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 ☒ 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, a 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.

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

As of December ~~13, 2019,~~7, 2020, there were approximately ~~5,570,530 million~~569,130 shares of the Registrant’s Common Stock outstanding.

	November 2, 2019			February 2, 2019			October 31, 2020			February 1, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,448		$	4,284		$	1,629		$	1,209
Accounts receivable, net		5,352			4,363			3,927			4,962
Other receivables		290			339
Income tax and other receivables								8,876			157
Prepaid expenses and other current assets		650			857			1,331			1,431
Total current assets		7,740			9,843			15,763			7,759
Property and equipment, net		511			620			240			319
Intangible assets, net		59,312			64,751			49,647			59,110
Goodwill		16,252			16,252			6,752			12,152
Accrued revenue and other assets		6,391			1,645			3,508			3,582
Total assets	$	90,206		$	93,111		$	75,910		$	82,922
Liabilities and Stockholders’ Equity
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable	$	2,794		$	3,120
Other current liabilities		3,785			4,714
Accounts payable and other current liabilities							$	6,145		$	6,282
Current portion of long-term debt		55,219			1,300			60,938			56,044
Deferred revenue—current		3,869			1,626			1,263			3,551
Total current liabilities		65,667			10,760			68,346			65,877
Long-term liabilities:
Long-term debt		—			53,154			490			—
Deferred income taxes		13,218			12,055			8,379			9,515
Long-term lease liabilities		3,616			—			1,159			1,389
Other liabilities		2,162			2,807			842			794
Total liabilities		84,663			78,776			79,216			77,575
Commitments and Contingencies (Note 7)
Stockholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized, none issued		—			—
Common stock, $.06 par value, 10,000,000 shares authorized, shares issued 5,570,530 (November 2, 2019) and 4,900,318 (February 2, 2019)		334			294
Commitments and contingencies (Note 7)
Stockholders’ (deficit) equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized, NaN issued								—			—
Common stock, $.02 par value, 25,000,000 shares authorized, shares issued 569,130 (October 31, 2020) and 557,053 (February 1, 2020)								11			11
Additional paid-in capital		78,154			76,633			79,139			78,641
Accumulated deficit		(72,945	)		(62,592	)		(82,456	)		(73,305	)
Total stockholders’ equity		5,543			14,335
Total liabilities and stockholders’ equity	$	90,206		$	93,111
Total stockholders’ (deficit) equity								(3,306	)		5,347
Total liabilities and stockholders’ (deficit) equity							$	75,910		$	82,922

	Three Months Ended							Nine Months Ended						Three Months Ended						Nine Months Ended
	November 2, 2019				November 3, 2018			November 2, 2019			November 3, 2018			October 31, 2020			November 2, 2019			October 31, 2020			November 2, 2019
Revenues	$	4,894			$	5,842		$	15,549		$	18,317		$	4,050		$	4,894		$	12,463		$	15,549
Operating expenses:
Selling, general and administrative expenses		3,193				3,234			10,117			11,577			2,291			3,193			7,288			10,117
Stock-based compensation		153				241			876			666			110			153			405			876
Business acquisition and integration costs		73				—			284			307
Transaction and other costs															654			73			654			284
Restructuring charges		138				—			180			5,615			—			138			(97	)		180
Intangible asset impairment charge		5,000				—			5,000			—
Loss (gain) on sale of assets		—				25			—			(546	)
Intangible assets and goodwill impairment charges															4,607			5,000			14,407			5,000
Depreciation and amortization		232				292			743			1,223			223			232			668			743
Total operating expenses		8,789				3,792			17,200			18,842			7,885			8,789			23,325			17,200
Operating income (loss)		(3,895	)			2,050			(1,651	)		(525	)
Other income (expense):
Operating loss															(3,835	)		(3,895	)		(10,862	)		(1,651	)
Other (expense) income:
Interest expense		(2,182	)			(1,910	)		(6,678	)		(6,007	)		(2,895	)		(2,182	)		(7,507	)		(6,678	)
Other income (expense), net		(59	)			14			2			(3,219	)
Other (expense) income, net															(27	)		(59	)		(175	)		2
Total other expense, net		(2,241	)			(1,896	)		(6,676	)		(9,226	)		(2,922	)		(2,241	)		(7,682	)		(6,676	)
Income (loss) before income taxes		(6,136	)			154			(8,327	)		(9,751	)
Provision for income taxes		692		��		91			2,026			1,980
Net income (loss)	$	(6,828	)		$	63		$	(10,353	)	$	(11,731	)
Loss before income taxes															(6,757	)		(6,136	)		(18,544	)		(8,327	)
(Benefit) provision for income taxes															(788	)		692			(9,393	)		2,026
Net loss														$	(5,969	)	$	(6,828	)	$	(9,151	)	$	(10,353	)
Net loss per share:
Basic earnings (loss) per share	$	(1.23	)		$	0.01		$	(1.93	)	$	(2.50	)
Diluted earnings (loss) per share	$	(1.23	)		$	0.01		$	(1.93	)	$	(2.50	)
Basic loss per share														$	(10.58	)	$	(12.35	)	$	(16.34	)	$	(19.32	)
Diluted loss per share														$	(10.58	)	$	(12.35	)	$	(16.34	)	$	(19.32	)
Weighted average common shares outstanding:
Basic		5,534				4,716			5,359			4,686			564			553			560			536
Diluted		5,534				4,716			5,359			4,686			564			553			560			536

Common Stock

Shares

Par Value

Additional
Paid-in
Capital

Retained
Earnings
(Accumulated
Deficit)

Total

Balance, February 2, 2019

4,900

$

294

$

76,633

$

(62,592
)

$

14,335

Stock-based compensation

—

—

208

—

208

Equity issuances, net of tax

415

25

598

—

623

Stock Warrants

—

—

28

—

28

Net Loss

—

—

—

(2,258
)

(2,258
)
Balance, May 4, 2019

5,315

$

319

$

77,467

$

(64,850
)

$

12,936

Stock-based compensation

—

—

515

—

515

Equity issuances, net of tax

207

12

(12
)

—

—

Stock Warrants

—

—

28

—

28

Net Loss

—

—

—

(1,267
)

(1,267
)
Balance, August 3, 2019

5,522

$

331

$

77,998

$

(66,117
)

$

12,212

Stock-based compensation

—

—

153

—

153

Equity issuances, net of tax

49

3

(24
)

—

(21
)
Stock Warrants

—

—

27

—

27

Net Loss

—

—

—

(6,828
)

(6,828
)
Balance, November 2, 2019

5,571

$

334

$

78,154

$

(72,945
)

$

5,543

	Common Stock
	Shares		Par Value			Additional Paid-in Capital			Accumulated Deficit			Total
Balance, February 1, 2020		557	$	11	$		78,641		$	(73,305	)	$	5,347
Stock-based compensation		—		—			150			—			150
Stock warrants		—		—			32			—			32
Net loss		—		—			—			(1,849	)		(1,849	)
Balance, May 2, 2020		557	$	11	$		78,823		$	(75,154	)	$	3,680
Stock-based compensation		—		—			145			—			145
Equity issuances, net of tax		6		—			—			—			-
Stock warrants		—		—			32			—			32
Net loss		—		—			—			(1,333	)		(1,333	)
Balance, August 1, 2020		563	$	11	$		79,000		$	(76,487	)	$	2,524
Stock-based compensation		—		—			110			—			110
Equity issuances, net of tax		6		—			(3	)		—			(3	)
Stock warrants		—		—			32			—			32
Net loss		—		—			—			(5,969	)		(5,969	)
Balance, October 31, 2020		569	$	11	$		79,139		$	(82,456	)	$	(3,306	)

Common Stock

Shares

Par Value

Additional
Paid-in
Capital

Retained
Earnings
(Accumulated
Deficit)

Total

Balance, February 3, 2018

4,666

$

280

$

74,377

$

(50,542
)

$

24,115

Adoption of ASC 606

—

—

—

275

275

Stock-based compensation

—

—

300

—

300

Stock Warrants

—

—

23

—

23

Net Loss

—

—

—

(2,741
)

(2,741
)
Balance, May 5, 2018

4,666

$

280

$

74,700

$

(53,008
)

$

21,972

Stock-based compensation

—

—

125

—

125

Equity issuances, net of tax

16

1

776

—

777

Stock Warrants

—

—

21

—

21

Net Loss

—

—

—

(9,053
)

(9,053
)
Balance, August 4, 2018

4,682

$

281

$

75,622

$

(62,061
)

$

13,842

Stock-based compensation

—

—

241

—

241

Equity issuances, net of tax

59

3

(3
)

—

—

Stock Warrants

—

—

22

—

22

Net Income

—

—

—

63

63

Balance, November 3, 2018

4,741

$

284

$

75,882

$

(61,998
)

$

14,168

	Common Stock
	Shares		Par Value			Additional Paid-in Capital			Accumulated Deficit			Total
Balance, February 2, 2019		490	$	10	$		76,917		$	(61,805	)	$	15,122
Stock-based compensation		—		—			208			—			208
Equity issuances, net of tax		42		1			622			—			623
Stock warrants		—		—			28			—			28
Net loss		—		—			—			(2,258	)		(2,258	)
Balance, May 4, 2019		532	$	11	$		77,775		$	(64,063	)	$	13,723
Stock-based compensation		—		—			515			—			515
Equity issuances, net of tax		20		—			—			—			—
Stock warrants		—		—			28			—			28
Net loss		—		—			—			(1,267	)		(1,267	)
Balance, August 3, 2019		552	$	11	$		78,318		$	(65,330	)	$	12,999
Stock-based compensation		—		—			153			—			153
Equity issuances, net of tax		5		—			(21	)		—			(21	)
Stock warrants		—		—			27			—			27
Net loss		—		—			—			(6,828	)		(6,828	)
Balance, November 2, 2019		557	$	11	$		78,477		$	(72,158	)	$	6,330

	Nine Months Ended						Nine Months Ended
	November 2, 2019		��	November 3, 2018			October 31, 2020				November 2, 2019
Cash flows from operating activities:
Net loss	$	(10,353	)	$	(11,731	)	$		(9,151	)	$	(10,353	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to cash from operating activities:
Depreciation and amortization		743			1,223				668			743
Restructuring charges		180			5,615				(97	)		180
Intangible asset impairment charge		5,000			—
Intangible assets and goodwill impairment charge									14,407			5,000
Amortization of deferred financing costs		1,755			3,750				2,641			1,755
Deferred income taxes and noncurrent provisions		1,163			1,079
Interest expense paid in kind									3,296			—
Deferred income taxes and other noncurrent provisions									(1,172	)		1,163
Stock-based compensation and stock warrant charges		958			729				501			958
Loss (gain) on sale of assets		—			(546	)
Changes in operating assets and liabilities, net of effects from business combinations:
Changes in operating assets and liabilities:
Accounts receivable		(989	)		3,764				1,035			(989	)
Other receivables		49			66
Income tax and other receivables									(8,719	)		49
Prepaid expenses and other current assets		207			314				100			207
Other assets		(569	)		(980	)
Accounts payable		(323	)		(507	)
Other current liabilities		(2,317	)		(7,180	)
Accrued revenue and other assets									74			(569	)
Accounts payable and other liabilities									44			(2,640	)
Long- term lease liabilities									(230	)		—
Deferred revenue		2,243			(1,692	)			(2,288	)		2,243
Net cash used in operating activities		(2,253	)		(6,096	)
Net cash used in operating activities from discontinued operations		(—	)		(1,380	)
Net cash provided by (used in) operating activities									1,109			(2,253	)
Cash flows from investing activities:
Capital investments		(195	)		(184	)			(133	)		(195	)
Proceeds from business disposition and sale of assets		—			5,643
Net cash provided by (used in) investing activities		(195	)		5,459
Net cash used in investing activities									(133	)		(195	)
Cash flows from financing activities:
Proceeds from term loan, subordinated promissory notes and line of credit		—			42,000
Payments on term loan and line of credit		(950	)		(38,100	)
Proceeds from promissory note payable								735				—
Payments on term loan									(700	)		(950	)
Debt issuance costs		(39	)		(3,016	)			(588	)		(39	)
Issuance of common stock		601			4				(3	)		601
Net cash (used in) provided by financing activities		(388	)		888
Decrease in cash and cash equivalents		(2,836	)		(1,129	)
Net cash used in financing activities									(556	)		(388	)
Increase (decrease) in cash and cash equivalents									420			(2,836	)
Cash and cash equivalents, beginning of period		4,284			3,174				1,209			4,284
Cash and cash equivalents, end of period	$	1,448		$	2,045		$		1,629		$	1,448
Cash paid for:
Income taxes	$	790		$	837		$		738		$	790
Interest	$	4,923		$	5,238		$		1,863		$	4,923
Noncash investing and financing activities:
Conversion of junior participation interests to subordinated promissory notes	$	—		$	11,500
Interest paid in kind							$		3,296		$	—

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statement presentation. Cherokee Inc. changed its name to Apex Global Brands Inc. effective June 27, 2019. These financial statements include the accounts of Apex Global Brands Inc. and its consolidated subsidiaries (the “Company”) and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and the results of operations for the periods presented. The condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended February ~~2, 2019~~1, 2020 included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of results to be expected for the full year.

