# EDGAR Filing Document

**Accession Number:** 0001083220
**File Stem:** 0001558370-25-008402
**Filing Date:** 2025-6
**Character Count:** 124936
**Document Hash:** 8c1b57fb89149714e4fe204e4b728809
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-008402.hdr.sgml**: 20250604

**ACCESSION NUMBER**: 0001558370-25-008402

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 76

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250604

**DATE AS OF CHANGE**: 20250604

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** XCel Brands, Inc.
- **CENTRAL INDEX KEY:** 0001083220
- **STANDARD INDUSTRIAL CLASSIFICATION:** PATENT OWNERS & LESSORS [6794]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 760307819
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37527
- **FILM NUMBER:** 251024078

**BUSINESS ADDRESS:**
- **STREET 1:** 1333 BROADWAY
- **STREET 2:** 10TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10018
- **BUSINESS PHONE:** (347) 727-2474

**MAIL ADDRESS:**
- **STREET 1:** 1333 BROADWAY
- **STREET 2:** 10TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10018

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NETFABRIC HOLDINGS, INC
- **DATE OF NAME CHANGE:** 20050516

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOUSTON OPERATING CO
- **DATE OF NAME CHANGE:** 19990402

?xml version='1.0' encoding='ASCII'? XCEL BRANDS, INC._March 31, 2025

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

**☒**&nbsp;&nbsp;&nbsp;&nbsp;**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended March 31, 2025

or

**☐&nbsp;&nbsp;&nbsp;&nbsp;TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACT OF 1934**

For the transition period from ___ to ___

*Commission File Number: 001-37527*

**XCEL BRANDS, INC.**

(Exact name of registrant as specified in its charter)

<u>Delaware</u> &nbsp;&nbsp;&nbsp;&nbsp; <u>76-0307819</u> <br> (State or Other Jurisdiction of (I.R.S. Employer <br> Incorporation or Organization) Identification No.)

<u>550 Seventh Avenue, 11th Floor, New York, NY 10018</u> <br> (Address of Principal Executive Offices)

(347) 727-2474

(Issuer's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, $0.001 par value per share | XELB | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ &nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
|  | Emerging growth company ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 29, 2025, there were 2,416,742 shares of common stock, $.001 par value per share, of the issuer outstanding.

------

[**Table of Contents**](#TOC)

#### XCEL BRANDS, INC.
INDEX

---

| | | |
|:---|:---|:---|
|  | a<br>| |
|  |  | <br>**Page** |
| [PART I - FINANCIAL INFORMATION](#PART1_879002) | [PART I - FINANCIAL INFORMATION](#PART1_879002) | 3 |
| [Item 1.](#ITEM1FINANCIALSTATEMENTS_494472) | [Financial Statements](#ITEM1FINANCIALSTATEMENTS_494472) | 3 |
|  | [Unaudited Condensed Consolidated Balance Sheets](#BalanceSheets_587180) | 3 |
|  | [Unaudited Condensed Consolidated Statements of Operations](#StatementsofOperations_713277) | 4 |
|  | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](#StockholdersEquity_347330) | 5 |
|  | [Unaudited Condensed Consolidated Statements of Cash Flows](#CashFlows_133022) | 6 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#a1NatureofOperations_790426) | 7 |
| [Item 2.](#ITEM2MANAGEMENTSDISCUSSIONANDANALYSIS_77) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#ITEM2MANAGEMENTSDISCUSSIONANDANALYSIS_77) | 25 |
| [Item 3.](#ITEM3QUANTITATIVEANDQUALITATIVE_639377) | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM3QUANTITATIVEANDQUALITATIVE_639377) | 32 |
| [Item 4.](#ITEM4CONTROLSANDPROCEDURES_83023) | [Controls and Procedures](#ITEM4CONTROLSANDPROCEDURES_83023) | 33 |
| [PART II - OTHER INFORMATION](#PARTII_336450) | [PART II - OTHER INFORMATION](#PARTII_336450) | 34 |
| [Item 1.](#ITEM1LEGALPROCEEDINGS_126264) | [Legal Proceedings](#ITEM1LEGALPROCEEDINGS_126264) | 34 |
| [Item 1A.](#RISK) | [Risk Factors](#RISK) | 34 |
| [Item 2.](#ITEM2UNREGISTEREDSALESOFEQUITY_812203) | [Unregistered Sales of Equity Securities and Use of Proceeds](#ITEM2UNREGISTEREDSALESOFEQUITY_812203) | 34 |
| [Item 3.](#ITEM3DEFAULTSUPONSENIORSECURITIES_275025) | [Defaults Upon Senior Securities](#ITEM3DEFAULTSUPONSENIORSECURITIES_275025) | 34 |
| [Item 4.](#ITEM4MINESAFETYDISCLOSURES_756050) | [Mine Safety Disclosures](#ITEM4MINESAFETYDISCLOSURES_756050) | 34 |
| [Item 5.](#ITEM5OTHERINFORMATION_91600) | [Other Information](#ITEM5OTHERINFORMATION_91600) | 34 |
| [Item 6.](#ITEM6EXHIBITS_376179) | [Exhibits](#ITEM6EXHIBITS_376179) | 34 |
|  | [Signatures](#SIGNATURES_835049) | 35 |

---

[**Table of Contents**](#TOC)

#### PART I. FINANCIAL INFORMATION

#### ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS
**Xcel Brands, Inc. and Subsidiaries**

**Unaudited Condensed Consolidated Balance Sheets**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **December 31, 2024** |
|  | **(Unaudited)** | **(Note 1)** |
| **Assets** |  |  |
| **Current Assets:** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $298 | $1254 |
| &nbsp;&nbsp;Accounts receivable, net of allowances for credit losses of $0 | 2105 | 2269 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 508 | 520 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2911 | 4043 |
| **Non-current Assets:** |  |  |
| &nbsp;&nbsp;Property and equipment, net | 180 | 182 |
| &nbsp;&nbsp;Operating lease right-of-use assets | 3573 | 3751 |
| &nbsp;&nbsp;Trademarks and other intangibles, net | 33877 | 34759 |
| &nbsp;&nbsp;Equity method investments | 9534 | 10110 |
| &nbsp;&nbsp;Other assets | 2411 | 911 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 49575 | 49713 |
| **Total Assets** | $**52486** | $**53756** |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;Accounts payable, accrued expenses and other current liabilities | $2714 | $2734 |
| &nbsp;&nbsp;Deferred revenue | 1398 | 1380 |
| &nbsp;&nbsp;Accrued income taxes payable | 546 | 554 |
| &nbsp;&nbsp;Current portion of operating lease obligations | 1594 | 1513 |
| &nbsp;&nbsp;Current portion of long-term debt | 250 |  |
| &nbsp;&nbsp;Contingent obligation | 3973 | 4213 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 10475 | 10394 |
| **Long-Term Liabilities:** |  |  |
| &nbsp;&nbsp;Deferred revenue | 2444 | 2667 |
| &nbsp;&nbsp;Long-term portion of operating lease obligations | 4956 | 5297 |
| &nbsp;&nbsp;Long-term debt, net, less current portion | 8470 | 6569 |
| &nbsp;&nbsp;Other long-term liabilities | 431 | 431 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 16301 | 14964 |
| Total Liabilities | 26776 | 25358 |
| **Commitments and Contingencies** |  |  |
| **Stockholders' Equity:** |  |  |
| &nbsp;&nbsp;Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding |  |  |
| &nbsp;&nbsp;Common stock, $.001 par value, 50,000,000 shares authorized, and 2,386,325 and 2,368,072 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 2 | 2 |
| &nbsp;&nbsp;Paid-in capital | 106775 | 106666 |
| &nbsp;&nbsp;Accumulated deficit | (79041) | (76244) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Xcel Brands, Inc. stockholders' equity | 27736 | 30424 |
| &nbsp;&nbsp;Noncontrolling interest | (2026) | (2026) |
| Total Stockholders' Equity | 25710 | 28398 |
| **Total Liabilities and Stockholders' Equity** | $**52486** | $**53756** |

---

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

[**Table of Contents**](#TOC)

**Xcel Brands, Inc. and Subsidiaries**

**Unaudited Condensed Consolidated Statements of Operations**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  |
|  | **March 31,**  | **March 31,**  |
|  | **2025** | **2024** |
| **Revenues** |  |  |
| &nbsp;&nbsp;Net licensing revenue | $1332 | $2184 |
| **Direct operating costs and expenses** |  |  |
| &nbsp;&nbsp;Salaries, benefits and employment taxes | 1086 | 1933 |
| &nbsp;&nbsp;Other selling, general and administrative expenses | 1197 | 2029 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total direct operating costs and expenses | 2283 | 3962 |
| Operating loss before other operating costs and expenses | (951) | (1778) |
| **Other operating costs and expenses** |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 900 | 1589 |
| &nbsp;&nbsp;Asset impairment charges |  | 2295 |
| &nbsp;&nbsp;Loss from equity method investments | 576 | 533 |
| &nbsp;&nbsp;Change in contingent reduction in equity ownership of IM Topco, LLC | (240) |  |
| Operating loss | (2187) | (6195) |
| **Interest and finance expense (income)**  |  |  |
| &nbsp;&nbsp;Interest expense | 473 | 146 |
| &nbsp;&nbsp;Other interest and finance charges (income), net | 87 | 4 |
| Interest and finance expense (income), net | 560 | 150 |
| **Loss before income taxes** | (2747) | (6345) |
| Income tax provision | 50 |  |
| **Net loss** | **(2797)** | **(6345)** |
| &nbsp;&nbsp;Net loss attributable to noncontrolling interest |  | (51) |
| **Net loss attributable to Xcel Brands, Inc. stockholders** | $**(2797)** | $**(6294)** |
| Loss per common share attributable to Xcel Brands, Inc. stockholders: |  |  |
| &nbsp;&nbsp;Basic and diluted net loss per share <sup>(1)</sup> | $(1.18) | $(3.09) |
| Weighted average number of common shares outstanding: |  |  |
| &nbsp;&nbsp;Basic and diluted weighted average common shares outstanding <sup>(1)</sup> | 2373583 | 2037397 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Amounts presented for 2024, including the weighted average number of shares outstanding and the resulting loss per share information have been retroactively adjusted in order to give effect to the Company's March 24, 2025 1-for-10 reverse stock split. See Note 1 and Note 7.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

