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XCel Brands (NASDAQ:XELB), Inc., a company specializing in patent ownership and leasing, announced on Monday that it has entered into a significant financial agreement, securing new term loans and issuing warrants for common stock.
The Delaware-incorporated company has taken steps to bolster its financial position through a series of transactions detailed in a recent 8-K filing with the Securities and Exchange Commission.
According to the filing dated December 12, 2024, XCel Brands and certain subsidiaries have agreed to a loan and security agreement with FEAC Agent, LLC, FEF Distributors, LLC, and Restore Capital, LLC. The agreement includes an initial term loan of $3.95 million (Term Loan A), a second loan of $4.0 million (Term Loan B), and a potential additional loan of $2.05 million (Delayed Draw Term Loan) upon meeting certain conditions. The funds from the first two loans were used to repay previous debt and cover associated costs, with the remainder allocated for working capital.
The loans are scheduled for quarterly repayments beginning March 31, 2026, and carry interest rates based on the secured overnight financing rate plus additional percentages, with Term Loan B attracting a notably higher rate than the others. All loans are set to mature on December 12, 2028.
To further secure its financial future, XCel Brands has issued warrants to purchase 1,456,667 shares of its common stock at an exercise price of $0.6315 per share. These warrants are immediately exercisable and will expire on December 12, 2034.
The company also disclosed a transaction with IPX Capital, LLC, controlled by XCel's CEO Robert W. D'Loren. IPX purchased a participation interest in Term Loan B and received warrants as part of the deal.
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