The accompanying condensed consolidated financial statements have been prepared on the going concern basis of accounting, which assumes the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Under the Company’s senior secured credit facility, the Company is required to maintain specified levels of Adjusted EBITDA as ~~defined ($9.5 million for the trailing twelve months as of February 1, 2020) and maintain a minimum cash balance of $1.0 million.~~ defined. The Company’s operating results for the twelve months ended November 2, 2019 and twelve months ended February 1, 2020 resulted in ~~a violation~~violations of ~~this~~the minimum Adjusted EBITDA covenant, which are events of default, and the valuation report prepared by the Company’s senior secured lender during the first quarter of Fiscal 2021 indicated that the Company’s borrowing base is ~~an event~~less than the outstanding term loan balance. Beginning in the first quarter of ~~default. However,~~fiscal 2021, the Company’s business has been materially adversely affected by the effects of the global pandemic of COVID-19 and the related protective public health measures. The Company’s business depends upon purchases and sales of products bearing the Company’s brands by the Company’s licensees, and the prevalence of shelter in place and similar orders in the regions where these products are sold, together with the closure of many retail stores of the Company’s licensees, have resulted in significant declines in the Company’s royalties, which will likely continue for some period of time. In response to the decline in revenues, the Company has implemented cost savings measures, such as pay reductions and employee furloughs among other things.

The Company’s senior lender has agreed to forbear from enforcing its rights under the senior secured credit facility with respect to various defaults through February 28, 2020. Revenues for the three months ended November 2, 2019 were lower than the Company’s previous forecasts due to lower than expected royalties reported by the Company’s licensees, which have been negatively impacted by the economic uncertainty surrounding Brexit, global trade wars and increasing tariffs on footwear and apparel,December 31, 2020 or March 31, 2021 if certain milestones are met, and the ~~weakening~~senior secured credit facility now matures on March 31, 2021 or December 31, 2020 if certain milestones are not met. Beginning with May 1, 2020 and continuing through the term of the ~~British pound sterling~~forbearance agreement, interest and ~~euro~~loan amortization payments are not be paid in ~~relation~~cash, other than approximately $85,000 per month beginning on September 1, 2020 and the interest payment due August 1, 2020, but an equivalent amount is added to the ~~United States dollar. In response, management has enacted certain cash savings measures, but such actions were not adequate~~principal amount of the term loans to ~~maintain compliance with~~be repaid. During the forbearance period, the Adjusted EBITDA ~~covenant.~~covenant was reduced, the required minimum cash balance to be maintained by the Company was reduced, and the borrowing base requirement was suspended. The Company ~~has classified its debt as current as financial projections indicate that there~~ is ~~a significant risk of further violations of the minimum Adjusted EBITDA covenant or minimum cash covenant beyond~~required during the forbearance period to evaluate strategic alternatives designed to provide liquidity to repay the term loans under the senior secured credit facility. In exchange for these concessions, the senior lender will receive an additional fee totaling 2% of the outstanding loan balance when the debt is repaid, which together with other exit fees is expected to total approximately $2.5 million. The Company’s Junior Note holders also agreed to ~~with~~accept interest payments in the form of additional principal rather than in cash from April 1, 2020 through January 1, 2021, and payments to the Company’s ~~senior lender.~~ Junior Notes holders are generally restricted by the forbearance agreement.

Future compliance failures ~~would subject~~under the senior secured credit facility subjects the Company to significant risks, including the right of its senior lender to terminate its ~~obligation~~obligations under the ~~Credit Facility,~~senior secured credit facility, declare all or any portion of the borrowed amounts then outstanding to be accelerated and due and payable, and/or exercise any other right or remedies it may have under applicable law, including foreclosing on the Company’s and/or its subsidiaries’ assets that serve as collateral for the borrowed amounts. If any of these rights were to be exercised, or if the Company is unable to refinance its senior secured credit facility by the accelerated maturity of March 31, 2021, which could be further accelerated to December 31, 2020 if certain milestones are not met, the Company’s financial condition and ability to continue operations would be materially jeopardized. If the Company is unable to meet obligations to lenders and other creditors, the Company may have to significantly curtail or even cease operations. The Company is evaluating potential sources of working capital and believes that the NOL carryback provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act passed by the U.S. Congress in March 2020 will result in additional liquidity, although the timing of these future cash receipts is uncertain. NOL carryback claims are expected to result in federal income tax refunds of approximately $9.1 million. Management’s plans also include the evaluation of strategic alternatives to refinance its debt or otherwise enhance shareholder value. There is no assurance that the Company will be able to execute these plans. Because of this uncertainty, there is substantial doubt about the Company’s ability to continue as a going concern. The Company is in negotiations for new and amended licenses that would increase its working capital and Adjusted EBITDA and is evaluating other potential sources of working capital, including the disposition of certain assets. Management’s plans also include further negotiations with its lenders and other potential sources of capital, and the Company’s management and board of directors have engaged an advisory firm to advise the Company regarding its business plans, risks and opportunities. There is no assurance that the Company will be able to execute these plans or continue to operate as a going concern.

On September ~~27, 2019,~~2, 2020, the Company effected a ~~one-for-three~~one-for-ten reverse stock split (the “Reverse Stock Split”) of its common stock. The Reverse Stock Split reduced the number of the Company’s outstanding shares of common stock from approximately ~~16.6~~5.6 million shares to approximately ~~5.5 million shares and reduces the number of authorized shares of common stock from 30.0 million shares to 10.0~~0.6 million shares. Unless the context otherwise requires, all share and per share amounts in these condensed consolidated financial statements have been revised to reflect the Reverse Stock ~~Split.~~Split including reclassifying an amount equal to the reduction in par value of our common stock to additional paid-in capital.

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued ~~Accounting Standards Update~~a new accounting standard update (“ASU”) ~~2016-13, “Financial Instruments-Credit Losses (“Topic 326”). For trade receivables,~~to simplify the ~~Company will be required to use a forward-looking expected loss model rather than the incurred loss model~~accounting for income taxes. The new guidance removes certain exceptions for recognizing ~~credit losses which reflects losses that are probable.~~deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. It also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This ~~new standard is~~guidance will be effective for the first quarter of the Company’s ~~fiscal year ending~~Fiscal 2023, which will end on January ~~30, 2021 (‘‘Fiscal 2021’’).~~28, 2023. The Company is currently evaluating the impact of the ~~adoption of this standard~~new guidance on ~~our condensed~~its consolidated financial ~~statements. Management does not expect the impact of adoption to be material.~~statements and related disclosures.

In March 2016, the FASB issued authoritative guidance which modified existing guidance for off-balance sheet treatment of a lessee’s operating leases (“Topic 842”). The standard requires a lessee to recognize assets and liabilities related to long-term leases that were classified as operating leases under previous guidance. An asset is recognized related to the right to use the underlying asset, and a liability is recognized related to the obligation to make lease payments over the term of the lease. These amounts are determined based on the present value of the lease payments over the lease term. The standard also requires expanded disclosures about leases. The Company adopted this standard as of the beginning of its fiscal year ending February 1, 2020, electing the transition option that allowed it not to restate the comparative periods in its financial statements in the year of adoption and to carry forward its historical assessment of whether contracts are, or contain, leases, along with its historical assessment of lease classifications and initial direct costs.

The Company’s leases obligations comprise primarily individual leases for office space without multiple components. The Company determines if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date when the leased assets are made available for use. For the Company’s long-term leases, operating leases obligations are included in other current liabilities and long-term lease liabilities, and right-of-use assets are included in accrued revenue and other assets. The Company does not have any material finance leases. The operating lease obligations and right-of-use assets recognized on adoption of Topic 842 were $4.7 million and $4.6 million, respectively. The difference between the total right-of-use assets and total lease liabilities recorded on adoption is primarily due to the derecognition of prepaid rent expenses.

The Company uses estimates of its incremental borrowing rate (IBR) based on the information available at the lease commencement date in determining the present value of lease payments. In determining the appropriate IBR, the Company considers information including, but not limited to, its credit rating, the lease term, and the currency in which the arrangement is denominated. For leases which commenced prior to our adoption of Topic 842, we used the estimated IBR on the date of adoption. When the Company has the sole option to either renew or terminate a lease, the present value of the right-of-use asset and lease obligation includes the extension period when it is reasonably certain that the Company will exercise the option. Lease expense is recognized on a straight-line basis over the lease term.

	November 2, 2019							February 2, 2019							October 31, 2020							February 1, 2020
(In thousands)	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value
Amortizable trademarks	$	28,004		(20,379	)	$	7,625	$	27,899		(19,835	)	$	8,064	$	30,283		(21,186	)	$	9,097	$	30,153		(20,600	)	$	9,553
Indefinite lived trademarks		51,687		—			51,687		56,687		—			56,687		40,550		—			40,550		49,557		—			49,557
	$	79,691	$	(20,379	)	$	59,312	$	84,586	$	(19,835	)	$	64,751	$	70,833	$	(21,186	)	$	49,647	$	79,710	$	(20,600	)	$	59,110

~~The Hi-Tec Acquisition during Fiscal 2017 resulted in~~Intangible assets include trademarks ~~valued at $52.4 million~~ that are classified as indefinite lived and not subjected to amortization. ~~Other indefinite lived trademarks include certain Cherokee brand trademarks that were acquired in historical transactions.~~ The Company's revenues ~~from~~have been adversely impacted by the COVID-19 pandemic and its ~~Hi-Tec, Magnum and Interceptor brands, which were acquired in~~effect on the ~~Hi-Tec Acquisition, were significantly below previous forecasts for the three months ended November 2, 2019. (See Note 1 for further discussion.)~~Company’s licensees. This was identified as an interim impairment indicator for the related indefinite lived trademarks during the preparation of the Company’s interim financial statements for the quarters ended May 2, 2020 and October 31, 2020, and management performed an interim impairment ~~test~~tests at those times based on updated cash flow projections and discounted cash flows based on estimated weighted average costs of capital (income approach). The Company determined that the fair values of its Hi-Tec and Magnum trademarks were not in excess of their carrying values, and as a result, an impairment charge of $~~5.0~~4.4 million was recorded during the three months ended ~~November~~May 2, ~~2019~~2020 and an additional impairment charge of $4.6 million was recorded during the three months ended October 31, 2020 to adjust these trademarks to their estimated fair value. The ~~fair value~~forecasted impact of the ~~Company’s Interceptor brand was in excess of its carrying value, so no impairment charge was necessary based~~COVID-19 pandemic on the interim test. However, the Company believes that increased tariffs and global trade wars have negatively impacted the competitive and economic environment in which Interceptor operates, and an indefinite lifeCompany’s future revenues is ~~no longer supported. Accordingly, the Interceptor trademark will be amortized prospectively over its estimated remaining useful life.~~ The recorded impairment charge is based on the preliminary valuation and is management’s best estimate as of the filing date of these condensed consolidated financial statements. The Company is in the process of completing its evaluation of the key inputs used to estimate the fair value of its indefinite lived trademarks. The impairment charge is therefore subject to ~~revision~~change as additional information becomes available. Further impairments may be required if management’s ~~valuation is performed~~revenue forecasts for Hi-Tec and ~~completed during the fourth quarter.~~ Magnum are further reduced in future reporting periods. The Company has acquired other trademarks that are being amortized over their estimated useful lives, which average 10.0 years with no0 residual values. Amortization of intangible assets was $0.2 million ~~and $0.2 million~~ for both the three months ended October 31, 2020 and November 2, 2019, and ~~November 3, 2018, respectively,~~$0.6 million and $0.5 ~~million and $0.7~~ million for the nine months ended October 31, 2020 and November 2, 2019, ~~and November 3, 2018,~~ respectively.