[**Table of Contents**](#TOC)

**Xcel Brands, Inc. and Subsidiaries**

**Unaudited Condensed Consolidated Statements of Stockholders' Equity**

**(in thousands, except share data)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Xcel Brands, Inc. Stockholders** | **Xcel Brands, Inc. Stockholders** | **Xcel Brands, Inc. Stockholders** | **Xcel Brands, Inc. Stockholders** | | |
|  | **Common Stock** | **Common Stock** | | | | |
|  | **Number of** <br>**Shares** | <br>**Amount** | <br>**Paid-In**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | <br>**Noncontrolling**<br>**Interest** | <br>**Total** |
| Balance as of December 31, 2023 | 1979413 | $2 | $103879 | $(53849) | $(1861) | $48171 |
| Compensation expense related to stock options and restricted stock |  |  | 36 |  |  | 36 |
| Contra-revenue related to warrants held by licensee |  |  | 10 |  |  | 10 |
| Shares issued to consultant in connection with stock grant | 7800 |  | 98 |  |  | 98 |
| Shares issued in connection with public offering and private placement transactions, net of transaction costs | 357889 |  | 1902 |  |  | 1902 |
| Net loss |  |  |  | (6294) | (51) | (6345) |
| Balance as of March 31, 2024 | 2345102 | $2 | $105925 | $(60143) | $(1912) | $43872 |
| Balance as of December 31, 2024 | 2368072 | $2 | $106666 | $(76244) | $(2026) | $28398 |
| Additional impact related to fractional shares from reverse stock split | (57) |  |  |  |  |  |
| Compensation expense related to stock options and restricted stock |  |  | 33 |  |  | 33 |
| Contra-revenue related to warrants held by licensee |  |  | 10 |  |  | 10 |
| Shares issued to executives for pro rata portion of base salaries, net of withholding taxes | 18310 |  | 66 |  |  | 66 |
| Net loss |  |  |  | (2797) |  | (2797) |
| Balance as of March 31, 2025 | 2386325 | $2 | $106775 | $(79041) | $(2026) | $25710 |

---

The values of Common stock and Paid-in capital, as well as the number of shares issued and outstanding, have been retroactively adjusted in order to give effect to the Company's March 24, 2025 1-for-10 reverse stock split. See Note 1 and Note 7.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

[**Table of Contents**](#TOC)

**Xcel Brands, Inc. and Subsidiaries**

**Unaudited Condensed Consolidated Statements of Cash Flows**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,**  | **For the Three Months Ended March 31,**  |
|  | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(2797) | $(6345) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 900 | 1589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset impairment charges |  | 2295 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred finance costs included in interest expense | 102 | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation and cost of licensee warrants | 109 | 144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from equity method investments | 576 | 533 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in contingent reduction in equity ownership of IM Topco, LLC | (240) |  |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 164 | (149) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory |  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current and non-current assets | 12 | (156) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (205) | (223) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses, accrued income taxes payable, and other current liabilities | 27 | (560) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease-related assets and liabilities | (82) | (237) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities |  | 466 |
| **Net cash used in operating activities** | (1434) | (2609) |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (14) |  |
| **Net cash used in investing activities** | (14) |  |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from public offering and private placement transactions, net of transaction costs |  | 1902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term debt | 2050 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares repurchased including vested restricted stock in exchange for withholding taxes | (58) |  |
| **Net cash provided by financing activities** | 1992 | 1902 |
| **Net increase (decrease) in cash, cash equivalents, and restricted cash** | 544 | (707) |
| Cash, cash equivalents, and restricted cash at beginning of period | 1993 | 2998 |
| Cash, cash equivalents, and restricted cash at end of period | $2537 | $2291 |
| **Reconciliation to amounts on consolidated balance sheets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $298 | $1552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash (reported in other non-current assets) | 2239 | 739 |
| &nbsp;&nbsp;&nbsp;Total cash, cash equivalents, and restricted cash | $2537 | $2291 |
| **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | $372 | $119 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for income taxes | $— | $— |

---

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

[**Table of Contents**](#TOC)

XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

**1. Nature of Operations, Background, and Basis of Presentation**

The accompanying condensed consolidated balance sheet as of December 31, 2024 (which has been derived from audited financial statements) and the unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission ("SEC"). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements were prepared following the same policies and procedures used in the preparation of the audited consolidated financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the results of operations, financial position, and cash flows of Xcel Brands, Inc. and its subsidiaries (the "Company" or "Xcel"). The results of operations for the interim periods presented herein are not necessarily indicative of the results for the entire fiscal year or for any future interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on May 28, 2025.

The Company is a media and consumer products company engaged in the design, licensing, marketing, live streaming, and social commerce sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands.

Currently, the Company's brand portfolio consists of the Halston brands (the "Halston Brand"), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the "C Wonder Brand"), the Longaberger brand (the "Longaberger Brand"), the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), and other proprietary brands.

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

● The Company also owns the co-branded collaboration brands TowerHill by Christie Brinkley (which launched in May 2024), LB70 by Lloyd Boston (which launched in August 2024), Trust. Respect. Love. by Cesar Milan (which is planned to launch in Spring 2026), and GemmaMade by Gemma Stafford (which is planned to launch in Spring 2026).

● The Company manages the Longaberger Brand through its 50% ownership interest in Longaberger Licensing, LLC; the Company consolidates Longaberger Licensing, LLC and recognizes noncontrolling interest for the remaining ownership interest held by a third party (see Note 2 for additional details).

● The Company holds a noncontrolling interest in the Isaac Mizrahi Brand through its 30% ownership interest in IM Topco, LLC (see Note 2 and Note 12 for additional details).

● The Company holds a 19% noncontrolling interest in ORME Live, Inc. ("ORME"), a short-form video and social commerce marketplace that launched in April 2024.

● The Company holds a long-term license agreement in the Jenny Martinez Live brand.

[**Table of Contents**](#TOC)

XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

The Company primarily generates revenue through the licensing of its brands through contractual arrangements with manufacturers and retailers. The Company, through its licensees, distributes through a true modern consumer products sales strategy, which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, brick-and-mortar retailers, and e-commerce channels, to be everywhere its customers shop.

***Change in Capital Structure***

As described more fully in Note 7, effective March 24, 2025, the Company effected a 1-for-10 reverse stock split for all of its issued and outstanding common stock. All share and per share amounts presented in these condensed consolidated financial statements and accompanying notes, including but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure. There were no changes to the total number of authorized common shares or par value per common share as a result of this reverse stock split.

***Segment Reporting Information***

The Company has a single reportable segment, which generates revenue from the design and licensing of branded apparel, jewelry, and similar consumer products. The Company derives revenue in North America and manages its business activities on a consolidated basis.

The Company's chief operating decision maker, as such term is defined under GAAP, is its Chief Executive Officer. The accounting policies of the Company's single reportable segment are the same as those for the Company as a whole.

The chief operating decision maker assesses performance for the single reportable segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The chief operating decision maker analyzes and reviews business performance based on available sales data from key licensees and quarterly sales and royalty reports provided by its licensees in addition to assessing the overall operating results on a monthly basis. The measure of segment assets is reported on the balance sheet as total consolidated assets, and, as the Company has a single reportable segment, the Company's resources are applicable to the business as a whole. The Company does not have intra-entity sales or transfers.

***Restricted Cash***

Restricted cash is reflected within other non-current assets in the condensed consolidated balance sheets.

Restricted cash at March 31, 2025 consisted of $0.7 million of cash deposited as collateral for a standby letter of credit associated with a real estate lease and $1.5 million of cash deposited in a bank account to satisfy a liquidity covenant in the Company's term loan debt agreement.

Restricted cash at December 31, 2024 consisted of $0.7 million of cash deposited as collateral for a standby letter of credit associated with a real estate lease.

***Going Concern***

The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

[**Table of Contents**](#TOC)

XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

As of March 31, 2025, the Company has incurred recurring losses, a history of cash flows used in operating activities, and an accumulated deficit. While the Company has undertaken significant restructuring efforts during 2023 and 2024, and has implemented additional measures during the first quarter of 2025 to further optimize its cost structure, management has determined that, absent additional funding, there is substantial doubt about the Company's ability to meet its financial obligations as they become due within twelve months from the date these financial statements are issued.

