XCel Brands shareholders approve reverse stock split

XCel Brands, Inc. (NASDAQ:XELB), a company specializing in patent ownership and leasing with a market capitalization of $6.43 million, announced the approval of a reverse stock split and a reduction in authorized shares following a special meeting of stockholders on March 12, 2025. According to InvestingPro analysis, the company’s stock has fallen 70% over the past year and currently trades near its 52-week low of $0.26. As outlined in the definitive proxy statement filed with the Securities and Exchange Commission on February 14, 2025, the company sought approval for three key proposals, all of which received majority support from its shareholders.

The first proposal, which passed with 15,214,948 votes in favor, authorizes the Board of Directors to implement a reverse stock split at their discretion. The approved ratio ranges from 1-for-2 to 1-for-10, with the specific ratio to be determined by the Chairman of the Board. There were 76,468 votes against and 3,625 abstentions, with no broker non-votes recorded. This strategic move comes as the company faces financial challenges, with InvestingPro data showing a significant debt burden of $11.36 million and a weak overall financial health score.

In the second proposal, stockholders voted to decrease the total number of authorized shares of the company’s capital stock from 51,000,000 to 16,000,000 and the authorized common stock from 50,000,000 to 15,000,000. The proposal garnered 15,217,427 votes for, 73,682 against, and 3,932 abstentions.

The third proposal, which was also approved with 15,207,484 votes for, would have allowed for an adjournment of the special meeting to solicit additional proxy votes if there had not been enough votes in favor of the first two proposals. However, the adjournment was not necessary as both proposals passed. Votes against numbered 85,037, with 2,520 abstentions.

The special meeting saw the presence, in person or by proxy, of over 15 million shares of Common Stock, representing a quorum and majority of the issued and outstanding capital stock.

The approval of these proposals is part of XCel Brands’ efforts to restructure its share capital. The company’s stockholders have demonstrated their support for the Board’s strategy with these votes. No other matters were voted upon during the special meeting.

This report is based on a press release statement and provides a summary of the key actions taken by XCel Brands, Inc. at their recent stockholders’ meeting. Despite current challenges, the company maintains impressive gross profit margins of 93%. For deeper insights into XCel Brands’ financial health and future prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which offers detailed analysis of over 1,400 US stocks.

In other recent news, Xcel Brands Inc . announced its Q1 2024 earnings, reporting a smaller-than-expected loss per share and exceeding revenue forecasts. The company reported an EPS of -$0.06, surpassing analysts’ expectations of -$0.11, and achieved revenue of $1.9 million, outperforming the forecasted $1.57 million. Despite these positive results, the company experienced a revenue decline from the previous year, with Q1 2024 revenue falling to $2.2 million from $6.1 million in Q1 2023. Xcel Brands is in the midst of a strategic shift towards a licensing-focused business model, which has contributed to a 50% improvement in adjusted EBITDA compared to the previous year. The company anticipates a return to profitability in 2024, with positive EBITDA expected in the latter half of the year. Additionally, Xcel Brands is expanding its product offerings, including new launches on HSN and JTV, and has set a target of $50 million in sales for its C Wonder brand by 2025. The company’s CEO, Robert D’Loren, expressed confidence in this strategic direction, emphasizing the potential growth in its interactive TV and e-commerce channels.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.