~~Goodwill~~ The Company’s goodwillarose from ~~historical acquisitions and~~ the Hi-Tec Acquisition that occurred during Fiscal ~~2017.~~2017 and amounted to $16.3 million at that time. Goodwill is tested at least annually for impairment ~~but was tested this quarter as a result of the revenue shortfall referred to above and the sustained drop~~ in the ~~trading price of the~~ Company’s ~~stock. Because~~fourth quarter, and because the Company has one reporting unit, ~~its~~the impairment test is based primarily on the relationship between ~~its~~the Company’s market capitalization and the book value of its equity adjusted for an estimated control premium. The annual goodwill impairment test ~~this~~in the fourth quarter of the fiscal year ended February 1, 2020 indicated that the Company’s goodwill ~~is not~~was impaired, and an impairment charge of $4.1 million was recorded to reduce goodwill to $12.2 million. The Company’s market capitalization was adversely affected during the three months ended May 2, 2020 as a result of the COVID-19 pandemic. This was identified as an interim impairment indicator for goodwill during the preparation of the Company’s interim financial statements, and management performed an interim impairment test, which indicated that the Company’s goodwill was impaired. Accordingly, an impairment charge of $5.4 million was recorded during the quarter ended May 2, 2020 to reduce goodwill to $6.8 million.

~~Other~~Accounts Payable and other current liabilities consist of the following:

(In thousands)	November 2, 2019		February 2, 2019		October 31, 2020		February 1, 2020
Accounts payable					$	3,955	$	2,814
Accrued employee compensation and benefits	$	363	$	376		164		413
Restructuring plan liabilities		1,602		3,003		854		1,677
Income taxes payable		486		473		306		291
Current lease obligations		564		—
Other liabilities		770		862		866		1,087
	$	3,785	$	4,714	$	6,145	$	6,282

The Company incurred restructuring charges in Fiscal 2018 and Fiscal 2017 related to the Hi-Tec Acquisition and its integration into the Company’s ongoing operations (the “Hi-Tec Plan”).Restructuring charges were also incurred ~~in the fourth quarter of Fiscal 2018 as the Company’s staff was realigned to appropriately support its then current business (the “FY18 Plan”). Furthermore,~~ during Fiscal 2019 as the Company took additional steps designed to improve its organizational efficiencies by eliminating redundant positions and unneeded facilities, and by terminating various consulting and marketing contracts (the “FY19 Plan”).

~~Charges~~Adjustments to, and payments against, the restructuring plan obligations were as follows:

On August 3, 2018, the Company entered into a senior secured credit facility, which provided a $40.0 term loan, and $13.5 million of subordinated promissory notes (the “Junior Notes”). The credit facility was amended on January 30, 2019 to provide an additional term loan of $5.3 million. The term loans ~~mature in August 2021 and~~generally require quarterly principal payments and monthly interest payments based on LIBOR plus a margin. The additional $5.3 million term loan also requires interest of 3.0% payable in kind with such interest being added to the principal balance of the loan. The term loans are secured by substantially all the assets of the Company and are guaranteed by the Company’s subsidiaries. The Junior Notes mature in November 2021, and they are secured by a second priority lien on substantially all of the assets of Company and guaranteed by the Company’s subsidiaries. Interest is generally payable monthly on the Junior Notes, but no0 periodic amortization payments are required. The Junior Notes are subordinated in rights of payment and priority to the term loans but otherwise have economic terms substantially similar to the term loans. ~~Excluding the interest payable in kind, the~~The weighted-average interest rate on both the term loans and Junior Notes at ~~November 2, 2019~~October 31, 2020 was ~~11.1%~~11.0%.

The term loans are generally subject to a borrowing base and include financial covenants and obligations regarding the operation of the Company’s business that are customary in facilities of this type, including limitations on the payment of dividends. Financial covenants include the requirement to maintain specified levels of Adjusted EBITDA, as defined in the agreement, and maintain a specified level of cash on hand. The Company is required to maintain a borrowing base comprising the value of the Company’s trademarks that exceeds the outstanding balance of the term loans. If the borrowing base is less than the outstanding term loans at any measurement period, then the Company would be required to repay a portion of the term loans to eliminate such shortfall. Events of default include, among other things, the occurrence of a change of control of the Company, and a default under the term loans agreement would also trigger a default under the Junior Notes agreements.

The Company’s operating results for the twelve months ended November 2, 2019 and February 1, 2020 resulted in ~~a violation~~violations of the minimum Adjusted EBITDA covenant, which are events of default, and the valuation report prepared by the Company’s senior secured lender during the first quarter of Fiscal 2021 indicated that the Company’s borrowing base is ~~an event of default.~~less than the outstanding term loan balance. However, the

Company’s senior secured lender has agreed to forbear from enforcing its rights under the senior secured credit facility in response to these events of default and borrowing base shortfall, and on December 15, 2020, the senior secured credit facility was amended, and the forbearance agreement was extended through ~~February 28, 2020.~~ ~~(See~~December 31, 2020 or March 31, 2021 if certain milestones are met (the Forbearance Agreement). (See Note 1, Liquidity and Going ~~Concern.)~~Concern). In conjunction with the Forbearance Agreement, the senior secured credit facility was amended to (i) reduce the Adjusted EBITDA requirement to $6.5 million during the forbearance period, (ii) reduce the minimum cash requirement to $100,000 during the forbearance period, (iii) defer the quarterly principal payment otherwise due during the forbearance period and (iv) accept interest payments in the form of additional principal rather than in cash during the forbearance period, other than approximately $85,000 per month beginning with September 1, 2020. The Forbearance Agreement requires that a portion of the Company’s federal income tax refunds expected to be received by the Company during the forbearance period be used to pay in cash the interest previously accrued and added to the principal amount of the term loans, and also to pay down a portion of the term loans principal balance. After such federal income tax refunds are received, monthly interest will again be required in cash, and no further interest payment obligations will be deferred and added to the principal amount of the term loans. At the conclusion of the forbearance period, the Adjusted EBITDA requirement, the borrowing base requirement and the minimum cash requirement revert to the original terms of the senior secured credit facility. In exchange for these concessions, the senior lender will receive an additional fee totaling 2% of the outstanding loan balance when the debt is repaid, which together with other exit fees is expected to total approximately $2.5 million. The Forbearance Agreement accelerates the maturity date of the Company’s senior secured credit facility from August 3, 2021 to March 31, 2021 or to December 31, 2020 if certain milestones are not met. As a result of the accelerated maturity, the additional fee and other exit fees are accreting starting September 1, 2020 over the accelerated life of the loans. The Company’s Junior Note holders have agreed to accept interest payments in the form of additional principal rather than in cash from April 1, 2020 through January 1, 2021, and payments to the Junior Notes holders are generally restricted by the September 2020 Forbearance Agreement.

~~Outstanding borrowings~~Amounts due under the term loans at October 31, 2020 were ~~$44.1~~$46.1 million, including $45.8 million of principle, unamortized debt issuance costs of $1.3 million and exit fees of $1.6 million. An additional $1.0 million of exit fees are expected to accrete by the maturity date of the term loans. Amounts due under the Junior Notes at ~~November 2, 2019 with~~October 31, 2020 were $14.6 million, including $14.8 million of principle and associated unamortized debt issuance costs of ~~$2.0 million. Outstanding Junior Notes were $13.5 million at November 2, 2019 with associated unamortized debt issuance costs of $0.4~~$0.2 million. As a result of the covenant ~~violation~~violations and the short-term nature of the forbearance agreement referred to above, the ~~total amount of the Company’s long-term~~related debt is reflected as a current obligation in the Company’s ~~November 2, 2019~~October 31, 2020 consolidated balance sheet.

During the three months ended May 2, 2020 the company obtained a Paycheck Protection Program loan under the CARES Act totaling $0.7 million. A substantial portion of this loan is expected to be forgiven under provisions of the CARES Act and related rules implemented by the Small Business Administration. The Paycheck Protection Program loan bears interest at 1.0% per annum for the balance not forgiven, and it matures in April 2022. The unforgiven portion is repayable monthly starting at the earlier of the application for forgiveness or August 2021.

The Company indemnifies certain customers against liability arising from third‑party claims of intellectual property rights infringement related to the Company’s trademarks. These indemnities appear in the licensing agreements with the Company’s customers, are not limited in amount or duration and generally survive the expiration of the contracts. The Company is unable to determine a range of estimated losses that it could incur related to such indemnities since the amount of any potential liabilities cannot be determined until an infringement claim has been made.

The Company is involved from time to time in various claims and other matters incidental to the Company’s business, the resolution of which is not presently expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity. Estimated reserves for contingent liabilities, including threatened or pending litigation, are recorded as liabilities in the financial statements when the outcome of these matters is deemed probable and the liability is reasonably estimable.

The Company has non-cancelable operating lease agreements with various expiration dates ~~through December 31, 2026~~ for office space and equipment. Certain lease agreements include options to renew, which are not reasonably certain to be exercised and therefore are not factored into our determination of the present value of lease obligations.

Operating lease costs are included as a component of selling, general and administrative expense and were $0.1 million and ~~$0.4~~$0.3 million, excluding variable lease costs and sublease income, for the three and nine months ended October 31, 2020. Operating lease costs were $0.1 million and $0.4 million for the three and nine months ended November 2, ~~2019, respectively.~~2019. Cash paid for operating lease obligations is consistent with operating lease costs for the period. ~~Total lease expense recognized prior to our adoption of Topic 842 was $0.2 million and $0.6 million for the three and nine months ended November 3, 2018, respectively.~~

As of ~~November 2, 2019,~~October 31, 2020, the weighted-average remaining lease term is ~~6.2~~3.9 years, and the weighted-average IBR is 8.8%. The right-of-use assets as of ~~November 2, 2019~~October 31, 2020 was ~~$4.2~~$1.3 million. Future minimum commitments under non-cancelable operating leases as of ~~November 2, 2019~~October 31, 2020 are as follows:

Revenues by geographic area based upon the licensees’ country of domicile comprise the following:

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
(In thousands)	November 2, 2019		November 3, 2018		November 2, 2019		November 3, 2018		October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
U.S. and Canada	$	1,327	$	1,505	$	4,049	$	4,908	$	1,093	$	1,358	$	3,149	$	4,080
Europe		851		1,136		2,798		4,358
Middle East, India and Africa		636		926		2,107		3,107
Asia/Pacific		1,402		1,431		4,345		3,260
EMEA (1)										1,202		1,143		3,526		3,964
Asia-Pacific										1,003		1,723		3,625		5,261
Latin America		678		844		2,250		2,684		752		670		2,163		2,244
Total	$	4,894	$	5,842	$	15,549	$	18,317	$	4,050	$	4,894	$	12,463	$	15,549
(1) EMEA includes Europe, Middle East and Africa

Long‑lived assets located in the United States and outside the United States amount to ~~$0.2~~$0.1 million and ~~$0.3~~$0.1 million, respectively, at ~~November 2, 2019~~October 31, 2020 and $0.2 million and ~~$0.4~~$0.2 million, respectively, at February ~~2, 2019.~~1, 2020.

Deferred revenue totaled ~~$3.9~~$1.6 million and ~~$2.2~~$3.8 million at ~~November 2, 2019~~October 31, 2020 and February ~~2, 2019,~~1, 2020, respectively. Revenue recognized in the three and nine months ended October 31, 2020 that was previously included in deferred revenue was $0.7 million and $2.7 million, respectively. Revenue recognized in the three and nine months ended November 2, 2019 that was previously included in deferred revenue was $0.1 million and $1.5 million, respectively. ~~Revenue recognized in~~

Two licensees accounted for approximately 31% of accounts receivable at October 31, 2020. Three licensees accounted for approximately 46% and two licensees for approximately 34% of revenues for the three and nine months ended ~~November 3, 2018 that was previously included in deferred revenue was $0.2 million and $2.1 million.~~

~~Three~~October 31, 2020, respectively. Four licensees accounted for approximately ~~37%~~45% of accounts receivable at ~~November 2, 2019, and two~~February 1, 2020. Two licensees accounted for approximately 29% and 27% of revenues for the three and nine months ended November 2, ~~2019, respectively. Two licensees accounted for approximately 29% of accounts receivable at February 2,~~ 2019. ~~Three licensees accounted for approximately 32% of revenues for the three months ended November 3, 2018, and two licensees for approximately 20% of revenues for the nine months ended November 3, 2018.~~

Basic earnings (loss) per share (“EPS”) is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, while diluted EPS additionally includes the dilutive effect of outstanding stock options and warrants as if such securities had been exercised at the beginning of the period. The computation of diluted common shares outstanding excludes outstanding stock options and warrants that are anti‑dilutive.

Each reporting period, the Company evaluates the realizability of its deferred tax ~~assets. As of November 2, 2019, the Company continued to maintain~~assets, and in recent years has maintained a full valuation allowance against its deferred tax assets in the United States and the foreign subsidiaries acquired in the Hi-Tec Acquisition. However, the CARES Act allows the Company’s historical net operating loss in Fiscal 2018 to be carried back two years and the Company’s net operating losses for Fiscal 2019, Fiscal 2020 and Fiscal 2021 to be carried back five years. The Company recognized an income tax benefit of $9.4 million in the nine months ended October 31, 2020, which includes the estimated tax refunds expected to result from these carryback claims. The Company continues to maintain a full valuation allowance against its other deferred tax assets. These valuation allowances will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that these other deferred tax assets will be realized.