Subsequent to March 31, 2025, the Company restructured its outstanding debt and received net proceeds from financing activities. However, these proceeds may still be insufficient to fully address the Company's liquidity needs. Management is actively pursuing an equity offering to secure additional capital; however, there can be no assurance that such efforts will be successful or that sufficient funds will be obtained to meet the Company's obligations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management intends to continue exploring strategic financing alternatives and operational efficiencies to improve liquidity. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***Recently Issued Accounting Pronouncements***

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This ASU requires disclosure of additional categories of information about federal, state, and foreign income taxes in the rate reconciliation table and requires entities to provide more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively, and is effective for fiscal years beginning after December 15, 2024. The required disclosures will be included in the Company's Form 10-K for the year ending December 31, 2025. As the requirements of this ASU relate to disclosure only, the Company does not anticipate that the adoption of this ASU will have a significant impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." This ASU requires public business entities to disclose specified information about certain costs and expenses, including but not limited to purchases of inventory, employee compensation, depreciation, and intangible asset amortization, in a tabular format within the notes to their financial statements, as well as provide additional disclosures related to certain other specified expenses. The ASU may be applied on either a prospective or retrospective basis, and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

2. Investments in Unconsolidated Affiliates and Variable Interest Entities

#### Investment in IM Topco, LLC
**On May 31, 2022, Xcel sold 70% of the membership interests of IM Topco, LLC ("IM Topco"), a former subsidiary which holds the trademarks and other intellectual property rights relating to the Isaac Mizrahi Brand, to a subsidiary of WHP Global ("WHP"), a private equity-backed brand management and licensing company. From June 1, 2022 through March 31, 2025, the Company accounted for its 30% retained interest in the ongoing operations of IM Topco as a component of other operating costs and expenses under the equity method of accounting, using the distribution provisions set forth in the governing business venture agreement between the Company and WHP.** 

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

**For the three months ended March 31, 2025, the Company recognized a $0.58 million loss related to its investment in IM Topco, comprised of (i) a $0.18 million equity method loss, and (ii) a $0.40 million charge to adjust the carrying value of the investment in IM Topco to its estimated fair value as of March 31, 2025.** 

#### For the three months ended March 31, 2024, the Company recognized a $0.52 million equity method loss related to its investment in IM Topco.
The May 31, 2022 membership interest purchase agreement between Xcel and WHP (as subsequently amended) also provided that if (i) IM Topco royalties were less than $13.5 million for the twelve-month period ending March 31, 2025 or (ii) IM Topco royalties were less than $18.0 million for the year ending December 31, 2025 or (iii) Xcel failed to make certain payments to IM Topco under the terms of a license agreement between Xcel and IM Topco on or before January 30, 2025 then Xcel would be required to transfer equity interests in IM Topco to WHP equal to 12.5% of the total outstanding equity interests of IM Topco, such that Xcel's ownership interest in IM Topco would decrease from 30% to 17.5%, and WHP's ownership interest in IM Topco would increase from 70% to 82.5%. During the three months ended March 31, 2025, in accordance with the terms of the amended membership purchase agreement, WHP became contractually entitled to receive from Xcel equity interests in IM Topco equal to 12.5% of the total outstanding equity interests of IM Topco. On and effective April 15, 2025, the Company transferred such interests to WHP.

Refer to Note 11 for additional information regarding the Company's accounting for this contingent contractual obligation, and refer to Note 12 for additional information regarding subsequent events related to the Company's ownership interest in IM Topco.

***Longaberger Licensing, LLC Variable Interest Entity***

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

3. Trademarks and Other Intangibles

Trademarks and other intangibles, net consist of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
| <br>**($ in thousands)** | **Weighted**<br>**Average**<br>**Amortization**<br>**Period** | **Gross Carrying**<br>**Amount** | **Accumulated**<br>**Amortization** | **Net Carrying**<br>**Amount** |
| Trademarks (finite-lived) | 15 years | 58580 | 24727 | 33853 |
| Copyrights and other intellectual property | 8 years | 429 | 405 | 24 |
| **Total** |  | $**59009** | $**25132** | $**33877** |

---

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| <br>**($ in thousands)** | **Weighted**<br>**Average**<br>**Amortization**<br>**Period** | **Gross Carrying**<br>**Amount** | **Accumulated**<br>**Amortization** | **Net Carrying**<br>**Amount** |
| Trademarks (finite-lived) | 15 years | 58580 | 23852 | 34728 |
| Copyrights and other intellectual property | 8 years | 429 | 398 | 31 |
| **Total** |  | $**59009** | $**24250** | $**34759** |

---

Amortization expense for intangible assets was approximately $0.88 million for the three-month period ended March 31, 2025 (the "current quarter") and approximately $1.53 million for the three-month period ended March 31, 2024 (the "prior year quarter").

4. Significant Contracts and Concentrations

#### Qurate Agreements
Under the Company's agreements with Qurate Retail Group ("Qurate"), collectively referred to as the Qurate Agreements, Qurate is obligated to make payments to the Company on a quarterly basis, based primarily upon a percentage of net retail sales of certain specified branded merchandise. Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by Qurate and its subsidiaries under the Qurate Agreements, net of customer returns, and excluding freight, shipping and handling charges, and sales, use, or other taxes. Net licensing revenue from the Qurate Agreements represents a significant portion of the Company's total net revenue.

Net licensing revenue from the Qurate Agreements totaled $0.33 million and $1.24 million for the current quarter and prior year quarter, respectively, representing approximately 25% and 57% of the Company's total net revenue for the current quarter and prior year quarter, respectively.

As of March 31, 2025 and December 31, 2024, the Company had receivables from Qurate of $0.33 million and $0.40 million, respectively, representing approximately 16% and 18% of the Company's total net accounts receivable, respectively.

#### Halston Master License
***On May 15, 2023, the Company, through its wholly owned subsidiaries, H Halston, LLC and H Heritage Licensing, LLC (collectively, the "Licensor"), entered into a master license agreement relating to the Halston Brand (the "Halston Master License") with G-III Apparel Group ("G-III"), an industry-leading wholesale apparel company, for men's and women's apparel, men's and women's fashion accessories, children's apparel and accessories, home, airline amenity and amenity kits, and such other product categories as mutually agreed upon. The Halston Master License provided for an upfront cash payment and royalties payable to the Company, including certain guaranteed minimum royalties, includes annual minimum net sales requirements, and has a twenty-five-year term (consisting of an initial five-year period, followed by a twenty-year period), subject to G-III's right to terminate with at least 120 days' notice prior to the end of each five-year period during the term. G-III has an option to purchase the Halston Brand for $5.0 million at the end of the twenty-five-year term, which right may be accelerated under certain conditions associated with an uncured material breach in accordance with the terms of the Halston Master License. The Licensor granted G-III a security interest in the Halston***

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

#### trademarks to secure the Licensor's obligations under the Halston Master License, including to honor the obligations under the purchase option.
***As a result of the upfront cash payment and guaranteed minimum royalties discussed above, the Company has recognized $3.76 million and $3.56 million of deferred revenue contract liabilities on its condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively. As of December 31, 2024, approximately $0.89 million of the contract liability balance was classified as a current liability and approximately $2.67 million was classified as a long-term liability. As of March 31, 2025, approximately $1.31 million of the contract liability balance was classified as a current liability and approximately $2.45 million was classified as a long-term liability; the balance of the deferred revenue contract liabilities will be recognized ratably as revenue over the next 3.75 years.***

***Net licensing revenue recognized from the Halston Master License was $0.64 million for both the current quarter and prior year quarter, representing approximately 48% and 29% of the Company's total net revenue for the current quarter and prior year quarter, respectively.***

#### JTV / America's Collectibles Network, Inc.
***The Company has a license agreement with America's Collectibles Network, Inc. (d/b/a JTV) ("JTV") that obligates JTV to pay the Company royalties based on product sales of Judith Ripka Brand merchandise. In addition, the Company has outstanding receivables from prior product sales of fine jewelry made to JTV. As of March 31, 2025 and December 31, 2024, the Company had receivables from JTV of $0.80 million and $1.06 million, respectively, representing approximately 38% and 45% of the Company's total net accounts receivable, respectively.***

**5. Leases** 

The Company is party to operating leases for real estate, and for certain equipment and storage space with a term of 12 months or less. The Company is currently not a party to any finance leases.

As of March 31, 2025, the Company's real estate leases have a weighted-average remaining lease term of approximately 4.55 years, and the lease liabilities are measured using a weighted-average discount rate of 7.92%.

Total lease expense (net of sublease income) included in selling, general and administrative expenses on the Company's unaudited condensed consolidated statements of operations was approximately $0.2 million and $0.4 million for the current quarter and prior year quarter, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.4 million in both the current quarter and prior year quarter.

During the prior year quarter, as a result of entering into an agreement (as sublessor) for the sublease of offices located at 1333 Broadway to a third-party subtenant, the Company recognized a non-cash impairment charge of approximately $1.9 million related to the right-of-use asset for this location, and a non-cash impairment charge of approximately $0.4 million related to leasehold improvement assets at this location.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

***Future Lease Obligations***

As of March 31, 2025, the maturities of future lease obligations were as follows:

---

| | |
|:---|:---|
| <br>**Year** | **Amount**<br>**(in thousands)** |
| 2025 (April 1 through December 31) | $1538 |
| 2026 | 2060 |
| 2027 | 1841 |
| 2028 | 570 |
| 2029 | 585 |
| Thereafter | 1420 |
| Total lease payments | 8014 |
| Less: Discount | 1464 |
| Present value of lease liabilities | 6550 |
| Current portion of lease liabilities | 1594 |
| Non-current portion of lease liabilities | $4956 |

---

**6. Debt**

The Company's net carrying amount of debt is comprised of the following:

---

| | | |
|:---|:---|:---|
| <br>**($ in thousands)** | **March 31,** <br>**2025** | **December 31,** <br>**2024** |
| Term loan debt | $10000 | $7950 |
| Unamortized deferred finance costs and other reductions to carrying value | (1280) | (1381) |
| &nbsp;&nbsp;Total | 8720 | 6569 |
| Current portion of debt | 250 |  |
| Long-term debt | $8470 | $6569 |

---

On December 12, 2024, the Company and certain of its subsidiaries entered into a loan and security agreement with FEAC Agent, LLC, as administrative agent and collateral agent, FEF Distributors, LLC, as lead arranger, and Restore Capital, LLC, as agent for certain lenders, pursuant to which the lenders made term loans to the Company and agreed to make additional term loans to the Company upon the satisfaction of a condition precedent described in the loan agreement. The term loans under the loan agreement are as follows: (1) a term loan in the amount of $3.95 million ("Term Loan A") was made on the closing date, (2) a term loan in the amount of $4.0 million ("Term Loan B") was made on the closing date, and (3) a term loan in the amount of $2.05 million ("Delayed Draw Term Loan"; Term Loan A, Term Loan B and Delayed Draw Term Loan are referred to as "Term Loans") was made in March 2025. The proceeds from Term Loan A and Term Loan B were used to repay the remaining balance of the Company's previous term loan debt with Israel Discount Bank of New York, as well as to pay fees, costs, and expenses incurred in connection with entering into the new loan agreement, and the balance may be used for working capital purposes. Approximately $1.5 million of the proceeds from the Delayed Draw Term Loan were deposited in a bank account to satisfy a liquidity covenant in the loan agreement.

