XCel Brands, Inc. 8-K

What Happened
XCel Brands, Inc. (XELB) announced on Jan. 21, 2026 that it entered a common stock Purchase Agreement and related Registration Rights Agreement with White Lion Capital, LLC under which White Lion has committed to purchase up to $15.0 million of Xcel common stock over a 24‑month commitment period. The Company controls the timing and amount of any sales; White Lion is obligated to buy shares only as the Company directs and subject to several limits and conditions. Xcel also agreed to issue Commitment Shares valued at $37,500 to White Lion and must file a Form S‑1 registration statement (or keep a resale registration effective) within specified timeframes.

Key Details

• Agreement date: January 21, 2026; 24‑month commitment period beginning on that date.
• Maximum potential funding: up to $15.0 million of common stock purchases by White Lion.
• Exchange cap: aggregate shares issued under the deal plus Commitment Shares capped at 1,178,173 shares (≈19.99% of outstanding stock pre‑agreement), unless shareholder approval or price thresholds are met.
• Beneficial ownership limit: White Lion cannot exceed 4.99% ownership (can increase to 9.99% with 61 days’ notice).
• Purchase types and pricing mechanics: Regular Purchases (price = average of three lowest closing sale prices on notice date); Rapid Purchases (price = average of two lowest traded prices during a three‑hour window after consent); VWAP Purchases (lowest VWAP over two consecutive days × 97%). Daily volume limits apply (generally up to 30% of 5‑day average daily volume).
• Fees and restrictions: Company to pay Maxim Group LLC a 4.0% cash fee on gross proceeds from purchases; White Lion agreed not to short XELB during the agreement; Xcel cannot enter another equity line‑style financing without White Lion’s approval while this agreement is in effect.
• Securities treatment: Commitment Shares and Purchase Notice Shares will be issued in a private placement relying on Section 4(a)(2) and Rule 506(b) (White Lion represented it is an accredited investor).

Why It Matters
This agreement gives Xcel Brands a flexible on‑demand capital source (up to $15M) that the company can tap at its discretion, which can help fund working capital and general corporate needs without immediate dilution. However, actual proceeds depend on how frequently Xcel chooses to sell shares and at what prices, and there are caps on the total shares issuable (about 19.99% unless waived or approved). Investors should note potential dilution from future sales under this facility, the registration obligations that will permit resale of those shares once effective, and the 4% placement fee to Maxim on proceeds.