~~As of November 2, 2019, the reserve for uncertain~~The Company’s deferred tax ~~positions resulting from unrecognized tax benefits~~liabilities related to its indefinite lived Hi-Tec and Magnum trademarks cannot be used as a source of taxable income to support the realization of the Company’s ~~Hi-Tec subsidiaries was $3.3 million. There was no change~~deferred tax assets. Accordingly, the valuation allowance reserves for the deferred tax assets in ~~the three months ended November 2, 2019~~these foreign jurisdictions and results in a ~~decrease of $0.1 million in~~“naked credit” for these indefinite-lived trademarks. The impairment charges recorded during the nine months ended ~~November 2, 2019,~~October 31, 2020 for these indefinite-lived trademarks reduced the naked credit, which resulted in an income tax benefit during the ~~Company’s liability for uncertain tax positions.~~

~~In November 2019, the Company entered into a lease termination agreement for its office building in Amsterdam. The lease will terminate as of December~~nine months ended October 31, 2019 rather than continue through December 2026. The compensation for early termination is a payment of $0.6 million and a subordinated note of $0.3 million, excluding VAT, reducing the Company’s lease obligation by $2.4 million.2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ~~ANALYSI~~SANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this discussion and analysis, “Apex Global Brands”, the “Company”, “we”, “us” and “our” refer to Apex Global Brands Inc. and its consolidated subsidiaries, unless the context indicates or requires otherwise. Additionally, “Fiscal ~~2020”~~2021” refers to our fiscal year ending ~~February 1, 2020~~January 30, 2021, and “Fiscal ~~2019”~~2020” refers to our fiscal year ended February ~~2, 2019.~~1, 2020. The following discussion and analysis should be read together with the unaudited condensed consolidated financial statements and the related notes included in this report. The information contained in this quarterly report on Form 10‑Q is not a complete description of our business or the risks associated with an investment in our securities. For additional context with which to understand our financial condition and results of operations, refer to management’s discussion and analysis of financial condition and results of operations (“MD&A”) contained in our Annual Report on Form 10‑K, for the fiscal year ended February ~~2, 2019,~~1, 2020, which was filed with the Securities and Exchange Commission (“SEC”) on April ~~23, 2019,~~30, 2020, as well as the consolidated financial statements and notes contained therein (collectively, our “Annual Report”). In preparing this MD&A, we presume that readers have access to and have read the MD&A in our Annual Report pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S‑K. The section entitled “Risk Factors” set forth in Item 1A of our Annual Report and similar disclosures in our other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition.

In addition to historical information, this discussion and analysis contains “forward‑looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical facts that relate to future events or circumstances or our future performance. The words “anticipates”, “believes”, “estimates”, “plans”, “expects”, “objectives”, “goals”, “aims”, “hopes”, “may”, “might”, “will”, “likely”, “should” and similar words or expressions are intended to identify forward‑looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward‑looking statements in this discussion and analysis include statements about, among other things, our future financial and operating performance, our future liquidity and capital resources, our business and growth strategies and anticipated trends in our business and our industry. Forward-looking statements are based on our current views, expectations and assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, achievements or stock prices to be materially different from any future results, performance, achievements or stock prices expressed or implied by the forward‑looking statements. Such risks, uncertainties and other factors include, among others, those described in Item 1A, “Risk Factors” in this report and in our Annual Report. In addition, we operate in a competitive and rapidly evolving industry in which new risks emerge from time to time, and it is not possible for us to predict all of the risks we may face, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors could cause actual results to differ from our expectations. As a result of these and other potential risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events because some or all of them may turn out to be wrong. Forward-looking statements speak only as of the date they are made and, except as required by law, we undertake no obligation to update any of the forward‑looking statements we make in this discussion and analysis to reflect future events or developments or changes in our expectations or for any other reason.

Apex Global Brands is a global marketer and manager of a portfolio of fashion and lifestyle brands that we own, brands that we create, and brands that we elevate for others. Company-owned brands, which are licensed in multiple consumer product categories and retail channels around the world, include Cherokee, Hi-Tec, Magnum, 50 Peaks, Interceptor, Hawk Signature, Tony Hawk, ~~Liz Lange, Completely Me by Liz Lange,~~ Everyday California, Carole Little, Sideout and others. As part of our business strategy, we also regularly evaluate other brands and trademarks for acquisition into our portfolio. We believe the strength of our brand portfolio and platform of design, product development and marketing capabilities has made us one of the leading global licensors of style-focused lifestyle brands for apparel, footwear, accessories and home products.

We have licensing relationships with recognizable retail partners in their global locations to provide them with the rights to design, manufacture and sell products bearing our brands. We refer to this strategy as our “Direct to Retail” or “DTR” licensing model. We also have license agreements with manufacturers and distributors for the manufacture and sale of products bearing our brands, which we refer to as “wholesale” licensing. In addition, we have relationships with other retailers that sell products we have developed and designed. As a brand marketer and manager, we do not directly sell product ourselves. Rather, we earn royalties when our licensees sell licensed products bearing the trademarks that we own or that we have designed and developed.

For certain of our key legacy brands, including Cherokee, Hawk Signature and Tony Hawk, ~~and Liz Lange,~~ we ~~are shifting~~have shifted our strategy for U.S. sales from DTR licensing to wholesale licensing. In addition, we are primarily pursuing a wholesale licensing strategy for global sales offor our ~~recently acquired~~ Hi-Tec, Magnum, Interceptor and 50 Peaks brands. We believe these arrangements signal a significant shift in our business strategy from our historical focus on DTR licensing for all of our brands to a substantially greater focus on wholesale licensing for many of our key brands. Although we believe these new wholesale licensing arrangements ~~may~~ help to diversify our sources of revenue and licensee or other partner relationships, and may provide additional avenues to obtain brand recognition and grow our Company ~~this shift in our strategy also exposes us to a number of risks, and it has had a negative effect on our results of operations as we transition to our new licensees.~~

We derive revenues primarily from licensing our trademarks to retailers ~~manufacturers~~ and ~~distributors~~wholesalers all over the world, and we are continually pursuing relationships with new retailers, ~~manufacturers~~wholesalers and ~~distributors~~others in order to expand the reach of our existing brands into new geographic and customer markets and new types of stores and other selling mediums. As of ~~November 2, 2019,~~October 31, 2020, we had 4544 continuing license agreements in approximately ~~140~~144 countries. These arrangements include relationships with Walmart, Soriana, Comercial Mexicana, TJ Maxx, Tottus, ~~Nishimatsuya, Big 5, Academy,~~Arvind, Reliance Retail, Tharanco, Martes Sports, Hi-Tec Europe, Hi-Tec South Africa, JD Sports, Black’s and ~~Lidl.~~Lidl. As of ~~November 2, 2019,~~October 31, 2020, we had contractual rights to receive ~~over $50.0~~$56.1 million of forward-facing minimum royalty revenues, ~~over the next nine years,~~ excluding any revenues that may be guaranteed in connection with future contract renewals.

The terms of our royalty arrangements vary for each of our licensees. We receive quarterly royalty statements and periodic sales and purchasing information from our licensees. However, our licensees are generally not required to provide, and typically do not provide, information that would enable us to determine the specific reasons for period‑to‑period fluctuations in sales or purchases. As a result, we do not typically have sufficient information to determine the effects on our operations of changes in price, volume or mix of products sold.

Our business has been materially adversely affected by the effects of the global pandemic of COVID-19 and the related protective public health measures that generally began in March 2020. Our business depends upon purchases and sales of our branded products by our licensees, and the prevalence of shelter-in-place and similar orders in the regions where our products are sold, together with the closure of many of our licensees’ or their customers’ stores, have resulted in significant declines in our royalties, which will likely continue for some period of time, and various licensees of ours have requested extensions of time for them to pay royalties due to us. We believe the impact of the global pandemic increases the uncertainty around our ability to negotiate future renewals with our licensees on favorable terms. Our licensees manufacture and distribute goods that carry our brands, and the temporary closures of the facilities used by our licensees to perform these functions could cause further or extended declines in sales and royalties. The shelter-in-place orders had been eased in various regions where our products are sold, which lessened the negative effect of the pandemic on our licensees’ businesses and accordingly reduced the negative effect on our royalty revenues and cash flows. However, in recent weeks, shelter-in-place orders and other restrictions have been reinstituted in many parts of the world where the effects of the pandemic have worsened, which we anticipate will extend the adverse effects of the pandemic on our financial results. The extent and duration of these new shelter-in-place orders and other restrictions is uncertain.

In response to the decline in revenues, we have implemented cost savings measures, including pay reductions, employee furloughs and other measures. We can provide no assurance that these cost savings measures will not cause our business operations and results to suffer. Our current forecasts indicate that we will generally be able to maintain our profit margins as a result of these efforts, even though the amount of anticipated profit is lower. It is not possible to predict with certainty the impact that the shelter-in-place orders and other business restrictions will have on our licensees and, therefore, our royalty revenues in the future. The ultimate impact will be greater the longer these restrictions remain in place.

The decline and anticipated decline in our revenues also exposes us to the risk that we will remain non-compliant with the covenants in our credit facility, which creates risk that our lender will exercise its rights to accelerate the amounts payable and foreclose on our assets. For further information, refer to the credit facilities and CARES Act benefits section below under the caption, Liquidity and Capital Resources.

We have not been designated as an essential business, and therefore our offices in Sherman Oaks, California and Amsterdam in the Netherlands have been closed. However, the nature of the work performed by our employees does not require us to assemble in our facilities, and we have successfully implemented work-from-home strategies using technologies that we generally had in place before the onset of the pandemic. These strategies may result in inefficiencies and lost opportunities, but they are not expected to materially affect our internal control over financial reporting. In previous years, we have successfully implemented cloud-based accounting systems that provide for remote access. We are also unable to travel to meetings with our licensees or their customers, which historically has been an important component of our business strategy. Our use of video conferencing technologies has been expanded and has proven effective, yet business opportunities may be diminished or lost due to the lack of in-person contact.

In March 2020, the federal government passed the CARES Act, which has several provisions that have been, and are expected to be, beneficial to us. In April 2020, we received a $0.7 million loan under the Paycheck Protection Program that is being implemented by the Small Business Administration and numerous commercial banks across the country. We anticipate that a substantial portion of this loan will be forgiven based on the amount we incur for payroll, rent and utilities in the weeks following the grant date of the loan. The portion of the loan that is not forgiven will bear interest at 1.0% per annum and will mature April 2022.

The CARES Act also modified federal income tax regulations related to the carryback of net operating losses. We incurred net operating losses in Fiscal 2018, Fiscal 2019, Fiscal 2020, and thus far in Fiscal 2021, which can be carried back either two or five years to receive refunds of federal income taxes previously paid. Our current estimate of federal income tax refunds available to us is approximately $9.1 million, which is subject to change, and is expected to be received in various installments as our carryback claims and amended returns are received and processed by the Internal Revenue Service. The timing of such refunds cannot be assured.

We typically enter into license agreements with retailers ~~manufacturers~~ and ~~distributors~~wholesalers for a certain brand in specific product categories over explicit territories, which can include one country or groups of countries and territories. Our revenues by geographic territory are as follows:

Three Months Ended

Nine Months Ended

(In thousands, except percentages)

November 2, 2019

November 3, 2018

November 2, 2019

November 3, 2018

United States and Canada

$

1,327

27.1

%

$

1,505

25.8

%

$

4,049

26.0

%

$

4,908

26.7

%
Europe

851

17.4

%

1,136

19.4

%

2,798

18.0

%

4,358

23.8

%
Middle East, India and Africa

636

13.0

%

926

15.9

%

2,107

13.6

%

3,107

17.0

%
Asia/Pacific

1,402

28.6

%

1,431

24.5

%

4,345

27.9

%

3,260

17.8

%
Latin America

678

13.9

%

844

14.4

%

2,250

14.5

%

2,684

14.7

%
Revenues

$

4,894

100.0

%

$

5,842

100.0

%

$

15,549

100.0

%

$

18,317

100.0

%

	Three Months Ended								Nine Months Ended
(In thousands, except percentages)	October 31, 2020				November 2, 2019				October 31, 2020				November 2, 2019
U.S. and Canada	$	1,093	26.9	%	$	1,358	27.7	%	$	3,149	25.2	%	$	4,080	26.3	%
EMEA		1,202	29.7	%		1,143	23.4	%		3,526	28.3	%		3,964	25.5	%
Asia-Pacific		1,003	24.8	%		1,723	35.2	%		3,625	29.1	%		5,261	33.8	%
Latin America		752	18.6	%		670	13.7	%		2,163	17.4	%		2,244	14.4	%
Total	$	4,050	100.0	%	$	4,894	100.0	%	$	12,463	100.0	%	$	15,549	100.0	%

~~Revenues in~~ United States and ~~Canada no longer include revenues from our Flip Flop Shops franchise business, which the Company sold in June 2018. Flip Flop Shops royalties contributed $0.3 million~~Canada. Our wholesale licensees in the ~~nine months ended November 3, 2018. Our Europe royalties declined in the three~~United States experienced sales decreases, and ~~nine months ended November 2, 2019 primarily as a result of~~hence our European licensees being negatively affected by Brexit, and from a large initial order of Cherokee products by a large retailer in Europe that did not repeat in the current year. Our revenues in the Middle East, India and Africa include revenues from our Cherokee licensee in South Africa that expired at the end of Fiscal 2019 and has yet to be replaced. Our royalty revenues in Asia grew as a result of our new product development and design services agreement with a major retailer in the People’s Republic of China. We are providing our product design and development expertise for a brand that they own, which we believe will efficiently enhance their retail operations.