Principal amounts on Term Loans are 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 at the maturity date of December 12, 2028.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

The aggregate future principal payments under the Term Loans are as follows:

---

| | |
|:---|:---|
| <br>**($ in thousands)**<br>**Year Ending December 31,**  | **Amount of**<br>**Principal**<br>**Payment** |
| 2025 | $— |
| 2026 | 1000 |
| 2027 | 1000 |
| 2028 | 8000 |
| &nbsp;&nbsp;Total | $10000 |

---

Interest on Term Loans accrues at an annual rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to three months, subject to a 2.0% floor, plus (i) 8.5% for Term Loan A and Delayed Draw Term Loan and (ii) 13.5% for Term Loan B. Interest on amounts outstanding under the Term Loans accrues daily and is payable at the end of each calendar month.

In connection with entering into the Terms Loans, the Company incurred loan origination fees, plus various legal and other fees. These fees and costs totaling $0.92 million were deferred on the Company's balance sheet as a reduction of the carrying value of the term loan debt.

Also in connection with entering into the Terms Loans, the Company issued warrants to the lenders to purchase an aggregate of 145,664 shares of the Company's common stock. These warrants have an exercise price of $6.32 per share, are immediately exercisable, and expire on December 12, 2034. In accordance with applicable GAAP, the Company allocated the value of the total proceeds of $10.0 million between the term loan debt and the warrants, based on the relative fair values of each. The fair value of the term loan debt was determined using a net present value calculation, while the fair value of the warrants was determined using a Black-Scholes option pricing model. As a result, the Company recognized a $0.48 million increase to stockholders' equity as additional paid-in capital for the allocated fair value of the warrants, and an offsetting decrease to the net carrying value of the term loan debt.

These reductions to the carrying value of the term loan debt totaling $1.40 million are being amortized to interest expense over the term of the debt using the effective interest method.

The loan agreement also requires that the Company pay an exit fee of $175,000 for the ratable benefit of the Term Loan A lenders and an exit fee of $375,000 for the ratable benefit of the Term Loan B lenders upon the maturity or full payment of the Term Loans. The Company is accruing the cost of these exit fees over the term of the related debt.

The 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 loan agreement contains various customary financial covenants and reporting requirements, as specified and defined in the loan agreement. The Company was in compliance with all applicable covenants under the loan agreement as of and for all periods presented in the financial statements.

The Company subsequently refinanced its term loan debt in April 2025; see Note 12 for additional information.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

**7. Stockholders' Equity** 

***Reverse Stock Split***

At a special meeting of the Company's stockholders on March 12, 2025, the stockholders approved a proposal granting the Company's Board of Directors the discretion to effect a reverse stock split of the Company's issued and outstanding common stock at a ratio in the range of 1-for-2 to 1-for-10, with such ratio to be determined by the Chairman of the Company's Board of Directors. Following the special meeting, the Chairman of the Company's Board of Directors approved a final split ratio of 1-for-10 (the "Reverse Stock Split").

Subsequently, the Company filed with the Delaware Secretary of State a Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation, which became effective at 5:00 p.m. on March 24, 2025, to effect such Reverse Stock Split. As a result of the Reverse Stock Split, every ten (10) shares (the "Reverse Stock Split Number") of issued and outstanding Common Stock was automatically combined into one (1) issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, stockholders who otherwise would have been entitled to receive fractional shares were entitled to receive a cash payment (without interest and subject to applicable withholding taxes) in lieu of such fractional shares equal to the fraction of a share of common stock to which such stockholder would otherwise be entitled multiplied by (i) the closing price per share of the common stock on the Nasdaq Capital Market at the close of business on the trading day preceding the date of the Certificate of Amendment, multiplied by (ii) the Reverse Stock Split Number. The aggregate number of fractional shares resulting from the Reverse Stock Split was 1,120 shares of common stock (or 112 shares on a pre-Reverse Stock Split basis); the aggregate cash payments made to stockholders in lieu of fractional shares was less than $1,000. Immediately prior to the Reverse Stock Split there were 23,796,200 shares of common stock outstanding; immediately following the Reverse Stock Split there were 2,379,508 shares of common stock outstanding.

The shares of common stock underlying the Company's outstanding stock options and warrants were also proportionately adjusted along with corresponding adjustments to their exercise prices.

All share and per share amounts presented in these condensed consolidated financial statements and accompanying notes, including but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure.

#### Public Offering and Private Placement 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 328,427 shares of the Company's common stock at a price to the public of $6.50 per share.***

***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, were approximately $1.7 million.***

***Upon closing of the Offering, the Company issued the Representative certain warrants to purchase up to 18,293 shares of common stock (the "Representative's Warrants") as compensation, which amount was offset against the proceeds received. The Representative's Warrants will be exercisable at a per share exercise price of $8.125. 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.***

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

***In connection with the Offering, on March 14, 2024, the Company entered into subscription agreements with each of 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 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 $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 357,889 shares and the total net proceeds received was approximately $1.9 million.***

#### Equity Incentive Plans
A total of 400,000 shares of common stock are eligible for issuance under the Company's 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan provides for the grant of any or all of the following types of awards: stock options (incentive or non-qualified), restricted stock, restricted stock units, performance awards, or cash awards. The 2021 Plan is administered by the Company's Board of Directors, or, at the Board's discretion, a committee of the Board.

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

***Stock-based Compensation***

Total expense recognized for all forms of stock-based compensation was approximately $0.16 million and $0.13 million for the current quarter and prior year quarter, respectively. Of the current quarter expense amount, approximately $0.13 million related to employees and approximately $0.03 million related to directors and consultants. Of the prior year quarter expense amount, substantially all of the expense was related to directors and consultants.

#### Stock Options
A summary of the Company's stock options activity for the current quarter is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Number of**<br>**Options** | <br>**Weighted**<br>**Average**<br>**Exercise**<br>**Price** | **Weighted**<br>**Average**<br>**Remaining**<br>**Contractual**<br>**Life**<br>**(in Years)** | <br>**Aggregate**<br>**Intrinsic**<br>**Value** |
| Outstanding at January 1, 2025 | 472392 | $19.01 | 3.65 | $— |
| &nbsp;&nbsp;Granted |  |  |  |  |
| &nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;Expired/Forfeited | (23000) | 39.68 |  |  |
| Outstanding at March 31, 2025, and expected to vest | 449392 | $17.96 | 3.56 | $— |
| Exercisable at March 31, 2025 | 74392 | $23.37 | 1.26 | $— |

---

Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $0.02 million and $0.02 million, respectively. Total unrecognized compensation expense related to unvested stock options at March 31, 2025 was approximately $0.02 million and is expected to be recognized over a weighted average period of approximately 1.00 year.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

A summary of the Company's non-vested stock options activity for the current quarter is as follows:

---

| | | |
|:---|:---|:---|
|  | <br>**Number of**<br>**Options** | **Weighted**<br> **Average** <br>**Grant Date** <br>**Fair Value** |
| Balance at January 1, 2025 | 375000 | $16.88 |
| &nbsp;&nbsp;Granted |  |  |
| &nbsp;&nbsp;Vested |  |  |
| &nbsp;&nbsp;Forfeited or Canceled |  |  |
| Balance at March 31, 2025 | 375000 | $16.88 |

---

***Of the total stock options outstanding at March 31, 2025, the vesting of 350,000 options is contingent upon the Company's common stock achieving certain target prices, and the vesting of 10,000 options is dependent upon the achievement of certain revenue targets. None of these 360,000 performance-based stock options have vested, and no compensation expense has been recorded related to such options.***

#### Stock Awards
A summary of the Company's restricted stock activity for the current quarter is as follows:

---

| | | |
|:---|:---|:---|
|  | <br>**Number of**<br>**Restricted**<br>**Shares** | **Weighted**<br>**Average**<br>**Grant Date**<br>**Fair Value** |
| Outstanding at January 1, 2025 | 35333 | $34.80 |
| &nbsp;&nbsp;Granted | 18310 | 3.24 |
| &nbsp;&nbsp;Vested | (18310) | 3.24 |
| &nbsp;&nbsp;Expired/Forfeited |  |  |
| Outstanding at March 31, 2025 | 35333 | $34.80 |

---

In accordance with the amended employment agreements with each of Robert W. D'Loren, Chairman of the Board, Chief Executive Officer and President, and Seth Burroughs, Executive Vice President of Business Development, effective July 16, 2024 and through December 31, 2025, the Company is paying 40% of each such executive officer's base salary via the issuance of shares of the Company's common stock, issued on the last day of each month. Each of Mr. D'Loren and Mr. Burroughs are permitted to pay the withholding tax through the exchange of a portion of the shares. Under the terms of these amended agreements, the Company issued an aggregate of 18,310 shares of common stock (which vested immediately) to executives for the current quarter.

