What the changes say
- Senior secured notes totaling $3.01 million issued in April 2026 threaten liquidity and operational flexibility.
- Concentration risks shifted as G-III Apparel Group Halston Master License grew to 52% of revenue while Qurate dropped to 20%.
- Ongoing going concern doubts persist due to historical net losses and cash usage.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
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
The issuance of $3.01 million in Senior Notes secured by all company assets could impair liquidity, restrict cash use, and trigger default if obligations are unmet.
- NewRisks Related to Our Business
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
Competition for brand acquisitions may drive up costs and integration difficulties, potentially limiting growth if new trademarks fail to achieve profitability.
- NewRisks Related to Our Business
Intellectual property rights may be unavailable or limited in some countries because standards of registration and ownership vary internationally. Consequently, in certain foreign jurisdictions, we have elected or may elect not to apply for trademark registrations
International trademark standards vary, and failure to timely register or enforce foreign trademarks could spark expensive litigation and damage brands.
- NewGeneral Risks
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
Past shipping and port congestion issues could recur, increasing credit loss allowances and straining licensees' abilities to receive goods and complete sales.
Dropped
- DroppedRisks Related to Our Business
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
Prior loan refinancing and general need for additional cash to fund working capital and growth.
- DroppedRisks Related to Our Business
We have identified material weaknesses in our internal controls over financial reporting
- DroppedRisks Related to Our Business
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
- DroppedRisks Related to Our Business
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
Material weaknesses in internal controls over financial reporting.
- DroppedRisks Related to Our Business
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
- DroppedGeneral Risks
Furthermore, changes in the credit and capital markets, including market disruptions, limited liquidity, and interest rate fluctuations, may increase the cost of financing or restrict our access to potential sources of capital for future acquisitions
Joint venture partner disagreements and changing business priorities.
Reworded
- 92% rewrittenRisks Related to Our Business
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
Updated debt figures showing $13.6 million in total outstanding loan balances as of December 31, 2025, and added a specific threat of losing trademark ownership upon default.
- 86% rewrittenRisks Related to Our Business
We are dependent upon our Chief Executive Officer and other key executives. If we lose the services of these individuals, we may not be able to fully implement our business plan and future growth strategy, which would harm our business and prospects
Removed specific phrasing regarding the enforceability of employment agreements for CEO Robert W. D'Loren and key executives.
- 62% rewrittenGeneral Risks
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
Truncated the pandemic impact discussion by removing the trailing sentence regarding future adjustments to credit loss allowances.
Was: 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
- 58% rewrittenRisks Related to Our Business
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
Removed references to joint ventures regarding influencer social media risks and added a warning that target consumers act immediately on unverified information.
- 53% rewrittenRisks Related to Our Business
Our failure to protect our proprietary rights could compromise our competitive position and decrease the value of our brands
Retained core intellectual property protection risks with minor stylistic phrasings adjustments.
- 35% rewrittenGeneral Risks
A decline in general economic conditions resulting in a decrease in consumer spending levels and an inability to access capital may adversely affect our business
Updated general economic condition factors by reordering and slightly refining listed consumer spending determinants.
- 34% rewrittenRisks Related to Our Business
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
Updated customer concentration figures for fiscal 2025 showing Qurate decreased to 20% and Halston Master License increased to 52% of total net revenue.
- 33% rewrittenRisks Related to Our Business
Our financial statements have been prepared assuming that we will continue as a going concern
Removed explicit historical 2024 and 2023 net loss and accumulated deficit figures from the going concern description.