Sales of products by certain of our licensees that operate in Europe are being negatively affected by the economic uncertainty surrounding Brexit. We believe this had a negative effect on these licensees’ businessesdecreased, during the three and nine months ended ~~November 2, 2019~~October 31, 2020 from the impact of the various shelter-in-place orders related to the COVID-19 pandemic. Furthermore, a substantial portion of our royalty revenues in the U.S. and Canada come from wholesale license arrangements for the sale of footwear bearing our Hi-Tec, Magnum and Interceptor brands. Our royalty revenues from these categories have decreased in comparison to the prior year as our licensees adapt to the new tariff and retail environment.

EMEA. Sales of products by our licensees that operate in Europe, the Middle East and Africa were negatively affected by shelter-in-place orders related to the COVID-19 pandemic, which had a corresponding negative impact on our royalty revenues ~~for that same period.~~ during the three and nine months ended October 31, 2020.

Asia-Pacific. Our Cherokee licensee in Japan opted to not renew their license at the end of Fiscal 2020. This ~~trend may continue into future quarters. Furthermore,~~resulted in a decrease in our royalty revenues during the ~~United States has increased tariff rates on apparel~~three and ~~footwear. We believe our licensees who use manufacturing facilities in countries subject~~nine months ended October 31, 2020 and is expected to increased tariffs are taking proactive steps to offset the potential impact of higher tariffs, including moving production to countries not subject to higher tariffs and negotiating lower costs with existing suppliers. Nonetheless, these higher tariffs may result in higher prices and a corresponding slow-down in retail sales of products bearing our trademarks, which in turn could result in lower royalty ~~revenues.~~revenues for the full year of Fiscal 2021.

Latin America. Our royalty revenues in Latin America resulted primarily from our Cherokee Brand and Everyday California licensees in Mexico, Peru and Chile. Our Hi-Tec and Magnum brands are also distributed in various other countries in Latin America.

Sales of products by most of our licensees are being negatively affected by the numerous shelter-in-place orders related to the COVID-19 pandemic, which have depressed wholesale and retail sales of footwear, apparel and related accessories. This had a corresponding negative impact on our royalty revenues in the three and nine months ended October 31, 2020. This trend is expected to continue into future quarters until the shelter-in-place orders are lifted and consumer demand is restored to pre-pandemic levels.

The table below contains certain information about our continuing operations from our condensed consolidated statements of operations along with other data and percentages. Historical results are not necessarily indicative of results to be expected in future periods.

	Three Months Ended										Nine Months Ended										Three Months Ended											Nine Months Ended
(In thousands, except percentages)	November 2, 2019					November 3, 2018					November 2, 2019					November 3, 2018					October 31, 2020					November 2, 2019						October 31, 2020						November 2, 2019
Revenues:
Cherokee	$	1,485		30.3	%	$	1,956		33.5	%	$	4,918		31.7	%	$	7,559		41.3	%	$	827		20.4	%	$	1,485		30.3		%	$	2,586		20.7		%	$	4,918		31.7		%
Hi-Tec, Magnum, Interceptor and 50 Peaks		2,481		50.7	%		2,986		51.1	%		7,760		49.9	%		8,568		46.7	%		2,339		57.8	%		2,481		50.7		%		7,012		56.4		%		7,760		49.9		%
Hawk		68		1.4	%		145		2.5	%		241		1.5	%		471		2.6	%		94		2.3	%		68		1.4		%		302		2.4		%		241		1.5		%
Other brands		860		17.6	%		755		12.9	%		2,630		16.9	%		1,719		9.4	%		790		19.5	%		860		17.6		%		2,563		20.6		%		2,630		16.9		%
Total revenues		4,894		100.0	%		5,842		100.0	%		15,549		100.0	%		18,317		100.0	%		4,050		100.0	%		4,894		100.0		%		12,463		100.0		%		15,549		100.0		%
Operating expenses:
Selling, general and, administrative expenses		3,193		65.2	%		3,234		55.4	%		10,117		65.1	%		11,577		63.2	%		2,291		56.6	%		3,193		65.2		%		7,288		58.4		%		10,117		65.0		%
Stock-based compensation		153		3.1	%		241		4.1	%		876		5.6	%		666		3.6	%		110		2.7	%		153		3.1		%		405		3.2		%		876		5.6		%
Business acquisition and integration costs		73		1.5	%		—		-	%		284		1.8	%		307		1.7	%
Transaction and other costs																						654		16.1	%		73		1.5		%		654		5.2		%		284		1.8		%
Restructuring charges		138		2.8	%		—		-	%		180		1.2	%		5,615		30.7	%		—		—	%		138		2.8		%		(97	)	(0.8	)	%		180		1.2		%
Intangible asset impairment charge		5,000		102.2	%		—		-	%		5,000		32.2	%		—		-	%
Loss (gain) on sale of assets		—		-	%		25		0.4	%		—		-	%		(546	)	-3.0	%
Intangible assets and goodwill impairment charges																						4,607		113.8	%		5,000		102.2		%		14,407		115.6		%		5,000		32.2		%
Depreciation and amortization		232		4.7	%		292		5.0	%		743		4.8	%		1,223		6.7	%		223		5.5	%		232		4.7		%		668		5.4		%		743		4.8		%
Total operating expenses		8,789		179.5	%		3,792		64.9	%		17,200		110.6	%		18,842		102.9	%		7,885		194.7	%		8,789		179.5		%		23,325		187.1		%		17,200		110.6		%
Operating income (loss)		(3,895	)	-79.6	%		2,050		35.1	%		(1,651	)	-10.6	%		(525	)	-2.9	%
Interest expense and other expense		(2,241	)	-45.8	%		(1,896	)	-32.5	%		(6,676	)	-42.9	%		(9,226	)	-50.3	%
Operating loss																						(3,835	)	-94.7	%		(3,895	)	(79.5	)	%		(10,862	)	-87.2		%		(1,651	)	(10.6	)	%
Interest and other expense, net																						(2,922	)	-72.1	%		(2,241	)	(45.8	)	%		(7,682	)	-61.6		%		(6,676	)	(43.0	)	%
Loss before income taxes		(6,136	)	-125.4	%		154		2.6	%		(8,327	)	-53.6	%		(9,751	)	-53.2	%		(6,757	)	-166.8	%		(6,136	)	(125.3	)	%		(18,544	)	-148.8		%		(8,327	)	(53.6	)	%
Provision for income taxes		692		14.2	%		91		1.6	%		2,026		13.0	%		1,980		10.8	%
(Benefit) provision for income taxes																						(788	)	-19.5	%		692		14.2		%		(9,393	)	-75.4		%		2,026		13.0		%
Net loss	$	(6,828	)	-139.5	%	$	63		1.1	%	$	(10,353	)	-66.6	%	$	(11,731	)	-64.0	%	$	(5,969	)	-147.4	%	$	(6,828	)	(139.5	)	%	$	(9,151	)	-73.4		%	$	(10,353	)	(66.6	)	%
Non-GAAP data:
Adjusted EBITDA⁽¹⁾	$	1,701				$	2,608				$	5,432				$	6,740				$	1,759				$	1,701					$	5,175					$	5,432

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
(In thousands)	November 2, 2019			November 3, 2018			November 2, 2019			November 3, 2018			October 31, 2020			November 2, 2019			October 31, 2020			November 2, 2019
Net loss	$	(6,828	)	$	63		$	(10,353	)	$	(11,731	)	$	(5,969	)	$	(6,828	)	$	(9,151	)	$	(10,353	)
Provision for income taxes		692			91			2,026			1,980
(Benefit) provision for income taxes														(788	)		692			(9,393	)		2,026
Interest expense		2,182			1,910			6,678			6,007			2,895			2,182			7,507			6,678
Other (income) expense, net		59			(14	)		(2	)		3,219
Other expense (income), net														27			59			175			(2	)
Depreciation and amortization		232			292			743			1,223			223			232			668			743
Intangible asset impairment charge		5,000			—			5,000			—			4,607			5,000			14,407			5,000
Loss (gain) on sale of assets		—			25			—			(546	)
Restructuring charges		138			—			180			5,615			—			138			(97	)		180
Business acquisition and integration costs		73			—			284			307
Transaction and other costs														654			73			654			284
Stock-based compensation		153			241			876			666			110			153			405			876
Adjusted EBITDA	$	1,701		$	2,608		$	5,432		$	6,740		$	1,759		$	1,701		$	5,175		$	5,432

Three and Nine ~~months~~Months Ended ~~November 2, 2019~~October 31, 2020 Compared to Three and Nine ~~months~~Months Ended November ~~3, 2018~~2, 2019

The decrease in royalty revenues in the three ~~months~~ and nine months ended ~~November 2, 2019~~October 31, 2020 compared to the three and nine months ended November ~~3, 2018~~2, 2019 was primarily due to the decrease in ~~Cherokee~~sales by our licensees related to the COVID-19 shelter-in-place orders and ~~Hi-Tec royalties from our European Licensees,~~ the ~~expiration~~non-renewal of our Cherokee license in South Africa at the end of Fiscal 2019, the impact of higher tariffs and the sale of our Flip Flop Shops franchise business in June 2018. These decreases were partially offset by revenues from our new design services agreement with a retailer in China.Japan.

Selling, general and administrative expenses ~~were~~decreased 28% to $2.3 million in the three months ended October 31, 2020 from $3.2 million in the three months ended November 2, 2019 ~~which was consistent with~~and decreased 28% to $7.3 million in the ~~three~~nine months ended ~~November 3, 2018, and decreased 13% to~~October 31, 2020 from $10.1 million in the nine months ended November 2, ~~2019 from $11.6 million in the nine months ended November 3, 2018.~~2019. These ongoing expenses include payroll, employee benefits, marketing, sales, legal, rent, information systems and other administrative costs that are part of our ~~ongoing~~current operations. ~~The decrease~~These decreases reflect the impact of cost-savings measures undertaken in ~~selling, general~~response to the COVID-19 pandemic and ~~administrative expenses for~~related shortfall in revenues, and the ~~nine-month periods was primarily due to reduced spending for payroll and administrative expenses that resulted from~~impact of our restructuring ~~plan~~plans that we implemented during the nine months ended November 3, 2018 to improve our organizational efficiencies. We also reduced the size of our board of directors, and board members received more of their compensationare continuing in ~~shares of our common stock.~~Fiscal 2021.

Stock-based compensation in the three ~~months ended November 2, 2019 was $0.2 million compared to $0.2 million in the three months ended November 3, 2018,~~ and ~~was $0.9 million in the~~ nine months ended ~~November 2, 2019 compared to $0.7~~October 31, 2020 was $0.1 million ~~in the nine months ended November 3, 2018,~~and $0.4 million, respectively, and comprises charges related to stock options, board compensation and restricted stock grants. ~~We incurred $0.1~~Transaction and other costs includes amounts related to the forbearance agreement with our senior secured lender, along with other legal costs, and amounted to $0.7 million ~~of costs~~ in the three months ended ~~November 2, 2019 and $0.3 million of costs in the nine months ended November 2, 2019 for legal and other costs related to business acquisitions and integration.~~October 31, 2020.