Compensation expense related to stock awards was approximately $0.14 million for the current quarter and approximately $0.11 million for the prior year quarter. Total unrecognized compensation expense related to unvested restricted stock grants at March 31, 2025 was approximately $0.02 million and is expected to be recognized over a weighted average period of approximately 1.00 year.

#### Restricted Stock Units
There were no restricted stock units outstanding as of March 31, 2025 and December 31, 2024, and no restricted stock units have been issued since the inception of the 2021 Plan.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

#### Shares Available Under the Company's Equity Incentive Plans
At March 31, 2025, there were 261,650 shares of common stock available for future award grants under the 2021 Plan.

#### Shares Reserved for Issuance
As of March 31, 2025, there were 711,042 shares of common stock reserved for issuance under the Company's Equity Incentive Plans, including 400,392 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 49,000 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 261,650 shares available for issuance under the 2021 Plan.

As of March 31, 2025, there were also 263,957 shares of common stock reserved for issuance that were unrelated to the Company's Equity Incentive Plans, including 100,000 shares reserved pursuant to unexercised warrants related to the Halston Master License (as described below), 18,293 shares reserved pursuant to unexercised Representative's Warrants related to the March 19, 2024 Offering (as described above), and 145,664 shares reserved pursuant to unexercised warrants related to the December 12, 2024 debt refinancing transaction (see Note 6).

#### Warrants
A summary of the Company's warrants activity for the current quarter is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Number of**<br>**Warrants** | <br>**Weighted**<br>**Average**<br>**Exercise**<br>**Price** | **Weighted**<br>**Average**<br>**Remaining**<br>**Contractual**<br>**Life**<br>**(in Years)** | <br>**Aggregate**<br>**Intrinsic**<br>**Value** |
| Outstanding and exercisable at January 1, 2025 | 263957 | $9.73 | 8.96 | $— |
| &nbsp;&nbsp;Issued |  |  |  |  |
| &nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;Expired/Forfeited |  |  |  |  |
| Outstanding at March 31, 2025 | 263957 | $9.73 | 8.71 | $— |
| Exercisable at March 31, 2025 | 163957 | $6.52 | 9.07 | $— |

---

***In connection with the entrance into the Halston Master License in 2023 (see Note 4), the Company issued to G-III a ten-year warrant to purchase up to 100,000 shares of the Company's common stock at an exercise price of $15.00 per share, which vests based upon certain annual royalty targets being satisfied under the license agreement. The fair value of this warrant is being recognized as a reduction of revenue over the term of the related license agreement, with an offsetting increase to stockholders' equity as additional paid-in capital. The amount of contra-revenue recognized related to this warrant during the current quarter and prior year quarter was approximately $0.01 million in each period. As of March 31, 2025, no portion of this warrant had vested. Excluding the contra-revenue recognized with respect to the Halston Master License warrant, there was no compensation expense related to warrants recognized in any of the periods presented.***

**8. Earnings (Loss) Per Share**

Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS reflects, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of stock options and warrants, using the treasury stock method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

The following table is a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share computations for the three months ended March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**  | **Three Months Ended**  |
|  | **March 31,**  | **March 31,**  |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| Net loss attributable to Xcel Brands, Inc. stockholders (in thousands) | $(2797) | $(6294) |
| **Denominator:** |  |  |
| Basic weighted average number of shares outstanding | 2373583 | 2037397 |
| &nbsp;&nbsp;&nbsp;&nbsp;Add: Effect of warrants |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Add: Effect of stock options |  |  |
| Diluted weighted average number of shares outstanding | 2373583 | 2037397 |
| Basic net income (loss) per share | $(1.18) | $(3.09) |
| Diluted net income (loss) per share | $(1.18) | $(3.09) |

---

As a result of the net loss for all periods presented, the Company calculated diluted EPS using basic weighted average shares outstanding for all such periods, as utilizing diluted shares would be anti-dilutive to loss per share.

The computation of diluted EPS excludes the following potentially dilutive securities because their inclusion would be anti-dilutive:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**  | **Three Months Ended**  |
|  | **March 31,**  | **March 31,**  |
|  | **2025** | **2024** |
| Stock options | 449392 | 488904 |
| Warrants | 263957 | 129899 |
| Total | 713349 | 618803 |

---

**9. Income Taxes**

The estimated annual effective income tax rate for the current quarter and the prior year quarter was approximately -1.8% and 0%, respectively, resulting in an income tax provision (benefit) of $0.05 million and $0, respectively.

For both the current quarter and the prior year quarter, the federal statutory rate differed from the effective tax rate due to the recording of a valuation allowance against the benefit that would have otherwise been recognized, as it was considered not more likely than not that the net operating losses generated during each period will be utilized in future periods.

**10. Related Party Transactions**

***IM Topco, LLC***

As described in Note 2, the Company holds a noncontrolling interest in IM Topco. Under the two agreements outlined below, the Company has a net payable to IM Topco of $12,500 as of March 31, 2025.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

*Service Agreement*

On May 31, 2022, the Company entered into a services agreement with IM Topco, pursuant to which the Company agreed to provide certain design and support services (including assistance with the operations of the interactive television business and related talent support) to IM Topco in exchange for payments of $300,000 per year. 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. 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 was required to prepay the service fees for the year ending December 31, 2025; as of March 31, 2025, IM Topco has prepaid $62,500 of such service fees.

In accordance with the terms of this services agreement (as amended), the Company recognized service fee income of $37,500 within net licensing revenue in the condensed consolidated statements of operations for the three months ended March 31, 2024. No such service fee income was recognized for the three months ended March 31, 2025. As of March 31, 2025, IM Topco owes the Company $125,000 under this agreement.

*License Agreement*

On May 31, 2022, the Company entered into a license agreement with IM Topco, pursuant to which IM Topco granted the Company a license to use certain Isaac Mizrahi trademarks on and in connection with the design, manufacture, distribution, sale, and promotion of women's sportswear products in the United States and Canada during the term of the agreement, in exchange for the payment of royalties in connection therewith. The initial term of this agreement was set to end on December 31, 2026, and provided guaranteed minimum royalties to IM Topco of $400,000 per year.

Effective December 16, 2022, the license agreement between IM Topco and Xcel was terminated in favor of a new similar license agreement between IM Topco and an unrelated third party. However, as part of the termination of the May 31, 2022 license agreement, Xcel provided a guarantee to IM Topco for the payment of any difference between (i) the royalties received by IM Topco from the unrelated third party under the new agreement and (ii) the amount of guaranteed royalties that IM Topco would have received from Xcel under the May 31, 2022 agreement. However, for both the current quarter and prior year quarter, royalties received by IM Topco from the third-party agreement were expected to exceed the guaranteed royalties that IM Topco would have received under the May 31, 2022 agreement, and thus no royalty expense for any shortfall was recognized for such periods.

In November 2023, the Company, WHP, and IM Topco entered into an amendment of the May 2022 membership purchase agreement, under which Xcel agreed to make additional royalty payments to IM Topco totaling $450,000 over 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 March 31, 2025, the remaining payments due totaled $137,500, and are reflected within accounts payable, accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of the date of this Quarterly Report on Form 10-Q, this amount has not been paid to IM Topco.

***Financing Transactions***

*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 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,

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

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.

In connection with the Offering, on March 14, 2024, the Company entered into subscription agreements with each of Mr. D'Loren, 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 $0.3 million. The purchase of the Private Placement Shares closed concurrently with the Offering.

*Debt Financing*

In connection with the December 12, 2024 term loan debt transaction (see Note 6 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 this amount, $200,000 was repaid to IPX upon the closing of the December 12, 2024 debt transaction, and was subsequently returned by IPX to the Company during the three months ended March 31, 2025 for repayment by the Company at a later date. From time to time, Mr. D'Loren may advance funds to the Company on a short-term basis as necessary.

Additionally, IPX purchased a 12.5% undivided, last-out, subordinated participation interest in a portion of the December 2024 Term Loan B debt for a purchase price of $500,000, and received a pro rata share of warrants received by the Term Loan B Lenders to purchase shares of the Company's common stock. In connection with the April 21, 2025 refinancing of the Company's term loan debt (see Note 12 for additional details), 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.

*Guarantee*

Since October 2024, in connection with a required standby letter of credit associated with the Company's real estate lease for offices located at 1333 Broadway (see Note 5), Mr. D'Loren has provided and continues to provide 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.

**11. Commitments and Contingencies**

***Contingent Obligation – Isaac Mizrahi Transaction***

In connection with the May 31, 2022 transaction related to the sale of a majority interest in the Isaac Mizrahi Brand, the Company agreed with WHP that, in the event that IM Topco receives less than $13.3 million in aggregate royalties for any four consecutive calendar quarters over a three-year period ending on May 31, 2025, WHP would be entitled to receive from Xcel up to $16 million, less all amounts of net cash flow distributed to WHP on an accumulated basis, as an adjustment to the purchase price previously paid by WHP. Such amount would be payable by the Company in either cash or equity interests in IM Topco held by the Company. In November 2023, this agreement was amended such that the purchase price adjustment provision was waived until the measurement period ending March 31, 2024.