- 30% rewrittenRisks Related to Our Business
Our business is dependent on continued market acceptance of our brands and any future brands we may acquire, and the products of our licensees
Was: 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
- 26% rewrittenRisks Related to Our Business
Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties
- 20% rewrittenRisks Related to an Investment in Our Securities
We may issue a substantial number of shares of common stock upon exercise of outstanding warrants and options
All 42 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01Our financial statements have been prepared assuming that we will continue as a going concern33% rewritten
- 02Our 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 assets92% rewritten
- 03On 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 subsidiariesNew
- 04A 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 flows34% rewritten
- 05The 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
- 06Our business is dependent on continued market acceptance of our brands and any future brands we may acquire, and the products of our licensees30% rewritten
- 07Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties26% rewritten
- 08We 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 business58% rewritten
- 09If 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
- 10If major department, mass merchant, and specialty store chains consolidate, continue to close stores, or cease to do business, our business could be negatively affected
- 11We expect to achieve growth based upon our plans to expand our business under our existing brands and brands we may develop independently or through collaborations or acquire. If we fail to manage our expected future growth, our business and operating results could be materially harmed
- 12We are dependent upon our Chief Executive Officer and other key executives. If we lose the services of these individuals, we may not be able to fully implement our business plan and future growth strategy, which would harm our business and prospects86% rewritten
- 13If 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 difficultiesNew
- 14Intense competition in the apparel, fashion, and jewelry industries could reduce our sales and profitability
- 15Because 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
- 16If our competition for licenses increases, or any of our current licensees elect not to renew their licenses or renew on terms less favorable than today, our growth plans could be slowed and our business, financial condition and results of operations would be adversely affected
- 17Difficulties with foreign sourcing may adversely affect our business
- 18Our failure to protect our proprietary rights could compromise our competitive position and decrease the value of our brands53% rewritten
- 19Intellectual property rights may be unavailable or limited in some countries because standards of registration and ownership vary internationally. Consequently, in certain foreign jurisdictions, we have elected or may elect not to apply for trademark registrationsNew
Risks Related to an Investment in Our Securities
- 20Management exercises significant control over matters requiring shareholder approval, which may result in the delay or prevention of a change in our control
- 21Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets
- 22applicable 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
- 23No assurance can be given that our stock will not be subject to these “penny stock” rules in the future
- 24Our common stock has historically been thinly traded, and you may be unable to sell at or near ask prices or at all if you need to sell or liquidate a substantial number of shares at one time
- 25The market price of our common stock has declined over the past several years and may be volatile, which could reduce the market price of our common stock
- 26We may issue a substantial number of shares of common stock upon exercise of outstanding warrants and options20% rewritten
- 27Holders of our common stock may be subject to restrictions on the use of Rule 144 by shell companies or former shell companies
- 28We do not anticipate paying cash dividends on our common stock
- 29Provisions of our corporate charter documents could delay or prevent change of control
General Risks
- 30impact on the Company's business, operating results and financial condition
- 31A 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 condition62% rewritten
- 32result, 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 resultsNew
- 33A decline in general economic conditions resulting in a decrease in consumer spending levels and an inability to access capital may adversely affect our business35% rewritten
- 34Macroeconomic conditions and international trade conditions could adversely impact our business and results of operations
- 35Changes in U.S. and foreign government administrative policy, including the imposition of or increases in tariffs and changes to existing trade agreements could have a material adverse effect on us
- 36Extreme or unseasonable weather conditions could adversely affect our business
- 37Our trademarks and other intangible assets are subject to impairment charges under accounting guidelines
- 38Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results
- 39We must successfully maintain and/or upgrade our information technology systems
- 40System security risk issues as well as other major system failures could disrupt our internal operations or information technology services, and any such disruption could negatively impact our revenues, increase our expenses, and harm our reputation
- 41Changes in laws could make conducting our business more expensive or otherwise change the way we do business
- 42There are limitations on the liabilities of our directors and executive officers. Under certain circumstances, we are obligated to indemnify our directors and executive officers against liability and expenses incurred by them in their service to us
Other XCel Brands 10-Ks
- FY2024 10-K risk factors44 risks
The company faces severe going concern doubts with recurring net losses and millions in accumulated deficits. Debt obligations, trademark risks, and heavy revenue concentration with Qurate and G-III Apparel drive the risk profile. Material weaknesses in internal controls and compliance with Nasdaq listing requirements threaten stock stability.
Filed May 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.