Term Loan Agreement between H Halston IP, LLC, as borrower, and Israel Discount Bank, as lender, dated October 19, 2023 (15)

Loan and Security Agreement dated as of December 12, 2024 (3)

Membership Pledge Agreement dated as of December 12, 2024 (3)

Asset Purchase Agreement dated June 21, 2024 (16)

Amendment to Employment Agreement between the Company and Robert D’Loren (17)

Amendment to Employment Agreement between the Company and Seth Burroughs (17)

Subscription Agreement, dated as of March 15, 2024, by and between Robert W.

3 unchanged sentences

DiSanto Investment Trust and Xcel Brands, Inc.

Second Amendment to Loan and Security Agreement, dated as of April 21, 2025, by and among Xcel Brands, Inc., each subsidiary party thereto as guarantors, the financial institutions party thereto as lenders and FEAC Agent, LLC as administrative agent and collateral agent (20)

Board Nominee Agreement by and between the Company and UTG dated April 21, 2025 (20)

Support Agreement dated April 21, 2025 (20)

Membership Interest Transfer Agreement effective as of April 15, 2025 (20)

Subsidiaries of the Registrant (21)

15 unchanged sentences

(2) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on December 24, 2013.

(3) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on March 20, 2014.

(3) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on December 16, 2024.

(4) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on April 9, 2014.

9 unchanged sentences

(14) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on March 19, 2024.

(15) This Exhibit is incorporated by reference to the appropriate Exhibit to the Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on April 19, 2024.

(16) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on June 24, 2024.

(17) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on August 2, 2024.

(18) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on March 24, 2025.

(19) This Exhibit is incorporated by referenced to the appropriate Exhibit to the Annual Report on Form 10-K/A for the year ended December 31, 2023, which was filed with the SEC on November 29, 2024.

(20) This Exhibit is incorporated by reference to the appropriate Exhibit to the Current Report on Form 8-K, which was filed with the SEC on March 24, 2025.

(21) Filed herewith.

(16) To be filed by amendment.

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

April 18, 2024

/s/ Robert W.

5 unchanged sentences

Chief Executive Officer and Chairman

April 18, 2024

(Principal Executive Officer)

Chief Financial Officer

April 18, 2024

(Principal Financial Officer and

1 unchanged sentence

/s/ Mark DiSanto

April 18, 2024

/s/ James Fielding

James Fielding

/s/ Howard Liebman

April 18, 2024

Howard Liebman

/s/ Deborah Weinswig

April 18, 2024

Deborah Weinswig

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 9A. Controls and Procedures