On April 12, 2024, this agreement was further amended such that the purchase price adjustment provision within the membership purchase agreement was waived until the measurement period ending September 30, 2025. This amendment also provided that if IM Topco royalties are less than $13.5 million for the twelve-month period ending March 31, 2025 or less than $18.0 million for the year ending December 31, 2025, Xcel shall transfer equity interests in IM Topco to WHP

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

equal to 12.5% of the total outstanding equity interests of IM Topco, such that Xcel's ownership interest in IM Topco would decrease from 30% to 17.5%, and WHP's ownership interest in IM Topco would increase from 70% to 82.5%.

During 2024, management concluded that, based on current trends in and projections of IM Topco's royalty revenues as well as the Company's decision to not make the remaining royalty payments to IM Topco, it was virtually certain that the Company would be required to make such transfer of equity interests to WHP in 2025. As such, the Company estimated and recorded a contingent obligation of approximately $4.21 million in the condensed consolidated balance sheets as of December 31, 2024.

During the three months ended March 31, 2025, in accordance with the terms of the amended membership purchase agreement between Xcel and WHP, WHP became contractually entitled to receive from Xcel equity interests in IM Topco equal to 12.5% of the total outstanding equity interests of IM Topco. Also during the current quarter, the Company adjusted the carrying value of the contingent obligation to its estimated fair value of $3.97 million as of March 31, 2025 in the condensed consolidated balance sheets, and recognized a $(0.24) million credit in the condensed consolidated statements of operations.

On and effective April 15, 2025, such equity interests were transferred to WHP in full satisfaction of this contractual obligation (see Note 12 for additional details).

***Legal Matters***

From time to time, the Company becomes involved in legal claims and litigation in the ordinary course of business. The Company routinely assesses all its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable.

In the opinion of management, based on consultations with legal counsel, the disposition of litigation currently pending against the Company is unlikely to have, individually or in the aggregate, a materially adverse effect on the Company's business, financial position, results of operations, or cash flows.

**12. Subsequent Events** 

***IM Topco Equity Interest Transfer***

On and effective April 15, 2025, the Company and two subsidiaries of WHP entered into a Membership Interest Transfer Agreement, pursuant to which Xcel transferred to WHP equity interests equal to 12.5% of the outstanding equity interests of IM Topco. As a result of the transfer, Xcel's interest in IM Topco was reduced from a 30% equity interest to a 17.5% equity interest.

As a result, the Company concluded that as of and effective April 2025, it no longer holds significant influence over IM Topco, and discontinued the application of the equity method of accounting. In accordance with relevant GAAP guidance, the Company remeasured its retained investment in IM Topco as of the date of discontinuance of the equity method, which was not significantly different from the value reflected on the Company's condensed consolidated balance sheet at March 31, 2025. Going forward, as the equity securities of IM Topco are not publicly traded and do not have readily determinable fair values, the Company has elected to measure its investment in IM Topco in accordance with ASC 820-10-35-59: at adjusted cost, less impairment, plus or minus observable price changes of an identical or similar investment of the same issuer.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

***Shares Issued to Executives***

On April 30, 2025, the Company issued an aggregate of 8,917 shares of common stock to executives, in accordance with the terms of the amended employment agreements with Mr. D'Loren and Mr. Burroughs (see Note 7 for details).

On May 28, 2025, the Company granted Mr. D'Loren 8,750 restricted shares of common stock and options to purchase an aggregate of 8,750 shares of common stock. Also on May 28, 2025, the Company granted Mr. Burroughs 2,500 restricted shares of common stock and options to purchase an aggregate of 2,500 shares of common stock.

***Debt Refinancing***

On April 21, 2025, the Company and its lenders and FEAC Agent, LLC entered into an amendment of the December 12, 2024 loan and security agreement, which provided for $1.5 million repayment of the $3.95 million Term Loan A and an additional Term Loan B in the amount of $5.12 million. The term loans outstanding after giving effect to the April 21, 2025 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. The proceeds from the additional Term Loan B were used to repay a portion of Term Loan A, as well as to pay fees, costs, and expenses incurred in connection with entering into the April 21, 2025 amendment, and the balance will be used for working capital purposes.

Within 30 days after April 21, 2025, the outstanding principal amount of the Term Loan A was repaid, on a pro rata basis in an aggregate amount equal to $500,000. Also in connection with this refinancing transaction, 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.

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.

From and after April 21, 2025, interest on each Term Loan A accrues at an annual rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to three months, subject to a 2.0% floor, plus 8.5%. From and after April 21, 2025, interest on each Term Loan B accrues at an annual rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to three months, subject to a 2.0% floor, plus 6.5%. From and after April 21, 2025 through March 31, 2027, interest on the Term Loan B will be paid in-kind by being capitalized and added to the principal amount of the Term Loan B at the end of each calendar month.

The 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 contains various customary financial covenants and reporting requirements, as specified and defined therein; the Company is currently in compliance with all applicable covenants.

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XCEL BRANDS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

Also in connection with this refinancing transaction, UTG Capital, Inc., a Delaware corporation ("UTG"), purchased a 100% undivided, participation interest in Term Loan B for a purchase price of $9.12 million and received warrants entitling it to purchase 1,107,457 warrants shares of the Company. Such warrants are exercisable for a period of seven years from the date of issuance, at specified exercise prices ranging from $6.60 per share to $17.50 per share. Further, the Company also issued warrants to purchase 30,000 shares of common stock to Restore Capital (EQ-W), LLC ("Restore"), another of the lenders, and amended warrants to purchase an aggregate of 107,333 shares of common stock held by Restore and warrants previously issued to warrants of FEAC Agent, LLC.

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**ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** 

*Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.* The statements that are not historical facts contained in this report are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks are detailed in the Risk Factors section of our Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on May 28, 2025. The words "believe," "anticipate," "expect," "continue," "estimate," "appear," "suggest," "goal," "potential," "predicts," "seek," "will," "confident," "project," "provide," "plan," "likely," "future," "ongoing," "intend," "may," "should," "would," "could," "guidance," and similar expressions identify forward-looking statements.

#### Overview
Xcel Brands, Inc. ("Xcel," the "Company," "we," "us," or "our") is a media and consumer products company engaged in the design, licensing, marketing, live streaming, and social commerce sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Xcel was founded in 2011 with a vision to reimagine shopping, entertainment, and social media as social commerce.

Xcel owns the Halston, Judith Ripka, and C Wonder brands, as well as the co-branded collaboration brands TowerHill by Christie Brinkley, LB70 by Lloyd Boston, Trust. Respect. Love. by Cesar Millan, and GemmaMade by Gemma Stafford, and also holds noncontrolling interests or long-term license agreements in the Isaac Mizrahi, Orme Live, and Jenny Martinez Live brands. Xcel also owns and manages the Longaberger brand through its controlling interest in Longaberger Licensing, LLC.

Xcel is pioneering a true modern consumer products sales strategy sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, brick-and-mortar retailers, and e-commerce channels to be everywhere its customers shop. Our brands have generated over $5 billion in retail sales via live streaming in interactive television and digital channels alone and over 20,000 hours of content production time in live-stream and social commerce. Our portfolio reaches in excess of 40 million social media followers and 200 million households.

Our objective is to build a diversified portfolio of lifestyle consumer products brands through organic growth and the strategic acquisition of new brands. To grow our brands, we are focused on the following primary strategies:

● distribution and/or licensing of our brands for sale through interactive television (e.g., QVC, HSN, America's Collectible Network, Inc. d/b/a JTV ("JTV"), etc.);

● licensing of our brands to retailers that sell to the end consumer;

● licensing our brands to manufacturers and retailers for promotion and distribution through e-commerce, social commerce, and traditional brick-and-mortar retail channels; and

● acquiring additional consumer brands and integrating them into our operating platform, and leveraging our operating infrastructure and distribution relationships.

We believe that Xcel offers a unique value proposition to our retail and direct-to-consumer customers and our licensees for the following reasons:

● our management team, including our officers' and directors' experience in, and relationships within the industry;

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● our deep knowledge, expertise, and proprietary technology in live streaming and social commerce;

● our design, sales, marketing, and technology platform that enables us to design trend-right product; and

● our significant media and internet presence.

#### Summary of Operating Results
***Three months ended March 31, 2025 (the "current quarter") compared with the three months ended March 31, 2024 (the "prior year quarter")***

#### Revenues
Current quarter net revenue decreased $0.85 million to $1.33 million from $2.18 million for the prior year quarter. This decrease was primarily attributable to the June 30, 2024 divestiture of the Lori Goldstein brand and the loss of the licensing revenues associated with that brand, partially offset by increased licensing revenues generated by our other brands, particularly for the C Wonder brand and the TowerHill by Christie Brinkley brand.

#### Direct Operating Costs and Expenses
Direct operating costs and expenses decreased approximately $1.68 million, from $3.96 million in the prior year quarter to $2.28 million in the current quarter. This decrease was primarily attributable to the 2023 restructuring and transformation of our business operating model, along with additional cost reduction actions taken by management in 2024, which have significantly reduced the Company's payroll, operating, and overhead costs. Management has continued to implement additional cost cutting measures throughout the first quarter of 2025 to further optimize the Company's cost structure. As of the end of the first quarter of 2025, the Company has reduced its direct operating expenses to an expected run rate of less than $10 million per annum.

***Other Operating Costs and Expenses (Income)***

Depreciation and amortization expense decreased approximately $0.69 million, from $1.59 million in the prior year quarter to $0.90 million in the current quarter. This decrease is primarily attributable to the June 30, 2024 divestiture of the Lori Goldstein brand, which included trademarks related to that brand with a net book value of approximately $1.93 million at the time of the divestiture.