We own various trademarks that are considered to have indefinite lives, while others are being amortized over their estimated useful lives. We also have furniture, fixtures and other equipment that isare being amortized over their useful ~~lives. Depreciation~~lives. In connection with the first and ~~amortization decreased in the three and nine months ended November 2, 2019 compared to the three and six ended November 3, 2018 primarily due to the disposition~~third quarters of ~~our Flip Flop Shops franchise business.~~ ~~Our~~Fiscal 2021, our royalty revenues were re-projected in consideration of the estimated negative impact on our licensee’s sales from ~~Hi-Tec, Magnum~~the COVID-19 pandemic and Interceptor were significantly below previous forecasts for the three months ended November 2, 2019, which affected our revenue projections in the near term for these brands. As these trademarks have indefinite lives and are not being amortized, we updated our projected cash flows for these brands and determinedrelated shelter-in-place orders. These re-projections indicated that the fair values of ~~these~~our Hi-Tec and Magnum indefinite-lived trademarks were not in excess of their carrying values. As a result, ana non-cash impairment charge of ~~$5.0~~$4.4 million was recorded ~~during~~in the three months ended ~~November~~May 2, ~~2019~~2020, and a non-cash impairment charge of $4.6 million was recorded in the three months ended October 31, 2020, to adjust these trademarks to their estimated fair value. The forecasted impact of the COVID-19 pandemic on our future revenues is subject to change as additional information becomes available. Further impairments may be required if our revenue forecasts for our indefinite-lived trademarks are further reduced in future reporting periods.

Our assessment of the fair value of goodwill is based primarily on the relationship between our market capitalization and the book value of our equity. Our market capitalization was adversely affected during the first quarter of Fiscal 2021 because of the COVID-19 pandemic. As a result of this impairment indicator, we performed an interim impairment test, which indicated that our goodwill was impaired. As a result, we recorded a $5.4 million non-cash impairment charge in the three months ended May 2, 2020 to reduce the book value of goodwill.

Interest expense was $2.9 million in the three months ended October 31, 2020 compared to $2.2 million in the three months ended November 2, 2019, ~~compared to $1.9~~and $7.5 million in the ~~three~~nine months ended ~~November 3, 2018, and~~October 31, 2020 compared to $6.7 million in the nine months ended November 2, ~~2019~~2019. The increase in interest expense compared to ~~$6.0 million in~~ the ~~nine months ended November 3, 2018.~~ ~~This nine-month increase was~~prior year is primarily due to incremental forbearance and other exit fees. Our term loans and Junior Notes are based on LIBOR, but we are not benefitting from declining LIBOR rates because our ~~increased debt level, along with higher non-cash~~ interest ~~charges related~~rates are subject to ~~our new term loans.~~ a 2.0% LIBOR floor.

We ~~incurred approximately~~reported an income tax benefit of $0.8 million and an income tax benefit of $9.4 million in the three and ~~nine-months~~nine months ended ~~November 3, 2018 related~~October 31, 2020, respectively, compared to refinancing our former credit facility, which did not repeat in the current year. Last year’s refinancing also resulted in a $3.2 million noncash charge to other expense to write off the then remaining unamortized debt issuance costs.

~~The provision for~~ income ~~taxes was $0.7~~tax provisions of $0.7 million and $2.0 million in the three and nine months ended November 2, 2019. Congress passed the CARES Act during the three months ended May 2, 2020, which changed the federal regulations regarding the carryback of net operating losses. Our Fiscal 2018 net operating loss can now be carried back two years, and our net operating losses in Fiscal 2019, ~~compared to~~Fiscal 2020 and Fiscal 2021 can be carried back five years. We estimate these carryback claims will result in refunds of approximately $9.1 million of previously paid federal income taxes, the majority of the benefit of which was recognized during the three months ended May 2, 2020. The timing of these future cash receipts is uncertain since it is based on when the Internal Revenue Service processes our refund claims and amended returns. Even though we generated pretax losses in the three and nine months ended November 2, 2019, we did not recognize tax benefits during those periods, but we recorded income tax provisions, primarily as a ~~$0.1~~result of deferred tax valuation allowances.

Our net loss was $6.0 million and ~~$2.0~~$9.2 million in the three and nine months ended November 3, 2018. Even though we generated an operating loss in these periods, we reported tax expense because no tax benefits were recognized for tax losses in the United States and certain foreign jurisdictions dueOctober 31, 2020 compared to ~~previously established valuation allowances.~~

~~Our~~a net loss ~~was~~ $6.8 million and $10.4 million in the three and nine months ended November 2, ~~2019 compared~~2019. Our Adjusted EBITDA increased 3% to ~~net income of $0.1 million and a net loss of $11.7~~$1.8 million in the three ~~and nine~~ months ended ~~November 3, 2018, respectively. Our Adjusted EBITDA decreased 35% to~~October 31, 2020 from $1.7 million in the three months ended November 2, 2019, ~~from $2.6~~and decreased 5% to $5.2 million in the ~~three~~nine months ended ~~November 3, 2018, and decreased 19% to~~October 31, 2020 from $5.4 million in the nine months ended November 2, ~~2019 from $6.7 million in the nine months ended November 3, 2018.~~2019.

We generally finance our working capital needs and capital investments with operating cash flows, term loans and subordinated promissory ~~notes and lines of credit. In December 2016, we entered into a $50.0 million credit facility that was used to partially fund the Hi-Tec Acquisition.~~notes. On August 3, 2018, we ~~replaced that credit facility with~~entered into a $40.0 million term loan and $13.5 million of subordinated promissory notes, and on January 30, 2019, we ~~entered into~~obtained an incremental $5.3 million term loan.On December 31, 2019 we issued a $0.3 million subordinated promissory note to our former landlord as partial consideration for an early lease termination.

~~We used $2.3~~Our operating activities provided $1.1 million of cash ~~in our operating activities~~ in the nine months ended ~~November 2, 2019,~~October 31, 2020, compared to ~~$6.1~~using $2.3 million used in the nine months ended November 3, 2018. This $3.8 million decrease in cash used in operations resulted primarily from collecting less cash from our licensees during the nine months ended November 2, 2019 compared to the nine months ended November 3, 2018 when we collected cash from our sales and distribution business that was sold to International Brands Group during the fourth quarter of Fiscal 2018. This decrease in cash collections was partially offset by using less cash to fund our restructuring obligations.

~~Our investing activities of $0.2 million relate to investments in our trademarks~~ in the nine months ended November 2, 2019. ~~We generated $5.5~~This $3.4 million increase in cash provided by operating activities resulted primarily from not paying a portion of our interest expense in cash. Rather, $3.3 million was paid in kind and added to the principal balance of our long-term debt.

Our investing activities used $0.1 million of cash ~~from investing activities~~to fund trademark investments in the nine months ended October 31, 2020 compared to $0.2 million in the nine months ended November ~~3, 2018 primarily~~2, 2019.

We received $0.7 million from the proceeds of a promissory note as ~~a result~~part of ~~selling~~ the ~~remaining sales and distribution operations~~Paycheck Protection Program of ~~Hi-Tec to International Brands Group~~the CARES Act in the ~~fourth~~first quarter of Fiscal ~~2018~~2021, which was used to fund payroll expenses, employee benefits, rent and utilities. We used $1.3 million of cash in the ~~sale of~~nine months ended October 31, 2020 to make a principal payment on our ~~Flip Flop Shops franchise business in June 2018.~~

term loan and pay for certain costs related to the forbearance agreement with our senior secured lender. The principal payments ~~of $1.0 million~~ on our term loan in the nine months ended November 2, 2019 ~~were partially~~was substantially offset by $0.6 million of cash received onfrom the exercise of stock warrants. ~~Financing activities in the nine months ended November 3, 2018 includes the refinancing our of former credit facility.~~

On August 3, 2018, we replaced our previous credit facility with a combination of a new senior secured credit facility, which provided a $40.0 million term loan, and $13.5 million of subordinated secured promissory notes. On January 30, 2019, the credit facility was amended to provide an additional $5.3 million term loan. The term loans ~~mature in August 2021 and~~generally require quarterly principal payments and monthly interest payments based on LIBOR plus a margin. The additional $5.3 million term loan also requires interest of 3.0% payable in kind with such interest being added to the principal balance of the loan. The term loans are secured by substantially all of our assets and are guaranteed by our subsidiaries. The ~~$13.5 million of~~ subordinated promissory notes mature in November 2021, and they are secured by a second priority lien on substantially all of our assets and guaranteed by our subsidiaries. Interest is generally payable monthly on the subordinated

promissory notes, but no periodic amortization payments are required. The subordinated promissory notes are subordinated in rights of payment and priority to the term loan but otherwise have economic terms substantially similar to the term loans. In the first quarter of Fiscal 2021, we borrowed $0.7 under the Paycheck Protection Program of the CARES Act. The Paycheck Protection Program loan bears interest at 1.0% per annum for the balance not forgiven, and it matures in April 2022. We anticipate that a substantial portion of the loan will be forgiven under provisions under the CARES Act based on payments for payroll, rent and utilities during the period subsequent to obtaining the loan.

Excluding the interest of 3% payable in kind on the $5.3 million term loan, the weighted-average interest rate on ~~both~~ the term loans, ~~and~~the subordinated promissory notes and the Paycheck Protection Program loan at ~~November 2, 2019~~October 31, 2020 was ~~11.1%~~11.0%. ~~Outstanding~~Including deferred interest payments, outstanding borrowings under the senior secured credit facility were ~~$44.1~~$45.8 million at ~~November 2, 2019,~~October 31, 2020, and outstanding subordinated secured promissory notes were ~~$13.5~~$14.8 million. The outstanding Paycheck Protection Program loan was $0.7 million.

The term loans are subject to a borrowing base and include financial covenants and obligations regarding the operation of our business that are customary in facilities of this type, including limitations on the payment of dividends. Financial covenants include the requirement to maintain specified levels of Adjusted EBITDA, as defined in the credit agreement, ~~($9.5 million for the trailing twelve months as of February 1, 2020),~~ and maintain a minimum cash ~~balance of $1.0 million.~~balance. We are also required to maintain a borrowing base comprising the value of our trademarks that exceeds the outstanding balance of the term ~~loan.~~loans. If the borrowing base is less than the outstanding term ~~loan~~loans at any measurement period, then we would be required to repay a portion of the term loan to eliminate such shortfall.

Our operating results for the twelve months ended November 2, 2019 and twelve months ended February 1, 2020 resulted in ~~a violation~~violations of ~~this~~the minimum Adjusted EBITDA covenant, which ~~is an event~~are events of ~~default.~~default, and the valuation report prepared by our senior secured lender during the three months ended May 2, 2020 indicated that our borrowing base was less than the outstanding balance of the term loans. However, our senior lender has agreed to forbear from enforcing its rights under the senior secured credit facility, ~~through February 28, 2020. Revenues for~~and on December 15, 2020, the three months ended November 2, 2019 were lower than our previous forecasts due to lower than expected royalties reported by our licensees, which have been negatively impacted by the economic uncertainty surrounding Brexit, global trade wars and increasing tariffs on footwear and apparel,senior secured credit facility was amended, and the ~~weakening of~~forbearance agreement was extended through December 31, 2020 or March 31, 2021 if certain milestones are met. In conjunction with the ~~British pound sterling and euro in relation~~extended forbearance agreement, the senior secured credit facility was amended to ~~the United States dollar. In response, we have enacted certain cash savings measures, but such actions were not adequate to maintain compliance with~~reduce the Adjusted EBITDA ~~covenant. Our current projections indicate that there is a significant risk of further violations of the minimum Adjusted EBITDA covenant or minimum cash covenant beyond~~requirement from $9.5 million to $6.5 million during the forbearance period and reduce our minimum cash requirement to $100,000 during the forbearance period. The quarterly principal payment due during the extended forbearance period was deferred, and other than approximately $85,000 per month beginning with September 1, 2020, interest payments due during the forbearance period will be paid in the form of additional principal rather than in cash. The extended forbearance agreement requires that a portion of our federal income tax refunds expected to be received during the forbearance period be used to pay in cash the interest previously accrued and added to the principal amount of the term loans, and also to pay down a portion of the term loans principal balance. After such federal income tax refunds are received, monthly interest will again be required in cash, and no further interest payment obligations will be deferred and added to the principal amount of the term loans. At the conclusion of the forbearance period, the Adjusted EBITDA requirement, the borrowing base requirement and the minimum cash requirement revert to the original terms of the senior secured credit facility. In exchange for these concessions, the senior lender will receive an additional fee totaling 2% of the outstanding loan balance when the debt is repaid, which together with other exit fees is expected to total approximately $2.5 million. The extended forbearance agreement accelerates the maturity date of the senior secured credit facility from August 3, 2021 to March 31, 2021 or to December 31, 2020 if certain milestones are not met. As a result of the accelerated maturity, the additional fee and other exit fees are accreting starting September 1, 2020 over the accelerated life of the loans. The Company’s Junior Note holders agreed to ~~with our~~accept interest payments in the form of additional principal rather than in cash from April 1, 2020 through January 1, 2021, and payments to the Junior Notes holders are generally restricted by the forbearance agreements. We are required during the forbearance period to evaluate strategic alternatives designed to provide liquidity to refinance the term loans under the senior ~~lender. Because of this uncertainty, there is substantial doubt about our ability to continue as a going concern.~~ secured credit facility.

