XCel Brands, Inc.

On December 12, 2024, we and certain of our subsidiaries entered into a loan and security agreement with FEAC Agent, LLC, as administrative agent and collateral agent, 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 current outstanding balances are as follows: (i) Term Loan A in the amount of $3.75 million and (ii) Term Loan B in the amount of $9.66 million.

As a result of our failure to satisfy the minimum revenues covenant for the three month periods ended June 30, 2025 and September 30, 2025, on November 18, 2025, we entered into a further amendment to the loan and security agreement to (i) amend certain financial covenants, including eliminate the minimum liquidity covenant if a payment of $3.25 million principal amount of Term Loan A is made on or prior to February 20, 2026, (ii) waive our failure to satisfy the minimum revenues covenant for the three months ended June 30, 2025 and September 30, 2025, (iii) require a payment of $3.25 million principal amount of Term Loan A on February 20, 2026, (iv) after such payment of Term Loan A, defer the quarterly installment payments of Term Loan A until December 31, 2026 and require a $500,000 principal payment of Term Loan A on that date, and (v) require us to pay an amendment fee of $450,000 (of which $125,000 is payable on December 5, 2025 and the remaining $325,000 will be due if $3.25 million principal amount of Term Loan A is not repaid on or prior to February 20, 2026). Additionally, the minimum actual revenues covenant was revised as follows:

The milestone obligations are as follows:

For avoidance of doubt, the amount of proceeds from any such transaction referred to in the milestones above must be sufficient to repay the First Out Obligations, which include $3.25 million of the outstanding balance of the Term Loan A and all accrued interest thereon, plus fees.