We recognized losses related to our equity investments in unconsolidated affiliates (IM Topco, LLC and ORME Live Inc.) of $0.58 million and $0.53 million for the current quarter and prior year quarter, respectively, due to the operations of those businesses, the distribution provisions applicable to each, and (in the current quarter) changes in estimated fair value. However, effective January 2025, the Company no longer applies the equity method of accounting to its investment in ORME, and effective April 2025, the Company will no longer apply the equity method of accounting to its investment in IM Topco. Going forward, the Company's investments in these unconsolidated affiliates will be valued at adjusted cost basis, less impairment, plus or minus observable price changes of an identical or similar investment of the same issuer.

We also recognized other income of $(0.24) million related to the change in the estimated value of a contractual contingent obligation (related to our investment in IM Topco, LLC) during the current quarter.

During the prior year quarter we recognized asset impairment charges of $2.30 million related to our exit from and sublease of our offices at 1333 Broadway, of which approximately $1.9 million related to the operating lease right-of-use asset and approximately $0.4 million related to leasehold improvements at that location. There were no similar asset impairment charges recognized during the current quarter.

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#### Income Taxes
The estimated annual effective income tax rate for the current quarter and the prior year quarter was approximately -1.8% and 0%, respectively, resulting in an income tax provision (benefit) of $0.05 million and $0, respectively.

For both the current quarter and the prior year quarter, the federal statutory rate differed from the effective tax rate due to the recording of a valuation allowance against the benefit that would have otherwise been recognized, as it was considered not more likely than not that the net operating losses generated during each period will be utilized in future periods.

#### Net Loss Attributable to Xcel Brands, Inc. Stockholders
We had a net loss of $2.80 million for the current quarter, compared with a net loss of $6.29 million for the prior year quarter, due to the combination of the factors outlined above.

#### Non-GAAP Net Income (Loss), Non-GAAP Diluted EPS, and Adjusted EBITDA
We had a non-GAAP net loss of approximately $1.37 million, or $0.58 per diluted share ("non-GAAP diluted EPS"), for the current quarter and a non-GAAP net loss of $1.80 million, or $0.88 per diluted share, for the prior year quarter. Non-GAAP net income (loss) is a non-GAAP unaudited term, which we define as net income (loss) attributable to Xcel Brands, Inc. stockholders, exclusive of amortization of trademarks, income (loss) from equity method investments, change in contingent reduction in equity ownership of IM Topco, LLC, stock-based compensation and cost of licensee warrants, asset impairment charges, and income taxes (if any). Non-GAAP net income (loss) and non-GAAP diluted EPS measures do not include the tax effect of the aforementioned adjusting items, due to the nature of these items and the Company's tax strategy.

We had Adjusted EBITDA of approximately $(0.70) million for the current quarter, compared with approximately $(1.57) million for the prior year quarter. Adjusted EBITDA is a non-GAAP unaudited measure, which we define as net income (loss) attributable to Xcel Brands, Inc. stockholders before interest and finance expenses (including loss on extinguishment of debt, if any), accretion of lease liability for exited leases, income taxes, other state and local franchise taxes, depreciation and amortization, income (loss) from equity method investments, change in contingent reduction in equity ownership of IM Topco, LLC, asset impairment charges, stock-based compensation and cost of licensee warrants, and costs associated with restructuring of operations.

Management uses non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to identify business trends relating to the Company's results of operations. Management believes non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA are also useful because these measures adjust for certain costs and other events that management believes are not representative of our core business operating results, and thus, these non-GAAP measures provide supplemental information to assist investors in evaluating the Company's financial results.

Non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA should not be considered in isolation or as alternatives to net income, earnings per share, or any other measure of financial performance calculated and presented in accordance with GAAP. Given that non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA are financial measures not deemed to be in accordance with GAAP and are susceptible to varying calculations, our non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in our industry, because other companies may calculate non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA in a different manner than we calculate these measures.

In evaluating non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA, you should be aware that in the future we may or may not incur expenses similar to some of the adjustments in this report. Our presentation of non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA does not imply that our future results will be unaffected by these expenses or any other unusual or non-recurring items. When evaluating our performance, you should consider non-GAAP net income (loss), non-GAAP diluted EPS, and Adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP results, and not rely on any single financial measure.

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The following table is a reconciliation of net loss attributable to Xcel Brands, Inc. stockholders (our most directly comparable financial measure presented in accordance with GAAP) to non-GAAP net loss:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended**  | **Three Months Ended**  |
| | **March 31,**  | **March 31,**  |
| <br>**($ in thousands)** | **2025** | **2024** |
| Net loss attributable to Xcel Brands, Inc. stockholders | $(2797) | $(6294) |
| Amortization of trademarks | 875 | 1519 |
| Loss from equity method investments | 576 | 533 |
| Change in contingent reduction in equity ownership of IM Topco, LLC | (240) |  |
| Stock-based compensation and cost of licensee warrants | 166 | 144 |
| Asset impairment charges |  | 2295 |
| Income tax provision (benefit) | 50 |  |
| Non-GAAP net loss | $(1370) | $(1803) |

---

The following table is a reconciliation of diluted loss per share (our most directly comparable financial measure presented in accordance with GAAP) to non-GAAP diluted EPS:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**  | **Three Months Ended**  |
|  | **March 31,**  | **March 31,**  |
|  | **2025** | **2024** |
| Diluted loss per share | $(1.18) | $(3.09) |
| Amortization of trademarks | 0.37 | 0.75 |
| Loss from equity method investments | 0.24 | 0.26 |
| Change in contingent reduction in equity ownership of IM Topco, LLC | (0.10) |  |
| Stock-based compensation and cost of licensee warrants | 0.07 | 0.07 |
| Asset impairment charges |  | 1.13 |
| Income tax provision (benefit) | 0.02 |  |
| Non-GAAP diluted EPS | $(0.58) | $(0.88) |
| Non-GAAP weighted average diluted shares | 2373583 | 2037397 |

---

The following table is a reconciliation of net loss attributable to Xcel Brands, Inc. stockholders (our most directly comparable financial measure presented in accordance with GAAP) to Adjusted EBITDA:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended**  | **Three Months Ended**  |
| | **March 31,**  | **March 31,**  |
| <br>**($ in thousands)** | **2025** | **2024** |
| Net loss attributable to Xcel Brands, Inc. stockholders | $(2797) | $(6294) |
| Interest and finance expense | 560 | 150 |
| Accretion of lease liability for exited lease | 61 |  |
| Income tax provision (benefit) | 50 |  |
| State and local franchise taxes | 8 | 12 |
| Depreciation and amortization | 900 | 1589 |
| Loss from equity method investments | 576 | 533 |
| Change in contingent reduction in equity ownership of IM Topco, LLC | (240) |  |
| Asset impairment charges |  | 2295 |
| Stock-based compensation and cost of licensee warrants | 166 | 144 |
| Costs associated with restructuring of operations | 17 |  |
| Adjusted EBITDA | $(699) | $(1571) |

---

[**Table of Contents**](#TOC)

#### Liquidity and Capital Resources

#### General
As of March 31, 2025 and December 31, 2024, our unrestricted cash and cash equivalents were $0.3 million and $1.3 million, respectively.

Restricted cash at March 31, 2025 consisted of $0.7 million of cash deposited as collateral for a standby letter of credit associated with a real estate lease and $1.5 million of cash deposited in a bank account to satisfy a liquidity covenant in the Company's term loan debt agreement.

Restricted cash at December 31, 2024 consisted of $0.7 million of cash deposited as collateral for a standby letter of credit associated with a real estate lease.

Our principal capital requirements have generally been to fund working capital needs and acquire new brands. Our current "licensing plus" operating model is a working capital light business model, and generally does not require material capital expenditures. As of March 31, 2025, we have no significant commitments for future capital expenditures.

***Working Capital***

We had a working capital (current assets less current liabilities, excluding the current portions of lease obligations, deferred revenue, and any contingent obligations payable in shares or via other non-cash means) deficit of approximately $0.6 million as of March 31, 2025. We had working capital of $0.8 million as of December 31, 2024.

***Going Concern***

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As of March 31, 2025, we have incurred recurring losses, a history of cash flows used in operating activities, and an accumulated deficit. While we have undertaken significant restructuring efforts during 2023 and 2024, and have implemented additional measures during the first quarter of 2025 to further optimize its cost structure, management has determined that, absent additional funding, there is substantial doubt about the Company's ability to meet its financial obligations as they become due within twelve months from the date these accompanying unaudited condensed consolidated financial statements are issued.

Subsequent to March 31, 2025, we restructured our outstanding debt and received net proceeds from financing activities. However, these proceeds may still be insufficient to fully address our liquidity needs. We are actively pursuing an equity offering to secure additional capital; however, there can be no assurance that such efforts will be successful or that sufficient funds will be obtained to meet our obligations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management intends to continue exploring strategic financing alternatives and operational efficiencies to improve liquidity. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Commentary on the components of our cash flows for the current quarter as compared with the prior year quarter is set forth below.

#### Operating Activities
Net cash used in operating activities was approximately $1.43 million in the current quarter, compared with approximately $2.61 million in the prior year quarter.

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The current quarter net cash used in operating activities was primarily attributable to the combination of the net loss of $(2.80) million plus non-cash items of approximately $1.45 million and the net change in operating assets and liabilities of approximately $(0.08) million. Non-cash items were comprised of approximately $0.90 million of depreciation and amortization expense, $0.34 million of non-cash expenses related to our equity method investees, $0.11 million of stock-based compensation and cost of licensee warrants, and $0.10 of amortization of deferred finance costs. The net change in operating assets and liabilities was primarily comprised of a decrease in deferred revenue of $(0.21) million and a decrease in lease-related assets and liabilities of $(0.08) million, partially offset by a decrease in accounts receivable of approximately $0.16 million.