Future compliance failures under our senior secured credit facility would subject us to significant risks, including the right of our senior lender to terminate ~~its obligation~~their obligations under the ~~Credit Facility,~~senior secured credit facility, declare all or any portion of the borrowed amounts then outstanding to be accelerated and due and payable, and/or exercise any other right or remedies itthey may have under applicable law, including foreclosing on our assets that serve as collateral for the ~~loans.~~borrowed amounts. If any of these rights were to be exercised, or if we are unable to refinance our senior secured credit facility by the accelerated maturity of March 31, 2021, which could be further accelerated to December 31, 2020 if certain milestones are not met, our financial condition and ability to continue operations would be materially jeopardized. If we are unable to meet our obligations to our lenders and other creditors, we may have to significantly curtail or even cease operations. We are ~~in negotiations for new and amended licenses that would increase our working capital and Adjusted EBITDA, and we are~~ evaluating ~~other~~ potential sources of working capital, ~~including~~and we believe that the ~~disposition~~NOL carryback provisions of ~~certain assets.~~the CARES Act will result in additional liquidity, although the timing of these cash inflows is uncertain. Our NOL carryback claims are expected to result in federal income tax refunds of approximately $9.1 million. We estimated that receipt of these tax refunds could range from one to 12 months from the date of this filing. Our plans also include ~~further negotiations with~~the evaluation of strategic alternatives to refinance our ~~lenders and other potential sources of capital, and we have engaged an advisory firm to advise us regarding our business plans, risks and opportunities.~~debt or otherwise enhance shareholder value. There is no assurance that we will be able to execute these plans, orand because of this uncertainty, there is substantial doubt about our ability to continue ~~to operate~~ as a going concern.

In connection with the refinancing on August 3, 2018, we issued warrants to purchase shares of our common stock to our term loan lenders and to certain holders of our subordinated promissory notes. In the nine months ended November 2, 2019, 415,000 stock warrant shares (adjusted for the reverse stock split described in Note 1 to our condensed consolidated financial statements) were exercised and converted into our common stock for a cash exercise price of $0.6 million.

In November 2019, we entered into a lease termination agreement for our office building in Amsterdam. The lease will terminate as of December 31, 2019 rather than continue through December 2026. The compensation for early termination is a payment of $0.6 million and a subordinated note of $0.3 million, excluding VAT, reducing our lease obligation by $2.4 million.

This MD&A is based upon our condensed consolidated financial statements, which are included in this report. The preparation of these condensed financial statements requires ~~management~~us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Refer to Note 3 of our condensed consolidated financial statements filed herewith regarding our indefinite lived trademarks ~~filed herewith~~and goodwill, and our Annual Report on Form 10-K for a discussion of our critical accounting policies and recent accounting pronouncements.

We maintain disclosure controls and procedures, as defined under Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~November 2, 2019.~~October 31, 2020.

During the most recently completed fiscal quarter, no changes in our internal control over financial reporting materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures and Internal Control Over Financial Reporting

In designing our disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of our controls and procedures must reflect that resource constraints exist, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of these inherent limitations, our disclosure and internal controls may not prevent or detect all instances of fraud, misstatements or other control issues. In addition, projections of any evaluation of the effectiveness of disclosure or internal controls to future periods are subject to risks, including, among others, that controls may become inadequate because of changes in conditions or that compliance with policies or procedures may deteriorate.

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that could harm our business. We are not currently aware of any such legal proceedings or claims to which we are a party or to which our property is subject that we believe will have, individually or in the aggregate, a material effect on our business, financial condition or results of operations.

The occurrence of any of the risks, uncertainties and other factors described in this report, our Annual Report and the other documents we file with the SEC could have a material adverse effect on our business, financial condition, results of operations and stock price, and could cause our future business, financial condition, results of operations and stock price to differ materially from our historical results and the results contemplated by any forward-looking statements we may make herein, in any other document we file with the SEC or in any press release or other written or oral statement we may make. You should carefully consider all of these risks and the other information in this report and the other documents we file with the SEC before making any investment decision with respect to our securities. The risks described are not the only ones we face. The risks described below and elsewhere in this report are not the only ones we face. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business, financial condition and results of operations or cause our stock price to decline.The following disclosure as well as the risks described in Item 1A. “Risk Factors” in our Quarterly Report on Form 10‑Q, for the quarter ended August 3, 2019, which was filed with the SEC on September 17, 2019 (the “Q2 10-Q”), and our Quarterly Report on Form 10‑Q, for the quarter ended May 4, 2019, which was filed with the SEC on June 18, 2019 (the “Q1 10-Q”), only describes our material risks that have undergone material changes since the date on which our Annual Report was filed with the SEC. As a result, you should carefully review Item 1A. “Risk Factors” in our Annual Report ~~our Q2 10-Q and our Q1 10-Q~~ for descriptions of additional material risks and uncertainties to which our business and our common stock are subject.

We face risks related to the impact of the COVID-19 pandemic and the related protective public health measures.

In March 2020, the World Health Organization recognized the outbreak of a novel coronavirus, COVID-19, as a pandemic. Our business has been materially adversely affected by the effects of COVID-19 and the related protective public health measures. Our business depends upon purchases and sales of our branded products by our licensees, and the prevalence of shelter-in-place and similar orders in the regions where our products are sold, together with the closure of many of our licensees’ or their customers’ stores, have resulted in significant declines in our royalties, which will likely continue for some period of time. Various licensees of ours have requested extensions of time for them to pay royalties due to us, and we believe the impact of the global pandemic increases the uncertainty around our ability to negotiate future renewals with our licensees on favorable terms. In response to the decline in revenues, we have implemented cost savings measures, including pay reductions, employee furloughs and other measures. We can provide no assurance that these cost savings measures will not cause our business operations and results to suffer. The ~~Nasdaq Hearings Panel~~decline and anticipated decline in our revenues also exposes us to the risk that we will remain non-compliant with the covenants in our credit facility, which creates risk that our lender will exercise its rights to accelerate the amounts payable and foreclose on our assets. Our employees have limited access to our offices and are mostly working remotely, which may result in inefficiencies and lost opportunities. In addition, the responses of the federal, international, state and regional governments to the pandemic, including the shelter-in-place and similar orders and the allocation of healthcare resources to treating those infected with the virus, has ~~imposed on us a Panel Monitor until December 2, 2020. If we fail to~~caused, and may continue to ~~comply~~cause, a significant decline in retail sales, including sales of our branded products by our licensees. Other adverse effects of the pandemic on our business could include disruptions or restrictions on our employees’ ability to travel, as well as temporary closures of the facilities of the manufacturers and distributors of our branded products, which could cause further or extended declines in sales and royalties. In addition, the continued spread of COVID-19, or the occurrence of other epidemics, could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our branded products and further adversely impact our results of operations.

There are numerous uncertainties associated with the ~~Nasdaq minimum bid price rule~~coronavirus outbreak, including the number of individuals who will become infected, whether a vaccine or ~~with any~~cure that mitigates the effect of the virus will be synthesized, and, if so, when such vaccine or cure will be ready to be used, and the extent of the protective and preventative measures that have been put in place by both governmental entities and other ~~Nasdaq listing requirement, our common stock~~businesses and those that may be ~~delisted from trading on~~put in place in the ~~Nasdaq Stock Market, which~~future. Any, or all, of the foregoing uncertainties could have a material adverse effect on ~~us and~~ our ~~stockholders.~~

~~On June 5, 2018, we received a deficiency letter from the Nasdaq notifying us that, because the bid price~~results of our common stock closed below $1.00 per share for 30 consecutive business days, we were no longer in compliance with Nasdaq’s minimum bid price rule, which is a requirement for continued listing on the Nasdaq Global Market. Nasdaq’s rules require that we would need to regain compliance with this rule by December 3, 2018. On December 4, 2018, however, we received a letter from Nasdaq notifying us that our transfer to the Nasdaq Capital Market was approved and that we had been granted an additional 180-day extension period to regain compliance with the minimum bid price rule. This 180-day period expired on June 3, 2019. We received another letter from Nasdaq on June 4, 2019 indicating their intent to delist our securities from the Nasdaq Capital Market on June 13, 2019 because we had not achieved the required minimum bid price unless we request an appeal of this determination. We filed our appeal on June 6, 2019 and met with the Nasdaq Hearings Panel in August 2019. The Nasdaq Hearings Panel accepted our compliance plan, which resulted in the September 2019 one-for-three reverse stock split described in Note 1 to our condensed consolidatedoperations, financial statements included in this report. On October 30, 2019, The Nasdaq Hearings Panel granted our continued listing on Nasdaq subject to further review after December 2, 2019. On December 11, 2019, we received a letter from Nasdaq informing us that the Nasdaq Hearings Panel determined that we had regained compliance with the minimum bid price rule. As a result, the Nasdaq Hearings Panel determined that we are in compliance with all applicable listing standards required for listing on The Nasdaq Capital Market. However, based on our recent bid price history, the Nasdaq Hearings Panel has imposed a “Panel Monitor” as that term is defined under Nasdaq Listing Rule 5815(d)(4)(A), through December 2, 2020. We are also required to notify the Panel Monitor if our bid price falls below $1.00 per share for any reason during the monitor period.position and/or cash flows.

If we fail to continue to comply with the minimum bid price rule or with any other Nasdaq requirement in the future, then we would receive additional deficiency letters from Nasdaq and our common stock could be delisted from trading on Nasdaq. Such an event could cause our common stock to be classified as a “penny stock,” among other potentially detrimental consequences, and could severely limit the liquidity of our common stock and materially adversely affect the price of our common stock, any of which could significantly impact our stockholders’ ability to sell their shares of our common stock or to sell these shares at a price that a stockholder may deem acceptable.

We have incurred a significant amount of indebtedness, our level of indebtedness and restrictions under our indebtedness could adversely affect our operations and liquidity, and we are currently in violation of certain financial covenants under our credit facility.

On August 3, 2018, we entered into a senior secured credit facility that provided a $40.0 million term loan, and $13.5 million of subordinated promissory notes. The credit facility was amended on January 30, 2019 to provide an additional term loan of $5.3 million. As of ~~November 2, 2019,~~October 31, 2020, outstanding borrowings under the term loans were ~~$44.1~~$45.8 million, ~~with associated unamortized debt issuance costs of $2.0 million. Outstanding~~and outstanding borrowings under subordinated promissory notes were ~~$13.5 million at November 2, 2019, with associated unamortized debt issuance costs of $0.4~~$14.8 million. The term loans ~~mature in August 2021 and~~generally require quarterly principal payments and monthly interest payments based on LIBOR plus a margin. The subordinated promissory notes mature in November 2021. Interest is generally payable monthly on the subordinated promissory notes, but no periodic amortization payments are required.On April 14, 2020, the company obtained a Paycheck Protection Program loan under the CARES Act totaling $0.7 million. The Paycheck Protection Program loan bears interest at 1.0% per annum for the balance not forgiven, and it matures in April 2022. The unforgiven portion is repayable monthly starting at the earlier of the application for forgiveness or August 2021. We anticipate that a substantial portion of the loan will be forgiven under provisions under the CARES Act based on payments for payroll, rent and utilities during the period subsequent to obtaining the loan.

The senior secured credit facility imposes various restrictions and covenants regarding the operation of our business, including covenants that require us to obtain the lender’s consent before we can, among other things and subject to certain limited exceptions: (i) incur additional indebtedness or additional liens on our property; (ii) consummate acquisitions, dispositions, mergers or consolidations; (iii) make any change in the nature of our business; (iv) enter into transactions with our affiliates; or (v) repurchase or redeem any outstanding shares of our common stock or pay dividends or other distributions, other than stock dividends, to our stockholders. The senior secured credit facility also imposes financial covenants that set financial standards we are required to maintain, including the requirement to maintain specified levels of Adjusted EBITDA, as defined in the credit agreement, ~~($9.5 million for the trailing twelve months as of February 1, 2020),~~ and maintain a minimum cash ~~balance of $1.0 million.~~balance. We are also required to maintain a borrowing base comprising the value of our trademarks that exceeds the outstanding balance of the term loan. If the borrowing base is less than the outstanding term loan at any measurement period, then we would be required to repay a portion of the term loan to eliminate such shortfall. Further, as collateral for the credit facility, we have granted a first priority security interest in favor of the lender in substantially all of our assets (including trademarks), and our indebtedness is guaranteed by our subsidiaries. If we do not comply with these requirements or if there is a change of control of the Company, it would be an event of default.