The prior year quarter cash used in operating activities was primarily attributable to the combination of the net loss of $(6.35) million plus non-cash items of approximately $4.59 million and the net change in operating assets and liabilities of approximately $(0.85) million. Non-cash items were primarily comprised of asset impairment charges of approximately $2.30 million, $1.59 million of depreciation and amortization, and the $0.53 million undistributed proportional share of net loss of equity method investees. The net change in operating assets and liabilities was primarily comprised of (i) a decrease in deferred revenue of approximately $(0.22) million, mainly related to the Halston Master License agreement, (ii) a decrease in various operating liabilities of $(0.56) million, and (iii) a decrease in lease-related assets and liabilities of $(0.24) million.

#### Investing Activities
Net cash used in investing activities in the current quarter was comprised of purchases of equipment totaling approximately $0.01 million.

#### There was no net cash used in or provided by investing activities for the prior year quarter.

#### Financing Activities
Net cash provided by financing activities in the current quarter was primarily attributable to $2.05 million of proceeds received from the delayed draw portion of the Company's December 2024 term loan agreement.

Net cash provided by financing activities in the prior year quarter was $1.90 million, attributable to the net proceeds received from the March 2024 public offering and private placement transactions in which the Company issued an aggregate of 357,889 shares of common stock along with warrants exercisable for an additional 18,293 shares of common stock.

***April 2025 Debt Refinancing***

On April 21, 2025, the Company and its lenders and FEAC Agent, LLC entered into an amendment of the December 12, 2024 loan and security agreement, which provided for $1.5 million repayment of the $3.95 million Term Loan A and an additional Term Loan B in the amount of $5.12 million. The term loans outstanding after giving effect to the April 21, 2025 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. The proceeds from the additional Term Loan B were used to repay a portion of Term Loan A, as well as to pay fees, costs, and expenses incurred in connection with entering into the April 21, 2025 amendment, and the balance will be used for working capital purposes.

Within 30 days after April 21, 2025, the outstanding principal amount of the Term Loan A was repaid, on a pro rata basis in an aggregate amount equal to $500,000. Also in connection with this refinancing transaction, 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.

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

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

From and after April 21, 2025, interest on each Term Loan A accrues at an annual rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to three months, subject to a 2.0% floor, plus 8.5%. From and after April 21, 2025, interest on each Term Loan B accrues at an annual rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for an interest period equal to three months, subject to a 2.0% floor, plus 6.5%. From and after April 21, 2025 through March 31, 2027, interest on the Term Loan B will be paid in-kind by being capitalized and added to the principal amount of the Term Loan B at the end of each calendar month.

The 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 contains various customary financial covenants and reporting requirements, as specified and defined therein; the Company is currently in compliance with all applicable covenants.

Also in connection with this refinancing transaction, UTG Capital, Inc., a Delaware corporation ("UTG"), purchased a 100% undivided, participation interest in Term Loan B for a purchase price of $9.12 million and received warrants entitling it to purchase 1,107,457 warrants shares of the Company. Such warrants are exercisable for a period of seven years from the date of issuance, at specified exercise prices ranging from $6.60 per share to $17.50 per share. Further, the Company also issued warrants to purchase 30,000 shares of common stock to Restore Capital (EQ-W), LLC ("Restore"), another of the lenders, and amended warrants to purchase an aggregate of 107,333 shares of common stock held by Restore and warrants previously issued to warrants of FEAC Agent, LLC.

#### Other Factors
We continue to seek to expand and diversify the types of licensed products being produced under our brands. We plan to continue to diversify the distribution channels within which licensed products are sold, in an effort to reduce dependence on any particular retailer, consumer, or market sector within each of our brands. The Halston brand, C Wonder brand, TowerHill by Christie Brinkley brand, and the LB70 by Lloyd Boston brand have a core business in fashion apparel and accessories. The Ripka brand is a fine jewelry business, and the Longaberger brand focuses on home good products, which we believe helps diversify our industry focus while at the same time complements our business operations and relationships.

While the 2022 sale of a majority interest in the Isaac Mizrahi brand and the 2024 divestiture of the LOGO by Lori Goldstein brand resulted in significant decreases in our licensing revenues, we have taken and continue to take actions to replace those revenues with new strategic business initiatives, as we concentrate our resources on growing our brands, launching new brands, and entering into new business partnerships. We continue to seek new opportunities, including expansion through interactive television, live streaming, and additional domestic and international licensing arrangements, and acquiring and collaborating with additional brands, including the TowerHill by Christie Brinkley brand and LB70 by Lloyd Boston brand, both of which launched in 2024. We recently announced two new co-branded collaborations, which are planned to launch in Spring 2026.

During 2023 and throughout 2024, we have restructured our business operations into a leaner, more focused "licensing plus" business model. We have entered into structured contractual arrangements with best-in-class business partners in order to more efficiently operate our former wholesale and e-commerce businesses while reducing and better managing our exposure to operating risks, and taken additional actions to generate cost savings. Based on all of these actions taken to date, plus additional measures implemented during the first quarter of 2025 to further optimize the Company's cost structure, the Company's direct operating costs on an annualized basis have been reduced from approximately $8 million per quarter under our previous operating model to less than $2.5 million per quarter on a going-forward basis. This represents more than $22 million of cost savings on an annualized basis compared to our cost structure in 2022.

Nonetheless, we continue to face a number of headwinds in the current macroeconomic environment. Poor economic and market conditions, including the impacts of inflation and rising consumer debt levels, may negatively impact market

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sentiment, decreasing the demand for apparel, footwear, accessories, fine jewelry, home goods, and other consumer products, which would adversely affect our operating income and results of operations. If we are unable to take effective measures in a timely manner to mitigate the impact of inflation and/or a potential recession, our business, financial condition, and results of operations could be adversely affected.

Our long-term success, however, will still remain largely dependent on our ability to build and maintain our brands' awareness and continue to attract wholesale and direct-to-consumer customers, and contract with and retain key licensees and business partners, as well as our and our licensees' ability to accurately predict upcoming fashion and design trends within their respective customer bases and fulfill the product requirements of the particular retail channels within the global marketplace. Unanticipated changes in consumer fashion preferences and purchasing patterns, slowdowns in the U.S. economy, changes in the prices of supplies, consolidation of retail establishments, and other factors noted in Item 1A of our most recent Annual Report on Form 10-K could adversely affect our licensees' ability to meet and/or exceed their contractual commitments to us and thereby adversely affect our future operating results.

#### Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations, or liquidity.

#### Critical Accounting Policies and Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to exercise judgment. We exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the financial statements. We evaluate our estimates and judgments on an on-going basis. We base our estimates and judgments on a variety of factors, including our historical experience, knowledge of our business and industry, and current and expected economic conditions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary. While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Because the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on May 28, 2025, for a discussion of our critical accounting policies and estimates. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies or estimates.

**ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not applicable to smaller reporting companies.

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**ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp;CONTROLS AND PROCEDURES**

A. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of March 31, 2025, the end of the period covered by this report. Based on, and as of the date of such evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2025, due to the material weakness described below.

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 and Quarterly Report on Form 10-Q 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 filings.

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.

B. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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#### PART II. OTHER INFORMATION
**ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;LEGAL PROCEEDINGS**

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

**ITEM 1A.&nbsp;&nbsp;&nbsp;&nbsp;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 in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 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.

---

| | |
|:---|:---|
| **ITEM 2.**  | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** |

---

None.

**ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp;MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp;OTHER INFORMATION**

None.

**ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp;EXHIBITS**

The following exhibits are filed herewith:

---

| |
|:---|
| [31.1 Rule 13a-14(a)/15d-14(a) Certification (CEO)](xelb-20250331xex31d1.htm)  |
| [31.2 Rule 13a-14(a)/15d-14(a) Certification (CFO)](xelb-20250331xex31d2.htm)  |
| [32.1 Section 1350 Certification (CEO)](xelb-20250331xex32d1.htm) \* |
| [32.2 Section 1350 Certification (CFO)](xelb-20250331xex32d2.htm) \* |
| 101.INS Inline XBRL Instance Document |
| 101.SCH Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF Inline XBRL Taxonomy Extension Definitions Linkbase Document |
| 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

---

\* Furnished herewith.

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#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: June 4, 2025 | By: | /s/ Robert W. D'Loren |
|  |  | Name: Robert W. D'Loren |
|  |  | Title: Chairman and Chief Executive Officer |
|  | By: | /s/ James F. Haran |
|  |  | Name: James F. Haran |
|  |  | Title: Chief Financial Officer and Vice President |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Robert W. D'Loren, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 of Xcel Brands, Inc. (the "Company").

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| June 4, 2025 | By: | /s/ Robert W. D'Loren |
|  |  | Name: Robert W. D'Loren |
|  |  | Title: Chairman and Chief Executive Officer |

---

------

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, James F. Haran, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 of Xcel Brands, Inc. (the "Company").

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| June 4, 2025 | By: | /s/ James F. Haran |
|  |  | Name: James F. Haran |
|  |  | Title: Chief Financial Officer and Vice President |

---

------

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Xcel Brands, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert W. D'Loren, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| June 4, 2025 | By: | /s/ Robert W. D'Loren |
|  |  | Name: Robert W. D'Loren |
|  |  | Title: Chairman and Chief Executive Officer |

---

------

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Xcel Brands, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James F. Haran, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| June 4, 2025 | By: | /s/ James F. Haran |
|  |  | Name: James F. Haran |
|  |  | Title: Chief Financial Officer and Vice President |

---

------