Our operating results for the twelve months ended November 2, 2019 and February 1, 2020 resulted in ~~a violation~~violations of the minimum Adjusted EBITDA covenant, which are events of default,and the valuation report prepared by our senior secured lender during the three months ended May 2, 2020 indicated that our borrowing base is ~~an event~~less than the outstanding balance of ~~default.~~the term loans. However, our senior lender has agreed to forbear from enforcing its rights with respect to certain events of default under the senior secured credit facility, and on December 15, 2020, the senior secured credit facility was amended and the forbearance agreement was extended through ~~February 28, 2020. Our financial projections indicate~~December 31, 2020 or March 31, 2021 if certain milestones are met. In conjunction with the extended forbearance agreement, the senior secured credit facility was amended to reduce the Adjusted EBITDA requirement from $9.5 million to $6.5 million during the forbearance period and reduce our minimum cash requirement to $100,000 during the forbearance period. The quarterly principal payment due during the forbearance period was deferred, and other than approximately $85,000 per month beginning with September 1, 2020, interest payments due during the forbearance period will be paid in the form of additional principal rather than in cash. The extended forbearance agreement requires that ~~there~~a portion of our federal income tax refunds expected to be received during the forbearance period be used to pay in cash the interest previously accrued and added to the principal amount of the term loans, and also to pay down a portion of the term loans principal balance. After such federal income tax refunds are received, monthly interest will again be required in cash, and no further interest payment obligations will be deferred and added to the principal amount of the term loans.At the conclusion of the forbearance period, the Adjusted EBITDA requirement, the borrowing base requirement and the minimum cash requirement revert to the original terms of the senior secured credit facility. In exchange for these concessions, the senior lender will receive an additional fee totaling 2% of the outstanding loan balance when the debt is repaid, which together with other exit fees is expected to total approximately $2.5 million. The extended forbearance agreement accelerates the maturity date of the senior secured credit facility from August 3, 2021 to March 31, 2021 or to December 31, 2020 if certain milestones are not met. The Company’s Junior Note holders agreed to accept interest payments in the form of additional principal rather than in cash from April 1, 2020 through January 1, 2021, and

payments to the Junior Note holders are generally restricted by the extended forbearance agreement. We are required during the forbearance period to evaluate strategic alternatives designed to provide liquidity to refinance the term loans under the senior secured credit facility. There is a significant risk ~~of further violations~~that we violate milestone provisions of the ~~minimum Adjusted EBITDA covenant or minimum cash covenant beyond the~~extended forbearance ~~period agreed to with our senior lender.~~agreement. If any such ~~future~~ violation or other event of default occurs under the extended forbearance agreement or the underlying credit facility that is not forborne, cured or waived in accordance with the terms of the credit facility, we would be subject to significant risks, including the right of our lender to terminate its obligations under the credit facility, declare all or any portion of the borrowed amounts then outstanding to be accelerated and due and payable, and/or exercise any other right or remedies it may have under applicable law, including foreclosing on our and/or our subsidiaries’ assets that serve as collateral for the borrowed amounts. Furthermore, a default under our term loan agreement would also trigger a default under our subordinated promissory note agreements, which would give those lenders the right to terminate their obligations under the subordinated promissory note agreements and accelerate the payment of those promissory notes. If any of these rights were to be exercised, or if we are unable to refinance our senior secured credit facility by the accelerated maturity of March 31, 2021, which could be further accelerated to December 31, 2020 if certain milestones are not met, our financial condition and ability to continue operations would be materially jeopardized. If we are unable to meet obligations to lenders and other creditors, we may have to significantly curtail or even cease operations. We are ~~in negotiations for new and amended licenses that would increase our working capital and Adjusted EBITDA, and we are~~ evaluating ~~other~~ potential sources of working capital, ~~including~~and we believe that certain provisions of the ~~disposition~~CARES Act passed by the U.S. Congress in March 2020 will result in additional liquidity. We received proceeds of ~~certain assets~~$0.7 million in the first quarter of Fiscal 2021 from a promissory note issued by one of our banks under the Paycheck Protection Program included in the CARES Act, and ~~further negotiations with~~the NOL carryback provisions of the CARES Act are expected to result in federal refund claims of approximately $9.1 million. Our plans also include the evaluation of strategic alternatives to refinance our ~~lenders and other potential sources of capital. We have also engaged an advisory firm to advise us regarding our business plans, risks and opportunities.~~debt or otherwise enhance shareholder value. However, there is no assurance that we will be able to execute these plans or continue to operate as a going concern.

Additionally, even if we are able to avoid a further event of default under the credit facility, the amount of our outstanding indebtedness, which is substantial, could have an adverse effect on our operations and liquidity, including by, among other things: (i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions, because we may not have sufficient cash flows to make our scheduled debt payments; (ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, product development, capital expenditures and other business activities; (iii) making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions; and (iv) limiting our ability to borrow additional monies in the future to fund the activities and expenditures described above and for other general corporate purposes as and when needed, which could force us to suspend, delay or curtail business prospects, strategies or operations.

~~ITEM 5. OTHER INFORMATION~~Our common stock was delisted from trading on the Nasdaq Stock Market and is now traded through the OTC Markets Group, which could have a material adverse effect on us and our stockholders.

Since the ~~12 months ended November 2, 2019 that was below the required minimum in our senior secured credit facility. In response, on December 20, 2019,~~middle of 2018, we entered into a third amendment to financing agreement and forbearance agreement with Gordon Brothers Finance Company and Gordon Brothers Brands, our senior lenders (the “Forbearance Agreement”), whereby the senior lenders have ~~agreed not to enforce their rights to declare an event~~generally been out of default and accelerate the payment of all amounts due under our senior secured credit facility through February 28, 2020 resulting from our failure to meet the Adjusted EBITDA threshold. Under the Forbearance Agreement, we are required to deliver enhanced cash budget reporting, maintain minimum cash balances ranging from $1.0 million to $0.7 million, complycompliance with the ~~other terms of our senior secured credit facility and engage an advisory firm to provide certain advisory services. Any failure by us to satisfy the~~listing requirements of the ~~Forbearance Agreement or any other breach under~~Nasdaq Stock Market. On November 3, 2020, we received a notice from the ~~senior secured credit facility during~~Nasdaq Hearings Panel that it determined to delist our common stock from The Nasdaq Stock Market due to our compliance history and our delays in meeting previous compliance deadlines imposed by the ~~forbearance period would give~~Panel. As a result of the ~~senior lenders~~Panel’s decision, Nasdaq suspended trading of our common stock effective at the ~~right~~open of business on November 5, 2020, and our common stock is now quoted on the Pink Open Market of the OTC Markets Group.

Although we may seek to ~~terminate~~establish relationships with market makers to provide additional trading opportunities in our common stock, there can be no assurance that a market for our shares will develop, which could severely limit the ~~Forbearance Agreement, to declare an event~~liquidity of ~~default under~~our common stock and materially adversely affect the ~~senior credit facility and accelerate the amounts due thereunder~~.price of our common stock.

The information required by this Item 6 is set forth on the Exhibit Index that immediately precedes the signature page to this report and is incorporated herein by reference.

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

Delaware		95-4182437
(State or other jurisdiction of Incorporation or organization)		(IRS employer identification number)

5990 Sepulveda Boulevard, Sherman Oaks, CA		91411
(Address of principal executive offices)		Zip Code

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

PART I. FINANCIAL INFORMATION		3

ITEM 1. Financial Statements (unaudited):		3

Condensed Consolidated Balance Sheets ~~November 2, 2019~~October 31, 2020 and February ~~2, 2019~~1, 2020		3

Condensed Consolidated Statements of Operations Three and nine months ended October 31, 2020 and November 2, 2019 ~~and November 3, 2018~~		4

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity Three and nine months ended October 31, 2020 and November 2, 2019 ~~and November 3, 2018~~		5

Condensed Consolidated Statements of Cash Flows Nine months ended October 31, 2020 and November 2, 2019 ~~and November 3, 2018~~		6

Notes to Condensed Consolidated Financial Statements		7

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1413

ITEM 4. Controls and Procedures		20

PART II. OTHER INFORMATION		21

ITEM 1. Legal Proceedings		21

ITEM 1A. Risk Factors		21

ITEM ~~5. Other Information~~6. Exhibits		23

~~ITEM 6. Exhibits~~SIGNATURES		23

~~SIGNATURES~~		25

(In thousands)	Operating Leases
Remainder of Fiscal ~~2020~~2021	$	~~193~~
~~Fiscal 2021~~		~~890~~111
Fiscal 2022		~~902~~540
Fiscal 2023		~~884~~425
Fiscal 2024		~~893~~434
~~Thereafter~~Fiscal 2025		~~1,597~~333
Total future minimum lease payments		~~5,359~~1,843
Less imputed interest		(~~1,178~~283	)
Present value of operating lease liabilities	$	~~4,181~~

~~(In thousands)~~	~~Operating~~ ~~Leases~~
~~Fiscal 2020~~	$	~~854~~
~~Fiscal 2021~~		~~865~~
~~Fiscal 2022~~		~~876~~
~~Fiscal 2023~~		~~857~~
~~Fiscal 2024~~		~~863~~
~~Thereafter~~		~~1,673~~
~~Total future minimum lease payments~~	$	~~5,988~~1,560

(In thousands)	FY19 Plan			FY18 Plan			Hi-Tec Plan			Total
Balance, February 2, 2019		2,760			44			199			3,003
Restructuring charges		180			—			—			180
Payments during the period		(1,372	)		(44	)		(165	)		(1,581	)
Balance, November 2, 2019	$	1,568		$	—		$	34		$	1,602

Exhibit Number		Description of Exhibit

3.1		~~Certificate of Amendment to~~ Amended and Restated ~~Certificate of Incorporation of Apex Global Brands Inc. (formerly known as Cherokee Inc.) dated September 24, 2019 (incorporated by reference to Exhibit 3.1~~Bylaws of the ~~registrant’s~~Company (filed as Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed ~~September 26,~~with the SEC on June 27, 2019).
10.1*3.2		~~Amended and Restated 2013 Stock Incentive Plan.~~Certificate of Amendment of the Company’s Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 27, 2019).
10.2*3.3		~~Third~~ Certificate of Correction to Certificate of Amendment of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 27, 2019).
3.4		Certificate of Amendment of the Company’s Certificate of Incorporation (filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed with the SEC on June 27, 2019).
3.5		Certificate of Amendment of the Company’s Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 26, 2019).
3.6		Certificate of Amendment of the Company’s Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 31, 2020)
10.1		Amendment to ~~Financing Agreement and~~ Forbearance ~~Agreement~~Period dated ~~December 20, 2019,~~February 28, 2020 by and among the Company, Gordon Brothers Finance Company and ~~additional parties named therein.~~Gordon Brothers Brands, LLC (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on June 16, 2020).
10.2		Amendment to Forbearance Period dated April 10, 2020 by and among the Company, Gordon Brothers Finance Company and Gordon Brothers Brands, LLC (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on June 16, 2020).
10.3		Promissory Note dated April 14, 2020 by and between the Company and Bank of America (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on June 16, 2020).
10.4		Fourth Amendment to Financing Agreement and Forbearance Agreement dated April 30, 2020 by and between the Company and Gordon Brothers Finance Company and Gordon Brothers Brands, LLC (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on June 16, 2020).
10.5		Form of Promissory Note issued by the Company to each of Jess Ravich, Patti Johnson, Dwight Mamanteo and Evan Hengel (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on June 16, 2020).
10.6 10.7*		Fifth Amendment to Financing Agreement and Forbearance Agreement dated September 1, 2020 by and among the Company, Gordon Brothers Finance Company and Gordon Brothers Brands, LLC (filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed with SEC on September 15, 2020). Sixth Amendment to Financing Agreement and Forbearance Agreement dated December 15, 2020 by and among the Company, Callodine Commercial Finance and Gordon Brothers Brands, LLC.
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*101.INS		~~The following materials from~~Inline XBRL Instance Document - the ~~Company’s Quarterly Report on Form 10-Q for~~instance document does not appear in the ~~quarter ended November 2, 2019, formatted~~Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition 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 XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at November 2, 2019 and February 2, 2019; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended November 2, 2019 and November 3, 2018; (iii) Condensed Consolidated Statement of Stockholders ‘Equity for the three and nine months ended November 2, 2019 and November 3, 2018; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended November 2, 2019 and November 3, 2018; and (v) Notes to Condensed Consolidated Financial Statements.Exhibit 101)

		APEX GLOBAL BRANDS INC.

		By:	/s/ Henry Stupp
			Henry Stupp
			Chief Executive Officer
			(Principal Executive Officer)


		By:	/s/ Steven L. Brink
			Steven L. Brink
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)